America needs domestic energy to help families, lower inflation and punish Putin


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BY DAVID HOLT:

The Russian invasion of Ukraine has laid bare some home truths about global energy security, the risk of letting unrealistic, extremist ideas dictate our energy policies and the everyday costs imposed on Americans by the intentional hampering of our oil and gas industry.

Let’s not buy into the fiction that Russia caused the highest inflation in 40 years and put oil prices at more than seven-year highs. Things were already bad in late 2021, and The White House continuously signaled to markets that oil and gas were out of favor.

No one disagrees that global factors including pandemic fallout contributed, but the Biden Administration’s actions have certainly fueled the high energy prices we now pay.

Russia’s invasion is just the accelerant that has turned our economic situation into a four-alarm fire requiring an emergency response. Gasoline prices are over $3.70 a gallon and are surging toward the level at which the Great Recession started – $4.50. High energy prices have preceded the last six recessions here.

The upside is that solving higher prices and hurting Russia’s war chest is right here – and it’s obvious. President Biden ignored the opportunity to talk about it in his State of the Union address, even while he correctly urged industries to “Make It in America” to reduce dependence on foreign supply chains.

Every industry, it seems, but the American oil and gas industry.

The president’s promise to use every tool in the toolbox to lower energy prices came in the form of announcing another drop-in-the-bucket release from the Strategic Petroleum Reserves. It didn’t help. Global oil prices surged to over $116 a barrel the next day.

It was as fruitless as his attempts to return to an era of American energy weakness, when we had to ask OPEC send us more oil. As in the past, they’ve said no again.

Taking a meaningless action just to say “I did that!” is the political equivalent of using a spoon to row a boat upstream. It becomes political tragi-comedy when everyone can see you’re furiously trying to toss the boat’s outboard motor over the side while you keep rowing with that spoon.

The outboard motor is the American energy industry, the same one which made us the world’s cleanest and largest producer of oil and gas and which has contributed heavily to our record as the world’s largest reducer of emissions.

The Administration since day one has hewed to a long list of demands from environmental hucksters to hamper American energy: shutting down the Keystone XL pipeline while approving Russia’s Nord Stream 2; pausing federal oil and gas leasing; de facto banning offshore production, implementing heavy-handed regulatory actions design to impede our energy security and raise the prices we pay for energy, which over a sustained period, increased the cost of bread, milk, lumber and frankly, nearly everything.

President Biden could change course and send powerful investment signal from The White House that would spur American energy production. He can hold an expedited Gulf of Mexico offshore lease sale, expedite permitting for onshore and offshore energy, get the stalled five-year plan for the Gulf moving fast, offer assistance to encourage smaller companies to ramp up, and fast-track infrastructure.

He can do this while securing further environmental progress commitments from industry, and working fast to get the regulatory framework in place for lower-carbon business opportunities like carbon capture and sequestration, and hydrogen.

Instead, we have been offered a potential solution that will take years to materialize. I wonder how the president’s announcement that he’s prioritizing legislation to offer weatherization assistance and electric vehicle charging stations is going to help us right now.

There are some calls to ban the dirtier, high-emitting Russian oil the U.S. imports. A fact: The U.S. spends $67 million every day – $24.5 billion a year – on Russian oil, assuming a price of $100 a barrel.

But that ban will only raise prices unless we unleash American production first.

We are more than a million and a half barrels per day under our peak production in 2019, when oil averaged $57. Returning to that level would leave us with enough to replace Russian imports and still have another million barrels a day to spare.

This is an achievable “Make It in America” goal which will bring down the high oil prices that benefit Putin and harm American families and businesses. It will put more than $100 million dollars a day back into our own economy, create spare capacity to share with our European allies and tell world oil markets that America is serious about energy.

Stop fighting American energy, Mr. President. Put it to work for America and the world.

David Holt is president of Consumer Energy Alliance, a U.S. consumer energy and environment advocate supporting affordable, reliable energy for working families, seniors and businesses across the country. 

This article originally appeared at Real Clear Energy

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