Biden's Price Hike
In an effort to appease the cult of climate change, the POTUS has created an unprecedented rise in energy costs that will hurt the most vulnerable
There is something deeply sadistic around the cult of climate change. They are so utterly convinced of the righteousness of their cause that they can justify any pain and suffering inflicted in its pursuit. And the fact that the pain inflicted is distributed unequally and most heavily on those who are least able to withstand the pain is of little consequence. When this cult of the ever warming earth has the levers of power at their disposal, that is when we should be the most worried, because that is when they attempt to achieve their ends. And in doing so they will inflict said pain and suffering.
Luckily for all of us, President Brandon and his merry band of ideologues are completely aboard the Climate Change Choo-Choo!
About the only thing the climate cultists and conservatives can agree on these days are the "I Did That!" stickers on gas pumps around the country. Of course they agree on the stickers for completely different reasons.
The conservatives that put them on gas pumps are making sure that you know who is responsible for the ever rising gas prices. That $50, $75, $100+ fill-up is directly attributable to the guy with the grin. And they are correct in that assessment as we will shortly discuss. The Brandon Administration has put in place policies and intentionally taken actions that have rapidly increased the cost of fossil fuels and the products derived from them. The stickers are a sarcastic rebuke against that administration and their wallet-pain inducing policies.
Now the climate cultists obviously see things differently, but they can still grin when they walk past the pump. Why? Because they (correctly) believe that the high prices will discourage people from driving as much. Furthermore this pain at the pump MAY encourage someone to ditch that ICE (internal combustion engine) vehicle for a sweet EV (electric vehicle). As we discussed a few weeks ago, the math on replacing your ICE for an EV is not exactly a winner if you want to save money.
But these two downstream effects of higher fuel costs are something the climate cultists are completely down with... the higher that price per gallon goes, the happier they become. Don't believe me? Check out the Energy Secretary, Jennifer Granholm, when asked what the admin could do to bring down gas costs (and this was when it was still under $3/gal)? Doesn't seem like she is too troubled by high gas prices to me.
But don't worry y'all... we're just in the midst of an INCREDIBLE transition away from fossil fuels!
And whatever you do, don't blame them! Even if they wanted to, they can't do anything to bring down the cost of gas. This is a global market, you idiots!
So how does the Brandon Administration continue to drive up prices while blaming it on Putin... or evil price gouging oil companies... or global markets dealing with exploding demand? Let's jump into President Brandon's Shoes and Depends and see how his policies are driving oil prices higher and higher.
From the climate cultists perspective, the day Brandon was sworn into office our country was in crisis. Gas prices were pretty darn low and they DEFINITELY do not want that. How low were they? Adjusted for inflation they were some of the lowest gas prices in the last 100 years. And this wasn't just COVID related as gas prices were below the 100 year inflation adjusted average for President Trump's 4 years in office. Low gas prices obviously enable people to drive more often and for further distances. More driving means more CO2 emissions. More CO2 emissions means exacerbating the greenhouse effect, thus making the planet warmer. When the planet gets warmer we all die... in 12 years. Or something like that. Don't blame me, blame the science!
So what did the Brandon Administration do to get these costs up quickly? First they started by killing the Keystone XL Pipeline via an executive order. The cult loves this action and the administration makes the claim that it doesn't affect oil prices. Their rationale for this argument was that the pipeline wasn't completed yet, therefore it wasn't delivering any oil to refineries in our country anyways. And if you don't think about this much, this kind of makes sense. So why would this drive up oil prices if it wasn't in use yet?
Well it turns out that oil pipelines are expensive. The Keystone XL Pipeline was going to cost roughly $7 Billion. And that is before a single drop of oil is sent through the entirety of the pipe. So the oil companies must invest capital to acquire the needed land, get the necessary permits, hire all of the workers, and build the actual pipeline. This investment is made with the expectation that they may realize profits over the long term if they incur debt in the short term.
If you stop a previously approved project like this, the oil company loses all investments made. TransCanada took around a $2.5 billion dollar loss after the announcement of the cancellation of the Keystone XL. And I don't want to get too technical here, but losing $2.5 billion is generally frowned upon in the business world. If you are another oil company, you're going to think long and hard about making any long term investments under an administration that has, on its very first day, with the stroke of a pen, cost another company over $2 billion. Without investments in infrastructure supply such as this the supply of oil is unable to increase at the same rate as demand. And if you know anything about the law of supply and demand you will recognize that this means higher prices.
The markets responded to this administrative action as they recognized that this administration was going to be combative with the fossil fuel companies. In the two months after Brandon took office, the price of a barrel of West Texas Intermediate (WTI) Crude went from around $53 to around $65... up 22% in just 2 months! The price had risen around $13 between election day and inauguration day. This is a $25 per barrel (61%) increase in the span of just 4 months!
"It went up 61% because things were opening up after the pandemic and there was more and more demand for gas!" Um, not so much. Google mobility data shows that people were moving less after the election than during the summer, so demand would be reduced. And if we compare the 5 months before election day to the 4 months after election day we see a stark difference between these two periods. Prior to the election oil prices had risen around 2% over 5 months. Compare this to the 61% increase in the 4 months after election day. The difference is stark!
The next action taken was to halt all new leases for oil exploration on federal land. Leasing land is the first step in a LONG process that takes place prior to actually drilling for oil. A variety of different permits and agreements must be made from the point at which a lease is granted. When these steps are complete, only then is oil effectively being pumped from the ground. So when we halt new leases from being granted AND the administration slows down projects that are currently in the process this dissuades oil companies from pursuing more oil drilling capacity. Stagnant drilling capacity along with increasing demand again results in increased costs.
Now there is another issue facing the climate cultists: Oil is largely a global market. Even if we drive up prices by killing leases and pipelines, this could be countered by other countries increasing their production and filling the void. Specifically the Organization of Petroleum Exporting Countries (OPEC) Cartel may feel compelled to increase production to increase market share and meet the increased demand. This would have the potential of keeping the cost of oil at a reasonable level.
But the Brandon Administration had an ace up their sleeve! How do you anger OPEC in such a way that they won't increase oil drilling sufficiently to meet global demands, even when it is in their interests to do so? Why not start reengaging in talks with the Iranians to restart the Iran Nuclear Deal with the US and other western nations. This approach worked! How mad were the Saudis? They wouldn't even take Brandon's phone calls as he was asking for them to increase production after Russia invaded Ukraine.
But why would Biden be calling the Saudis to increase oil production if they want oil prices to increase? Well Russia's invasion into Ukraine did increase the price of oil at a much faster rate than was likely expected. The Putin Price Hike is real, but it is more of an acceleration of an already existing upward trend in oil prices rather than an increase in prices that exists on it’s own.
The frog in the boiling water is an appropriate analogy here. The reason the frog stays in the water is it is increasing in temperature so slowly that by the time the frog notices, it is too late and it is unable to jump out of the pot. The frog has the capability to jump out of the water, it just doesn't recognize the need to. Well if gas prices at the pump are rising slowly enough, people have some time and capacity to adjust. They will be less likely to take out their frustrations on politicians... If those prices rise too fast, then that is how you lose elections. That is how you lose power. So it was in Brandon's best interest to at least attempt to somehow increase oil supplies by asking OPEC to increase production. And the Saudis decided they don't particularly like this administration, so they were happy enough to see the price of oil rise and put more and more political pressure on Brandon. You don't get to a 43% approval rating without a little help from your friends!
Given the actions taken by this administration and their attitudes towards these increased prices, it is hard to conclude that these increases in oil costs are anything but intentional. They ran on this platform and the climate cultists love it. Promises Made, Promises Kept.
But the costs are extraordinary and will be felt most harshly by the poor and those in the lower-middle class. These are the people that will have the hardest time affording gasoline to get to work. To afford heating oil in the winter. To afford air conditioning in the summer. To afford food which will become significantly more expensive due to the increased production and transportation costs. Sadly people will die because of this. And the climate cultists aren't the slightest bit bothered by this. They cheer the suffering as they believe the ends justify the means. And this is what happens when they get the power. For in the end, no one meeting in Davos last week at the World Economic Forum will miss a meal. John Kerry won't fret the cost of filling up his private jet. They'll be just fine.
But I’ll leave you with this. Here is a good read on how the US could get back to a more reasonable energy strategy that is environmentally friendly and makes sense. Not that the climate cultists actually care about reasonable ways to protect the environment.