Tag Archive for: BidenEnergyPolicy

America’s Broken Policies Put Our Energy and Environmental Futures at Risk

Estimated Reading Time: 3 minutes

To hear the current administration tell it, the energy crisis is over because gasoline prices have come off near-record highs. They tell us that there is no “there” there when it comes to the fact that America’s energy policy is thoroughly broken and headed down a path that is already risking our economic, national and energy security.

Pay no mind to inflation at 40-year highs and gasoline prices are still well over $1.50 higher than they were in January 2021. Ignore the fact that the fundamentals that caused the problem – lack of supply, bottlenecks in refining, Putin taking advantage of European dependency on Russian oil and gas – still exist and prices are likely to go back up.

Please disregard the fact that our federal government keeps intentionally limiting U.S. energy production to essentially put the Gulf of Mexico out of the oil and gas business, even though it provides 15% of our oil supply.

Nothing to see in the UK’s economic ruin, either, where restrictive energy policies that look exactly like the ones being proposed for the U.S. caused prices to triple and felled former Prime Minister Boris Johnson’s government. Those same policies are expected to increase utility bills by 80% in October, barring a taxpayer-funded bailout of $172 billion.

What were some of the UK’s first steps toward disaster? Limiting exploration and production in the North Sea and bans on hydraulic fracturing. Do those sound familiar?

That is the very path some in our federal government appear to want Americans to follow. High prices of oil and gas, some argue, are why we should change our energy systems completely. They are the ones who seek to model California’s energy example, while its Europe-style policies can barely keep the lights on, strangle its economy in insane energy prices, all while backtracking on its environmental progress.

No American, regardless of party affiliation, should accept this state of affairs. This is 2022 in the most innovative nation on Earth.  We should expect more. We should expect better policies.

We must demand sound energy policies that keep energy reliable and affordable, and require constant environmental improvement. They must be worked on as a single, three-sided challenge, and not a battle of one against the other.

What we should demand Congress and the White House focus on is creating a national energy program Americans can believe in.

First, we must understand and agree that fossil fuels will play a critical role in our energy mix while we advance toward net-zero emissions of greenhouse gases by 2050. Anyone who says they must be eliminated fails to understand the science and overwhelming role they play in every facet of our society. No credible study concludes that we can have the energy we need without traditional fuels by 2050 and beyond so let’s work together to advance the technologies and the workforce to build an honest path to net-zero.

Second, we need to stop talking about an “energy transition” as if we are moving away from one energy and toward another. This is a misnomer and implies a pre-determined outcome. Academic studies have shown that changes in energy systems are long-term evolutions, where the most efficient, reliable, and available sources are adopted over time – not legislated into or out of existence. We need them all – traditional sources, wind, solar, hydro, geothermal, nuclear, you name it– because energy depends so much on where it’s deployed and why.

Third, we must supercharge our carbon capture and sequestration efforts. One solution: capture and store carbon dioxide safely underground. The technology to make this happen is already here, and it is one of the fastest ways for us to reduce the carbon footprint of critical industrial sectors like steel, cement and other manufacturing.

Fourth, the government must recognize that its wind and solar power ambitions cannot ignore the elephant in the room: the need for hundreds of billions of dollars of new transmission infrastructure. Our permitting system must be overhauled in a way that speeds projects along while not compromising on safety and environmental studies. It no longer needs to be so complex that it spawned and sustains an entire litigation industry.

While we are at it, our pipeline infrastructure needs attention. Failing to permit energy pipelines makes our environment worse by forcing energy delivery via more polluting means. Permit delays, misguided activist protests and endless litigation are curtailing and not helping carbon mitigation.  Streamline permitting today.

Fifth, we must move swiftly to expand the domestic supply chain for critical minerals essential for many modern technologies, including clean energy innovations, now controlled by China. The Administration has ordered a review of vulnerabilities in our supply chains, but we need to act now if we have any hope of moving forward without Beijing’s blessing or supplies. Like all energy-related issues, this is a clear and present national security issue that must be resolved.

These are a few points that should receive swift bipartisan support for the good of the nation. We need national leadership from Congress and the Administration to deal realistically with our energy and environmental issues. We believe those leaders exist, but it is up to all Americans to send a clear message in November that energy is too important for anyone to mishandle.

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This article was published by CFACT, Committee for a Constructive Tomorrow and is reproduced with permission.

Green Energy Threatens Reliability of Texas, US Electric Grids

Estimated Reading Time: 4 minutes

Texans might be forgiven for thinking they have it better than the Brits when it comes to keeping the lights on. After all, they live in the energy capital of the world. However, the destructive nature of renewable energy like that used in Great Britain knows no borders, especially when American politicians push subsidies and mandates to force us off fossil fuels, threatening not just Texas but the entire U.S. electric grid.

Just a few days after the British were warned they might have to lower their thermostats and delay their dinners this winter to avoid blackouts, Texans were advised last Monday and Wednesday to conserve energy as summer temperatures peaked.

The Electric Reliability Council of Texas, the grid manager for most of Texas, issued a conservation appeal to Texans and Texas businesses as last week’s temperatures were expected to top 105 degrees.

Yet the high temperatures were not all that unusual for Texas this summer. So even though demand was pushing to near-record levels, the primary reason for the call for conservation was “wind generation [that] is currently generating significantly less than what it historically generated in this time period.” On Wednesday, some forced traditional outages and lower solar output (due to West Texas cloud cover) also contributed.

Renewables—wind and solar—have come to dominate Texas’s electricity market. For years, coal and natural gas had been the leading sources of electric generation. Over the last two years, though, renewables have topped both, with wind leading the way.

But not last week.

Since the push for renewables in Texas began in 1999, electric generators have spent about $66 billion building wind and solar farms that have a generation capacity today of 46,949 megawatts, with wind accounting for 35,162 of those megawatts.

Yet as temperatures and Texans’ need for electricity were soaring, wind turbines across the state were still; and last Monday, they were producing about only 8% of their installed capacity. Operating reserves—the backup generation needed to keep air conditioners blowing and factories working—were shrinking.

Something very similar happened last year during the unprecedented 2021 blackouts when 10 million Texans went without power and 12 million without water, many for several days, during freezing temperatures. Energy analyst Robert Bryce noted at the time, “Roughly 17% of [wind’s installed] capacity was available when the grid operator was shedding load to prevent the state’s grid from going dark.”

It should also be pointed out that solar’s contribution to the grid during those pre-dawn hours was zero.

Thankfully, last Monday and Wednesday, the Texas grid did not fail. The wind began to pick up in the afternoons, allowing the state to avoid any blackouts. Yet the lesson learned is clear: During periods of extreme cold and heat, Texans have become deeply dependent on the wind and the sun to keep the lights on.

Why did energy-savvy Texas build an electric grid dependent on such unreliable energy sources? The answer is simple: Since 2005, renewable energy subsidies and benefits from federal, state, and local governments have totaled about $23 billion in Texas. As a result, investors have thrown $66 billion at renewables, chasing $1 of guaranteed return for every $3 invested, regardless of the price they get for their electricity.

Additionally, the Biden administration is doing everything it can to make investments in fossil fuels unprofitable. From bans on pipelines and drilling to the Securities and Exchange Commission’s proposed rule on environmental, social, and governance investing that would force businesses to disclose uncertain risks due to climate change, it is becoming more difficult and expensive to run afoul of the green agenda.

Despite these costs, renewables are still far more expensive and less efficient in practice than fossil fuels and nuclear energy. For instance, with wind operating at only 8% of installed capacity last Monday, about $51 billion of the $56 billion invested in Texas wind turbines produced nothing just when Texans needed power most. While investors profited, Texas consumers and taxpayers were paying billions for a grid on the verge of blackouts.

On the other hand, imagine if the $56 billion spent on wind had been invested in reliable generation from coal, natural gas, or nuclear fuel. With those sources operating at 90% or more of capacity, no calls for conservation would have been issued last week, electricity prices would be lower in general, and Texans would be working and resting comfortably without a regular fear of grid failure.

Of course, Texans are not the only people experiencing these problems. The reliability of the entire U.S. electric grid is under pressure as it is being forced by irresponsible politicians and bureaucrats to shift away from fossil fuels to renewables. Energy trader Brynne Kelly recently said, “Problems with power grids across the U.S. and other countries are a potential catalyst for chaos in energy markets that are underappreciated.”

Bryce explains that the push for renewables is doomed to failure for the simple reason that they are ancient technologies that have long been eclipsed by more reliable alternatives:

By using hydrocarbons (at first coal, then later oil and natural gas) humans were able to harness ever increasing quantities of power and do so in ever-denser packages. In place of animal power, sun power, and wind power, factories began using advanced waterwheels and coal-fired steam engines.

The only reason wind and solar have made a comeback in the United States is because of government mandates and the more than $140 billion in government subsidies renewables have received in recent years.

There is still hope, however, that Americans won’t have to experience the energy poverty and forced lifestyle changes of our British neighbors. The solution for avoiding this is straightforward: End the subsidies and mandates, and renewables will go the way of the horse and buggy.

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This article was published by The Daily Signal and is reproduced with permission.

Heartland/Rasmussen Poll: Vast Majority of Voters Worried About Rising Energy Prices, Favor Increased Drilling in the U.S.

Estimated Reading Time: 3 minutes

60% of likely voters favor a law that would dramatically increase American energy production

Only 30% believe it is “very likely” climate change will be catastrophic for humans, plants, and animals within the next century

As Americans grapple with record-high prices at the pump and the highest rate of inflation in more than four decades, a whopping 82% of likely voters say they are either “very” or “somewhat concerned” about rising energy and gas prices under the Biden administration.

A new poll by The Heartland Institute and Rasmussen Reports indicates a strong bipartisan consensus that President Biden should sign a bill that would dramatically increase oil and gas drilling in the United States.

Drill Now, and Drill More

The survey of 1,004 likely voters, conducted from April 28 to May 2, 2022, found that 60% favor “a law that would dramatically increase oil and gas drilling in the United States.” Such a policy was favored by 76% of Republicans, 57% of Independents, and even 46% of Democrats—despite the Biden administration’s reticence to allow more domestic oil and gas exploration.

Partisan Split on Environmental Worries

Meanwhile, 52% of likely voters—including 74% of Republicans and 54% of Independents—think President Biden and Congress should focus more on “increasing oil and gas drilling to help reduce energy prices” than “limiting carbon dioxide emissions in an attempt to reduce climate change.” Among Democrats, only 34% favor “increasing oil and gas drilling to help reduce energy prices.”

The poll also found that 71% of likely Democratic voters believe climate change will be catastrophic for humans, plants, and animals within the next 100 years. On the other hand, 63% of likely Republican voters and 53% of Independents think climate change will not be catastrophic within the next 100 years.

Younger Voters Worry Most About Environment

Among younger likely voters, between the ages of 19 and 39, 57% believe that climate change poses a “catastrophic” threat to humanity in the next 100 years. This demographic is also more prone to favor policies that would deter energy production while limiting carbon dioxide emissions, even though 73% of likely voters aged 19 to 39 are “concerned” about rising energy and gas prices.

See the poll questions and the crosstabs here.

“When push comes to shove, polls consistently show energy and economic security trump climate change for a majority of the public when asked which is more important. Despite three decades of propagandizing, just 50 percent of those surveyed believe climate change poses a real threat to humans or the environment over the next 100 years.

“By contrast, a strong majority of Americans support government policies that would expand oil and gas production, regardless of climate change. Oil and gas remain, for the foreseeable future, vital to maintaining our present standard of living and lifestyles and to ensuring continued economic and national security. This Heartland/Rasmussen poll indicates the public understands that fundamental fact.”

“The results of this poll confirm that Americans have far different priorities than the Biden administration. Americans are worried about being able to afford the fuel that they need to work and live, and they know that our current oil and gas energy infrastructure is insufficient. Despite this, the federal government continues to pursue massively damaging policies that are in direct opposition to Americans’ needs. Our elected officials should take note.”

National Survey of 1,004 Likely Voters on Climate Change and Energy Policies

Conducted April 28 – May 2, 2022
By The Heartland Institute and Rasmussen Reports

How likely is it within the next 100 years that climate change will be catastrophic for humans, plants and animals?

30% very likely

20% somewhat likely

18% not very likely

24% not at all likely

8% not sure

How concerned are you about rising energy and gasoline prices?

60% very concerned

22% somewhat concerned

10% not very concerned

4% not at all concerned

4% not sure

Would you strongly favor, somewhat favor, somewhat oppose, or strongly oppose a law that would dramatically increase oil and gas drilling in the United States?

43% strongly favor

17% somewhat favor

14% somewhat oppose

16% strongly oppose

11% not sure

In your opinion, which of the following policy objectives should Congress and President Biden focus on more – increasing oil and gas drilling to help reduce energy prices or limiting carbon dioxide emissions in an attempt to reduce climate change?

52% increasing oil and gas drilling

34% limited carbon dioxide emissions

6% something else

9% not sure

NOTE: Margin of Sampling Error, +/- 3 percentage points with a 95% level of confidence

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This article was published by The Heartland Institute and is reproduced with permission.

Is The Oil & Gas Industry To Blame For Unused Leases?

Estimated Reading Time: 2 minutes

In wake of Russia’s invasion of Ukraine, the Biden administration is refusing to cut its reliance on foreign oil and gas despite plenty of reserves available here at home.

According to the U.S. Energy Information Agency, reserves of U.S. crude oil and leases stand at 38.2 billion barrels as of 2020.

However, President Biden and Press Secretary Jen Psaki insist it’s the oil and gas industry’s fault for not producing more energy. Adding insult to injury, Congressional progressives want Biden to declare a climate emergency and immediately phase out fossil fuels under the guise of energy security.

On March 7, for example, Psaki said the following in an exchange with Fox News reporter Peter Doocy:

“Let me give you the facts here & I know that can be inconvenient, but…they’re important…There are 9,000 approved…permits…not being used,” she said.

Peter Doocy: “Would President Biden rescind his executive order that halts new oil & natural gas leases on public lands?”

Jen Psaki: “Well, 90% of them have been on private lands…[T]here are 9,000 unused approved drilling permits, so I would suggest you ask the oil companies…”

False. Completely make-believe.

President Biden is correct that over 9,000—9,173—Applications for Permit to Drill (APDs) were approved for drilling, according to the Bureau of Land Management (BLM) December 2021 APD Status Report. But that same report found that 4,621 APDs remain pending approval. And as Junk Science’s Steve Milloy highlighted in a twitter thread, the 9,000 unused leases would actually mean that the utilization rate is at a historic high.

Further, Psaki fails to make a clear distinction between the permitting process and the Bureau of Land Management’s (BLM) leasing program. Despite holding leases, oil and gas companies can’t turn on drilling operations overnight.

The American Petroleum Institute, a trade association representing the natural gas and oil industry, called Psaki’s claim about unused leases a “red herring” — “a smokescreen for energy policies that have had a hamstringing effect on the world’s leading producer of natural gas and oil.”

That’s because it’s one thing to have access to leases; it’s another to obtain permits to drill on federal oil and gas lands.

After a lease is obtained, a permit is needed to explore for oil and gas. This process could take upwards of ten years due to regulatory roadblocks and red tape stemming from the Endangered Species Act, National Environmental Policy Act, and National Historic Preservation Act. And frequently environmental groups take oil and gas companies to court, preventing them from acting on the lease in question.

The issue is much more complicated than the Biden administration would lead you to believe. In claiming that the oil and gas industry is at fault for unused leases, they’re citing a misleading statistic to shirk responsibility for high gas prices and shift the blame to anyone but themselves.

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This article was published by the Independent Women’s Forum and is reproduced with permission.

25 Republican Governors Call on Biden to Prioritize U.S. Oil and Gas Production

Estimated Reading Time: 3 minutes

From oil rich North Dakota, U.S. senators introduce energy independence legislation

North Dakota can produce enough crude oil to offset dependence on Russian imports, but the Biden administration is prohibiting it from doing so, the state’s governor and U.S. senators argue.

North Dakota Gov. Doug Burgum and 24 Republican governors have called on President Joe Biden to prioritize U.S. oil and gas production and restore American energy independence. They did so as crude oil hit $120 a barrel and is expected to surpass $200 a barrel, causing gas prices, and everything that depends on gasoline for transport, to skyrocket.

The market went into a correction on Monday, after the U.S. already entered into a 40-year inflationary high. Both are expected to push the U.S. toward a volatile recession.

This was totally avoidable, Burgum said.

“From the unsecured southern border to the underutilized oil fields of North Dakota, President Biden’s misguided policies continue to put U.S. citizens at risk and hold America back,” he said.

“The Biden administration has again failed to meet its obligation to hold a federal oil lease sale, [which] is further proof that this administration isn’t serious about U.S. energy security. The President needs to reverse his anti-oil policies and unleash American energy production to protect U.S. consumers and return our nation to a position where we can sell energy to our friends and allies instead of importing it from adversaries like Russia.”

The Biden administration argues that its restrictions on oil and gas production are necessary to combat climate change and that there are enough untapped permits for drilling on federal land that the industry could increase production if it wanted to.

North Dakota produces more than 1.13 million barrels of crude a day and 2,990,340 MCF (thousand cubic feet) of natural gas a day.

Crude oil production from North Dakota alone would easily offset the imports from Russia, the governor argues.

In Biden’s first year in office, he halted and restricted oil and gas leases on federal lands, stopped construction of the Keystone Pipeline, and redirected U.S. policy to import more oil from Organization of the Petroleum Exporting Countries and Russia (OPEC+) instead of bolstering American oil and gas exploration and production.

While U.S. production on federal lands was stifled in 2021, the U.S. imported 8.47 million barrels per day of crude oil and refined products, of which 672,000 barrels per day (8%) came from Russia, according to the U.S. Energy Information Agency. The U.S. also imported 6.10 million barrels per day of crude oil, of which 199,000 barrels per day (3%) came from Russia.

The U.S. has been importing about 473,000 barrels per day of refined products from Russia, Andrew Lipow of Houston-based Lipow Oil Associates LLC, told The Center Square in an email. Of this, 354,000 barrels a day is unfished oils, which means they need to be upgraded in refineries in the U.S. – mostly on the Gulf Coast, because the Russian refineries aren’t unable to upgrade them.

The U.S. also imports 697,000 barrels a day of gasoline blendstocks, of which 50,000 barrels a day (7%) came from Russia, Lipow said. This mainly goes to states on the East Coast.

The U.S. also imports 287,000 barrels a day of distillate, of which 23,000 barrels a day (8%) come from Russia. This also mainly goes to states on the East Coast, he said.

The 25 governors in their joint statement to Biden called on him “to reverse his policies and restore America’s energy independence for our citizens as well as our allies abroad.

“By removing his bans on new oil and gas development on federal lands, building the Keystone XL pipeline, and reinstating regulatory reforms to streamline energy permitting, we can protect our national energy security and sell to our friends rather than buy from our enemies – specifically Russia.”

Governors from Alabama, Alaska, Arkansas, Arizona, Florida, Georgia, Idaho, Indiana, Iowa, Maryland, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming signed the letter.

North Dakota’s two Republican U.S. senators, John Hoeven and Kevin Cramer, along with seven other cosponsors, also introduced the American Energy Independence from Russia Act in the U.S. Senate.

The bill would require the Biden administration to submit an energy independence plan to Congress within 30 days that provides an energy security evaluation and risk assessment, and plans to leverage America’s oil and gas resources.

It would authorize the construction and operation of the Keystone XL pipeline, which Biden shut down when he entered office, and remove regulatory hurdles to increase liquefied natural gas exports.

It also would prohibit any presidential moratoria on new federal leases and require the U.S. Department of Interior to hold a minimum of four oil and natural gas lease sales in fiscal year 2022 in each state that has federal land available for leasing. It also would prohibit the U.S. Energy Department Secretary from drawing down the Strategic Petroleum Reserve until the Secretary of the Interior issues a plan to increase oil and gas production on federal lands and waters.

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This article was published by The Center Square and is reproduced with permission.

America Can Loosen Europe’s Russian Energy Noose

Estimated Reading Time: 4 minutes

Western Europe’s self-inflicted abandonment of its own energy resources resulting in dependence on Russian oil seems to generally follow Lenin’s playbook when he reportedly quipped that “capitalists will sell us the rope by which we hang them.”

The main editorial clarification to add here is that applies most directly to the crony capitalist green energy subsidy lobbies and their climate alarm enablers who build the scaffolds.

Russia’s invasion of Ukraine puts Vladimir Putin in a position to tighten that garrot around Western Europe — Germany in particular — using oil strangulation extortion to discourage their interference.

Germany, a dominant EU economic power, now depends on Russia for over half of its natural gas and a quarter of its oil imports.

Ironically, it isn’t as if the EU doesn’t have petroleum resources of their own … they have plenty. As recently as 15 years ago, their member countries produced more gas than Russia exported.

Also paradoxically, although Europe’s gas reserves are smaller than Russia’s, they may have as much technically recoverable shale gas as the U.S. which their governments won’t allow to be developed.

Plans by multinational energy companies, including Chevron, ExxonMobil, Shell, and TotalEnergies, to repeat the U.S. shale fracking boom were blocked by continentwide protests.

Former NATO Secretary General Anders Fogh Rasmussen blamed Russia for fueling the fracking opposition. “Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called nongovernmental organizations — environmental organizations working against shale gas — to maintain dependence on imported Russian gas,” he noted in 2014.

Over the past decade, European oil and gas production has plunged by half, with Russia most pleased to fill the supply gap.

This is occurring at a time when Germany has sabotaged itself to become even more dependent on Russian gas by already shutting down three nuclear plants in December, with three more to be mothballed this year.

Simultaneously, coal plant shutdowns across Europe have left populations even more dependent on natural gas — including as backup for heavily subsidized intermittent solar and wind. Making matters even worse, a lag in wind production last summer has contributed to soaring gas prices as Europe now enters winter with little reserve storage.

Meanwhile, the global market lacks the capacity to make up for any eventual loss of Russian gas by substituting it with liquefied natural gas, or LNG, from the U.S. or the Middle East.

By killing nuclear and coal, while failing to develop its own technically recoverable massive shale gas resources, Germany, and the broader E.U., have legitimate reasons to worry that Russia will weaponize its energy life support supply leverage to advance its territorial agendas.

They did so before when Gazprom cut off Ukraine’s gas supply for 13 days during a 2009 dispute with painful effects extending to Poland and other European countries.

How and why did this occur?

With converging and compounding consequences, U.N.-promoted climate alarmism over fossil burning energy greenhouse gas emissions inexplicably prompted a plan hatched about 20 years ago by then-German Chancellor Gerhard Schröder to also phase out non-carbon emission nuclear energy over three decades.

It was also under Schröder’s term of office when Germany and Russia agreed to build a Nord Stream trans-Baltic Sea gas pipeline linking the two countries.

Then, following his electoral defeat to Angela Merkel, Schröder went on to chair the supervisory boards of both Nord Stream and the Russian giant state-controlled oil firm Rosneft.

Merkel, who succeeded Schröder in 2005, accelerated the process, with the country’s last nuclear-power plants due to go offline this year — a decade ahead of schedule.

Chancellor Merkel then subsequently teamed up with President Vladimir Putin to counter widespread opposition to Nord Stream 2, a second pipeline which is now completed running alongside the first one. If, and when licensed, it will double the Russian gas provided to Germany … making Berlin even more dependent on Moscow … doing so even after Gazprom had previously suspended pipeline exports to Ukraine.

Recognizing Russia’s opportunity to weaponize Germany’s vulnerable dependency, President Trump sanctioned the Gulf Stream 2 development, a policy that President Biden reversed upon taking office.

The Trump administration had also pressed Germany to build LNG import terminals to diversify its gas supply, as Poland, the Netherlands and Lithuania have done.

Whereas Poland and Lithuania now no longer rely on Russian gas because they can import supplies from as far away as Australia, the German LNG terminals became ensnarled in permitting delays, and one company last year decided to turn an LNG project into a “green hydrogen hub,” including an import terminal for ammonia and an electrolysis plant.

Then, most recently following Russia’s Ukraine invasion, both the new German government under Chancellor Olaf Scholz and the Biden White House belatedly put a hold on Nord Stream 2 licensing as well.

Germany and the U.S. also joined with other NATO countries in agreeing to end Russian access to SWIFT global interbank accounts … with the remarkable exception of those incredibly important ones involving Russian oil and gas transactions that will impact them as well.

The Biden administration has been directly complicit in this rolling self-inflicted disaster since Joe’s first day in the Oval Office when he inexplicably cancelled the U.S.- Canadian Keystone XL pipeline and, shortly thereafter, issued a moratorium on new oil and gas leases on federal land including Alaska’s Arctic National Wildlife Refuge (ANWR) and in the Gulf of Mexico.

Over merely a year, the Biden White House and Democrat-controlled Congress has transformed President Trump’s America from not only being energy independent, but also a leading global exporter.

Consequential skyrocketing U.S. pump prices and plummeting poll numbers attributed in large part to Democrat anti-drilling policies have since incentivized President Biden to pathetically plead with OPEC and Russia to produce more oil.

Throughout 2021, the U.S. imported between 12 million and 26 million barrels of Russian oil monthly. There is now strong bi-partisan Congressional support to terminate such purchases altogether — even Democrat House Speaker Nancy Pelosi supports such a ban — which is stalemated by far-left progressive elements that transparently control Joe Biden.

Current U.S. domestic and global energy starvation policies are insanely unnecessary and morally unconscionable. They will not benefit either the world’s climate or its inhabitants in any conceivable way.

America has the capacity to end Putin’s stranglehold weaponization of European oil and gas dependence and simultaneously fuel our own needs, economic prosperity, and influence in an increasingly dangerous world.

Let Ukraine be an instructive moment to bring this urgent realization home.

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This article was published by CFACT, Committee for a Constructive Tomorrow and is reproduced with permission.

Catastrophe in Progress: The Biden Presidency

Estimated Reading Time: 4 minutes

Almost all of America’s past presidents have had blunders occur on their watch.  For Jimmy Carter, it was skyrocketing inflation and the Iran hostage situation.  (Few people recall that when the “students” took over the United States Embassy in Tehran, it was the second seizure, not the first — yet Carter had done nothing to either reinforce the Embassy with Marines or else evacuate everyone).  For Bill Clinton, it was “I didn’t inhale” and Monica Lewinsky (“I did not have sex with that woman”).  Even the great Ronald Reagan, after he had been shot by John Hinckley, Jr., told Nancy “Honey, I forgot to duck.”

 The Biden Administration, however, is in a class by itself.  In the mere space of less than 15 months, it has already outdone all the others by a huge margin.  It’s been one mindless blunder after another, not merely on one front (foreign policy, for example) but on all of them.  Let’s look at the sorry record on this.

Failure to Defend the Border

The Biden Administration has allowed two million illegals to cross our southern border.  Many of them have been surreptitiously flown at no charge to cities and towns across the United States, with planes landing in the middle of the night so the locals won’t know what’s happening.  Your taxes are paying for this.  If an illegal wants to fly a commercial on his or her own dime, he or she can use his arrest warrant as a form of identification.  Truly, you can’t make this stuff up.  The Mexican Drug Cartels are having a field day smuggling illegal drugs across the border along with trafficking human beings.  It wouldn’t be surprising to learn that the Sinaloa Cartel has given Joe Biden its “Most Friendly and Helpful Gringo Award” for 2021-2022.

Afghanistan

It doesn’t take a genius to figure out that if you are going to withdraw both military personnel and civilians from a war-torn area, the civilians should go first.  Quite obviously, the military can stand by to protect the civilians if matters go awry.  If the military is withdrawn first, the civilians are left defenseless.  Yet the Biden Administration, in a mind-boggling display of incompetence, chose to evacuate the military first, with the result that hundreds of Americans are still stranded behind enemy lines.

Compounding this blunder, the Biden Administration left about $70 billion worth of military equipment behind in Afghanistan for the Taliban to use as it sees fit.  When the question is asked who benefited the most from Biden’s first year in office, the answer is clear:  the Taliban. Joe Biden has met all the requisite tests to qualify as the Taliban’s “Man of the Year.”

Bidenflation

Under Biden, consumer price inflation is now the worst in almost half a century.  We are now back to Jimmy Carter’s levels of inflation.  Enough said.

Destruction of the Oil and Gas Industry

When Biden was sworn in, the United States was energy independent and a net exporter of oil and natural gas for the first time in around 70 years.  At the instigation of fanatical Watermelon Greens (green on the outside, red on the inside), Biden set about to destroy America’s energy independence and its oil and gas industry by canceling oil and gas leases and by promulgating oppressive regulations expressly designed to cripple the industry.  Before too long, (1) America was no longer energy independent, and (2) prices at the gasoline pump began rising.  The Greenies, sadists that they are, rubbed their hands in glee as Joe Sixpack found it more and more expensive to fill up his SUV.  Let Joe Sixpack suffer, they argued — he should be riding public transportation anyway.

The Ukraine Invasion

Putin’s invasion of Ukraine was no surprise attack.  It was known for months that he was massing troops on Russia’s border with Ukraine.  The dolts running the Biden Administration had a golden opportunity to move Javelins, Stingers, maybe even fighter jets into Ukraine while Russia was standing pat.  If the armament transfer had been robust enough, Putin may have thought twice about trying to invade.  Instead, little or nothing was done until the war began.

The foregoing are largely instances of incompetence and poor planning.  More sinister are the Biden Administration’s efforts to quell free speech and deprive Americans of their First and Second Amendment rights.  An example in point is the targeting of parents of schoolchildren by the U.S. Department of Justice.  If you show up at a school board meeting to protest the mask requirements for your children or the tyrannical vaccine mandates (a clear and especially vicious form of child abuse — let the prosecutions begin after the Republicans re-take Congress and the White House), you may find yourself being investigated.  Additionally, there is the persecution of peaceful January 6 protestors and the issuance of a get-out-of-jail-free card to jackbooted thugs wearing a uniform and a badge who murdered January 6 protestors in cold blood.  Note that this too can be remedied after the voters send the Democrats packing — there is no statute of limitations for murder.

We can go on and on, but you get the point.  Joe Biden has shown by his actions and his Administration’s actions that he is far and away the worst President in our country’s history — and he still has almost another three years to wreak yet more havoc.

But there is hope.  If Republicans retake the House in November 2022, there would be nothing stopping the House from impeaching both Biden and Harris, thereby putting a Republican Speaker of the House in the White House if a two-thirds majority to convict can be assembled in the Senate.  Yeah, it’s a long shot, but if things get even worse between now and 2023 (which seems assured, given the way Biden is running the country), it’s not totally impossible.

Gas Prices Hit All-Time High As White House Turns To Dictators For Help

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The average price of gasoline surged to the highest level ever recorded in the U.S. on Monday as the White House scrambled to negotiate increased global oil production.

The nationwide average price at the pump hit $4.104 per gallon, the highest level in U.S. history, according to energy analytics firm GasBuddy which tracks gasoline costs. The previous record was set in 2008, prior to the Great Recession and housing crisis.

In addition, the price of diesel fuel reached $4.63 per gallon on Monday, and it is set to break its record within two weeks, GasBuddy data showed. The 49.1-cents per gallon spike over the last seven days represented the largest one-week spike since Hurricane Katrina upended domestic supplies in 2005. (RELATED: Stock Market Sinks, Oil Tops $130 As West Considers Russian Energy Sanctions)

“Americans have never seen gasoline prices this high, nor have we seen the pace of increases so fast and furious,” Patrick De Haan, GasBuddy’s head of petroleum analysis, said in a statement. “That combination makes this situation all the more remarkable and intense, with crippling sanctions on Russia curbing their flow of oil, leading to the massive spike in the price of all fuels: gasoline, diesel, jet fuel and more.”

“It’s a dire situation and won’t improve any time soon. The high prices are likely to stick around for not days or weeks, like they did in 2008, but months. GasBuddy now expects the yearly national average to rise to its highest ever recorded,” De Haan said.

Meanwhile, the White House has mulled reversing years of foreign policy and turning to Iran, Venezuela and Saudi Arabia for more oil production.

The administration is also under significant pressure from dozens of lawmakers on both sides of the aisle to ban Russian oil imports. But President Joe Biden has thus far avoided such a measure, explaining that it would primarily harm American consumers.

“It’s shocking, actually, because we have the ability, in the United States, to completely fulfill all the Russian oil imports that are coming into the United States with domestic production,” Republican North Dakota Gov. Doug Burgum told Fox Business on Monday.North Dakota alone, we’re operating at 400,000 barrels per day below what we were prior to the pandemic. That can easily be turned back on again.”

“The idea that we are talking with authoritarian regimes, Venezuela and Iran, to try to increase production … it’s absolutely absurd,” Burgum said.

*****

This article was published by Daily Caller and is reprinted with permission.

The Big Inflation Lie

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President Biden, no economic expert, wants to blame the high rate of inflation on the pandemic created shortages like computer chips stopping cars from being built. While supply chains were altered for a time and some products still have backlogs there are two major reasons that the inflation rate has accelerated to the highest it has been in two generations. Those two reasons are self-inflicted wounds, almost exclusively by Biden policies.

By far the most tangible one is the price of energy. It does not take much to figure out when you see the average price of an oil barrel – 2020 $39.68, 2021 $68.17 and 2022 $84.70. We don’t know where the average price in 2022 will end up for the year, but it is a good beat it will be north of the current figure – currently at above $95.00.

American oil production went from 5,484,000 barrels in 2010 to 11,283,000 in 2020, Some of that growth came at the end of the Obama Administration due to private land fracking, but the figures really soared during the Trump era. Oil production dropped 1.1 million barrels in 2021. Natural gas production went from 22,381,873 million cubic feet in 2010 to 36,202,466 million cubic feet in 2020. Again, it was raised during the Obama administration but accelerated during the Trump era.

Production is predicted to rebound in 2022, but will we continue on our upward trajectory which will bring prices down? The stall that occurred once the Biden Administration took over caused an upward spiral. The Biden government is doing its best to discourage oil and gas production in the United States.

Not only has Biden put a clamp on production here, but he has also discouraged production In Canada by shutting down the Keystone XL pipeline. Biden has thrown his lot in with the environmentalists who believe we can live on solar and wind power the only clean energy sources they fully endorse. Sure, they accept hydropower — to the extent, it does not disturb waterways they want undisturbed, but nuclear which is clean, yet evil in their eyes, is an energy source non grata.

What they forget is oil doesn’t just power vehicles and airplanes, it is used in the plastics that touches virtually everything in our lives. The clothing we wear, the glasses on our faces, and the containers that hold the food we eat.

By turning us away from the energy independence that we had created prior to his administration Biden has caused a major element of the inflation that we are burdened with today. Everything is touched by the cost of oil and gas. Certainly, the sign at the corner gas station with ever-rising prices is the most visible, but not necessarily the most determinant in the crushing increase in inflation. Just think how much more it costs to ship products from a foreign country or from Minnesota to your grocery shelf.

This is an unforced error of momentous proportions driven by a zealous and naïve political philosophy. The worst part is that the energy sources they dream will replace oil are nowhere near effective since they are dependent on the vagaries of nature. Ask the supporters of the green revolution what it would cost to develop the batteries necessary to store energy for the times the winds don’t blow on the sun goes down. They have no answer because they either don’t know, or they do know, and they are aware the public would turn on them knowing the reality of an estimated a few hundred trillion dollars. They can live with 7.5% inflation when they are saving our planet.

The second self-inflicted wound is the disregard of an elemental concept. A grade-schooler understands the basics of supply and demand theory. It seems that Biden has found “economic experts” who live in denial that this exists. While the supply of many things is being crushed Biden ramped up demand with his first legislation in March 2021. In December, Trump had signed a bill to inject $1 trillion of made-up money into the economy to stave off the effects of government forced shutdowns.

The reasoned thing would be to let that money be spent and consider how that changed the economic picture. Not when you and your party needed a victory and wanted people more tied to government benefits than the fruits of their own labor. Instead, they passed another $1.9 trillion of handouts with questionable parameters as to why people needed that money. 

To evidence their lack of understanding of how ramping up demand by injecting made-up money into the economy chasing the same supply, the Biden team is still telling us their disastrous Build Back Better baloney will get passed during 2022.  Their desire to pursue their Left-wing government-centric policies seems to be more important than controlling the expanding inflation.  Nancy, Chuck, and Joe are still trying to tell us the injection of up to $4.9 trillion will tame inflation.  This delirious position insults not only us but themselves.

Has supply chain shortages caused some inflation in the economy? Yes. Will it be transitory? Probably not.  Is it corporate greed as President Biden and his ill-informed idealogue buddy Lizzie Warren like to tell us  – NO.  Until the Biden Administration focuses on the ill-conceived policies they have created and adjusted, inflation will rage, and their heads will be on the political chopping block.

Let’s see what Biden says in his State of the Union address which is supposedly going to focus on this issue.

 

 

 

 

War and Bad Energy Policy Makes a Difficult Situation Even Worse

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We don’t write that often about markets because The Prickly Pear is not a financial publication.  However, we appreciate that our readers, like the public generally, are being squeezed by the worst inflation in a generation and are being buffeted by very uncertain financial markets.

Our main concern remains the country and the future of our children and our grandchildren. But financial affairs embrace both political and personal concerns.  It is difficult for a nation to do well if its people are not doing well. In addition, it is hard to help your family when you are broke.

In our past few pieces, we suggested some broad themes about 2022 were likely. First, we felt it would be a “risk-off” year. That is to say, things that had been working so well and attracting risk money such as stocks, cryptocurrencies, bonds, and real estate, would be in for a rough go of it. We would have a corrective phase.

We also suggested that the classic 60% stock and 40% bond asset allocation strategy would not work because stocks and bonds were likely to go down together. Thus, bonds would not be providing the diversification and protection they historically have. That has certainly turned out to be true.

We also suggested that cryptocurrencies would not provide diversification and that governments were likely to move against them. Governments do not want to give up their monopoly on controlling money, nor will they tolerate much in the way of financial privacy. Cryptos have been highly correlated to stocks and governments from Canada to China are cracking down on them.

We recommended reducing exposure to stocks and bonds, increasing substantial holdings in cash, and adding a bit of gold.

Although pointing out that we so far have been basically correct might appear boastful, we are not. In fact, we know from painful experience that markets can be fickle and unpredictable and can make idiots of us all. But the trends we were worried about have just been considerably made worse by the uncertainties of war and that compels us to write more on the subject. 

Most of our observations were based primarily on a change in the monetary regime. There has been well over a decade of extraordinary easy money policies pursued both on the fiscal front by Congress and the monetary from by the Federal Reserve. Many markets are now quite addicted to cheap credit, speculative juices have been flowing in the extreme, and many markets seemed to have the look of mania about them.

But with inflation running this hot, it would appear the Federal Reserve would attempt the impossible: increase rates enough to cool off inflation, but not raise them enough to tank the economy. Likewise, the excessive and wasteful Federal spending would probably peak, especially with Republicans likely to take back both the House and Senate.

In short, the monetary flows supporting the rapid appreciation of various markets were going to be reduced, likely creating monetary addiction withdrawal symptoms. That is what triggered our caution.

Thus far, most of our general predictions have come true, and sad to say, we think there is likely more to come.  Yes, in the short term, the stock market is getting quite oversold and due for a bounce. The strength and duration of that bounce will tell us more about the rest of the year. How that process works out will define the difference between a correction and a bear market.

So far, most major stock indices are in “correction” territory, that is losses of 10-20%. Many individual stocks have lost a lot more as the market indices have been held aloft by a handful of giant tech companies. We have not yet entered bear market territory, which is much greater in both time and extent. Typical bear markets will pull equity prices back 50%, and sometimes even more than that.

So far this year cash has done fine, gold has modest gains, while energy and energy stocks have been the big winner.

While the FED continues to prepare the markets for rate increases, so far, they have not delivered.

But the markets are moving in anticipation and interest rates are nonetheless rising, the yield curve is flattening, and credit spreads are widening. All are typical preliminary signs of credit stress.

This process of cooling off inflation caused by both monetary excess and supply chain issues caused by the idiotic response of governments to Covid would by itself present quite a challenge to the FED and to the markets.

Then along comes Russia and the invasion of Ukraine. Since inflation is at least in part caused by the Democrat’s war against fossil fuels, sanctions against a major energy producer, while entirely justified, can only make matters worse. The Administration has countered that they plan to make up the energy deficit they have created, by accelerating “renewable energy.”

There is simply no way realistically to expand the very small contribution renewables make to world energy in a short period of time, and it is very questionable if it is technically possible long term.

Europe, especially Germany, has drunk the Cool Aid of the “green movement” and is very vulnerable, closing down their remaining nuke plants just like the geniuses in California. Electricity costs have been skyrocketing.

The Biden energy policy is almost a guarantee for soaring energy prices, creating an additional serious problem for the world economy. Money that goes into the gas tank is money not spent on clothing, ball games, or orthodontics for the kids. As energy and labor costs soar, it now risks a profit squeeze on business hardly helpful to a stock market already in distress. And because Biden is shutting down domestic production, the benefit of those energy revenue streams goes to all those wonderful people in the Middle East.

By acting almost immediately against the  Keystone XL Pipeline, he in effect suppressed Canadian production. By targeting U.S. producers, we in the U.S. are producing less. By vetoing the gas pipeline from Israel to Europe, he made Europe more vulnerable to Russian energy, just on the brink of war.

You could not design by intent a worse energy policy.

The Administration and its fans do not seem to understand that oil and gas go far beyond just fueling cars and heating homes. There are basic materials for fertilizer and plastics, and thousands of other things we buy all the time. It does not matter how many Chinese solar panels you erect if oil is needed to make plastics and gas to grow food.

Food prices are likely to be impacted in two ways.  First, fuel and fertilizer are major costs for farmers.  Secondly, Ukraine is a big food producer, especially of grains.  This can only add upward pressure on food prices.  For the poor, food and fuel are often their biggest costs.  A food squeeze only makes inflationary pressures worse.

An oil price shock could plunge the country into recession just as the FED is raising rates. This has the potential of making the FED interest hikes pro-cyclical. In short, the FED could make what would be a soft patch into recession because the economy will get the triple shock of inflation, interest rate increases, and an energy crisis. Financial flows are international and supply chains are integrated. Sanctions may indeed be necessary but they come with a cost both to us and the Russians.

The Russian/Ukrainian conflict and the accompanying economic sanctions could wreck credit flows, cause central bank issues, foreign exchange turmoil, and various other maladies that could further disrupt the international economy.  We are long past the time when the U.S. economy ran pretty much on its own. It is now thoroughly integrated with international trade.

The worst case would be for Europe or the U.S., or both, to get directly involved in the war. While we doubt that will happen, there are many economic tripwires being hit that don’t involve direct military contact.

The personal experience we have had with recessions and bear markets is you just can’t know in advance where all the difficulties could show up. For example, a slow down in the economy hits the tax collections of state and local governments. A bear market in equities can harm households, retirement funds, public and private pension funds, and consumer spending. A bear market in stocks can create negative wealth effects and change consumer psychology as well. A slow down in the economy will expose the excesses in debt that may range from housing finance to the junk bond market. Default rates could rise.

And, with interest rates just barely coming off zero, it is not like the central banks of the world have a lot of ammunition to fight in the next recession. How much water do the fire trucks have left?

As far as fiscal stimulation goes, the same thing can be said. We have just had a huge surge in deficits just to satisfy the Democrat political agenda. If the Republicans take over in Congress, it is unlikely they will be willing to spend if the economy slides into recession. Besides, we are not sure how much more in the way of global deficit spending the markets can take, nor is anyone else.

While there is no sign of recession evident right now, they do typically follow a course of interest rates hikes, a burst of inflation, political turmoil, and an energy crisis. Professionally, we cut our teeth on the 1973-74 bear market, and there are a lot of things that appear similar to that era.

We don’t envy Jerome Powell at the FED. He faces record deficits, soaring inflation, and now disruption from a war that was hardly on anyone’s radar. Does he hold off on the interest rate increases that have been so widely publicized?

If he does that, will the markets interpret that to mean the FED is too fearful to tighten and thus has chosen to let inflation run? That too will have profound consequences.

The FED rate increases are expected to start early next month so we should be getting some answers soon. But as mentioned before, rates in the marketplace have already increased and are impacting decision making.

To reiterate: threading the needle between inflation and recession would have always been a tall order to fill. When we add to that the confusion of war, massive deficits, distortions due to Covid policy, and terrible energy policies, the risks of policy error and unintended consequences go up considerably.

That makes for a difficult and uncertain investing environment. We would still say prepare for a risk-off year.