Biden’s Energy Screw-up

COMMENTARY Environment

Biden’s Energy Screw-up

Apr 1, 2022 8 min read
COMMENTARY BY
Katie Tubb

Research Fellow, Center for Energy, Climate, and Environment

Katie Tubb is a research fellow for energy and environmental issues at The Heritage Foundation.
Students walk through crop field with oil well at Arvin High School, Arvin, High School, Kern County, California, USA. Citizen of the Planet / Getty Images

Key Takeaways

Joe Biden claims to be all for “energy independence.”

Biden is not the first president to take a command-and-control approach when faced with an energy crisis.

The U.S. and other freedom-loving countries have ample resources to improve human well-being and weaken the power of those who would weaponize energy.

Joe Biden claims to be all for “energy independence.” As families and businesses face some of the highest energy prices in over a decade, the president has embraced the phrase as a banner over his own policies.

It’s a catchphrase normally associated with those vehemently opposed to the president’s energy agenda. But when Biden uses the term, he means something far different than “drill, baby, drill.” He means, in fact, its opposite. And that’s why Biden’s version of “energy independence” is a mirage, and Americans will pay dearly while he chases it.

There is no question that America faces an energy crisis. From January 2021 to January 2022, crude oil prices increased 45%, blowing past records set in 2008. Gasoline and diesel prices are the highest on record since the Energy Information Administration started keeping track in 1993. Natural gas prices are up 46%. Average household electricity prices haven’t grown this fast since 2008. Even coal prices have ticked upward after years of policy-driven decline.

Simple economics would argue that the way out of high prices and high demand is increased supply and innovation. Yet Biden persistently has rejected policy reforms that would allow U.S. producers to do this and has instead resorted to alternatives that have puzzled Americans and allies alike. The president’s decision to try to negotiate oil imports from Venezuela rather than hold, as required by law, lease sales for energy development on federal lands and waters has many asking why such obvious solutions are being rejected.

>>> Biden Throttles U.S. Energy Production When We Needed It Most

The answer can be found in his March 8 statement announcing a nationwide ban on Russian energy imports:

This crisis is a stark reminder: to protect our economy over the long term, we need to become energy independent. … It should motivate us to accelerate the transition to clean energy. … And if we can—if we do what we can, it will mean that no one has to worry about the price at the gas pump in the future. … This is the goal we should be racing toward.

When Biden speaks of energy independence, he means forcing a rapid transition to renewable energy technologies and aggressively phasing out conventional fuels. He has hijacked the phrase to rebrand his extremist climate agenda as a blueprint. To this end, the administration’s regulatory onslaught to force long-term transformation in both energy production and consumer demand has neither paused nor slowed.

On energy production, the administration continues to push policies that frustrate future oil, coal, and natural gas exploration, production, distribution, and investment, even as it saps taxpayers to boost subsidies for renewable energy R&D, investment, manufacturing and production, and infrastructure.

In his first month, Biden instituted a “moratorium” on energy production in regions of Alaska and a similar “pause” on federal lands and waters, despite clear directions from Congress. He removed streamlining and transparency reforms for federal permitting processes, which environmental extremists continue to weaponize in courts today to shut down new energy projects. Biden also reinstated the “social cost of carbon,” a shadow carbon tax enforced by regulators, not legislators. And he began nominating extremists with clear anti-energy agendas to fill out offices at the Department of Interior and elsewhere, such as Brian Deese as his National Economic Council director. Deese was formerly of BlackRock, the investment firm that has in many ways led the charge to shut out coal, oil, and natural gas companies—entirely legal industries—from the U.S. financial system. This is in addition to naming Gina McCarthy (of the EPA’s Clean Power Plan days) as White House national climate adviser and John Kerry (who has personally pressured banks to curb their work with oil and gas companies) as special climate envoy. While clearly setting administration policy, neither were ever Senate confirmed and evade any meaningful oversight from the public’s representatives in Congress. As they say, personnel is policy.

Meanwhile, the administration contradicts itself. In March, Energy Secretary Jennifer Granholm told Wall Street to start investing in oil companies again, even as the Securities and Exchange Commission proposed a rule that will make it risky and burdensome for anyone to invest in fossil fuel companies, ultimately choking off their access to capital. That Biden has authorized releases from the Strategic Petroleum Reserve three times in six months is emblematic of the degree to which he has backed U.S. energy policy into a corner—preferring to draw down reserves rather than send a clear signal that the United States is open for energy production.

Biden’s policies to transform the consumer side of energy economics also continue apace, subtly conditioning the choices the public will be able to make in the future. For example, while a president cannot make people buy an electric vehicle, he can make it very difficult for car companies to manufacture and sell anything else. The Environmental Protection Agency and Transportation Department are finalizing fuel-economy standards on cars and heavy-duty trucks that are so stringent they make it nearly impossible for a conventional gasoline- or diesel-powered vehicle to comply by the end of the decade. Less obvious are scores of regulations that will increase the costs of everyday energy-consuming products such as kitchen stoves and ovens, washing machines and dryers, water heaters, lightbulbs, ceiling fans, dehumidifiers, dishwashers, microwaves, and furnaces. This is what the administration calls “innovation” and “consumer choice.”

This attitude toward consumers helps make sense of some of the administration’s other baffling statements and decisions. It is how White House press secretary Jen Psaki could state, without a note of irony, that “the rise in gas prices over the long term makes an even stronger case for doubling down on our investment and our focus on clean energy options.” It’s also what enables the administration to seek half a trillion dollars in new taxpayer-backed subsidies for renewable energy programs despite record-high inflation.

In other words, the administration’s energy independence agenda embraces high consumer prices for conventional energy as a feature, not a bug. By appropriating terms such as “independence,” “clean,” and “innovation,” it presses on advancing costly policies that ultimately will eliminate conventional fuels by regulatory fiat. This should be no surprise—this self-imposed energy scarcity is exactly what Biden promised on the campaign trail when he told voters, “Look into my eyes: I guarantee you we’re going to end fossil fuels.”

Biden is not the first president to take a command-and-control approach when faced with an energy crisis. Richard Nixon tried to tame the 1970s oil crisis with government price controls. It failed. In the mid-2000s, “temporary” energy subsidies and the ethanol mandate were responses to a projected energy supply crisis. Both have failed miserably. In 2012, President Barack Obama said America could not drill its way to lower gasoline prices. American energy companies proved him wrong, but Biden apparently never got the message.

Biden’s vision has also been tried at the state level, where it is also failing miserably. California has implemented aggressive policies to choke the production of conventional energy, tax and ultimately ban its use, and mandate the use of renewable energy. As a result, it has some of the highest gasoline and electricity prices in the country and is the nation’s largest importer of electricity. Commissioner Mark Christie at the Federal Energy Regulatory Commission has described such aggressive mandates and timetables for renewable energy as little wiser than a “gamble” on the reliability of the nation’s electrical grids.

Europe should be another cautionary tale. Countries there committed decades ago to limit their own production of natural gas, coal, oil, and (in some cases) nuclear energy, and to subsidize wind and solar technologies heavily. The results? In the last year, Europe has faced even worse energy-price increases than the U.S., and dependence on Russian energy has utterly compromised Europe’s energy security and political independence.

This is the path the president seeks to follow. That the “transition” to green has not been painless is, according to the administration, better explained by “Putin’s price hike” or greedy oil companies rather than the groanings of a stressed economy. In editing out the possibility that his own policies are contributing to the stress the public is feeling, Biden is also placing solutions out of consideration.

The United States (and other freedom-loving nations) should quickly pivot to a policy agenda that fosters energy abundance, consumer-driven innovation, and energy security through diverse routes and resources. Developing an abundance of affordable energy will not only drive down prices; it is also truly the only way to weaken the power of adversarial governments seeking to weaponize energy to manipulate political outcomes.

Again, history is helpful. Before 2008, government and private-sector experts were projecting shortages of oil and natural gas in the U.S. with accompanying high prices. But Texan George Mitchell’s innovations in fracking and drilling technology turned the tables. Oil and natural gas prices plummeted, transforming the electricity sector and bucking the Great Recession with new investment in energy production, manufacturing, and heavy industry.

As American producers drove down prices, OPEC and Russia cut back their own production. Events that normally would have rocked global oil markets—political upheaval in Venezuela or the Iranian attack on Saudi oil fields in 2019—hardly caught the attention of Americans filling up at the pump because the flood of new domestic resources was filling the shortfall.

Today, coal, oil, and natural gas meet roughly 80% of Americans’ total energy needs. Petroleum meets 90% of transportation fuel needs. In 2020, 83% of global energy consumption for power, transportation, and heat was met by these energy resources. This has remained roughly unchanged for decades, even as global energy consumption increased and renewable energy technologies were introduced into energy markets.

Global energy needs are expected to increase in the decades to come. The EIA’s International Energy Outlook projects global demand for oil and natural gas in each of various possible scenarios through at least 2050. Global energy use is expected to increase by 50% by then.

And that’s a good thing. Too many people around the world, and particularly in developing nations, still do not have access to modern energy and electricity. As a result, they can’t approach anything near the standards of living that affordable, reliable energy has enabled in the U.S. These countries cannot afford Biden’s narrow and costly energy policies, and it would be immoral to withhold life-giving energy resources from them. As countries such as India have shown, they do not intend to forgo useful and affordable energy options.

>>> Biden’s Burnt Bridges Exacerbate Ukraine-Related Oil Crisis

No one knows what the future holds or what direction innovation will take. However, the EIA and other projections provide policymakers with a useful framework for thinking about the future.

“We all want progress,” C.S. Lewis once wrote, “but if you’re on the wrong road, progress means doing an about-turn and walking back to the right road; in that case, the man who turns back soonest is the most progressive.”

Americans are sitting on an abundance of energy—oil, natural gas, coal, wind, nuclear, solar, hydropower—and have a strong culture of innovation looking to energy solutions of the future. We should be able to access that abundance. Even Europe, facing a far deeper crisis, is starting to turn the ship back toward realistic notions of energy security by using coal, reinvigorating oil production in the North Sea, rescinding anti-nuclear policies, and taking steps to allow exploratory hydraulic fracking in Great Britain.

The world needs more energy. The U.S. and other freedom-loving countries have ample resources to improve human well-being and weaken the power of those who would weaponize energy. It’s time to use it—all of it.

This piece originally appeared in the Washington Examiner