Biden adviser: Drilling more oil won't affect its price, or something

Biden adviser: Drilling more oil won't affect its price, or something

Even for a White House that clearly has never learned basic supply and demand, this statement from Daleep Singh is particularly clueless. It’s also contradictory to Joe Biden’s own messaging that “Big Oil” is the problem rather than Biden’s actions to restrict their activities. The RNC is passing this around for the ridicule it so clearly deserves:

To call this nonsense on stilts is to undersell the stilts. Yes, oil is a global commodity, and yes, price is conditioned on supply, but increased American production of oil would impact its global price. Adding supply to a constant demand lowers prices, while artificially tamping down supply as demand increases creates the wild price hikes we’re seeing now.  The ongoing supply-chain crisis and rapidly increasing inflation demonstrates rather neatly what happens when demand increases and supply declines. Of course, the Biden administration has been botching that for months, too.

However, the White House certainly knows better when it comes to oil. Why does Singh think that Biden’s begging Nicolas Maduro and Mohammed bin Salman to increase their production levels and exports to the US? Why does Singh think that Pete Buttigieg declared that Iranian oil imports were “on the table” to deal with rapidly escalating oil prices?

Answer: Biden needs more supply to drive down prices at the gas pump, which will eventually damage the political prospects of Democrats. Biden desperately wants more supply — but doesn’t want it from America. The damage done by high gas prices doesn’t come from the delayed embargo on Russian oil, but from a firm refusal to return to the policies of scalable oil and natural gas production that turned the US into a net exporter under Donald Trump.

Even Senate Democrats Joe Manchin and Jon Tester want a return to that status quo ante that Biden dismantled, starting on his first day in office. Biden explicitly campaigned against such ability to expand drilling and extraction, and has suggested all along that resulting high prices would incentivize people to move to alternate energy sources.

Even if Singh meant that reversing Biden’s deliberate policies to restrict and eliminate drilling and extraction wouldn’t impact prices in the near term, that’s also absurd. Oil gets traded as a commodity in two ways: spot markets and futures markets. A rollback of Biden’s EOs and other policies might not make an immediate impact on the spot market, but it would have a potentially big impact on the futures markets. That’s precisely what happened in 2017 when Trump announced his reversal of the Obama/Biden policies that were based on the idea that we couldn’t drill our way to lower gas prices, when futures dropped by low double digit percentages in the immediate term.

And of course, even if we don’t see a drop back to $3 gas tomorrow, the increased supply would drive prices down when it arrives. Plus, this kind of strategic planning shouldn’t just be based on what happens within 72 hours — which is tactical thinking — but what happens for the next 72 months. Returning to energy-independent scalable oil and nat-gas production and especially relaunching significant exports would allow us to control oil prices rather than beg for help when we’re in a jam. It would negate the necessity to cut deals with terror-supporting states like Iran and brutal dictators like Maduro for American national security concerns, as well as political issues.

A strategic administration would never have surrendered that advantage in the first place. An administration that can’t even comprehend supply and demand can’t strategize its way out of a paper bag … as we have seen repeatedly over the past 13 months.

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