Pumping inflation, not oil: Biden yanks multiple oil-lease sales

Pumping inflation, not oil: Biden yanks multiple oil-lease sales
AP Photo/Susan Walsh

It’s a “victory for climate activists,” reports the Washington Post. It’s a loss for American consumers, both now and especially in the future. With gas prices soaring to record highs, Joe Biden and his team canceled oil lease sales on millions of acres of federal land, mostly offshore.

Even the Post casts a nervous eye toward consumers and voters, as well as to the incoherence in Biden’s public statements:

The Interior Department confirmed Wednesday that it will not hold three oil and gas lease sales in the Gulf of Mexico and off the coast of Alaska that had been scheduled to take place, taking millions of acres off the auction block.

The decision, which comes as U.S. gas prices have reached record highs, effectively ends the possibility of the federal government holding a lease sale in coastal waters this year. The Biden administration is poised to let the nationwide offshore drilling program expire next month without a new plan in place.

While President Biden has spoken in recent weeks about the need to supply oil and gas to Europe so those nations can stop importing energy from Russia in light of the ongoing war in Ukraine, the move would mark a victory for climate activists intent on curbing U.S. fossil fuel leasing. …

Amid rising oil prices, inflationary pressure and the upcoming midterm elections, there is much uncertainty over how far the administration is willing to go on offshore drilling.

Thus we have the inherent contradictions of climate-change priorities in an electoral context. Some voters certainly do care about climate change, but they are now discovering that to be a luxury when gas prices shoot up 79% within a year. Demand in a recovering economy increases, and perhaps even more when the demand is pent-up from an artificial suppression such as the pandemic created. It should have been patently obvious that demand for oil would sharply increase not just for consumers but especially for distribution as supply chains healed up.

Put on top of that the desire to backstop Europe against Russia, and we have demand on steroids. We simply do not have the supply to feed one of those two demand categories, let alone both. If we had kept expanding leases and kept regulatory obstacles to exploration and extraction to a minimum, we might have been able to keep pace with some moderate price increases. Instead, Biden has cut off both paths to supply, and we can see the result at the pump.

That will only get worse as we begin exports to Europe at the scale Biden envisions, too. Without the ability to find new oil — and with all of the additional costs from Biden’s EO 13990 disincentivizing capital investment in those activities — we can look forward to continually spiraling gas prices. The only thing Biden reliably fuels is inflation. And today’s PPI inflation report shows that Biden will be fueling that for a long time to come, too.

Let’s not forget, too, that high gas prices are a feature for Biden in the long run. Progressives want gas prices to remain high so as to discourage the use of fossil fuels. They believe that imposing such pain on consumers will convince them to press for a conversion to renewable energy sources. Unfortunately, we have already seen the results of that conversion in places like California, which can’t keep up with electrical demand today even before forcing all vehicles onto the grid. The ultimate conversion that will take place is a conversion of the electorate to get rid of fossilized politicians peddling climate change, and the election of officials who focus on the immediate needs of American households.

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John Sexton 10:00 PM on June 02, 2023