Nearly every piece of climate legislation championed by Democrats, from cap-and-trade to Green New Deal, has been a deliberate effort to make energy less affordable, either by creating scarcity through fabricated markets and inhibiting fossil fuel production (banning fracking or stripping leases) or by trying to spike prices through gas taxes and mandating expensive alternative sources.That, dear reader, is where the environmentalist trickle-down fantasy begins. The first element of the policy is to destroy the incentives to develop oil and gas.
Policies that undermine future production are baked into today’s prices. The administration and media tell us that Keystone wouldn’t make any difference in the oil prices, but then turn around and argue that we should overhaul the world’s largest energy grid, create millions of solar panels, rid the nation of most existing cars, retrofit nearly every building in the country, and ask us not to treat them as if they’re not insane.That part of the policy worked.
Biden initiatives hampering U.S. energy output are “higher tax rates; additional regulatory burdens; the suspending of needed energy infrastructure, such as pipelines; prohibitions on drilling on public lands and off-shore; and . . . the political risk of investing billions of dollars only to have operations shut down by this administration,” [Casey] Mulligan and [Stephen] Moore note.Then the Jarrett regency chickened out.
Biden has sold more than 30% of the U.S.’s Strategic Petroleum Reserve (SPR), which is intended for emergency use. “The SPR is at its lowest level since 1984, when U.S. oil consumption was considerably less and the reserve was initially being stocked,” the piece by Alexander Zemek notes.If you're going to force that incredible transition, dear reader, aren't you relying on some combination of rising prices to induce invention, perhaps nudged along by technology forcing rules such as California's prohibition of new internal combustion vehicle sales after 2035.
According to Mulligan and Moore’s study, the U.S. “would not have had to sell a single barrel of oil” from the SPR had the Biden administration maintained Trump’s drilling policies.
Biden’s SPR releases have done little to address the sheer magnitude of the domestic oil production that he has suppressed by executive fiat, according to Mulligan and Moore. They estimate that Biden’s policies have forsaken 600 million barrels of oil, compared to the 150 million emergency barrels that he has released from the SPR (as of July 2022).
Apparently doubling down on the incredible transition and urging people to stay the course wasn't a winning move.
The median voter’s view is more an “all of the above” approach as captured by a recent Pew question. Pew asked the public which energy supply approach it preferred “Phase out the use of oil, coal and natural gas completely, relying instead on renewable energy sources such as wind and solar power only” or “Use a mix of energy sources including oil, coal and natural gas along with renewable energy sources”. The all of the above approach was favored by an overwhelming 67 percent to 31 percent margin.Perhaps because they're still hoping for that incredible transition, or is it a miracle?
Thus, it is interesting and telling that when the Biden administration came into office, on the very first day Biden signed two executive orders on U.S. oil and gas production. The first said that America would rejoin the Paris climate accords. But the other put a stop to oil and gas exploration in the Arctic National Wildlife Refuge, drilling in large parts of Utah and, critically, the Keystone XL pipeline between the United States and Canada. Then a week later the issuance of new oil and gas leases on public lands was paused. Not exactly all of the above but completely in line with what climate activists wanted.
As the energy situation has become more dire in Europe and begun to bite in the US, reflected in rising energy prices, the administration is still pursuing an aggressive climate change program oriented toward renewables. In the short term, the administration is willing to beg for more oil from domestic and international producers, but it is doing little to assure long-term supplies of oil and gas in the country.
[W]ithout adequate infrastructure and firm power supply from nuclear or fossil fuels, the rapid build-out of wind and solar the administration wants is highly unlikely to work the way they want. But it will stress the grid and inevitably anger consumers and industry through rising prices and declining reliability. The Democrats are making a very unwise bet to pursue this course, however laudable their original motivations may have been.That's always been the problem with sponsoring innovation, whether it's a moon shot or a Solyndra. "I'll let somebody else tackle the symbolism of subsidized trickle down good (anybody else remember Teflon and Tang) while commercial trickle down is bad, if it even exists." Learning curves exist, and perhaps there will be substitutes for fossil fuels that only make sense at very high oil and gas prices now that will be useful substitutes at current prices later. I was betting on that phenomenon as a check on the OPEC types a few years ago, it might be something the Jarrett regency could point to, if anybody was thinking clearly.
In short, the current approach of the Democrats is based on a fantasy. Climate change is a problem, but a solvable one that will take decades and massive technological innovation rather than a quixotic attempt to remake the global economy around renewables in just a few years. In the meantime, adaptations to unavoidable rises in temperature will be necessary, but these do not require turning the world upside down nor will they condemn billions of people to mass migration and death. This is also a fantasy, albeit a dark one.
The regulations are unlikely to go away, and there's still a strong constituency for technology forcing regulations. There's also an opportunity. What happens if the substitutes are able to compete at $70 crude? That's one possibility if the kleptocrats running OPEC decide to restrict output so as to be able to raise prices. Their problem: some of those startups can cover running costs at such prices, and the substitutes have that learning curve working in their favor.But just because higher crude oil prices, with or without technology forcing regulations, are in place, it does not follow that the backstop technology, or some seemingly crazy idea, will be forthcoming, or that there won't be unintended consequences. "[T]echnology-forcing legislation, when implemented, might have the effect of accelerating some forms of improvement, but not without other tradeoffs. The continued debate over the role of fuel-economy standards on vehicular safety (old sample here) is one such example: you can improve the fuel economy of cars by making them lighter, which makes them more fragile in crashes, oh, and cheaper to drive."
Too bad for the Jarrett regency.
Democrats do not have a rational approach to the issue. What started as a reasonable attempt to deal with a genuine problem, in the spirit of reformist environmentalism, has been hijacked by a millenarian, quasi-religious commitment to rapidly zeroing out fossil fuels and creating a renewables-based economy. This hasn’t worked and will not work; it will subvert the Democrats as a electoral and governing force for as long as this dogma persists.What was that quip about whatever the woke touches turns to ???
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