Since Saudi Arabia cued us in to President Biden’s attempted quid pro quo, Americans understood that Democrats knew rising gas prices would hurt them in the midterm elections. According to a statement by Saudi Arabia, the Biden administration asked them to ensure OPEC maintained production for a month after the group’s meeting. That time frame coincides neatly with the November 8 elections. OPEC+ voted to cut output despite Team Biden’s pleas. And anyone who thinks it was not a poke in the eye from the Saudis is just not thinking.
Just about a month before Election Day, gas prices started to rise along with the cost of everything else. As the generic ballot started to tilt wildly toward the GOP, the Biden administration had to do something. So they put out a tweet with a graphic:
The Biden-Harris Administration is taking additional steps to reduce gas prices. pic.twitter.com/u0tZrai13q
— The White House (@WhiteHouse) October 19, 2022
What will Team Biden do when the Strategic Petroleum Reserve (SPR) is empty? The primary value of the SPR is national security. Yet Biden is treating it like a piggy bank to borrow a modicum of goodwill ahead of the election while there is a ground war in Europe and China is eyeing Taiwan. It can only be a short-term solution.
After November 8, the SPR spigot will close, and prices will skyrocket again. As activist and author Michael Shellenberger reported in July,
President Joe Biden, has no intention of significantly expanding American oil and gas production, and indeed has no energy plan beyond November, according to a senior oil and gas industry lobbyist who spoke on the condition of anonymity.
“There is no grand strategy,” the person said about Biden’s actions on oil and gas production.
Point two on the graphic acknowledges that the administration needs to replenish the SPR going forward. As I recall, in 2020, congressional Democrats spiked a Department of Energy proposal to fill the SPR to its maximum capacity by purchasing 77 million barrels of oil at $24 a barrel. They called it a “bailout” for the oil industry.
The DOE proposal was life support for domestic production to keep the price from going negative when the pandemic lockdowns erased global demand. However, filling the SPR at bargain prices makes much more sense than refilling it when crude oil is trading at nearly $90 a barrel and is projected to go nowhere but up. In the last year, the price of a barrel has been as high as $130.50. It could quickly get there again due in no small part to Biden’s domestic energy policy.
The government will be bidding against consumers to purchase energy in an environment of restricted supply to refill the SPR. That will increase prices across the board. Additionally, the government may have an asset if the price rises after it purchases the oil. However, profit is only recognized if it is sold, and the taxpayer receives no tangible benefit.
Finally, what savings is the third bullet talking about? While emptying the SPR may temporarily lower wholesale prices, commodities are priced on futures. And the margin at your local gas station on a gallon at the pump is near zero. The energy companies also do not set the price at the pump. Franchise and private business owners do.
It is pretty evident that Joe Biden never ran a business. No business owner will overprice in an inflationary market if they can make a profit by lowering the price. And if the administration saw widespread price fixing, it would be prosecuting it. It isn’t, which tells you that the administration’s demands for owners to lower prices are purely performative.
Hilariously, after Biden announced the additional SPR release, he denied it was motivated by the appearance of a growing red wave on Election Day. When a reporter asked how he responds to Republican accusations that the new SPR release was to help Democrats in three weeks, Biden responded, “No, it’s not. Look, it makes sense. I’ve been doing this for how long now?” Yes, Joe. You are a one-trick pony when it comes to energy policy.
A week ago, Biden also tried to rewrite the history of his trip to Saudi Arabia in July. He told CNN’s Jake Tapper, “And by the way, let’s get straight about why I went. I didn’t go about oil. I went about making sure that we made sure we weren’t gonna walk away from the Middle East.” At the time, even NBC News noted, “Biden is on the hunt for higher oil production on his trip to Saudi Arabia. The odds are steep.” The odds were against him because he caved to pressure from his left wing to declare Saudi Arabia “a pariah regime.” That is not exactly how to influence people who have all of the leverage because of your own NIMBY energy policy.
It looks like a five-year-old may be coming up with the administration’s messaging on energy policy and the plan to lower prices at the pump because it is clear there is no plan to mitigate the energy crisis after November 8 and that any relief ahead of that date is just craven electoral politics at the expense of national security.
Story cited here.
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