Search anytime by typing below

Thanks for joining the AEA efforts to help combat rising energy prices. We don’t want to bug you that often, so let us know what energy issues interest you, and we’ll keep your inbox happy.

*Please fill in all items

The Unregulated Podcast #73: Go Get Him!

March 7, 2022 by Leave a Comment

On this week’s episode of The Unreglated Podcast Tom Pyle and Mike McKenna preview the future of “green” policy in light of the harsh realities exposed by the Russian invasion of Ukraine and give a recapp of Biden’s State of the Union Address.

Links:

Filed Under: Podcast Tagged With: , , , , , , ,

Natural Gas Pipeline Capacity Additions Decrease in 2021

March 3, 2022 by Leave a Comment

According to the U.S. Energy Information Administration’s Natural Gas Pipeline Projects Tracker, in 2021, 7.44 billion cubic feet per day (Bcf/d) of interstate natural gas pipeline capacity was added in the United States. This was the lowest amount of added capacity since 2016. The vast majority of new interstate natural gas pipeline capacity was added to transport natural gas within Texas and around the Gulf Coast. 

Source: Energy Information Administration

As the chart above shows, U.S. natural gas interstate pipeline additions peaked in 2018 during the Trump administration. The recent decline in additional capacity can be attributed to two primary factors: strained economic growth due to the Covid-19 pandemic as well as an increase in regulatory burdens on new pipeline construction across all levels of government. 

The lack of new natural gas pipeline construction has been particularly costly in the Northeast, where environmental politics has prevented the construction of new natural gas pipelines in recent years. Both oil and natural gas pipeline capacity is being limited, resulting in bottlenecks that either raise prices when demand is high such as in the Northeast during cold winters or cause supply prices to be discounted. 

New York’s anti-natural gas policies are particularly noteworthy as their impact creates spillover effects to much of the Northeast. In 2014, Governor Cuomo banned hydraulic fracking in the state, which would have helped produce natural gas from the state’s own deposits of shale gas. On top of this, his administration also denied permits for new pipelines, which, if they had been approved, would have brought inexpensive supplies of natural gas from neighboring Pennsylvania. 

The combination of these anti-pipeline policies with other market-distorting policies such as the Jones Act have further implications beyond higher energy prices for consumers in the Northeast. As I noted several years ago, policies that block American energy development also have important foreign policy implications. 

Today, with the renewed interest in building a resilient energy supply chain, voters and politicians should seriously reconsider policies that block the development of pipelines as well as other policies that hinder the development of energy resources in the U.S. As current events in Europe have demonstrated, we can no longer afford an approach to energy policy that is defined by a monomaniacal obsession with carbon dioxide emissions. We should reject central planning as the core ethos of American energy policy as it will only lead to higher energy prices for consumers and greater instability. The U.S. needs to get serious about energy policy and recognize that tradeoffs abound when determining how to maintain access to affordable and reliable energy.

Filed Under: Blog Tagged With: , , , , , , , ,

Contrary To Biden’s SOTU Speech, His Policies Are Behind Rising Energy Prices

March 2, 2022 by Leave a Comment

President Biden used his State of the Union Address to blame everyone and everything else for rising energy prices except his own anti-production policies.

Natural gas prices have escalated because of President Biden’s anti-oil and gas policies that are limiting pipeline infrastructure and increased production on federal lands, while the promise of pending regulatory actions add uncertainty to investments. As soon as Biden got inaugurated, he started implementing his domestic anti-oil and gas policies by pausing lease sales on federal lands. Despite a federal judge overturning his pause, only one lease sale has been conducted offshore in the Gulf of Mexico and that lease sale was later overturned because Biden’s Department of Interior failed to consider climate change sufficiently in setting up the lease sale. Immediately prior to the sale, the administration appealed the judge’s decision ordering sales to be conducted.

Further, Biden’s appointees to the Federal Energy Commission now indicate that they will use climate change in their assessment of future natural gas pipeline projects. In a 3-2 vote divided along party lines, commission members changed the policy that lays out the process for reviewing and approving applications for new natural-gas pipeline projects to take into consideration a project’s environmental impact and the steps a developer has taken to limit that impact. In determining whether a project is in the public interest, FERC will examine greenhouse gas emissions from the project’s construction and operations — as well as the emissions from when the gas is ultimately burned to generate electricity. The new guidance will be applied immediately, despite it being issued only on an interim basis while the agency accepts public comments, and may make changes later based on the feedback. Subjecting project applications that have been pending for years to the new policies established today creates additional uncertainty for those pending projects and significant delays for much-needed infrastructure.

The new FERC guidance will make even more difficult to construct natural gas pipelines. Just from environmental opposition and court cases, six of the last seven planned interstate pipeline projects to transport natural gas throughout the east have been paused or canceled. Because of insufficient pipeline infrastructure, the Northeast must import natural gas from Russia rather than obtaining it from neighboring Pennsylvania, where natural gas prices are $3.50. The average natural gas price in Massachusetts during December was $8.38 per million British thermal units—up 96.7 percent from the December 2020 average Massachusetts natural gas price of $4.26 per million Btu. Russia’s war on Ukraine exacerbates these issues.

Democratic Senators have recently called on the Department of Energy to cut exports of liquefied natural gas (LNG) in an attempt to reduce prices. But, because natural gas prices are set regionally, most LNG exports would have no impact on the high natural gas prices in New England. Also, due to the Jones Act, LNG from the U.S. Gulf Coast cannot be shipped to New England in lieu of the Russian LNG because U.S. oil and natural gas must be shipped by U.S. tankers, which the United States does not own.

Further, President Biden has promised “freedom gas” to Europe as their energy prices have exploded. Natural gas in Europe is priced at the equivalent of $180 per barrel oil. According to the White House, “The United States and the EU are working jointly towards continued, sufficient, and timely supply of natural gas to the EU from diverse sources across the globe to avoid supply shocks…. The United States is already the largest supplier of liquefied natural gas (LNG) to the EU.” A flotilla of LNG carriers have steamed to Europe from the United States to help rescue the U.K. and other European nations who face shortages of natural gas due to Russian cutbacks and poor planning, from racing into intermittent wind and solar power while cutting back on coal and nuclear power. Last January, the United States sent about 20 percent of its LNG cargoes to Europe. This January, it has sent nearly 70 percent.

As Europe confronts the possibility of a serious supply disruption amid Russia’s attack on Ukraine, the United States is trying to help Europe secure emergency gas supplies. But, Europe has limited LNG facilities to import more as it wanted the cheaper natural gas piped from Russia, who supplies 40 percent of the continent’s natural gas. If Russian supplies are further cut off this spring, Europe would pay a heavy price since it remains dependent on Russian gas to heat homes and generate electricity despite the shipments of U.S. LNG. While some European countries, such as Poland, have built LNG terminals, Germany has not. Proposed LNG import facilities in Germany have been delayed as Russia built a new pipeline—Nord Stream 2—that would double Russian gas exported to Germany.

Conclusion

U.S. natural gas prices in the Northeast face more upward pressure amid Russia’s war on Ukraine because there is insufficient pipeline infrastructure for the Northeast to get its natural gas from neighboring Pennsylvania, forcing it to get LNG deliveries from Russia. While President Biden is supplying Europe with freedom gas and appealing to Qatar for more gas supplies to Europe, he has placed a pause on lease sales of oil and natural gas on federal lands in the United States and has appointed FERC commissioners who are making it even more difficult to construct natural gas pipelines in the United States. His restrictions have resulted in high heating prices this winter, particularly in the Northeast, and they are only bound to get worse as Biden continues to implement his anti-energy policies.

*This article was adapted from content originally published by the Institute for Energy Research.

Filed Under: Blog

Will Biden Return to 50 Years of Failed Energy Policy?

March 1, 2022 by Leave a Comment

For the last fifty years, with one notable exception, U.S. presidents have used their State of the Union Address to push for expensive, unreliable, and politically motivated sources of energy.

Contact The White House

This year it is likely Joe Biden will return to this trend in his address to the nation and champion his so-called “Build Back Better” agenda which would give BILLIONS of dollars to special interest groups working to make energy MORE EXPENSIVE and LESS RELIABLE for American families! 

After catching up on the history of presidential pandering during the SOTU from our short video, send Biden a message telling him enough is enough!

President Trump proved what American energy producers are capable of and now it’s time to remind the current administration we won’t go back to paying $4.00 a gallon gas and importing foreign energy quietly!

The American Energy Alliance calls on everyone who supports free markets and affordable energy to contact Joe Biden and demand he rejects 50 years of failed energy policy!

Filed Under: Blog Tagged With: , , , , , , ,

AEA Statement on President Joe Biden’s State of the Union Address

March 1, 2022 by Leave a Comment

“It is past time to give American consumers a break.  American energy workers deserve a chance to go to work and provide the energy we need to restore the nation to its potential and its position in the world.  Mr. President, you need to reverse your war on American energy.”

– Tom Pyle, AEA President

WASHINGTON DC (March 1, 2022) – The American Energy Alliance (AEA), the country’s premier pro-consumer, pro-taxpayer, and free-market energy organization, has a direct message for President Joe Biden in advance of his State of the Union address.

AEA President Tom Pyle issued the following statement:

Mr. President,

Considering the attacks of Vladimir Putin’s Russia on Ukraine, you have an obligation to direct your administration to cease your attacks on America’s energy producers who are willing and have proven themselves capable of meeting our energy, economic, and national security needs.  A stronger, more self-reliant America makes for a more safe and more prosperous world.  

Between 2010 and 2019, the U.S. and Canada – one of our strongest allies – provided 91% of the world’s marginal increase in oil production.  We could do that again.  The U.S. is already the world’s largest producer of natural gas and could assist in meeting the needs of our allies in Europe as we have enormous amounts of recoverable resources.  And, we will discover and produce more, if allowed.  

The State of the Union is stressed.  Consumers every day notch in their memories the increasing costs they see at the pump, the grocery store, and their utility bills.  They see the shortages of goods in the ‘Land of Plenty’ and wonder what is going wrong?  They worry about their future, and the future for  their children.  They worry even more as they see the faces of Ukrainian children and their scared-to-death parents seeking refuge from an invasion from totalitarian Russia – fueled, in part, by the sale of oil to the United States.  

Last year oil imports from Russia increased 29%, even as you, President Biden, waged war on the U.S. energy industry, including your pipeline blockade on the border with our Canadian allies and friends who are our largest source of oil and our largest trading partner.  With all due respect, Mr. President, this madness must stop.  It is time to reconsider your Keystone decision. As partners with Canada, we can contribute to peace and stability in the world.  

Much has been said already on how a refocus on “renewable energy” might provide relief, and you will no doubt talk about that tonight.  It will not, Mr. President.  Europe has found this out the hard way. Putin’s invasion of Ukraine comes after an economically-crushing winter for Europe which has already engineered the deployment of renewable energy and whose consumers and industries are reeling from spiking energy input costs.  Instead of providing more jobs, this more expensive energy has cost jobs and is offshoring those jobs to China. 

There’s a little secret some of your aides may not be telling you, Mr. President.  If you are worried about the economic and national security consequences of energy policy, you should know that a “green energy future” is – at least currently – a Chinese energy future.  At the peak of U.S. dependence on foreign oil, we imported 23% from the Middle East.  Already the U.S. is 80% dependent upon China for its rare earth minerals and materials which make renewable energy work.  Your executive actions to date give us no assurances, in spite of what you say, that you intend to do anything meaningful with respect to sourcing these materials here at home.

At a time when the world is witnessing the horror of energy dependency and what it has wrought on the European continent, it is prudent to ask what the costs to the United States might be – and the kind of life we would leave for the generations to come – if we allow ourselves to become almost four times as dependent upon China for our renewable energy as we ever were on the Middle East for oil. 

In closing, we would remind you that the fascination with weak, intermittent, and renewable energies is not something new. You will recall that as a Freshman Senator from Delaware, you heard President Richard Nixon address it in his State of the Union Address on January 30, 1974.  In the five decades since, it has been repeated time and again. Yet, the only thing that has really and truly led us to energy security has been when Americans have been free to work our way out of the problem, as they did when we reached Energy Independence in 2020 under your immediate predecessor.  

We can do it again, with your help, Mr. President.  It will take courage on your part to go against the green-at-all-cost special interests that have captured your political party, but America will be better off for it.

 Tom Pyle, AEA President

Additional Resources:

For media inquiries please contact: 

[email protected]

Filed Under: Press Releases Tagged With: , , , , , , , ,

America Needs “Grown Ups Running Energy Policy” Tom Pyle on Varney & Co.

February 28, 2022 by Leave a Comment

Monday, February 28, AEA president Tom Pyle joined Stuart Varney on Fox Business to discuss Democrats’ energy policies. Watch the video below to see Tom argue that there is no reason for higher energy prices in the U.S. other than ‘bad western leaders promoting bad policies that are driven by the green left.’

Follow Tom on Twitter for his latest on America’s energy policy.

Tom on Twitter
Filed Under: Blog Tagged With: , , , ,

The Unregulated Podcast # 72: Biden Crosses the Delaware

February 28, 2022 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss Biden’s script for the upcoming State of the Union and how the administration’s response to the war in Ukraine has the speechwriters scrambling for last-minute edits.

Links:

Filed Under: Podcast Tagged With: , , , , , ,

Policy Advice for President Joe Biden in Response to Putin’s Aggression in Ukraine

February 24, 2022 by Leave a Comment

It’s time for grown-ups to start handling energy policy in your administration.

The American Energy Alliance, the country’s premier pro-consumer, pro-taxpayer, and free-market energy organization, has a direct message for President Joe Biden as we await his comments on the blatant act of military aggression against Ukraine by Russian President Vladimir Putin.

AEA President Thomas Pyle issued the following statement:

“It’s past time for President Biden to recognize the strategic importance of American energy production by reversing his decisions to shut down our domestic natural gas, oil, and coal industry.  His senseless pandering to the green left has helped foment the very conditions that have given Vladimir Putin the confidence that his war on Ukraine will be met with little resistance from the U.S.

From his very first day in office, President Biden has conducted his own war on American energy.  He has persisted despite growing signs that other nations are ignoring international agreements to limit carbon dioxide and instead are concentrating on increasing their energy security in pursuit of the economic growth and security that always accompanies it.  

With the Russian Federation’s invasion of Ukraine – an aggression steeped in energy as its casus belli – it is time for the grown-ups to handle energy policy in your administration. The abandonment of the U.S. position as the world’s premier energy producer must be reversed. Russia and China are accelerating their energy cooperation with new deals promoting the development of coal, oil and natural gas. This new energy axis has the potential to place the U.S. in grave peril.” 

In his speech today, President Biden should announce the following: 

Immediately approve the Keystone XL pipeline, lifting his blockade of the U.S./Canada Border and allowing safe and secure transport of oil from our closest ally and number one oil importer to our refineries in the Gulf Coast.  This will also help American producers in the Bakken shale oil deposits along our northern border;

Immediately resume leasing on 2.46 billion acres of federal mineral estate on- and offshore.  President Biden continues embargoing American energy supplies despite the illegality of his actions.

Use the Presidential bully pulpit to immediately call upon American financial and investment firms to recognize the importance of American energy investments and work with our western allies to increase global energy security and investment in secure, reliable and affordable energy for our common security and economic progress.  The trendy focus on ESG to the exclusion of investment in western energy supplies is a large part of the problem that currently faces the West, especially in light of some of those firms’ investments in energy in other parts of the world, including China.  

Rescind the nomination of Sarah Bloom Raskin to the Federal Reserve Board of Governors.  Her anti-American energy positions are well known.

Fire Special Envoy John Kerry, who called the senseless killing of Ukrainian citizens at the hands of Vladimir Putin a distraction.

Fire NEC Director Brian Deese, who helped Larry Fink orchestrate BlackRock’s effort to cut off Wall Street financing of publicly traded energy companies.

Appeal the federal judge’s decision overturning OCS lease sale 257.  It is the only offshore lease sale that has been held since January 2021, and was done so only at the direction of a federal judge who ordered President Biden to do it. 

Cease the regulatory assault of the Administrative State against energy exploration, production, transportation and processing immediately. 

Repeal all Executive Orders including, but not limited to, EO 13990 of January 20, 2021.

Abide by the ruling of a federal judge last week stopping the imposition of a Social Cost of Carbon regulation on every federal energy permit. 

Cease attempts to reestablish the Waters of the United States (WOTUS) rule which the Obama Administration sought to impose on landowners around the United States regulating every last mud puddle in a farmer’s field.  This has enormous implications for U.S. energy security. 

Stop the assault on Alaska’s enormous energy potential, including your breach of legally issued leases in ANWR and projects in the National Petroleum Reserve Alaska. In July of 2021, the U.S. received twice as much oil from Russia as we did from Alaska. With the Alaska Pipeline running at less than 25% of its capacity, it is time to fill it back up and make America more secure.

Pyle added:

“This list is by no means all-inclusive. It is, however, the type of signal that President Biden needs to send to the world to stop the decline of American energy security, and ultimately of America itself.  

Right now, Vladimir Putin sees America as weak and unwilling to do what it takes to stop his acts of aggression in Eastern Europe.  President Biden can start to reverse this perception by acknowledging and supporting American energy production.  It is a weak America, not climate change, that presents an existential threat to the U.S. and the world.” 

Additional Resources:

For media inquiries please contact:
[email protected]

Filed Under: Press Releases Tagged With: , , , , , , , , , ,

Ukrainian Conflict Reveals Europe’s Green New Deal Follies

February 23, 2022 by Leave a Comment

Futures of Brent oil were up more than 4 percent at $97.70 per barrel early this week and West Texas Intermediate oil also increased nearly 4 percent to $94.67 per barrel, after Russian President Vladimir Putin ordered troops into the Donetsk and Luhansk separatist regions of Ukraine, indicating Russia would recognize their independence. In response to Putin’s action, Germany suspended the approval process for the Nord Stream 2 natural gas pipeline from Russia and the United States and other nations are preparing to announce new sanctions against Russia. Germany’s announcement on Nord Stream 2 is escalating natural gas prices in Europe and former Russian President and current Deputy Chair of the Security Council Dmitry Medvedev said they could reach €2,000 for 1,000 cubic meters of natural gas, about $63 per million Btu. European natural gas prices currently are at about $25 per million Btu, compared to U.S. prices of $4.57. Nevertheless, the European Union, United Kingdom and United States purchase 3.5 million barrels of Russian oil daily, with a current value of over $330 million.

Russia’s Actions

After President Vladimir Putin had ordered his forces into the two self-proclaimed republics in eastern Ukraine, Russia’s lower house of parliament, the State Duma, unanimously ratified the Kremlin’s treaties recognizing the two republics. The upper chamber is also expected to vote in favor of the treaties. The ratified treaties open the door for Russian troops to enter the territories and allow Russia to build military bases in the breakaway zones. At present, separatists control about 30 percent of the Donetsk and Luhansk Oblasts (provinces).

Russia provides more than a third of Europe’s natural gas, which heats homes, generates electricity and powers factories. Since November, the amount of natural gas shipped to Germany from Russia has dropped, escalating prices, draining reserves, and leaving Europe in an energy crunch. Last year, Russian gas accounted for almost 27 percent of the energy consumed in Germany—an increasing amount that was expected to continue after the country shutters its last three nuclear power plants, scheduled in December, and works to phase out coal-fired power plants by 2030. Germany received two-thirds of its natural gas from Russia last year.

Nord Stream 2, the $11 billion natural gas pipeline, was completed late last year and runs from Russia’s coast to northern Germany under the Baltic Sea. President Trump had sanctioned the companies building the pipeline, but President Biden lifted those sanctions early in his administration. The pipeline, which is owned by a subsidiary of Gazprom, Russia’s state-controlled energy company, is filled with natural gas but has not gone online, pending approval from a German regulator, which has now been halted by German Chancellor Olaf Scholz with the announcement of Putin’s intentions in Ukraine.

Source: The Epoch Times

European Energy Crisis

Europeans have long paid some of the world’s highest prices for energy, but this winter has been the worst even before Putin threatened the Ukraine. A series of factors have affected the continent, including pandemic-induced supply shortages and geopolitical tensions, which are now escalating and driving up energy prices. People are turning to burning wood or coal in wood-burning stoves. But, Europeans that do not have that option must rely instead on piling layers of clothing on or adding blankets to sleeping quarters. In Britain, the government’s price cap on energy bills was recently raised 54 percent, increasing annual charges to 1,971 pounds ($2,678), which will affect 22 million households beginning in April, contributing to greater energy poverty.

Energy prices are also forcing shutdowns or slowing production at manufacturers across Europe, who are eager to fill a backlog of orders and resume levels of business from before the pandemic. The smelting industry has been especially hit hard. In normal times, Nyrstar, the world’s second-largest zinc processor, produces nearly 500 tons of the metal each day at a factory in Auby in northern France—a complex that consumes as much energy as the French city of Lyon. When the company’s electrical rates increased from €35 to €50 per megawatt-hour to €400 ($453) last December, the plant was shut down for three weeks. Nyrstar temporarily halved production at its other European plants in October when the energy crisis set in, prompting a spike in the global price of zinc.

Last fall, fertilizer plants in Britain were forced to close because of natural gas prices. And several German companies that produce glass, steel and fertilizer also scaled back production.

To ease the burden of the high prices, the German government reduced by half an energy surcharge on bills that fund the country’s aggressive transition to renewable sources of power, and plans to phase it out by the end of next year. But that is not soon enough. Almost two-thirds of the 28,000 companies surveyed by the Association of German Chambers of Commerce and Industry rated energy prices as one of their biggest business risks. In the industrial sector, 85 percent rated it as a big business risk.

Even hospitals that have been financially stressed by the coronavirus are now having problems keeping their doors open due to high electricity bills. In Poland, a hospital’s electricity prices had increased 100 percent. Hospital directors appealed to the government in Warsaw to intervene, saying the recent cuts to taxes on energy and gasoline were not enough.

In Germany, municipally owned utilities, who must accept customers, are having trouble because their relatively low-cost contracts were dropped by private energy companies that cannot pay the escalating energy rates. The municipal utilities are forced to increase the rates for new customers, often almost astronomically high, to cover the cost of buying extra energy on the spot market at record prices.

Conclusion

U.S. energy consumers need to look to Europe’s energy crisis and geopolitical tensions to realize that the direction that the Europeans have taken wiping out coal and nuclear plants and transitioning to wind and solar power are creating hardships for businesses and homes. Rather than making electricity cheaper for consumers, their addition to the grid is rapidly escalating prices. Businesses have closed for weeks and homeowners have switched to burning wood and coal or adding on layers instead of using centrally provided energy. President Biden’s energy policies are following the same path as the European energy policies and should be stopped or at least slowed or the United States will face the same circumstances as the Europeans with countries that are not our allies realizing the vulnerabilities and increasing political tensions.

*This article was adapted from content originally published by the Institute for Energy Research.

Filed Under: Blog Tagged With: , , , , , , , ,

Lagging In Polls, Democrats Try To Distance Themselves From Biden’s Energy Inflation

February 18, 2022 by Leave a Comment

Wyoming Governor Mark Gordon: “Mr. Biden, tear up your energy policy. Let Wyoming power our country.”

The White House and top Democratic lawmakers are considering a federal gasoline tax holiday, potentially pausing fees at the pump to help combat rising gasoline prices. The hypocrisy of that move is almost laughable given that it is President Biden’s energy policies that are causing the high gasoline prices. It is Biden on his first day in office canceling the Keystone XL Pipeline. It is Biden who put a moratorium on oil and gas leasing on Federal lands. It is the Biden administration that canceled leasing in the Arctic National Wildlife Refuge. Biden’s message to the oil industry in the United States is clear: we do not want your industry to grow here, but keep gasoline prices low so we can win the next election and continue to destroy your industry. President Biden is waging war on American energy producers.

The Proposed Bill

A group of Senate Democrats introduced a bill that would suspend the gasoline tax of 18.4 cents per gallon for the rest of the year—an election year. Asked about the proposal, the White House signaled that “all options are on the table” as the administration tries to ease the gasoline price as it has always been a factor in Americans’ choice at the polls.

Gasoline prices have spiked in recent months, with average prices recently topping $3.52 per gallon, about $1 more than at the same time last year. Biden’s oil and gas policies have kept oil supply low in a market of rising demand, which has increased oil prices, and his inability to contain the geopolitical tensions between Russia and Ukraine have continued the oil price rise. Rising gasoline prices are in addition to rising housing costs and higher prices at the grocery store. Prices overall climbed 7.5 percent in January, compared with the same month in 2021, as inflation continued at its most rapid clip in about four decades. Higher energy prices drive prices of everything higher, as transportation costs escalate.

Other attempts by the White House to curb the rise in gasoline prices have failed. In November, President Biden opted to release 50 million barrels of oil from the country’s Strategic Petroleum Reserve. In August, the Biden administration called on the Organization of the Petroleum Exporting Countries (OPEC) to increase oil production to help increase global supply after OPEC had implemented production cuts during the COVID-19 pandemic. This proposed bill to temporarily end the gasoline tax could also backfire by ultimately serving to benefit the producers of gasoline more than consumers. Clearly, the policy would be difficult to end as gasoline prices will spike with its reestablishment, especially since Biden’s moratorium on leasing restricts future energy supplies.

In the meantime, the U.S. Transportation Department will be short of funding and requiring rescue from taxpayers in a time when roads and bridges are in need of repair. Sen. Joe Manchin III told reporters he was not comfortable with the fact that a gas tax holiday could leave federal highway funds in worse shape. Democratic lawmakers have proposed shifting other federal money into the federal highway fund, which is normally financed through the per-gallon federal fees. The trust fund, which brought in over $39.5 billion in 2019, suffers from an annual shortfall as the transportation department has grown and as some consumers have shifted to electric vehicles that are not subject to the same fees.

Wyoming Governor Gordon’s ‘State of the State’ Message

“Stopping the exploration and production of federal oil, gas and coal means that our state bears a disproportionate burden of reduced royalties, reduced severance taxes and reduced economic benefit,” Gordon said. “And for what?” “These actions won’t reduce global warming or benefit consumers. Instead, they have caused inflation to soar. As a matter of fact, during 2021, while the Biden administration was limiting oil production in Wyoming, it increased Russian oil imports and called for more production from OPEC.” Biden begged OPEC for more oil after federal oil and gas lease sales that had originally been slated to take place in spring and summer 2021 in Wyoming and elsewhere were deferred due to an executive order from Biden that implemented the pause on the sales.

“Mr. Biden, tear up your energy policy,” Gordon said. Gordon called for an energy policy that makes room for fossil fuels and new sources of energy, arguing that Wyoming is well poised to help execute an all-the-above energy strategy. “Let Wyoming power our country,” the governor said. “Give us the tools and that chance to make the nation energy independent again. Wyoming has it all: best wind, solar, gas, coal, nuclear and the ability to store over 50 years of our nation’s carbon emissions.” “Innovation, not regulation is our way forward to give our nation the energy it requires and simultaneously solve the world’s climate concerns. We don’t need to choose between fossil fuels or new types of energy.”

A lease sale in Wyoming was slated for the first quarter of 2022 after a federal judge in Louisiana blocked the Biden administration’s pause on federal oil and gas leases. And a lease sale did take place in the offshore Gulf of Mexico on November 17 for $192 million—the largest oil and gas lease sale in the nation’s history. However, another judge decided to invalidate that lease sale on grounds that the government had failed to take climate change into consideration. Judge Rudolph Contreras of the United States District Court for the District of Columbia ruled that the Biden administration had acted “arbitrarily and capriciously” when it conducted an auction of more than 80 million acres in the Gulf of Mexico because the Interior Department failed to fully analyze the climate effects of the oil and gas consumption that would result from the lease sale. As such, it is not clear whether Wyoming’s lease sale will fare any better. In the meantime, not one legal lease has been issued since President Biden’s inauguration on January 20, 2021.

Conclusion

In an election year, Democrats are grasping at straws to lower gasoline prices that are continuing to increase. Their latest proposal is to place a temporary moratorium on federal gasoline taxes for this year. That means taxpayers will be subsidizing the transportation department even more than the current shortfall that has occurred annually as it has grown and as consumers buy electric cars and are not contributing to the highway trust fund. As Wyoming Governor Gordon indicates, the solution is clear. Biden just needs to tear up his anti-oil and gas energy policies and let the market work. Innovation, not regulation, is what the United States needs.

*This article was adapted from content originally published by the Institute for Energy Research.

Filed Under: Blog Tagged With: , , , , , , , ,
Previous
Next