BLACK GOLD BLUES: Biden doubles down on domestic oil as gas prices surge

 

...According to the AAA, the national average gas price has recently hit a seven-year high of $3.24 per gallon. The rise is being felt across the country, in both the highest and lowest cost states. Texas often enjoys some of the lowest average gas prices in America, but drivers have faced roughly a $1 per gallon increase over the past year. Meanwhile in California, where Sacramento imposes the highest gas tax in the country, the state average is up by approximately $1.20.

To make matters worse, increases in the price of gas are particularly regressive—meaning poorer families spend a greater share of their income on gas than their wealthier counterparts. Coupled with onerous zoning regulations in many parts of the country, which force lower income workers to live and commute from further afield, rising gas prices serve a punishing blow to household budgets.

Unlike during the 1970s, when rapid political developments in the Middle East sent domestic prices soaring, the current price squeeze is the slow accumulation of Joe Biden’s near-sighted policies. Since taking office in January, the Biden administration has orchestrated a broad campaign to disincentivize domestic oil production. Some tactics were explicit, such as (unlawfully) banning public land and water leases for drilling, mulling emissions reporting mandates from public companies, and vowing to slash oil and gas industry subsidies. Other moves were more subtle, such as re-joining the Paris Climate Agreement and promising to pursue a net-zero emissions economy by 2050.

Unsurprisingly, the campaign has drawn investors away from the oil industry. As Biden’s tenure goes on, the recovery of the industry’s investment is slowing and, despite high oil prices, investment remains less than three quarters of its pre-pandemic size. Meanwhile, due to the gap between global supply and demand of oil, late last month Goldman Sachs revised their end of year Brent crude forecast up from $80 to $90 a barrel.

...As gas prices rise, instead of tempering the crusade against domestic oil production, the administration and its congressional allies are doubling down. A raft of taxes, charges, and levies upon the domestic energy industry have been flagged for inclusion in the Democrats’ beleaguered reconciliation bill. Potentially banning energy-related drilling has also been proposed.

READ ENTIRE POST