President Biden wants you to know that Russia’s invasion of Ukraine will drive up oil prices. He warns that it may soon cost more to fill up your tank.
He’s right, but don’t be deceived; that’s been the plan all along. Not, certainly, to foster war in Europe, but to push a hasty and ill-considered switch to renewable fuels, no matter the cost to consumers. Sadly, that has also been the program in Europe, which is now dealing with the ugly consequences of bowing to climate activists. The world still needs oil, and much of it is in the wrong hands.
Russia has Europe over a barrel. Americans must understand that this is no accident. It’s the result of European climate policies just like those that Democrats want to force on Americans, substituting unreliable and costly renewable energy for oil and gas. It is the continent’s adoption of a Green New Deal-like agenda – banning fracking, subsidizing wind and solar, etc. – that has made Europe dependent on a hostile nation to power their economies.
If we continue down a similar path, we could find ourselves back in the 1970s, overly reliant for oil on Saudi Arabia, as well as Russia and other hostile nations. In 1973, OPEC cut off oil exports to the U.S.; oil prices quadrupled, plunging the U.S. into recession.
Here’s the reality: We will still be burning oil and gas to heat our homes and generate our electricity for years to come. We can either produce those fuels at home or, like Europe, import them from abroad.
Since Biden became president, he has clearly chosen the latter path; this is a grave mistake. In thrall to well-heeled and noisy climate activists, Biden has set about junking one of America’s greatest geopolitical advantages – abundant, cheap energy – in a reckless quest to drive down carbon emissions.
A quest, by the way, that even the president admitted was pointless. Last April, Biden acknowledged that 85 percent of emissions come from outside the U.S. and confessed, “That’s why I kept my commitment to rejoin the Paris accord, because [even] if we do everything perfectly, it’s not going to matter.” He was correct. Whatever we do will be overwhelmed by increased emissions from China and India.
Even as Russian tanks lined up on the Ukraine border, Biden’s administration froze U.S. drilling on federal lands and slapped on rules making it even more difficult to build natural gas pipelines. What can they be thinking?
Are they not concerned that voters rank inflation as their number one concern, and that the 48 percent spike in oil prices from last year is a major driver of Americans’ rising cost of living?
Does Biden want to empower Russian President Vladimir Putin via higher oil prices? Since 36 percent of Russia’s federal budget comes from sales of oil and gas, every jump in oil prices – and every incremental barrel he sells instead of the U.S. – is a windfall for Putin. We are currently producing about one million barrels of oil a day less than we did in 2019; that buys a lot of tanks.
The White House remains committed to Biden’s pledge that the U.S. will cut emissions by 50 percent to 52 percent by 2030. That near doubling of President Obama’s 2015 emissions goal (a target we are not even close to meeting) is unrealistic and dangerous, requiring policies as foolhardy as those now undermining the sovereignty of a European country.
This past summer revealed the risks of Europe’s rushed transition away from oil and gas, as the wind stopped blowing for about six weeks in the North Sea, causing an energy shortfall and panicky search for alternatives.
About one quarter of U.K.’s electricity is generated by offshore wind towers; the resulting shortages drove natural gas prices in the UK up six-fold and doubled electricity costs overnight.
The damage spread to Europe, driving Germany to unsuccessfully beg Putin for more natural gas exports and setting off a mad scramble for additional supplies. With Europe dependent on Russia for 38 percent of its natural gas supplies, the stage was set for the Ukraine showdown.
Democrats in the U.S. also want to rapidly move away from fossil fuels, including relatively clean natural gas, even though we lack the infrastructure to do so. As we have seen in Europe, the transition carries risks; it can even lead to war.
Does the Biden team know what they are doing?
Apparently not. For instance, Biden has set a goal to make half of all new vehicles sold by 2030 zero-emissions vehicles. It is an absurd target and also expensive, since taxpayers still subsidize electric vehicles (EVs). As the Manhattan Institute’s Mark Mills has reported, we have neither the infrastructure (massive numbers of new charging stations) nor the raw materials to accomplish such a transition.
Further, it is not clear that electric vehicles will save the planet. The energy required to produce the powerful battery and supply the electricity that drives the car may actually drive emissions up, not down, as a French study determined last year. Encouraging GM to manufacture EVs may do more for Joe Biden’s standing with climate activists than it does for clean air.
The media is already circling the wagons, claiming that rising gas prices are the fault of Putin and not Biden’s hapless policies. CBS is blaming Ukraine tensions not only for higher gasoline prices but rising inflation in general.
Americans are not that gullible. They know inflation has been increasing for months, thanks to a behind-the-curve Federal Reserve and big-spending policies that have overheated an economy that was already growing rapidly as the country reopened.
They may blame Putin, but polling shows that voters think the buck ultimately stops at President Biden’s door, as it should.
Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.