America needs more oil output

So Biden decides to threaten a windfall profit tax

As the global energy shortage deepens and the need for more oil & gas output reaches crisis proportions, President Joe Biden’s policy response is to threaten oil producers with a “windfall profits” tax if they don’t reduce gasoline prices at the pump. Yep, that is his response. Let’s examine just how that will play out.

First, Biden’s grip on power is 8 days from fading into history as a “red wave” shifts the majority in the House of Representatives to Republicans (according to latest polls) and perhaps in the Senate as well. So this sabre rattling may die on the vine.

But suppose the Democrats were able to hang on to both houses and Biden could proceed with this threat. What happens?

Some things are obvious. Oil producers paying more taxes will not boost oil & gas output by a barrel. The oil price is not set by producers but by global markets so the price of oil in America will not fall. Gasoline is priced by refiners and independent gas stations, so don’t expect to see much change there. The shortage of diesel fuel is extreme, and no one is going to subsidize diesel fuel by selling this vital fuel for less than cost.

The likely outcome - less oil output, a worsening global shortage, higher inflation as energy prices filter through every aspect of the economy, and Biden with egg on his face. Is 1600 Pennsylvania Avenue where common sense goes to die?

A policy that might have worked is not complex or extreme. Direct the energy secretary and the related parts of the administration to speed up the review and approval of drilling permits currently hung up by red tape and climate activism, repeal the Jones Act so oil can pass freely from one part of the United States where it is in surplus to other parts in deficit, repeal bans on “fracking” in federal lands, approve the Keystone XL pipeline (which Biden canceled his first day in office) and fast track the plethora of LNG projects proposed by industry. Voters might be so impressed with this set of policies they might even vote Democrat in the mid-terms.

But it won’t happen because the Democrats are committed to their “climate” nonsense, can’t accept the reality that CO2 is harmless and can’t accept the even more obvious reality that even if CO2 did cause warming (which it certainly does not), the need for fossil fuels will remain very high for decades to come and only America has the capability of rapidly expanding output to ease the world’s shortfall from its current crisis proportions.

Expect the “red wave” to accelerate in the next few days and the Democrats (with Biden elected with the highest majority of votes in history) squander that mandate with policies that are nothing short of stupidity in the most powerful office in the world.