Biden blames Putin for high gas prices

Republicans blame BLM and have the evidence to prove it

The global energy crisis is fueling inflation with natural gas prices in Europe at levels never seen before in history and likely to go higher with Putin threatening to cut off gas supplies if European importers of Russian natural gas do not pay for that gas in Roubles, taking some of the pressure off the collapsing Russian economy struggling with sanctions imposed as a result of Russia’s invasion of Ukraine. In parallel, inflation rates in Western democracies seem on a path to double digit and almost uncontrollable without draconian increases in interest rates. Needing a scapegoat for the high gasoline prices in United States at a time when inflation is at levels not seen since the early 1980’s, Biden blames Putin.

Republicans aren’t having any of it, and lay the blame squarely on the Bureau of Land Management (BLM) - , not the left wing gang of communists protesting against “racism” whether warranted or not - but a Biden administration regulatory body that administers federal lands, grants leases and determines when lands leased for oil & gas development can be permitted for drilling. Biden claims oil & gas companies are refusing to increase production on 9,000 leases on federal lands already granted. Biden conveniently ignores his publicly stated goals to stifle oil & gas decelopment immediately upon his election, even threatening to shut down the entire fossil fuel industry as soon as “renewables” can supply enough power to run America.

The American Petroleum Institute sets the record straight on those 9,000 leases, all of which are awaiting permitting by BLM. The Biden administration took steps to end granting of oil & gas leases on federal lands immediately upon Biden taking office, and slowed down the process of approving for drilling leases already granted. There are 109,000 leases on federal lands and 100,000 of those are producing oil today, the balance tied up in Biden’s regulatory morass. The lease alone won’t result in drilling. There are dozens of other permits needed. For gas wells, there needs to be pipeline access and Biden is curtailing pipelines. The industry is a popular scapegoat since Biden’s base comprises millions of climate activists who are deluded enough to believe CO2 causes climate change, a physical impossibility.

The real cause of high gasoline prices in America and high natural gas prices in Europe is left wing policies which set out to stifle oil & gas production and (in line with the legendary Irish curse “may you get your wish) got their wish. It took only months after Biden was elected, killed the Keystone XL pipeline and issued executive orders intended to curtail oil & gas drilling for oil prices to plunge and capital to flee the sector. Oil & gas production geophysics incluces a natural “decline rate” from producing wells that see those wells produce less output each year after first oil, with decline rates running from 10 to 30% for conventional oil and as much as 40% for shale oil & gas. As capital left the industry, output stalled.

Output may have stalled but demand did not, other than for a few months following the outbreak of COVID-19 which dramatically affected air travel, the end market for about 8% of oil products. COVID has pretty well ended now and air travel is rebounding along with the rest of the economy and oil & gas demand is strong while supply is short. That is the reality behind soaring prices and has little to do with Putin or Ukraine. The Ukraine war has had an effect of supply of natural gas to Europe which depends on Russian gas for as much as 45% of its supply. The laws of supply and demand are taking Europe to the woodshed as natural gas prices in the United Kingdom, for example, have hit as high as 650 pence per therm (about CDN$480 per barrel of oil on a BTU equivalent basis). What goes around comes around.

In the absence of a revitalized North American energy industry, this left wing created disease will find its way to United States and Canada over the next few years. In September 2021 Biden appointed climate activist Tracy Stone-Manning as head of BLM, so don’t expect to see much progress in oil & gas drilling on federal lands while Biden is in office.

Biden’s recent relase of 180 million barrels of oil from the U.S. strategic reserve is a stop-gap vote getting move that will not ameliorate the shortage, just shift it past the mid-term elections where Democrats are running for cover as the polls support for Biden’s policies tank. It is a desperate and dangerous step. If there is a major interruption in mid-East oil production arising from a terrorist attack, for example, the depleted strategic reserve post Biden’s latest release will last about a month. Such attacks have become a regular occurrence but to date have not had a material impact on Saudi oil output, but that can change quickly.

The U.S. strategic oil reserve was put in place to protect America from such a geopolitical catastrophe, not to buy votes for Joe Biden. Biden can try to deflect responsibility for both high gas prices and surging inflation but voters know better. Expect to see a lot less Democrats in the House and Senate this November, and a Republican in the oval office in 2024.