The Biden Administration’s Energy Policy: Taking Us Back to a Bygone Carter Era
Gas prices are surging across the nation with California recently setting new records of consecutive days at nearly $4.70 per gallon. Unfortunately, Americans hoping for some relief at the pump will have to wait a little longer as analysts are predicting the high oil and gas prices will remain for the foreseeable future. Natural gas prices are also expected to remain high, with the U.S. Energy Information Administration (EIA) forecasting a 30 percent increase in home heating bills this year. The Biden administration is scrambling for solutions, but its Carter-esque approach will only take us backward.
With echoes of President Carter encouraging Americans to wear a sweater to reduce home heating usage, White House press secretary Jen Psaki recently said up was down saying that “Our view is that the rise in gas prices over the long term makes an even stronger case for doubling down our investment and our focus on clean energy options, so that we are not relying on the fluctuations and OPEC.”
There’s much to unpack in that statement. The first being the administration’s apparent embrace of high gasoline prices to push its environmental agenda; never mind the short term financial burden this places on working families, or the long term consequences to our nation’s economy, to include rising inflation.
The second, while Ms. Psaki is correct that the United States shouldn’t have to rely on “fluctuations and OPEC,” is that the current situation is a problem of our own doing. The U.S. has an abundance of oil and natural gas and the capability to extract and transport both in an environmentally safe way. Yet the administration and environmental activists are leading us down a path that all but ensures we remain dependent on OPEC and Russian market management. Whether it’s cancelling the Keystone XL pipeline or throwing legal and bureaucratic roadblocks at the Dakota Access Pipeline and other energy infrastructure projects, our ability to meet the energy needs of the nation economically and efficiently is being hampered.
The demand for oil and natural gas is not going to subside any time soon, especially with Americans on the move again and the economy waking up from its COVID downturn. In its most recent International Energy Outlook, the EIA forecasted that global energy demand will continue to rise through 2050 with liquid fuels like petroleum as the largest energy source. This is not surprising news considering that as the report points out, “the majority of passenger and freight vehicles continue to be fueled by liquid fuel‐consuming internal combustion engines (ICEs).”
The nation must be prepared to satisfy that demand; otherwise, Americans will continue experiencing pain at the pump and higher home heating bills. The US and it’s IEA partners will be subject to supply security concerns for decades. Deleting the Strategic Petroleum Reserve (SPR) for short term political gain is short sighted.
The increased production and export of oil, natural gas and natural gas liquids (NGL) is key to bolstering American national security, energy independence, and our foreign policy interests at home and abroad. Providing reliable, affordable fuels to our allies around the globe supports energy diversification, reduces carbon emissions, and strengthens the U.S. position in international affairs.
Less than 50 years ago, the United States was very much dependent on foreign sources of oil, but since then the U.S. government and the U.S. energy industry moved forward to develop the nation’s energy resources to finally establish our position as a net energy exporter. But because of recent policy decisions, the U.S. is at risk of diminishing its gains, allowing regimes like Russia and Iran a stronger hold on the global energy market.
Taking the long view, energy companies are forging ahead with new construction and innovative technologies. Energy Transfer’s Nederland Terminal is the second largest NGL export facility in the world. NGLs play an important role in the energy and petrochemical industry—serving as a key feedstock for critical manufacturing, a fuel for home heating and cooking, and blended into vehicle fuel. Similarly, U.S. LNG also provides a secure, reliable source for the global natural gas market.
Clean energy company NET Power has developed cutting-edge technology that generates zero-emissions electricity from natural gas and announced that it has recently delivered electricity to the grid from its Texas test facility—the first time this has ever been achieved.
Solutions like these and others will be necessary for the U.S. to maintain its balance of power in the global energy marketplace. Moving back to the days of malaise, as this Administration appears content to do, would have lasting consequences for our nation’s economic and national security.
Guy F. Caruso is a nonresident senior adviser in the Energy Security and Climate Change Program at the Center for Strategic and International Studies and served as administrator of the U.S. Energy Information Administration from July 2002 to September 2008.