Last week, as gasoline and home heating prices hit new highs and his approval ratings hit new lows, President Biden decided to play the blame game. He asked the head of the Federal Trade Commission to investigate whether oil companies are illegally increasing prices. This transparent attempt to divert attention away from his own policies by blaming the energy sector does not line up with what the president himself has done in his first 11 months.
In January, on the first day of his presidency, Biden vetoed the Keystone XL pipeline from Canada. Keystone would have transported an addition 830,000 barrels of oil/day to US refineries on the Gulf coast, further reducing America’s dependence on imports. Actually, it’s a poorly kept secret that Russia has now replaced Mexico and Saudi Arabia as the second largest supplier of oil imports to the US. Yes, that’s right. We are now importing 844,000 b/d from Vladimir Putin.
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While Canada remains the number one source of oil imports to the US, completion of the Keystone pipeline would have given Americans at least several more decades of energy security and affordability. The Alberta oil sands are the third largest proven oil reserves in the world, and, unlike conventional oil wells, their production rates do not decline over time.
Ten days later, President Biden directed the Secretary of the Interior to stop all new oil and natural gas leases on public lands and waters. For many Western states, these federal leases account for much or even most of the oil and gas production—for example, in Wyoming, 90 percent.
This moratorium on new oil and gas leases was quickly and successfully challenged in the courts by Louisiana and twelve other oil and gas producing states—including Montana. The District Court judge ruled that oil-producing states had “demonstrated a substantial threat of irreparable injury.” He further ruled that such a policy change could not be done with simply an executive order by the president, but would require congressional approval. This decision is now under appeal.
While the outcome of this appeal is uncertain, the message the Biden policy is ending to America’s energy sector is clear: You are now a sunset industry. Investors got this message too, which explains why energy company valuations remain so low, despite rising oil prices and profitability. Why invest in drilling new wells if your government is trying to destroy your future markets?
Now fast forward to July. As gasoline prices began to spike, Biden publicly asked OPEC to increase its production of oil. Apparently, he hoped that increased supply from OPEC would offset growing demand as the US and global economies recover from Covid shutdowns.
OPEC predictably ignored this request. The higher oil prices go, the happier the Arab sheiks become. But the bigger question was: Why would a president want to increase Americans’ dependency for energy security on the most politically unstable region in the world? Has everyone forgotten the 1970s, when OPEC embargos tripled the global price of oil not once but twice?
But before this question could even be asked, the following month—August—Biden handed over Afghanistan to the Taliban, a sworn enemy of the West and the United States in particular. Biden’s abandonment of Afghanistan gives the radical Muslim movement another safe base—in addition to Iran and Syria—from which wage their “holy war” against Israel and the West. It also arms them with hundreds of thousands of state-of-the-art military equipment that the Biden administration left behind—arms that can and will be used to destabilize neighboring Muslim regimes in Iraq, Kuwait, UAE and Saudi Arabia—that is, the very core of the OPEC cartel.
The Middle East is destined to remain as politically unstable and hostile to US interests in the coming decades as it has been for the past 40 years. Is this really the region Americans want to depend on for energy security and affordability?
Canada is America’s oldest and most reliable ally. Going forward, if the alternative suppliers are going to be OPEC and now Russia, the choice should be obvious. As the former governor of Montana Brian Schweitzer said, “You don’t have to send the national guard to Alberta.”
Which brings us to November and the COP Climate Change meetings in Glasgow. There Biden proudly announced that high energy prices are not “a reason to back off our clean energy goals” but rather “a call to action … [and] only reinforce the urgent need to diversify sources.” To this end, Biden declared that his “Build back Better” policies now before the US Senate will allocate $555 billion dollars in “climate spending.”
But now, less than a week after he claimed the mantle of climate change leadership, Biden has ordered the release of 50 million barrels of oil from America’s Strategic Petroleum Reserve to bring down the price of gasoline. Whatever short-term effect this might have on Biden’s approval ratings, it will do nothing to decrease America’s growing dependency on expensive imported oil.
If President Biden wants to understand the real reasons why American will be paying record high prices to fuel their cars and heat their homes this winter, he only has to look in the mirror.
Frederic Morton is Professor Emeritus and Executive Fellow at the School of Public Policy at the University of Calgary. A former Minister of Energy and Minister of Finance in the government of Alberta, he is retired and living in Whitefish.