Paul Krugman says voters shouldn’t be mad at Biden because he has no control over the price of gasoline, but that’s absurd: the US is the world’s largest producer of oil; Biden froze new oil/ gas leases in January; and he may open the Strategic Petroleum Reserve to lower prices.
Biden doesn’t agree with @paulkrugman that he’s not capable of lowering oil prices. Biden has been pressuring OPEC to produce more for weeks
But, as Bloomberg’s @JavierBlas notes, Saudi Arabia & Russia are producing at or above pre-covid levels & “it’s the US who’s lagging”
It’s true that part of the reason that the US is not producing more oil and gas is because the sector expanded too quickly between 2010-2015, and US firms since have been wary to invest in new production.
But oil prices rose after 2015 & we did not see more investment
Biden could have expanded oil & gas drilling on taking office but instead did the opposite, freezing new lease sales as part of his plan to review the federal oil program for supposedly contributing to climate change. Biden appealed in court after a judge ruled against the freeze
A mid-August court ruling that Biden’s freeze on new oil and gas leases was illegal provided a good excuse for Biden to stand-up to the enviros and resume leasing, but instead he doubled down and appealed the ruling.
“The federal onshore and offshore oil and gas leasing programs are responsible for significant greenhouse gas emissions and growing climate and community impacts,” wrote Interior Dept.
More responsible than oil & gas production in Saudi Arabia & Russia?
doi.gov/pressreleases/…
According to Goldman Sachs, Bloomberg, and Financial Times, the main reason for under-investment in new oil and gas production since 2015 has been shareholder activism around climate change and “ESG”
michaelshellenberger.substack.com/p/how-climate-…
Oil & gas exploration investments declined by half between 2011 and 2021. New oilfield discoveries fell to historic lows between 2016 and 2020 due to lack of investment. Today firms are spending 25 percent less than they need to hold oil production steady.
The result of successful climate activism is, paradoxically, rising coal use and rising carbon emissions. That’s because because electricity produced from natural gas produces about half of the emissions of coal.
Another result is the US increasing its dependence on OPEC.
Some worry that cheap oil increases its use, but petroleum use is highly inelastic, since our cars and trucks rely on it. Little oil is burned for electricity production, and natural gas is required to balance at the intermittency of solar and wind.
Even many Biden allies sense the political danger. “Biden has accepted the idea that the US will rely more on foreign oil,” noted The New York Times. “calling on OPEC to boost production even as it seeks to limit the growth of oil and gas production on federal lands and waters.”
In response to OPEC rejecting Biden Admin.’s pleas to increase oil production, Dems are doubling down on false claim that OPEC alone determines production levels, ignoring the fact that US is #1 global producer & that Biden restricted new development
Sen. Chuck Schumer understands supply & demand better than some economists
reuters.com/business/energ…
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