Latest Member Analysis
THE GREAT OIL PRICE RIGG
By: Tom Wright
Oil prices are up over 60% since President Biden took office. Locally, the gasoline average is up 35% and propane up 30-cents per gallon. Why? Because the president shut down production and pipeline transportation of crude. It is not because OPEC and Russia have refused to increase their production or because the oil companies are gouging, as President Biden has indicated.
According to the U.S. Energy Information Administration, the average price of gasoline in 2020 was $2.17. According to the AAA, as of November 21, 2021 the average in New Mexico was $3.347. In 2020, the average natural gas spot price at Louisiana’s Henry Hub was $2.05 per million British thermal units, the lowest annual in decades. The November 20, 2020 price was $2.40, due to cold weather and the increase in demand. The November 2021 spot price is $5.06. That increase is more than double in one year and a sure enough negative for the Biden Administration whose Secretary of Energy, Jennifer Granholm cackled at the idea we had any control over the price of oil. In a recent press conference she had no idea what our daily domestic consumption is and she also cameoed in a 2018 video singing about the end of fossil fuel. And she is our energy secretary?
Natural gas, largely used for home heating is also used to drive electric power plants so, there goes our cost of electricity.
Like him or not, President Trump gave us low gasoline prices, oil independence, and we became a net exporter country. Now, President Biden is begging OPEC and Russia to increase production so we can buy more from them instead of producing it at home, but OPEC told the president to take a hike and the president is in a bind.
To ease the price of gasoline, Biden has authorized selling oil from our 727-million-barrel strategic petroleum reserve (SPR) which is stored for emergencies like fuel shortages, national disasters and war.
The market intelligence firm Kepler estimates 12 million barrels of the SPR have left our shores for Asia in the past two months. The White House has just authorized 50 million barrels for release. The problem is, it amounts to only three days of domestic consumption and is fully priced at market value. Such will do nothing to reduce the local price and then it must be refined. The sensible answer is, resume domestic production in ANWAR, on government lands and remove the closure of pipelines.
President Biden and Secretary Granholm are scapegoating their own inflationary policies by blaming the oil companies. The investment bank, Goldman Sachs sees the SPR release as being mostly political in response to inflationary pressures across the economy.
The reality is, the Biden Administration is kowtowing to the climate change lobby by rigging prices and driving the price of fossil fuel higher so the public will beg for cleaner, cheaper energy sources which are now not economically affordable or able to replace fossil fuels as a reliable energy source. This administration is creating a calculated mess and we are paying for it. They want higher prices to precipitate consumer demand for greener energy and to blame inflation on the energy sector, which they see as a political adversary.
Here in New Mexico, we depend on the oil and gas industry for a large portion of our state’s revenue. Last year, that amounted to $2.8 billion which was 33.5% of our state’s spending.
Additionally, President Biden has nominated Moscow educated Saule Omarova as Comptroller of the Currency. She has stated she wants to force banks to withhold loans to oil companies as to bankrupt the sector. Now, that would really help us here in New Mexico. Watch how your senators vote on her confirmation.
___
By Tom Wright
News & Reports
Our Mission
Adelante Now Foundation’s overall mission is to help improve education in the state of New Mexico. For over a decade Adelante Now funded tutoring in a few Rio Grande valley public schools. The tutoring was directed at elementary school children who were not reading at grade level or who were not grasping the elements of math. The tutoring program was rewarding to most of the tutored children – and to us. Yet, each year we were reminded that there are many more fundamental problems with New Mexico’s education system than our tutoring program was capable of remedying. We found that the problems are often circular in nature and often have unexpected causations.
Education problems in the state often are affected by family problems. Family problems often are connected to the lack of job availability. The lack job availability arises from the lack of sufficient job creation in the state. The lack of sufficient job creation arises from multiple problems including the lack of a sufficiently educated workforce to support broad job creation. Again, the problems appear to us often to be circular in nature.
We asked, “Would it be possible to devise a long term plan to move New Mexico away from many of these problems? Could a plan be devised that would improve educational outcomes in the state, improve job creation in the state, and strengthen families in the state?
Our new mission is to answer these questions. We started our new mission in 2015 by contracting with the Bureau of Business and Economic Research at the University of New Mexico to compare job creation in New Mexico with job creation in surrounding states. This was step one. Now for step two.