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