The Biden administration, it seems, never misses an opportunity to announce its incompetence with respect to energy.
A few days ago, OPEC announced that it planned to reduce its production quota by 2 million barrels of oil a day. That came as a surprise to no one who knows even a little about the world’s market for oil and natural gas. The OPEC crew had been saying for weeks that they believed that the price of crude oil did not reflect the fundamentals of the market.
Moreover, by emptying the Strategic Petroleum Reserve for political purposes, Team Biden has made it clear that they are content to monkey-wrench oil markets, as are the Europeans, who have spent much of the last few months talking about some sort of price cap on Russian oil (it seems it is still too complicated for Europe to produce its own energy).
Faced with these political realities and the absolute certainty of a global recession, OPEC did what any rational person would have done: They took steps to rebalance.
The only people surprised by this? The hopeless Biden administration and their fellow Democrats. The president announced he was “disappointed” and has threatened consequences. His clients in Congress talked openly about not selling military equipment to Saudi Arabia (because the best way to get back at another nation is to damage your own industries).
The most embarrassing part of this? Had the administration been paying attention, they would know that OPEC is already producing 3 million barrels of oil a day less than the current production quota. The announcement simply acknowledges that reality. The market knows; the price of crude went up a grand total of about 1% in the wake of the announcement.
Undeterred by facts, some in the administration are contemplating a ban on the export of oil and refined products from the United States to other countries. Such a ban would send the global energy market into chaos, raise the price of gasoline and everything that is moved by trucks, boats or planes for everyone in the United States, and drive the world even deeper into recession and economic despair.
It is a “solution” only this crew could consider.
At some level, all of this demonstrates one of the fatal flaws of this administration: As a group, they don’t know anything about energy markets. Nor do they have anyone, with the possible exception of Amos Hochstein, who has even the most remote conception of how global energy markets might work. That should not come as a surprise. Only someone with a childlike comprehension of the complexity of the world could imagine that our entire energy system could or should be completely composed of energy sources dependent entirely on communist China that humans can neither turn on nor off.
The original sin of this administration with respect to energy is, of course, their contempt of those sources — oil, natural gas, coal — that actually provide about 80% of the energy used in this country. Canceling and obstructing pipelines, delaying oil and natural gas production, putting steady downward pressure on investments in oil and natural gas production, using the power of the federal government to incentivize electric vehicles and other energy products from communist China — these are the actions of people who are willfully ignorant of the fundamental facts of energy.
A final thought bears notice. Team Biden is not even internally consistent in their foolishness. They need to decide whether the production of more oil is good — as their response to the OPEC news suggests — or whether the production of more oil is bad — as their entire energy policy architecture makes clear.
More plentiful, more affordable and more reliable energy is always the right answer.