Want to pay more for energy? If so, President Joe Biden’s new drilling prohibition in the Arctic National Wildlife Refuge (ANWR) is good news for you. The rest of us, though, are less than thrilled with his efforts to throttle the energy sector. They’re needlessly costing American families an extra $2,400 on their annual energy bills.
On his first day in office, Biden canceled the Keystone XL pipeline and issued what was supposed to be a temporary moratorium on all oil and natural gas activities in ANWR. But now he has canceled all leases and permits there, closing off one of the nation’s most energy-rich areas.
This unwise maneuver follows closely on the heels of the administration’s ban on shipping liquified natural gas by rail. By blocking transport of domestic natural gas via additional pipelines and now railroads, the president is simultaneously increasing the nation’s dependence on energy imports, driving up energy prices and increasing countless costs throughout the chemical and manufacturing industries.
While about 80% of the world derives their fossil-fuel-based chemical feedstocks from crude oil, America gets about 80% of its feedstocks from its abundant reserves of inexpensive, clean natural gas. This gives American industry about a 70% cost savings on feedstocks, which are passed to consumers on countless items.
But hamstringing the transportation of inexpensive natural gas curtails how much is available to domestic industry, squandering that advantage. The result is higher prices throughout the economy. Even without considering these broader negative implications, the increase in energy prices alone is devastating to American families.
Since Biden took office, every energy source has seen a dramatic increase in price: gasoline 60%, diesel 47%, natural gas 25% and propane 23%. These increases, combined with a 70% increase in the price of coal, have also driven electricity prices up 24%.
Those higher electricity prices are also the result of Biden administration mandates that force unreliable energy sources into the nation’s electricity grid. That’s another cost that ultimately gets passed to consumers.
And these costs are certainly adding up during Biden’s tenure. The average American family is spending about $2,400 more on energy today than when he took office. That means families’ energy bills have increased more than a third in less than three years.
This is the consequence of Biden’s war on reliable, American energy, which he repeatedly promised as a presidential candidate that he would wage if elected. He has followed through on that pledge, hitting domestic energy producers with higher taxes, more onerous regulations and possibly the most hostile business environment in their industry’s history.
It’s no surprise, then, that energy production remains artificially depressed under the withering attacks of the Biden administration. Oil production remains below its pre-pandemic level and substantially below its pre-pandemic trend. Biden’s policies have decreased domestic oil production by between 2 and 3 million barrels a day, and between 20 and 25 billion cubic feet of natural gas.
Consequently, Americans have been forced to import more oil. Even with the addition of this energy from abroad, private oil stocks are still falling almost 800,000 barrels per day because we simply aren’t producing enough domestically. Privately owned oil stockpiles haven’t been this low since 1985.
Thanks to Biden, the government’s oil stock in the Strategic Petroleum Reserve is also way down, almost 290 million barrels or 45%, since he took office. Reduced production and reserves jeopardize America’s ability to adequately meet a crisis. Should one arise, prices would soar even higher than their current elevated levels.
But that’s the goal of Biden’s “green” agenda. Higher prices are a success in his eyes, not a failure, because they force families to use less. High energy prices are a feature, not a bug. Your economic pain in the meantime? Tough. It’s just something you must endure.
While the oil cartel OPEC+ cuts their production, we should be increasing our own, powering both the American and the global economy. Instead, we are willing captives to our enemies, costing American families thousands of dollars and costing us our prestige as a nation.
E.J. Antoni is a public finance economist at The Heritage Foundation and a senior fellow at Committee to Unleash Prosperity./Tribune News Service