The New York Times announces that “President Biden is considering a plan to release one million barrels of oil a day from the Strategic Petroleum Reserve for as long as 180 days… The idea would be to combat rising prices at the pump.” Which is very odd since the whole idea was rising prices at the pump. Remember? Stop people using carbon-intensive fuels by making them scarce and expensive? Save the planet? Wasn’t that what everyone wanted? Oh oh.
The policy is silly in practical terms as well. The U.S. strategic reserve does not contain, is not meant to contain, and could not possibly contain enough energy to power the American economy indefinitely. It is, as the name implies, a strategic asset intended to ensure that in a crisis potentially involving widespread infrastructure breakdown, the government itself including the military can operate in the ensuing chaos long enough to restore order so private citizens and the private economy can get back to functioning including producing and transporting energy.
Even the New York Times, in an email teaser to another story, admitted that the response from “oil industry and energy experts was muted”. And that there was something disquieting about “the largest release” from the SPR in its history.
Regrettably it then went on to quote Biden’s folksy rhetoric about growing up in a family that worried about the price of gas without mentioning that he was as committed as the Times is to making people go without from now to eternity, or mentioning that there was something economically fatuous and politically expedient about worrying that “With midterm elections just months away, gasoline prices have risen nearly $1.50 a gallon over the last year, undercutting consumer confidence.” Especially since the planned release is just 5% of American consumption and 1% of world consumption. Big enough to cause panic at the ataxic nature of policy development, but far too small to calm fears about the underlying problem.
We confess to a horrified fascination with the rhetoric of politicians, in this case the Biden administration’s professed intention, quoted in the first Times story, to take “actions to reduce the impact of Putin’s price hike on energy prices and lower gas prices at the pump for American families”. Which is classic verbal misdirection because families do not purchase gas from different pumps with different prices than unattached individuals. And, more importantly, because the floundering Russian tyrant did not set out to raise prices for families or everyone else, unlike democratic politicians. And while the Ukraine war has disrupted world energy systems and sent the futures market into a tizzy, neither inflation nor the shortages of oil, coal and natural gas caused by banning pipelines, preventing drilling, suppressing fracking, shutting power plants and imposing carbon taxes are the work of Vladimir Vladimirovich Kremlin.
Even inflation is, primarily, the result of piling the Pelion of cranking open the monetary floodgates on the Ossa of the deficit spending that made cheap borrowing critical to the short-term functioning of government in the industrialized democracies as elsewhere. But we digress.
The point is that governments throughout the Western world, including the American government at least under the Democrats, have not only insisted that we must reduce our reliance on hydrocarbon energy, they have moved with ataxic vigour to reduce our supply of it. And it has worked. Not as quickly or as completely as they had long promised, but sufficiently by now to be self-evidently bad. And now the same politicians are desperately trying to reverse the price increases they themselves deliberately caused, while Bart Simpson-ing about how it happened.
As Eric Worrall put it of McCarthy-style Congressional hearings getting under way in the United States, “After two years of blocking drilling permits, banning pipelines, hostile EPA oversight, pressure on banks, SEC investigations into climate risk exposure, and helping the enemies of friendly oil producers, the Democrats suspect big oil executives are responsible for gasoline shortages.” And it is amusing to watch climate-panic politicians’ journalistic hangers-on trying to argue that the best way to raise taxes on fuel quickly enough to avoid climate catastrophe is to raise them slowly enough to avoid economic and political catastrophe. But how can they ever get citizens to accept higher fuel prices if they won’t defend them in principle, and try to prevent them in practice? Or have they not thought that far ahead?
To be fair, Justin Trudeau and his colleagues are pushing ahead with carbon tax hikes. But modest ones, and even they are trying to send the entire increase in costs back to consumers in rebates so the net cost increase is zero whereas for net zero you need large increases.