I’m surprised she didn’t use the phrase “Putin spike” or “Putin price hike” here.
Doesn’t the White House know that repetition is key to jumpstarting a new buzzword?
Democrats are giddy at the prospect of suddenly having a bad guy out of central casting on whom to blame inflation, never mind that Americans were struggling with high gas prices for months before Russia made its move on Ukraine. “The good news is we now have a very specific reason for rising gas prices and a specific villain,” said Dem pollster Celinda Lake about Putin. “Before, it was kind of ambiguous: What’s going on? Why are gas prices going up?” Even better, she told WaPo, Democrats are united in their contempt for Putin while Republicans are … mostly united. The right’s small contingent of hardcore nationalists remains Putin-curious, shall we say, even if they’re quieter about it lately than they have been in awhile.
Never forget that it’s the Russkies, not the Democrats and their massive COVID relief stimulus last year, who are responsible for your pain at the pump, Jen Psaki warned in a new video. Although I think her comments towards the end about oil production are the more interesting part of this statement:
.@PressSec breaks down what @POTUS‘s Russian oil ban means for Americans, our strong domestic oil production under President Biden, and the steps we’re taking to mitigate the pain American families feel at the pump.pic.twitter.com/gaG8KUnywf
— Karine Jean-Pierre (@KJP46) March 10, 2022
Is it true that the oil industry is sitting on 9,000 unused oil leases, just waiting to be tapped?
It is. In fact, per Yahoo News, new drilling applications were approved at a higher clip during Biden’s first year than Trump’s final year. Fully 98 percent were approved in FY 2021 versus 94 percent the year prior. In the current fiscal year, 96 percent have been approved. Insofar as Team Joe is discouraging oil production, they’re not doing it by rejecting applications.
But they are doing it in other ways, and the statistic about 9,000 unused leases is misleading. The figure may be accurate but exploiting a lease is far more complicated and expensive than just showing up and starting to drill. For one thing, leases are granted before an oil company even has reason to know that there’s oil in the ground at that location. They’re speculative. “9,000 leases” doesn’t translate to “9,000 oil-rich sites to tap.” Meanwhile, it costs time and money to explore a site, to assemble a drilling plan, to contract with rigs to dig a well, to secure the necessary local permits and rights of way, to find off any environmentalist lawsuits, and so on. Companies may even decide that a site where oil is found isn’t worth drilling if the global price of oil happens to be low since the cost of getting the oil out of the ground might exceed the expected revenue at that moment. Thousands of permits routinely go unused during presidential administrations.
On top of that, the pandemic has affected the oil market just as it’s affected every other market, reducing demand during periods when consumers are staying home to avoid infection and reducing supply via labor disruptions.
None of the forgoing is the White House’s fault, but it’s not the industry’s fault either. For Psaki to handwave at 9,000 unused leases, implying that the oil companies are being lazy and/or greedy by refusing to increase supply, is thus misleading.
What Team Biden does deserve some blame for is creating a regulatory environment in which the fossil-fuel industry has reason to be cautious with production, not knowing how it might be constrained for the sake of promoting Biden’s green agenda. “[W]ho is going to risk capital under an administration whose entire administrative power is focused on making it harder than ever to explore and produce fossil fuels like oil or natural gas?” Marco Rubio wondered recently. The American Petroleum Institute listed some of its grievances last week:
Instead, the administration discouraged American energy. For more than a year it has halted new federal leasing – key to future energy investment and production. It canceled energy infrastructure, blocked development in parts of Alaska, entertained new taxes to punish the U.S. energy industry and chilled future investment by signaling that oil and gas wouldn’t be part of America’s future energy mix. All last summer, the administration called on OPEC+, the oil cartel, to increase its production more rapidly in the face of rising energy costs, bypassing American producers.
The current situation is a reminder that American energy abundance requires foresight and planning, investment and policy support. This is the path to sound energy policy that keeps America safe and strong and allows American energy to support allies.
A few days ago, the Washington Free Beacon recalled a House hearing from October in which progressive Democrats badgered oil executives about reducing production, inflation be damned.
In one exchange during the October hearing, Khanna pressed Shell president Gretchen Watkins on whether she agreed that “under the Paris agreement that … we need to have oil and gas production declining every year.” After she answered that the company believes “that hydrocarbon demand needs to reduce if we’re going to get to net zero [emissions] by 2050,” Khanna demanded to know whether Shell will decrease its production by 2 percent each year, a figure initially offered by the company in 2019…
Khanna also demanded to know whether Chevron CEO Michael Wirth was embarrassed that his company has increased production while “the European counterparts are going down.” When Wirth said that global demand has increased, Khanna asked for a commitment to help “bring the actual demand of oil production down.”
Rep. Robin Kelly (D., Ill.) continued Khanna’s line of questioning Watkins, asking, “Will Shell commit to reducing gas production as part of its emissions reductions plans?”
Even with all the political and regulatory disincentives to drilling, one top API official told Yahoo News that the industry is “at a two-decade high for the percentage of leases in production, with nearly two out of three leases producing natural gas and oil.” The sudden spike in already high gas prices will make exploiting leases more profitable for them so presumably the total number in production is headed up as you read this.
I’ll leave you with another Psaki soundbite from today’s briefing in which she assured reporters that the Putin spike in gas should be “temporary.” Where have I heard that before?
PSAKI: “We do anticipate that gas prices and energy prices will go up” pic.twitter.com/ZMki0Q9Ljg
— RNC Research (@RNCResearch) March 10, 2022