In an op-ed published in The Hill today, ATR Federal Affairs Manager Bryan Bashur highlighted how President Biden’s policies are contributing to the staggering rise in gas prices.
The Biden administration has restricted the domestic energy supply and is instead relying on totalitarian regimes to provide energy for Americans. As Bashur points out:
President Biden is restricting America’s ability to produce its own oil and is instead relying on foreign countries, some of which have governments run by totalitarian regimes, to produce more oil to lower gas prices. Biden’s decision to cut off avenues for more domestic supply of oil by canceling the Keystone XL pipeline and limiting exploration on federal lands and waters gives the Organization of the Petroleum Exporting Countries (OPEC) significant leverage over American energy consumption.
Energy prices have skyrocketed over the past year. As Bashur explains:
According to the Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers rose 6.2 percent from October 2020 to October 2021. Specifically, energy prices increased by 30 percent in the past year, “its largest 12-month increase since the period ending September 2005.” At the same time, gas prices rose 49.6 percent. Additionally, the Personal Consumption Expenditures Price Index rose by 5 percent from October 2020 to October 2021.
Inflation is eroding purchasing power for low-income households and the Biden administration is seeking to choke off capital to the oil and gas industry, limiting the United States’ energy supply.
At least three different financial executives have told media outlets that the lack of financing from banks and asset managers is limiting the supply of traditional energy production and leading to further inflationary pressures on gas prices. Bashur states that:
In October, Blackstone CEO Stephen Schwarzman stated that part of the reason why energy prices are so high is that financing for fossil fuel companies is “almost impossible” to attain. Moreover, BlackRock CEO Larry Fink also admitted that policies that restrict the “supply of hydrocarbons has created energy inflation” and that it is not transitory — in fact, it may stick around for a long time.
Additionally, Christopher Wood, Global Head of Equity Strategy at Jeffries, told CNBC that the mismatch between demand and supply for energy could get worse. Wood states that the issue is the “oil price is gonna go higher in a fully reopened world because nobody’s investing in oil but the world still consumes fossil fuels.” Wood went so far as to say that in a “fully reopened world, the oil price could go to $150 dollars.”
The rise in prices can be attributed to political pressure from the administration to reel back oil and gas production. Wood claims that the “political attack” on oil and gas “has removed the incentive for investment in the sector despite its lingering importance.”
This trend to discriminate against oil and gas lending is significantly influenced by the Biden administration’s ambitions to choke off capital to the industry. According to Bashur:
State officials from across the United States are fed up with politics seeping into investment decision-making. The Federalist obtained a letter sent by 15 state financial officers threatening to remove $600 billion worth of assets under management by U.S. financial institutions if they continue to discriminate against oil and gas investments. The letter explains how the Biden administration is choking off capital to oil and gas. Specifically, the letter describes how the Treasury Department released guidance for multilateral development banks “to end American financial support for traditional energy production projects in developing countries around the world, likely ceding future development and exploration to Chinese interests.”
Bashur concludes that states across the country can be on the right track to removing political favoritism from investments by following Texas’ lead and enacting legislation that prioritizes investments based on the best rate of return, instead of virtue signaling.
Click here to read the full op-ed.