FWIW # 27 Unintended Consequences?

“Unintended consequences” are the latest “it is not my fault” excuses coming from leaders who have all the resources of multiple government intelligence agencies at their service. America is experiencing the highest gasoline prices ever—the price of oil is above one hundred dollars a barrel. This is an inconvenience to American drivers and, in some cases, a real hardship for hardworking citizens. For others in the world, the price of oil is a life-and-death question.

The war in Ukraine is a most glaring life-and-death situation. Russia is engaging in war there because it has the money to do so—money obtained from selling oil and gas at high prices. China and India are taking all the oil the Russians can produce, financing Russian aggression.

Significantly more people in developing countries, along with Ukrainians, will starve to death because of the war’s disruption to the supply of grains and cooking oil around the world. The question is this: what can and should the United States do to reduce Russia’s war-making capabilities?

Remember Joe Biden’s first day in office? He signed executive orders to block and stifle future oil production in the US. He gave orders to various federal government departments to make it extremely difficult to get permits to drill. He canceled lease sales—both on-shore and in the Gulf of Mexico. He supported the drive to deny fossil fuel companies access to capital in the banking system. He publicly expressed an intent to put the fossil fuel industry out of business. He has lived up to his word. Since President Biden took office, the price of a barrel of oil has steadily gone up. The rise in price due to the Ukraine war is small compared to the rise when President Biden took office before the war began.

So, what has President Biden accomplished with his anti-fossil fuel actions? First, lower, and middle class US citizens are being seriously hurt in all aspects of their lives by the cost of energy. Second, there is a mean, evil, criminal politician—financed by the high oil price—killing people on purpose in Ukraine. Third, the longer the war goes on, the more the numbers of the global poor will be pushed to the verge or over the cliff of starvation.

What would be the most expedient way to lower gas prices for Americans, seriously degrade the Russian ability to make war in Ukraine, and reduce the potential of starvation occurring around the world? It does not take a genius to understand that a low price of oil would accomplish all three goals. The next question then is why does not the president reverse all the actions he has taken since January 2021 to hamper the US oil industry from producing oil and gas? Commodities follow simple supply and demand models. The last 5% of supply or demand has the potential to significantly change price. Increasing domestic supply to meet demand could drive the price of gas and other energy products down. On December 31, 2020—the last month before President Biden too office— the price of WTI oil was $48.73. If the price of US crude declines due to ramped up production and excess production elsewhere flows to the international market, the price of global crude will decline. If that were to happen, Russia would have a difficult time financing the Ukrainian war. If Russia was brought to the negotiating table, perhaps the export of grains from Ukraine could resume and the risk of starvation lessened.

President Biden, if taking these steps to restore US national security by embracing oil production rather than stifling it, would demonstrate that his focus is on helping the American consumer, injuring the aggressor in Ukraine, and helping feed the hungry. He would also go a long way to blunt the Republican drumbeat of incompetence. So, what is he going to do?

President Biden is asking Congress to eliminate the federal tax on gasoline and diesel fuel for three months. It is estimated by CNBC that the average American will save $9 a month during these months, if, and it is a big if, the price of oil does not go higher. Remember the supply/demand model? It is possible the marginal demand for oil will go up since the pump price will appear to go down. At the same time, supply will remain stable.

Just as important, continuing to restrict the supply of oil through his executive orders will place a floor under the price of oil, thus helping Russians sell oil at high prices, which will fuel their war machine and prolong the war in Ukraine. The likely outcome of a prolonged war is potential mass starvation around the globe.

Even the Germans, who fully embrace the concept of renewable energy, are restarting their coal-fired electricity plants they had shut down.

An unbiased observer must ask the questions: have none of the president’s advisors or the government’s intelligence agencies examined and explained the unintended consequences of President Biden’s decisions? If they have, exactly who is the president working for?