On Jan. 20, 2021, a Democratic president took office and immediately bypassed Congress and initiated over six dozen executive orders to change life in America. Among these “highest priority” orders were initiatives to acquiesce to the environmental lobby and shutdown the Keystone XL pipeline, which would provide oil from Canada as part of the latest USMCA trade agreement, as well as to terminate existing drilling permits in several regions of the country. The new president also rejoined the Paris Climate Accords, creating more fossil fuel energy production restrictions that the majority of other Paris Accord countries have already relaxed due to ever-increasing energy costs.
With the country’s economy struggling to overcome severe headwinds furnished by not only the pandemic and bureaucratic restrictions on its citizens, these hostile acts against the country’s primary energy sector sent several strong messages to energy markets as well as to those dictatorial leaders of our adversaries. The consequences would soon become apparent.
The world runs on fossil fuels —not on solar panels, not on wind farms. It is an ugly truth. It is commendable to work towards a workable Plan B for our energy, however, the reality of today, as well as the past two years, should be more than enough evidence that the world is neither fair, nor willing to work together to reach alternative energy goals. Nor is every country concerned about climate change like the globalists in the west.
In January 2021, America’s inflation rate was 1.4 percent despite the spread of the pandemic and increasing supply issues across the globe. In 14 months, inflation has skyrocketed to almost 8 percent, a 40-year high as supply issues have increased, the computer chip shortage has magnified and energy prices have dramatically spiked. Wage gains experienced over the past two years have been erased while consumers are still staring at rapidly increased prices for food, fuel, housing and cars.
With reduced drilling in America, barrel pricing for crude oil increased monthly —as demand accelerated here and around the globe. The West Texas Intermediary price for oil (the American market benchmark) was $54 a barrel in January 2021. On March 17 this year, 14 months later, the market was at $103 a barrel.
When oil goes up, so does natural gas, propane, gasoline and diesel fuel. Everything made from oil, everything moved by oil goes up in price too. When Europe’s alternative fuels —solar and wind—couldn’t meet demand in the fall of 2021, the market had to supply more oil and natural gas, constraining an already depressed supply. Russia, the Saudis and Iran all saw their position improve —and their income from the West radically increase.
As inflation tore through the American economy, the new president literally begged the Saudis and the Russians to drill for more oil to send to America. In less than 10 months, we had gone from energy independence to asking bad actors on the world stage to bail out failed political philosophies.
Two months later —mid-February 2022, the Democratic president “begged” the Saudi Crown Prince to drill for more oil to help the world economy. The Crown Prince, the defacto leader of OPEC+ (the oil-nation consortium that includes Russia) effectively told the American president to “pound sand”; they were going to stick with their agreed pact with Russia. The markets reacted with a sharp increase in the price of oil, signaling another major political setback for the gang that couldn’t shoot straight in Washington.
On March 9, the American President asked the Saudi Prince to help the world energy market; the Prince again rebuffed the White House. Another failed international relationship for the career politician who boasted of his foreign acumen.
In Maine, electric rates have increased up to 80 percent in one year. Gasoline pump prices are over $4 a gallon: highest prices ever. Heating oil averages across the state have broached $4.70 a gallon, almost double from a year ago. William Harwood, the state’s public advocate, stated the electricity increases “are unacceptable —we shouldn’t be at the mercy of the fossil fuel industry when gas prices go through the roof”.
We shouldn’t be at the mercy of any single fuel, but the culprit here is flawed political practices, Mr. Harwood, not the energy that drives the world economy. These are the consequences of an ideology driven energy philosophy. Damn the torpedoes (and the citizens), we’re going to march towards our climate goals, no matter what the cost, is apparently the reasoning of those unwilling or unable to face reality
—the cruelty —of economics.
The latest Gallup polling indicates that 84 percent of Americans are concerned about the direction of their country. Over 60 percent disapprove of the current president’s performance.
“You are free to choose, but you are not free from the consequence of your choice.” Anonymous.
Tim Plouff of Otis is retired from a 30-year career in the energy sector. He writes The Ellsworth American’s weekly auto review column.