The Biden administration plans to “re-evaluate” America’s eight-decade-old alliance with Saudi Arabia because of last week’s OPEC+ decision to cut oil production.
But the White House posturing looks like a bid to distract from the effects at home of Washington’s failure to pursue a successful transition to clean energy. [bold, links added]
Blaming Saudi Arabia, or OPEC+, or Vladimir Putin for an energy crisis that results from a policy of switching from carbon fuels to “clean energy”—on the basis of what looks like utopian assumptions—is disingenuous.
Unlike countries such as Japan or China, America can produce far more oil than it consumes. The oil prices U.S. consumers pay are due to choices their leaders made.
In September 2019, the U.S. became a net exporter of crude oil and petroleum products for the first time since such records have been kept.
In 2020 America exported still more oil, with investment in domestic pipelines, refineries, and extraction technologies and resulting in employment all reaching new highs.
But in 2021 America began importing much larger amounts of crude oil than it produced. In 2022 the U.S. will again be a net oil importer.
In less than two years, investment in the domestic American oil industry has collapsed, U.S. refining capacity has atrophied, and the jobs that investment produced have largely vanished.
The causes of this reversal, which left the U.S. dependent on imported oil at a dangerous geopolitical moment, aren’t a mystery.
In the 2020 election, American politicians, from Joe Biden down, ran and won on a set of policies intended to wean the American economy off fossil fuels in favor of so-called clean energy.
These policies included bans on fracking, bans on drilling, closing down the Keystone Pipeline and other infrastructure built to serve future energy needs, and subsidizing alternative energy, such as solar and electric cars.
It is up to American political leaders and voters to weigh the benefits and costs of “clean energy.”
In some circumstances, voters might choose policies that perhaps would reduce the country’s gross domestic product through higher fuel prices and other measures to achieve particular goals—such as encouraging people to ride bicycles or take public transportation.
It also is the prerogative of elected leaders to pursue policies that promote new domestic industries, even if those policies kill off existing industries.
Those policies also might promote new forms of dependence on foreign trade partners like China—the world’s leading and in some cases only source of rare-earth metals that are essential to the solar energy fuel cycle.
Demonizing the Kingdom of Saudi Arabia for refusing to politicize oil production while the U.S. negotiates an Iran nuclear deal that will fund the programs that let Tehran launch missiles at Saudi oil fields is scapegoating.
Scapegoating poisons the democratic process by trying to prevent citizens from properly responding to the results of their own choices.
In doing so, politicians short-circuit the self-correcting mechanisms that allow democracy to function. Instead, elected officials make voters endure the negative consequences of bad policy choices by blaming foreign entities for predictable outcomes.
Last week some Washington commentators spouted accusations of Saudi Arabia “siding with Russia” after the OPEC+ announcement of relatively small production cuts.
In a statement Thursday, the Saudi foreign minister revealed that the U.S. asked OPEC+ to delay announcing its production cut by a month and said that he rejects such “dictates” from Washington.
The figure of two million barrels a day that is often cited is eye-catching but misleading since many OPEC+ states aren’t meeting their current production quotas by a total of about one million barrels a day.
The actual OPEC+ cut is therefore around one million. Markets’ lethargic response to the announcement suggests that they are well-supplied and not overreacting.
Nor is the OPEC+ decision to cut production a matter of Saudi national interest alone. The Gulf states say they hope that thanks to the recent cut, OPEC+ will have more spare capacity to respond to market disruptions likely to arise this winter.
Those potential disruptions result from U.S. and European Union sanctions on Russian oil as well as instability stemming from Mr. Putin’s threats to use nuclear weapons.
Read rest at WSJ
Biden is destroying him Dictatorship each day with his action and every thing he spews from his Mouth/Piehole. What dose Time Magazine think of their Person of the Years now
Just the latest example of an Administration that shows LITTLE to no knowledge of international oil markets.I completely DISAGREE with the one comment that “America can produce far more oil than it consumes.” There is no practical evidence this is the case. We consume about 19 million barrels/day and the most optimistic projections I’v seen is around 15 million barrels per day maximum (domestic) oil production. There is not enough surplus capacity in the world market (right now) for anyone, including the U.S to be a true “swing” proiducer. This supply shortage started with the market dowmturn in 2014 and was exacerbated by COVID demand destruction, ESG in the domestic & EU financial markets and other factors that have depressed capital investment in the oil & gas industry by 50%. A hostile regulatory environment & fanatical environmental NGO’s endlessly litigating major domestic permits along with the war in Ukraine are just the icing on the cake. As such, there is no surprise to anyone (in industry) that we have a SUPPLY shortage as world demand has recovered. So, I do agree with the author that the Saudi’s are being used as a political “scapegoat.” I’ll sum this up. Like my dad (a football coach) used to always say…WINNERS look for results. LOSERS look for BLAME…
The Dem’s are wrecking the USA so completely that it HAS to be deliberate. They’re doing everything completely opposite to Trump’s policies. If American voters act in their own self-interest, the anarchists will be defeated.