So, President Biden keeps telling us that the oil and gas industry has all the leases and permits they need to produce more.
Madam Psaki today asked if they needed an "embroidered invitation" to produce more. I've never seen an embroidered invitation, but I’ll take her word for it.
Of course, if they do produce more and make a profit, the president will accuse them of price gouging and excess profits. So, of course, I support the ban on Russian energy imports, but I do not support the president's continuing war against fossil fuels—a war that he virtually escalated in yesterday's Russia sanctions announcement.
Here's what oil entrepreneur, Cecil O'Brate, CEO of American Warrior Oil, told Fox Business yesterday, "President Biden, on day one of his presidency, made it his top priority to cripple American oil and gas producers. His administration has axed progress on the Keystone Pipeline, shut down leases on federal lands, encouraged woke Wall Street to divest from fossil fuels, and installed absolute antagonists in leadership at Federal Reserve, the EPA and Department of Interior."
Mr. O'Brate has it exactly right. The New York Times reported a few weeks ago that the Biden administration halted new drilling in a legal fight over climate costs. The Times pointed out that the Interior Department is pausing new federal oil and gas leases.
In fact, no new onshore federal leases have been issued under Biden. There was an offshore sale, but it was challenged in court and the Bidens have left the challenge unanswered.
Now, here's a key point: Put aside federal permits and leases and look at private lands. They don't need federal permitting, but—and it's a huge but—private oil development may run into federal opposition from the Endangered Species Act, the Clean Water Act, NEPA, or other federal statutes that would block drilling and that is exactly what's happening.
9,000 federal leases or not, reality is the EPA, FERC, the SEC and the Federal Reserve are all working against new oil and gas production, particularly the EPA and FERC. They are invoking this crazy social cost of carbon metric which is, as I've said, covers upstream, downstream, global, and past centuries estimates of CO2 emissions. That's right, centuries. Now that's tough to fight and, in fact, that's how the Biden regulatory octopus is stopping oil and gas production.
President Biden won't acknowledge this. He's too busy attacking the fossil fuel industry, but his big government socialist central planning apparatus, something right out of Hayek's "Road to Serfdom" is regulating fossil fuels out of existence. That's why we're a couple of million barrels per day below pre-pandemic levels and you've got the SEC on the verge of issuing important climate change regulations on investors and the possible appointment of Sarah Bloom Raskin at the Fed to use bank supervision to reallocate capital from fossil fuels to green energy.
Incidentally, FERC has stopped new pipelines because of the social cost of carbon, but producers will tell you they're not going to drill more unless they can find some additional pipeline space. So, there's a bottleneck.
From today's Wall Street Journal editorial is a solution, "Stand at the White House and declare that his administration will support the development of U.S. oil and gas... Rescind all regulations designed to curb production, development and consumption...Announce a moratorium on new ones. Expedite permits, and encourage investment...Our guess is the price of Brent Crude would fall $20 a barrel in anticipation of higher production."
Good for the Journal editorial page. Or, as a friend of mine wrote this morning about the craziness of negotiating with Venezuela, Iran, or even the Saudis, "We just can't help but wonder whether establishing diplomatic relations with the U.S. oil patch might be simpler."
Think of that! That's my riff.
This article is adapted from Larry Kudlow's opening commentary on the March 9, 2022, edition of "Kudlow."