Larry Kudlow: Record oil and gas prices are killing the economy

During his presidential campaign, Joe Biden promised to end fossil fuels. Now, if you're in that business and you know that the guy who got elected is going to end your business, the chances are you're going to take a very defensive posture regarding your future operations and investments. 

You're not going to embark on a wildly expansionary strategy, even though short-run prices and profits are favorable because you fear that you will not have a functioning business in the longer term. That's called prudent common sense. 

Now, maybe Joe Biden regrets being so definitive about ending fossil fuels, because of record oil and gasoline prices that are killing the economy and the middle class, but he still believes as a cardinal principle of the radical, woke, progressive climate agenda, that he'll kill fossil fuels. Still believes it. See for yourself: 

PRESIDENT BIDEN: Exxon made more money than God this year. Why aren't they drilling? Because they make more money, not producing more oil. Exxon started investing and start paying your taxes.

 GAS PRICES SET NEW RECORD SUNDAY MORNING 

So, for starters, Exxon Mobile, which lost $20 billion in 2020 and had to borrow $30 billion the year before to finance its capital investments, paid more than $40 billion in taxes last year, in 2021. That's right, $40 billion. 

So, Uncle Joe said they need to start paying taxes? Well, they paid $40 billion. Think that's enough? Think they paid their fair share? Exxon's $40 billion is even bigger than Elon Musk's $11 billion. Think he paid his fair share or do you think this utterly ridiculous, presidential, woke, baying about paying one's fair share of taxes is just a lot of bunk? Nonsense, factually untrue. Are you as sick of this as I am?  

In his letter to Exxon CEO Darren Woods, Biden threatened, and I’ll quote, "My administration is prepared to use all reasonable and appropriate federal government tools and emergency authorities to increase refinery capacity." 

Big threat. Sounds like Hugo Chavez nationalizing the Venezuelan oil companies years ago. Perhaps Mr. Biden will send 20 or 30,000 army troops to take over Midland, Texas and seize Exxon Mobil and while he's at it, maybe he'll capture Chevron as well. 

Here's a couple more factoids: according to the American Petroleum Institute, the U.S. is about a million barrels short of refining capacity right now. Eleven refineries were forced to shut down or convert to renewable fuels as a result of federal and state policies. 

EPA ordered the shutdown of several other refineries because of environmental and air quality restrictions. 

EXXON MOBIL HITS BACK AFTER BIDEN THREATENS ENERGY PRODUCERS 

At a recent conference, Chevron CEO Mike Wirth said there would never be a new oil refinery built in the United States. No new refinery has been built since the 1970s and what's left of the refining industry is operating at 94% utilization. 

So, I ask you: who is to blame here? I would say, the government, excessively stringent interpretations of the clean air and clean water rules, the end of NEPA permitting reforms, truly ridiculous rules coming out of the White House Council on Environmental Quality and the highest levels ever set by the EPA for renewable fuel standards.    

Consequently, $5 gas at the pump comes from a series of self-inflicted wounds from our president, who is doing all he can to end fossil fuels and regrettably, all these radical, progressive, climate change policy chickens are coming home to roost and basically the whole country is against it. 

This climate obsession, which is so harmful to our economy and middle-class living standards, is just part and parcel of the progressives’ attempt to transform society. They ignore facts and instead prefer to repeat falsehoods. They are doing what they can to prevent criticisms, which as you know, in Biden world, such criticisms are labeled misinformation. 

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This progressive thrust is a totalitarian strategy to prevent free speech. It is part and parcel of an authoritarian attempt to block religious freedom. It is an effort to end free-market capitalism and replace it with big government socialist statism and central government planning toward redistribution instead of growth. 

All of this is part and parcel of a related movement in our schools, our homes and our families to cancel traditional culture. This is a radical lurch to the left inside the Democratic Party that began with Obama, was temporarily halted by Trump, and now is exponentially advancing under Biden. 

But you know what? America doesn't want it. The cavalry is coming. That's my riff. 

This article is adapted from Larry Kudlow's opening commentary on the June 16, 2022, edition of "Kudlow."