Larry Kudlow: US should be scaling up its LNG exports, but Biden policies are standing in the way
Kudlow reacts to Biden ordering gas stations to cut their prices
So, let me get this right. Joe Biden is ordering gas stations to cut their prices.
Here's the tweet: "My message to the companies running gas stations and setting prices at the pump is simple: this is a time of war and global peril. Bring down the price you are charging at the pump to reflect the cost you’re paying for the product. And do it now."
Now, first up, if Donald Trump ever did that, the House would impeach him as an authoritarian dictator, ending democracy and taking over the economy, which, right now, given how Uncle Joe has destroyed a perfectly good economy in just 18 months, wouldn't really be bad if Donald Trump took the economy over. He would right the ship, but I digress.
The industry people from the U.S. Oil and Gas Association blasted this Biden order in a very pleasant way over the holiday with this tweet:
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"Working on it, Mr. President. In the meantime — have a happy 4th and please make sure the WH intern who posted this tweet registers for Econ 101 for the fall semester."
In a harsher tweet, Former Amazon CEO and multi-multi-billionaire, Jeff Bezos, tweeted this: "Ouch. Inflation is far too important a problem for the White House to keep making statements like this. It’s either straight ahead misdirection or a deep misunderstanding of basic market dynamics."
Let’s dig a little deeper into this Presidential miscue. First, Mr. Biden's pledge to end fossil fuels makes me think he's really not unhappy with high gas prices. The far-left climate change people still think higher fossil prices will move everybody to renewable fuels and power. That's a myth; ain't gonna happen.
All that's really happening is middle-income workin' folks are getting killed by high energy prices, which are spilling into high food prices and they're extremely unhappy with the reign of President Biden.
In fact, in a recent Monmouth poll, the biggest concern for voters: 33% inflation, 15% gas prices, 9% economy, 6% everyday bills, and only 5% abortion—but remember, or perhaps Mr. Biden should remember, or perhaps his intern should remember, to have lower gas prices, you need more gasoline.
That means more and larger refineries. That means permits. That means leases. It also means pipelines, but his administration's policy opposes leases and permits for anything to do with fossil fuels. They oppose it.
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His Interior Department just came out and basically said "no new leases." Interior, Energy and EPA have stopped new permits.
Now, the recent Supreme Court decision knocking back EPA's authority may change that and there will be court battles, but in the meantime, the Biden administration is doing everything it can to stop the production of oil, natural gas, LNG, coal and gasoline. So, without more oil production and pipelines and refineries, you're not going to increase supply or reduce prices.
These gasoline stations, by the way, are 95% independent. Most of them are kind of supermarkets. Their margins are very thin and they're not going to be intimidated and then, just to top it off, after several Strategic Petroleum Reserve sales, the SPRO caverns will have been reduced by nearly 50% from roughly 650 million barrels to about 350 million and it also turns out, the Bidens are actually exporting SPRO oil abroad, which is incredibly dumb.
SPRO is there for energy security and national security, not political price-fixing. The U.S. should be scaling up its LNG exports, which would create more production all around, from the oil and gas companies, but here too, Biden policies are standing in the way.
Just to toss in one more point, it is rumored that the EPA will publish ozone rules that would slash, or end oil production in the Permian Basin in Texas that has 43% of oil production.
With the new Supreme Court decision against the EPA, anything like these ozone rules will be taken to court, but my point is, it's yet another action by the Bidens to end fossil fuels.
The reason Biden's intern should learn some econ 101 is simply this: if you increase the supply of something faster than its demand, the price will fall, but if you curtail supply, then the price will rise. Joe Biden's extreme progressive, left-wing, climate policies are doing everything they can to cut supply.
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Even Russia is now producing oil at pre-war levels purchased by India and China. Germany, and other parts of Europe, have gone back to coal. The G-7 idea of world oil price controls is dead on arrival.
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When Joe Biden loses the support of Silicon Valley billionaires like Jeff Bezos, and Elon Musk, you know he's in political trouble.
Guess what? He's in political trouble. That's why the cavalry is coming and that's my riff.
This article is adapted from Larry Kudlow's opening commentary on the July 6, 2022, edition of "Kudlow."