The Political Petroleum Reserve
The White House announced this week on November 23, 2021, that President Biden has ordered the release of fifty million barrels from the Strategic Petroleum Reserve. This move to tap reserves, in coordination with other countries including India and Japan, was done to combat rising prices of gasoline at the pump, here and abroad. It is unclear how much impact this coordinated move will have on global energy prices, in particular, or rising prices, generally. The last coordinated release of strategic reserves was in 2011 to offset disrupted oil production arising from the Libyan civil war, however gasoline prices were higher one year later in 2012 despite the release of reserves.
But there are no supply chain problems with energy products unlike those that bedevil plastic Chinese toys backed up at the ports of Los Angeles and Long Beach. The only supply disruptions in the United States have been self-inflicted such as the closing of the Keystone Pipeline by the Biden Administration. The purpose of a strategic reserve is to provide strategic power to back up US foreign policy and reduce our vulnerability to international rivals who are not acting in our best interests. The US Strategic Petroleum Reserve is not a powerful policy tool, giving the US only a 40-day cushion of reserves. Using the reserve to alleviate a non-strategic challenge will only make us weaker while providing, at best, only temporary relief from the pricing policies of other nations.
The Wall Street Journal published a scathing editorial denouncing President Biden’s move as blatant political posturing designed to give the impression that his administration is actually doing something about inflation. Most of the energy policies being implemented by the Biden Administration are designed to hamper US companies’ production of energy from carbon-based sources such as petroleum and coal. But the WSJ editorial’s principal critique of the President’s actions was based on the futility of changing the economic outcomes that are the result of his progressive environmental policies. But those policies will have a long-term strategic impact far worse than inflation.
Because of our dependency on foreign oil, US foreign policy had long been held hostage by Saudi Arabia and other OPEC members that limited our strategic options in the Middle East and around the world. This vulnerability was eliminated when the US increased production of oil and gas through the use of hydraulic fracturing, horizontal drilling and other technical advances developed by the US private sector oil industry. Instead of being at the mercy of the pricing policies of other nations, energy independence gave the United States the ability to manage the world-wide price of energy, adding a powerful strategic tool to our arsenal.
The Biden administration’s policies regarding energy are increasing our vulnerability to other nations at a time when authoritarian powers are on the rise. Pleading with OPEC countries to increase production to offset political problems of Western leaders is an admission of weakness, not of leadership. Depleting the Strategic Petroleum Reserve (as feeble a policy tool as it is) for partisan political advantage is criminal. Renewable energy sources such as solar and wind power are too unreliable to use as the basis of a vibrant economy. The Biden administration points out that Europe is ahead of the United States in switching to renewable energy. But Europe is facing an energy crisis this winter as wind and solar energy production has fallen because light winds and cloudy days leave the continent short of energy. Germany, not only going green but also shutting down its nuclear plants, has had to restart its coal fired plants to have enough energy to face a tough winter. Even more ominous, the UK’s back-up energy plants are dependent on natural gas from Russia which leaves the UK unable to provide a forceful response to Russia’s troop build-up on the Ukrainian border. Russian ally Belarus is threatening to block the flow of gas through pipelines running through the country in order to get the Europeans to back off sanctions imposed against Belarus’s authoritarian activities. Many believe that Europe’s dependency on Russian natural gas was the reason that President Biden reversed President Trump’s blocking of the Nord Stream 2 pipeline. Falling US production as a result of progressive environmental policies will leave the US unable to be of assistance to these allies.
Energy policy is foreign policy. Adopting an energy policy based on progressive environmental ideologies will weaken the ability of the United States to fulfill its role as a global leader.
While President Biden is busy trying to convince Joe Manchin that it really is necessary to spend trillions of dollars on things like free pre-K, elder care, family leave and a plethora of other benefits for the middle class, China is busy spending money on hypersonic missiles that can penetrate America’s missile defenses and hardening hundreds of missile silos to house its rapidly growing nuclear arsenal.
To supply the energy needed for this incipient superpower, China is building 43 new coal-fired power plants, three times as many coal-fired plants as the rest of the world combined. China’s talk of being carbon neutral by 2060 (besides being 29 years past AOC’s end of the world) is just that. Talk. In addition, China, according to Bloomberg news service, is planning to spend $440 billion to build 150 new nuclear power plants over the next 15 years, more than the rest of the world built over the last 35 years. It takes energy to be a superpower, lots of it, and China is doing what is necessary to play that role.
Under the Biden Administration, the United States is doing what is necessary to make the US more like Europe, which means relinquishing its superpower status. Europe can’t even defend itself without back-up by a real superpower like the United States, or at least a superpower like the United States used to be. Europe has little global reach except for its commercial interests – commercial interests that limit its ability to exert political leadership or moral authority much beyond their own borders. Europe’s global leadership is exemplified by the toothless Glasgow COP26 environmental conference, the blatantly ignored JCPOA (the Iranian nuclear deal) or any other impotent diplomatic initiative you can think of.
The ability of the United States to provide all the free benefits envisioned by President Biden and the progressive left are derived from the great wealth that the people of the United States created within a free market economic system that the left is trying to emasculate. And the ability of European nations to deliver a vast social welfare system is based on free markets backed by a superpower protector. The progressive left is living in an ideal world of their imagination wearing blinders that block the awareness of the very real challenges that lie in the real world. A real world that includes Russia’s ability to shoot down US satellites and a Chinese navy bigger and newer than the US Navy. And surviving in that real world requires energy. Reliable energy and lots of it.