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President Biden has done more to promote green energy than any president in U.S. history. He probably hopes no one notices, but it’s ironic that he remains so tied to fossil fuels.
Mr. Biden’s entire energy policy over the past three years has been a combination of overt promotion of renewable energy and covert efforts to keep fossil fuels abundant and cheap. The latest example is the Biden administration’s Jan. 26 decision to suspend approvals of new facilities for natural gas exports. The current facility will continue to operate without restrictions on exports.
The moratorium will allow the Energy Department to study the impact of a surge in U.S. natural gas exports on climate, domestic energy prices, national security concerns and other factors. Reviews take several months, followed by a regular comment period. Well after the November election, he won’t go bankrupt by betting the farm that the result will come in 2025.
In some ways, the reviews make sense. The hydraulic fracturing revolution that began around 2010 sparked a massive boom in U.S. fossil fuel production, making the U.S. the world’s largest producer of oil and gas. U.S. law restricted energy exports until President Barack Obama signed the bill and changed other rules to broadly allow oil and gas exports. Gas exports have increased rapidly since 2015. The Biden administration now argues that export facility approval rules are outdated and must account for gas exports, which have increased nearly fivefold since 2014.
But there can also be political dimensions when a president makes controversial policy changes in an election year. Environmental groups lobbied hard for a moratorium on new gas export facilities and declared victory when the White House took action. So perhaps Mr. Biden is resuming his pitch to environmentally-minded voters who skew young and want stronger action to eliminate the sources of greenhouse gases that cause global warming. Maybe.
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Another possible goal is to keep U.S. energy prices low. Drillers often say strong exports create an incentive to produce more gas, resulting in abundant domestic supply and lower prices. But that may be wishful thinking. In his 2023 analysis by the U.S. Energy Information Administration, “ [gas] Exports put upward and downward pressure on U.S. natural gas prices [gas] Exports bring downward pressure. It is also true that gasoline prices in other markets such as Europe and Asia are significantly higher than in the United States, creating a clear incentive for U.S. producers to sell abroad where they can earn more profits. There is.
Therefore, Biden may be making sure that U.S. energy prices do not rise while he is running for re-election. While natural gas prices don’t get as much attention as gasoline prices, they are probably more important because natural gas provides 40% of the nation’s electricity generation and 60% of home heating. Kurt Cobb recently wrote on OilPrice.com, “It’s likely that someone whispered something in the administration’s ear about the potential for significant domestic price increases over the next few years once U.S. LNG is delivered.” Seems like it,” he wrote. [liquified natural gas] It will be allowed to continue as an exporting powerhouse. ”
U.S. natural gas prices actually rose in 2022 as Russia’s invasion of Ukraine sharply reduced Russian gas exports to Europe and other gas exporters scrambled to make up the difference. U.S. natural gas prices have now returned to relatively low levels typical of 2015-2021.
However, electricity prices have skyrocketed and remain the same. Electricity prices have increased by 27% since Biden took office. This is the hidden source of inflation, which is Biden’s biggest economic challenge. Rising electricity prices drive up utility costs for consumers, while also making it more expensive for businesses to produce goods and keep the lights on (literally). Companies typically try to pass the increased costs on to consumers.
When inflation soared in 2022 and gas prices hit $5 a gallon, Biden’s approval ratings plummeted. Although overall inflation has returned to near normal levels, Mr. Biden clearly recognizes the risks that rising energy prices pose to his own political future. Since 2022, Biden has taken various steps to lower energy prices. He sells US oil reserves, asks Saudi Arabia to produce oil, and even encourages failed states Iran and Venezuela to expand energy production. Biden’s credibility with environmentalists stems from the massive green energy plan he signed into law in 2022, but Biden’s overall popularity is due to the fact that we still rely on are much more dependent on the cost of fossil fuels.
There are good reasons for Mr. Biden to maintain the export-promoting policies that began under the Obama administration, continued under President Trump, and maintained during his first three years in office. Eurasia Group said in a Jan. 26 analysis that U.S. gas exports, which remain at high levels, are a critical lifeline for Europe and an important lever of U.S. power in other parts of the world, including Asia. He claimed that It is clear that Russia wants to have greater influence in these parts of the world, and the availability of US energy as a substitute for Russian exports is a barrier to Russia’s malign ambitions. It becomes.
So if Biden is re-elected, perhaps his review will sound all clear, with some permit denials to appease the climate lobby. But as evidence mounts that energy exports are driving up costs for Americans, Biden won’t be the last president to have a problem with this.
Rick Newman is a senior columnist in the United States. Yahoo Finance. Follow him on Twitter @rickjnewman.
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