President Joe Biden's energy policy is slipping through his fingers. It has no leverage over OPEC, which has announced a production cut of two million barrels per day and will push the price of oil to around $100 per barrel.
The Biden Administration is very concerned about this, as it would cause gas to rise again before the midterm elections. The average price per gallon of gasoline was $2.326 in December 2020, while according to AAA, the current average price is $3.891, an increase of more than 67%.
Fight against global warming and oil
In relation to the elements he can control, Joe Biden's energy policy has sacrificed oil and gas production on the pyre of fighting greenhouse gases. Thus, since he has been in power, he has adopted a number of policies in this regard.
After repealing Order 3398 proclaiming the principle of energy independence. This then limited drilling on public lands and removed it from the Arctic National Wildlife Refuge. It has increased taxes on production companies. And it has introduced several changes in legislation that make extraction more costly.
All these measures have decreased oil production by two to three million barrels per day, as much as OPEC has stated it will cut production by. This comes at a cost to GDP of about $100 billion a year, according to estimates by the Committee to Unleash Prosperity.
The Global Energy Institute has released a letter, signed by more than 200 business associations, calling on the Biden administration to turn its energy policy around:
High energy prices continue to be a major concern for businesses across the United States and are a leading cause of inflation. Businesses of all sizes are facing the burden of rising costs for goods, services, and transportation, which, combined with tight labor markets, is a major headwind for the U.S. economy. The undersigned organizations urge you to strengthen our energy security by removing impediments to increased domestic energy production.
According to the signatories, an appropriate energy policy and the fight against global warming created by the excessive greenhouse effect are not incompatible. Moreover, "We must increase domestic oil and natural gas production and accelerate the energy transition."
