(The opinions expressed in guest op-eds are those of the writer and do not necessarily represent the views of RedState.com.)
The Biden Administration’s “Energy Information Agency” (EIA) is a master of understatement with their “Today in Energy” post on Twitter.
In addressing Distillate stocks in the U.S., New England and Central Atlantic states “fall to low levels…” But this doesn’t quite convey the seriousness of Biden’s energy scarcity agenda.
When supplies are measured against where they were five years ago, today’s “low” stock levels, which range from a 32% reduction in New Hampshire to as much as a 72% and 91% reduction in Maine and New Hampshire, respectively, the issue takes on a sense of, well, urgency!
Combine this with the energy scarcity facing European countries this winter, and you couldn’t have a clearer picture proving the administration governing us in Washington D.C. and those in European capitals is either incompetent or corrupt.
This obvious fact is chilling enough, except when you consider the almost certain probability that on both sides of the Atlantic, both are true; these governments are incompetent and corrupt.
What are the main factors causing this massive reduction in our domestic fuel-oil inventories?
First is our President’s idiotic, immoral, and naive foreign policy, including the decision to sanction “Russian oil.” This has forced global energy markets to reroute oil and gas produced in Russia and destined for the world’s markets that are smart enough to take it, including right here in the United States.
Why does that happen, and how does it work? Think about your navigation system. You put the address in, and it directs you to the right location.
Now consider what happens when you make an unplanned deviation; maybe stopping for gas sourced from Norway because Biden’s convinced you gas sourced from Russia is terrible; once you deviate from the route, the program assesses where you are and reroutes you to your original destination.
If you want to be obnoxious and/or incompetent as the Bidenistas, try doing this over and over, and your navigation system, like markets, will work harder than otherwise necessary. In the global economy, where time is currency and decisions cost or save consumers money, as global energy markets are concerned, Biden’s foolish and manic driving habits only cost us money.
The second factor is that two refineries on the East Coast, including what was the largest refinery, closed. This matters a lot because, as pointed out by the EIA, the East Coast is the largest regional consumer of petroleum products in the United States.
With those refineries now closed, markets are rerouting…
A third factor is a refinery; and this makes three, who would’ve predicted this, closed due to Covid.
This perfect storm of presidential incompetence, Russia’s anachronistic aggression, refineries closing, a “Woke” ideology that punishes investment in our domestic oil and gas industry, and you can understand the volatile situation facing our fellow citizens on the East Coast, not to mention our friends in Europe.
Considering that 51% of all the oil refined into heating oil for America’s East Coast comes from a global market, perhaps even the most parched Biden Kool-Aid drinkers will appreciate the absurdity of sanctioning one of the world’s primary energy producers. As the late Senator John McCain once quipped, Russia is a gas station masquerading as a government. Well, America needs gas and heating oil.
In a global energy market, there’s no such thing as “Russian” oil or “Norwegian” oil, or even “American” oil. It is global oil because it is produced globally wherever it is accessible and is cost-effective depending on the global price. Sometimes that is right here in the United States, sometimes not.
Worth mentioning is that regardless of whether the global oil ppb is $100 or $45, it is more cost-effective to produce oil in some places in the world where they have lower production costs such as Libya, Qatar, or Kuwait.
It is worth mentioning, too, that global oil prices can go as low as $20-$25 and it will be cost-effective to produce oil for the world’s markets in Turkmenistan, the United Arab Emirates, and several other countries.
The global ppb needs to be in the $50-$75 range for it to be cost-effective to produce it here in the U.S. To produce it from deep waters, it needs to be at the lower end of the range, from shale it needs to be on the higher end.
A lower global oil price is good for America even if that means it isn’t cost-effective to produce it in America. If our thirsty markets are amply supplied, and they can and should be, the geographic location from where the commodity is produced matters not, or very little assuming we had wise and effective leadership in Washington.
Hey, one can dream.
The Manic Contrarian is the former head of several heady groups, associations and organizations. His views are his and by necessity should represent of the views of every freedom and peace-loving American. Manic can be reached at: 805.990-2494.