‘The U.S., in particular, will likely have to update and amend its mining regulatory regime,’ authors at the liberal Brookings Institute wrote.
A new report from the liberal Brookings Institute out Monday warned that the United States and European supply chains are too dependent on China for modern technologies such as electric vehicles, transmission, and energy storage.
The report, titled “China’s Role in Supplying Critical Minerals for the Global Energy Transition,” is urging Western policymakers to expedite an overhaul of their mining regulatory regime to meet 21st-century demand for clean technology.
“China is the dominant global player in refining strategic minerals,” the authors wrote, with Chinese operations refining 68 percent of the world’s nickel, 40 percent of the world’s copper, 59 percent of lithium, and 73 percent of cobalt. “Most notably, China holds 78 percent of the world’s cell manufacturing capacity for [electric vehicle] batteries, which are then assembled into modules that are used to form a battery pack.”
Beyond Chinese monopolization of electric battery production, demand for which is set to spike as the Biden administration reaches to achieve its goal of half U.S. auto sales being electric by 2030 with generous subsidies, Beijing also maintains a grip on rare earth mining.
The 17 rare earth elements (REE) are not just critical for electric cars and wind turbines, but also for aerospace and defense technologies. President Joe Biden’s aggressive expansion of wind power at the expense of a reliable power grid run by conventional sources, has only deepened American reliance on Chinese exports.
According to the Department of Energy, “demand for rare earth elements for wind power alone could exceed the supply for all uses by 1.6 to 3.5 times over.”
Although China dominates in the refinement of critical minerals and rare earth production, the authors emphasize Beijing lacks the upper hand in mining critical minerals such as lithium and cobalt. Together, Australia and Chile are home to more than 70 percent of the global lithium supply, and the Democratic Republic of the Congo alone extracts nearly 70 percent of the world’s cobalt.
“While China has a clear downstream competitive advantage, it does not dominate the upstream for critical minerals,” the authors wrote. However, the Chinese are working to change that. “With demand for critical minerals rapidly increasing, Chinese companies are striking new deals for minerals globally to secure raw mineral inputs for refining and battery manufacturing.”
American lawmakers have certainly taken notice of vulnerabilities in supply chains as global turmoil, from Russia’s invasion of Ukraine to rising tensions with China, has ramped up the pressure to produce more critical minerals within the United States.
In June, the U.S. along with nine allied nations and the European Commission formed the Minerals Security Partnership, which is seen as a form of “metallic NATO,” to insulate stability and security in supply chains among members. The Senate Committee on Energy and Natural Resources also held a series of hearings on the nation’s supply of critical minerals this spring, where members of both sides of the aisle expressed a need to develop new American mines.
“From the technologies needed to support military readiness and combat climate change to the cell phones in our pockets or the cars in our driveways, critical minerals are essential to life we lead and the technologies we have come to depend on,” said Sen. Joe Manchin, D-W.Va., who chairs the committee. “Accelerating their production and establishing secure and dependable supply chains is vital to our energy and national security.”
Lawmakers have proposed reforms to the Mining Act of 1872, though uncertainty over the final outcome has continued to chill investment in the capital-intensive industry. A proposed lithium mine in Nevada, described by Reuters as “the first new U.S. source of the battery metal in decades,” is the sole exception after Panasonic and Toyota came to a deal to purchase from the project.
“The U.S., in particular, will likely have to update and amend its mining regulatory regime,” the authors of the Brookings report wrote, describing it as “outdated.”
Debra Struhsacker, a hardrock mining and environmental policy expert who has testified before Congress five times, agrees. The nation’s current regulatory mining regime, Struhsacker told The Federalist, “is fraught with delays and uncertainly,” with permitting processes, not environmental rules, in desperate need of reform.
“The U.S. has tremendous potential,” Struhsacker said, with rich deposits of lithium, copper, cobalt, nickel, and antimony, to name a few, waiting for harvest across the American continent. The nation’s complex permitting system, which has created a lucrative litigation industry to shut down major projects, however, has stifled the ability to develop new mines. “Part of the reason we have so much reliance on foreign minerals is because we’ve made our own lands off-limits to mining,” she said.
While Congress has struggled to put together a bipartisan package to stimulate American mining operations, Struhsacker said, she gives Biden a “D” on his performance addressing the issue.
In April, Biden invoked the Defense Production Act to support mining operations behind lithium, nickel, cobalt, graphite, and manganese, but the administration has continued to shut down major projects from Alaska to Minnesota.
Biden’s Department of the Interior welcomed the new year with the cancellation of mineral leases for a copper and nickel mine in Minnesota. The proposed “Twin Metals” mine in the Superior National Forest, which Struhsacker described as a “world class resource,” would be one of the largest in the nation. In May, Biden’s Environmental Protection Agency moved to shut down plans for a trillion-dollar copper project known as “Pebble Mine” in southwest Alaska.
“The Biden administration is currently taking some steps to address these challenges related to political and stakeholder factors, but its efforts are not commensurate with the scale of the challenge,” reads the Brookings report. “Moreover, the administration has been unwilling to advance controversial projects like Pebble and Twin Metals, which are likely needed to significantly increase domestic supply in the short term.”
Struhsacker summed up her assessment of Biden’s approach as “schizophrenic.”
“On the one hand he’s giving policy lip service to the need for these minerals but he hasn’t really given his land management agencies the imperative to get critical mineral projects permitted,” Struhsacker said.
The mixed signals to the industry from the White House’s inconsistency, combined with a slow-moving Congress, is maintaining the status quo of reliance on foreign sources. In the end, that means an era of supply-chain vulnerability and higher emissions from overseas transportation as opposed to domestic mining operations here at home.
A range of world actors and events share the blame for the run-up in prices.
If you, unlike Michigan Democratic senator Debbie Stabenow, have bought gasoline lately, there’s a good chance that you’ve seen a sticker on the gas pump with a picture of President Biden saying, “I did that.” Typically, those stickers are placed by customers, not gas station owners, and for that reason, I’m against them: they violate the owners’ property rights.
But I’m more interested here in the substantive question: did Joe Biden “do that”? My answer is “somewhat.” It wasn’t Biden alone. The Federal Reserve had some role, and the recovery from the pandemic had a large role. But the many actions Biden took before Vladimir Putin’s invasion of Ukraine and some of his actions afterwards have certainly caused the price of oil and gasoline to rise. Biden didn’t do all of “that.” Other governments have contributed to the problem, and various US government restrictions in the oil and gasoline markets have also contributed.
More important, many of Biden’s actions, unless reversed, will contribute to high oil and gasoline prices in the future. We shouldn’t be surprised. After all, he and his employees John Kerry, special presidential envoy for climate, and Jennifer Granholm, secretary of energy, explicitly want a diminished role for fossil fuels in the near future. If future oil production falls, then, for a given demand for oil, oil prices will rise.
We need to separate two categories of gasoline price increases: increases due to inflation and increases due to actions specific to the oil and gasoline markets.
Between January 2021, when Biden took office, and May 2022, the consumer price index (CPI), which is the usual measure of the inflation rate, rose by 11.7 percent. So, if gasoline prices had simply kept pace with the CPI, they would now be 11.7 percent higher than in January 2021. In January 2021, the average retail price of gasoline in the United States was $2.42. By the week of June 13, 2022, it had reached a whopping $5.11 per gallon. That’s up by $2.69. The 111 percent increase is, of course, much bigger than the increase in the CPI. Clearly, other factors besides inflation have caused gasoline prices to rise.
The major entity responsible for inflation is the Federal Reserve. In the 1960s, Milton Friedman famously stated that “inflation is always and everywhere a monetary phenomenon.” What he meant is that any persistent inflation that we have observed has been preceded by an increase in the money supply. That’s why a standard line that people have used is that inflation is due to too much money chasing too few goods.
There are several measures of the money supply. The one that monetary economists use most is M2, which includes M1 plus time deposits under $100,000 and shares in retail money market funds. M1, in turn, consists of currency and coins held by the non-bank public, checkable deposits, and savings deposits. In February 2020, just before the pandemic-induced lockdowns, M2 was $15.46 trillion. By April 2022, it had reached $21.73 trillion, an increase of 40.6 percent. Of course, we didn’t get close to a 40 percent inflation rate. The main reason is that Americans’ demand to hold money increased dramatically early in the pandemic. With fewer goods and services for people to buy, they (we) hoarded money. Now, with the pandemic largely behind us, our demand for money is slowly falling.
But why did the money supply increase so much? A major factor was the huge increases in pandemic-related federal government spending, during both the Trump and the Biden administrations. The CARES Act, which President Trump signed in March 2020, increased government spending by $2.2 trillion. To put that in perspective, total federal spending in FY 2019 was $4.45 trillion. And FY 2019 was not exactly a low-spending year, except in retrospect. Nor was Trump done. In late December 2020, he signed another spending bill that included $900 billion in further pandemic-related spending. Those spending increases weren’t enough for President Biden. In early March 2021, Biden signed a further $1.9 trillion pandemic-related spending bill.
All three of these spending measures massively increased the federal budget deficits for FY 2020, FY 2021, and FY 2022. That meant that the federal government had to borrow additional trillions of dollars. The Federal Reserve “monetized” a large part of that additional debt by buying federal government bonds that had first been sold to the public. According to Veronique de Rugy, of the $6 trillion in new federal debt issued during the pandemic, the Federal Reserve monetized $2.7 trillion, or 45 percent. That’s how the money supply increased.
So, if we’re going to blame the entities that caused inflation, they are, in order, the Federal Reserve, Donald Trump, and Joe Biden. On the plus side, we should give huge credit to Joe Manchin, the Democratic senator from West Virginia, for standing strong against Biden’s further huge spending increase, misleadingly labeled “Build Back Better.”
The Oil Market
But the major cause of gasoline price increases, as the earlier data show, has not been inflation. The other causes are specific to the oil and gasoline markets.
Start with oil. The biggest factor in the increase in gasoline prices since January 2021 is the increase in the price of oil. Between January 2021 and May 2022, the price of West Texas Intermediate oil (a standard measure of prices) increased from $52.00 per barrel to $109.55, an increase of 111 percent. There are 42 gallons per barrel of oil. The $57.55 increase in the price of oil, the major input in gasoline, accounts for $1.37, or over half, of the $2.69 increase in the price of gasoline.
Before we turn to other factors that account for the gasoline price increase, let’s first consider who or what is responsible for the increase in the world price of oil. The major factor is the increase in worldwide demand as we make our way out of the economic collapse of 2020. We can’t have data on demand because demand is always a schedule: it gives the amount demanded at each price and all we observe at a point in time is the price and the quantity consumed. But here’s how we know that demand increased. Between the first quarter of 2021 and the fourth quarter of 2021, worldwide consumption rose from 93.9 million barrels per day (mbd) to 99.2 mbd. When both the consumption of oil and the price of oil rise, that necessarily means that demand increased.
Besides increases in demand, what factors have led to higher oil prices, especially in the past few months?
One factor is Biden’s and many European governments’ response in the oil market to Vladimir Putin’s invasion of Ukraine. They have colluded to keep Russian oil off the market. The Russian government has responded by selling oil to China and India that it would have sold mainly to European consumers. This could be just a game of musical chairs, with the qualification that the number of chairs equals the number of players. In such a case, the overall effect on the world oil market would be small. But the collusive agreement seems to be holding up. Why do I say that? Because the prices that Russia is charging China and India are deeply discounted from world prices. If the collusion had broken down, the prices would be close to equal. The EU and Biden have effectively segmented the world oil market. Chinese and Indian consumers move down their demand curve at the lower prices they pay, buying more than they would have, and we other consumers are bidding over a diminished supply. So, the EU and Biden have definitely contributed to the higher price of oil since the Russian invasion.
Interestingly, Biden admits that his and the EU’s actions have increased oil prices. In a June 22, 2022, speech, Biden stated:
We cut off Russian oil into the United States, and our partners in Europe did the same, knowing that we would see higher gas prices.
Longer term, Biden will contribute to higher oil prices regardless of what happens with Russia and Ukraine. The reason is that he has signaled in many ways his hostility to US production of oil and natural gas. The American Energy Alliance has listed “100 Ways Biden and the Democrats Have Made It Harder to Produce Oil and Gas.” As with most such lists, some of the items seem minor. But the shocking thing is how many appear to be substantial. They include an executive order imposing a moratorium on new oil and gas leases on government lands and a proposed rule by the Securities and Exchange Commission that would require public companies to disclose their greenhouse gas emissions. No oil company decision maker could miss the overall negative tenor of the list. I recommend a quick perusal of the list of 100.
Interestingly, one of Biden’s cabinet members recently admitted her hostility to long-term production of oil and natural gas. In a June 15 interview with CNN’s John Berman, Energy Secretary Jennifer Granholm admitted that she and Biden want oil companies to produce more oil this year but not produce more in five to ten years. The video is priceless. You can tell by the look on Berman’s face and by his tone that he is skeptical that oil companies can be motivated to bear a lot of startup costs just to produce more oil for only a year or two.
But you don’t have to go with tone or facial expression. Berman laid out the problem beautifully:
But that’s the problem for these companies. These companies are saying, you know, “you’re asking me to do more now, invest more now, when in fact five or ten years from now we don’t think that demand will be there, and the administration doesn’t even necessarily want it to be there.”
You might think that because oil prices are determined in a world market, US government actions that discourage domestic US production don’t matter much. But that’s not true. Because oil demand worldwide is fairly inelastic, small changes in supply can cause large changes in price.
As noted above, the increased price of oil between January 2021 and May 2022 accounts for $1.37 of the $2.69 increase in the price of gasoline. What about the remaining $1.32 of the increase? The problem is that the increased demand for gasoline is pushing against a very inelastic refining supply. Here’s how Debnil Chowdhury and Susan D. Bell put it in “Restart or remain shuttered—why rationalized US refineries will not come to the rescue” (IHS Markit, June 24), after noting the amount of refinery capacity that has been sidelined by storms or other incidents:
General market sentiment, our medium-term outlook included, is that the current high-margin environment [for refineries] will be fleeting. Recouping recommissioning costs will be difficult unless these strong margins are sustained beyond 2023. Refiners are unlikely to invest hundreds of millions of dollars in recommissioning costs for only one or two years of strong returns.
Getting permission to build a refinery in the United States is not easy. While the US Energy Information Administration lists thirteen US refineries that have been built since 1978, none of these has the capacity to refine more than 84,000 barrels per day. Compare that to the Marathon Oil refinery in Garyville, Louisiana, built in 1976, which has the capacity to refine 578,000 barrels per day. Oil company executives would have to think long and hard before applying for permission to build a new refinery or putting serious resources into expanding a refinery. You can bet that all of them heard, loud and clear, Granholm’s statement about not wanting so much oil in five or ten years.
As I noted earlier, I’m not a fan of violating the property rights of gasoline station owners and so I would never put an uninvited sticker on a gasoline pump. But if I were to do so, the sticker would have a picture of Joe Biden saying, “I did some of that, and I’ll do more.”
President Joe Biden thinks it’s important to decouple America from its reliance on fossil fuels. Most of America disagrees, yet he keeps pushing for the adoption of renewables to replace the energy that comes from traditional sources like petroleum and natural gas. That’s why we’ve seen the price we pay at the pump spike so high. Not that the green energy crowd is much bothered by that. To them, the decline in the consumption of fossil fuels reduces the production of greenhouse gasses, which is music to their ears. Yet while they call the tune, we pay the piper.
Most Americans are all for doing “something” about climate change but aren’t willing to pay very much to do it. If it’s a problem, it’s a global one. The U.S. cannot fix it alone. Every nation must participate. Some, like China, simply refuse and its use of coal is rising so fast that it wipes out any benefit the reduction of U.S. carbon emissions has had.
Most Americans don’t realize how reliant on China the Biden plan is. The hoped-for transition to producing electricity from renewable sources like wind and solar can’t happen without cheap Asian-made solar panels being allowed into the United States. Without them, the nation can look forward to rolling brownouts – which the White House would like to avoid in the coming summer months, causing it to move quickly to suspend the tariffs on them for two years, despite credible evidence of dumping.
Allowing Chinese-made solar panels and solar panels that use materials made and mined in China, probably by slave labor, into the U.S. marketplace because our government’s policies created a need for them is bad policy. The president’s use of the Defense Production Act to increase American-based solar panel production is a diversion, as Nick Iacovella, a senior vice president at the pro-manufacturing group Coalition for a Prosperous America inferred when he said, “You can’t say that you want to spur domestic production, and then allow the Chinese to continue to dump product, which is a direct threat and something that is working against increasing domestic production.”
What Biden wants and is doing takes U.S. energy resources off the board and stifles the innovations of producers working to supply Americans with cleaner, more affordable energy. Former Congressman Harold Ford, D-Tenn., got it right when he urged President Biden to “stop vilifying U.S. energy producers, many of which are leading the development of technologies to mitigate carbon emissions and make the transition to cleaner energy.”
If that were not bad enough, the president is also signaling his administration will overlook human rights abuses in the effort to make America green. Nearly 40 percent of global polysilicon production, which is important to the manufacture of solar panels, comes from China’s Xinjiang region. That’s where, according to the U.S. Department of State, genocide and slave labor are prevalent.
In its rush to make America go green, the Biden administration is ignoring the reasons to be wary of the role China must play. Congressional China Task Force Chairman Michael McCaul, R-Texas, said the tariff suspension amount to “amnesty to products that the administration admitted are linked to genocide and slave labor.”
These two concerns intersect in the U.S. Virgin Islands, where what a taxpayer watchdog calls a “Solar Boondoggle” is about to begin. In March 2022, VI Gov. Albert Bryan announced his intention to transition St. Croix – one of the three islands that comprise the USVI — to 100 percent solar power. A tall order under any circumstances, the fact the islands are still rebuilding after the 2017 hurricanes that devastated them and that solar power currently accounts for just 2 percent of its energy mix, makes it near impossible.
Andrew Smith, who heads the power company there, recently called the switch a boon to St. Croix “because solar is effectively free.” If the Biden administration ends up sending the bill for the transition to the U.S. taxpayers, he’d be right – and that’s the path Gov. Bryan says he’ll pursue.
In a recent interview, Bryan said he expected more federal assistance, specifically from the U.S. DOE, to build a new solar grid above and beyond the more than $1.4 billion in Federal Emergency Management Agency loans already sent to the USVI. Meanwhile, St. Croix’s energy infrastructure remains unreliable.
The economics of the transition dictate the USVI must use cheaper Chinese components, regardless of their impact on American industry or the harsh realities of their manufacturing processes, if the plan to build out a new green infrastructure is to succeed. If what happens there is allowed to replicate itself across America, we’ll be in a heck of a mess.
Enough of one that they have decided it’s good policy, and better political optics, to bully gas station owners over how much they charge at the pump. The president’s Twitter team published this gem over the long holiday weekend:
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.
Setting aside the notion that an American president feels the need to harangue the franchise owner on the corner…the economic illiteracy on display in Mr. Biden’s tweet is inexcusable.
It would be generous and kind to blame the communications staff for this. But the buck stops with Joe, so the blame is all his. As such Mr. Biden deserves the strong corrective he gets from, among others, The Wall Street Journal:
More than a quarter of gas stations have closed since the 1990s because they couldn’t make the economics work. If retailers were to sell fuel at cost, most would go out of business. Perhaps those owned by large refiners would survive, but they’d be accused of predatory pricing by Mr. Biden’s antitrust cops.
The President’s economic ignorance isn’t a one-off. In recent months he has accused oil and gas companies of price gouging and demanded that they increase production even while his Administration threatens to put them out of business. Mr. Biden doesn’t understand that businesses make long-term decisions based on demand expectations and policy signals. Jeff Bezos called the President’s weekend tweet “either straight ahead misdirection or a deep misunderstanding of basic market dynamics.” They aren’t mutually exclusive.
Indeed, the Biden team’s misdirection is just a manifestation of its misunderstanding…of market function, prices, incentives, regulation and so on.
And if you think the gas station episode was bad, buckle-up, because Team Biden is about to face a cascade of troubles thanks to one of his oldest political backers…Big Labor:
…the labor contract for 29 West Coast ports, which covers 22,000 dockworkers, lapsed over the weekend.
For now, talks continue; the two sides are reportedly fighting over port managers’ desire to automate more operations, as major ports in Europe and Asia have already done. But if a work stoppage or slowdown results, it could wreak havoc on the country’s already-fragile supply chains, with potentially catastrophic consequences for inflation and the economy.
Also, of course, for Democrats’ chances in the midterms.
This isn’t some remote risk. The last time this contract was being renegotiated, starting in 2014, talks broke down and work slowdowns led to expensive shipping delays. The Obama administration had to intervene. Labor disruptions (strikes, lockouts, slowdowns) also occurred during West Coast port contract negotiations in 2002, 2008 and 2012.
Does Biden side with his old allies in the labor movement? Or does his professed determination to fight inflation convince him to convince them to get back to work?
Given Biden’s grasp of economics, we should prepare for the worst.
Biden's Energy Department said move would 'support American consumers' and combat 'Putin's price hike'
The Biden administration sold roughly one million barrels from the Strategic Petroleum Reserve to a Chinese state-controlled gas giant that continues to purchase Russian oil, a move the Energy Department said would “support American consumers” and combat “Putin’s price hike.”
Biden’s Energy Department in April announced the sale of 950,000 Strategic Petroleum Reserve barrels to Unipec, the trading arm of the China Petrochemical Corporation. That company, which is commonly known as Sinopec, is wholly owned by the Chinese government. The Biden administration claimed the move would “address the pain Americans are feeling at the pump” and “help lower energy costs.” More than five million barrels of oil released from the U.S. emergency reserves, however, were sent overseas last month, according to a Wednesday Reuters report. At least one shipment of American crude went to China, the report said.
The Biden administration also claimed the Unipec sale would “support American consumers and the global economy in response to Vladimir Putin’s war of choice against Ukraine” and combat “Putin’s price hike.” But as the war rages on, Unipec has continued to purchase Russian oil. In May, for example, the company “significantly increased the number of hired tankers to ship a key crude from eastern Russia,” Bloomberg reported. That decision came roughly one month after Unipec said it would purchase “no more Russian oil going forward” once “shipments that have arrived in March and due to arrive in April” were fulfilled.
The White House did not return a request for comment. Its decision to sell barrels from the country’s Strategic Petroleum Reserve to a Chinese conglomerate comes as the American public increasingly sours on Biden’s energy policies. According to a January Gallup poll, roughly three in four Americans are not satisfied with the federal government’s national energy policy, the highest level in roughly two decades.
Power the Future founder Daniel Turner admonished Biden for selling “raw materials to the Communist Chinese for them to use as they want.”
“We were assured Biden was releasing this oil to America so it could be refined for gasoline to drive down prices at the pump. So right off the bat, they’re just lying to the American people,” Turner told the Washington Free Beacon. “What they’re saying they did and what they did are not remotely related.”
Turner also said the decision highlights the Biden family’s “relationship with China.” Biden’s son, Hunter Biden, is tied to Sinopec. In 2015, a private equity firm he cofounded bought a $1.7 billion stake in Sinopec Marketing. Sinopec went on to enter negotiations to purchase Gazprom in March, one month after the Biden administration sanctioned the Russian gas giant.
Biden campaigned heavily against the oil and gas industry in 2020, promising to “end fossil fuel.” He went on to cancel the Keystone XL pipeline and implement a moratorium on new gas leases on federal land during his first month in office. Biden’s energy secretary, meanwhile, is working with left-wing activists who want to eliminate fossil fuels, and in late October, House Oversight and Reform Committee Democrats pushed top oil executives to produce less gas due to climate change.
Gas prices have since soared to record highs. In mid June, the national average for a gallon of gas surpassed $5 for the first time ever. Still, the White House has assured Americans that they need to pay high gas prices to support the “liberal world order.”
“What do you say to those families that say, ‘Listen, we can’t afford to pay $4.85 a gallon for months, if not years?'” CNN anchor Victor Blackwell asked Biden economic adviser Brian Deese in late June. “This is about the future of the liberal world order and we have to stand firm,” Deese responded.
Democrats denounce fuel tax suspension
On the campaign trail in 2008, Obama said of the tax suspension, “We’re arguing over a gimmick that would save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say they did something. Well, let me tell you, this isn’t an idea designed to get you through the summer, it’s designed to get them through an election.”
House Speaker Nancy Pelosi (D., Calif.) in April said gas tax holidays are “good PR,” but shared the concern that there is “no guarantee that the reduction in the federal tax would be passed on to the consumer.”
Rep. Peter DeFazio, (D., Ore.), the chairman of the House Transportation and Infrastructure Committee, agreed.
“Suspending the 18.4 cents per gallon federal gas tax is not going to give consumers significant relief—if any at all,” DeFazio said in February, adding that the move may have negative effects. “Suspending the tax will blow a $26 billion hole in the highway trust fund this year and cause further delay in rebuilding our decrepit infrastructure and the tens of thousands of jobs that investment would have provided.”
Sen. Joe Manchin (D., W.Va.) also foresees road blocks for infrastructure projects. He said the suspension “just doesn’t make sense,” adding, “People want their bridges and their roads, and we have an infrastructure bill we just passed this summer, and they want to take that all away.”
The Free Beacon reported Monday that Biden is the least popular president in more than a century. Democrats are on the fence about his viability for a second term and bracing for a tumultuous midterm season.
Whether or not Marie Antoinette said rioting French peasants upset about the shortage of bread to feed their families should “eat cake” instead is not important. The idea that she did has been passed down, generation to generation, as the perfect illustration of how the isolated elites in a society can become hopelessly out of touch.
This is not just a problem for the rich but also for the powerful, who use their positions to grant themselves perks that alleviate the need for them to worry about the kinds of things that keep the rest of us at night.
Like whether we’re going to have enough gas in the car to get to work in the morning.
Since coming into office, the Biden Administration has been at war with the American energy sector. Following the President’s lead, they believe climate change is an existential threat to the continued well-being of mankind that can only be thwarted if Americans are forced to go green.
That’s what’s really behind the sudden, continuing rise in the price of gasoline. It’s not, as President Joe Biden continues to assert, a transitory thing caused by Vladimir Putin’s invasion of Ukraine. It is the result of calculated policy decisions intended to roll back the energy independence that became a reality by the end of the Trump Administration.
There’s nothing wrong with green energy per se. Indeed, the United States would realize considerable benefit from the ability to rely on fuel coming from renewable sources like wind and solar and to be more efficient in the generation and use of power from fossil fuels so that less of it is wasted
All that can be achieved by market forces a lot faster and cheaper than by government mandates. The Biden Administration has chosen – regardless of the consequences – to force this upon us all, meaning that some people are now, in a period of inflation unseen for at least 40 years, to face the very real choice between putting gas in the car and food on the table.
Too many Democrats regard that as a good thing. They don’t blame the government for the problem. They blame the energy sector, which it criticizes for earning record profits because the price at the pump is up thanks to the shrinkage Biden and his cohorts have forced on the industry. The cancelation of new pipelines and oil and gas leases on federal lands are two among a handful of reasons domestic energy producers cannot respond to the increase in demand by increasing the supply to keep prices stable.
The energy markets are behaving as the President wants, given his belief, he can prioritize his strategy to increase the use of energy made from renewables and the need to bring down the price of gasoline.
White House Press Secretary Karine Jean-Pierre seemed badly ignorant of economic reality when she insisted during a recent press briefing that there was nothing inherently problematic with pursuing both objectives at the same time.
“What we’re trying to deal with right now is how do we lower costs for American families,” she said. “One of the things that we are seeing currently right now with oil refiners is they are using this moment,” she continued, “to actually make a profit.”
She can get away with shifting blame for a while but what does she suggest as an alternative? Does she think the energy sector should sell gasoline and other fuels at a loss? That’s a recipe for economic catastrophe, as would be the kind of nationalization of the sector that exists in so many other countries.
The problem is that Biden and Jean-Pierre and so many others are out of touch with what’s going on. The people aren’t rioting for gas yet, but it may just be a matter of time.
Consider the comments of Michigan Sen. Debbie Stabenow, who recently described a drive she made from her home state to Washington in an electric vehicle.
“After waiting for a long time to have enough chips in this country to finally get my electric vehicle,” the state’s senior elected Democrat said during a June 7 meeting of the Senate Finance Committee. “I got it and drove it from Michigan to here last weekend and went by every gas station and it didn’t matter how high it was.”
Stabenow doesn’t have to choose between putting food on her table and putting gas in her car. Rather than being grateful and understanding she’s insulated from reality because she enjoys elected privilege, she claims she’s mystified by the expressions of concern coming from the American people because they are routinely paying more than $100 for a full tank of gas. Wonderful.
An elected official, whose annual salary is just shy of $200,000, is driving a car that cost more than most Americans make in a year that the taxpayers probably pay for her to use, thinks high gas prices aren’t a problem because she doesn’t have to pay them anymore. That’s the kind of leadership that causes politicians to lose their heads.
The Surface Transportation Board needs to avoid adding new inefficiencies to supply chains by rejecting a cumbersome proposed regulation on freight railroads.
Reciprocal switching already occurs based on private agreements between railroads. But Democrats, first under Obama and now under Biden, have wanted to give the government more power to determine switching agreements in the name of promoting competition. (For a more in-depth discussion of the regulatory history and effects of mandated reciprocal switching, see my piece from January here.)
February 14 was the deadline for organizations to provide written comments before the STB hearing. The last time organizations were asked to comment, in 2016, a wide array of interests that don’t usually agree came together to oppose the STB regulation. This time, it’s the same story. The STB should listen to the disparate voices speaking out against this regulation and abandon it.
The Association of American Railroads (AAR), in a massive 611-page filing, provides evidence that freight-rail rates have not seen significant increases in the past few decades, which undermines shippers’ claims that the industry has been behaving monopolistically. To understand why reciprocal switching is such a big deal for railroads, it’s helpful to watch this video from AAR that shows how a switch actually works. It sounds relatively simple in the abstract — just switch cars from one railroad to another — but the video demonstrates that a typical switch of one car between two railroads can take six days and involve eight trains, three rail yards, and 68 separate rail operations. That process should only be undertaken when it makes economic sense, AAR argues, not when government bureaucrats decide it would promote some other goal.
Economic analysis from a wide variety of groups concludes that mandated reciprocal switching would not be helpful. The International Center for Law and Economics writes in its filing that “the regulatory solutions the STB offers are in search of competition problems, evidence of which remains conspicuously absent.” The center’s filing argues that market interventions, while sometimes necessary, need to be backed up with evidence, and the STB has not done the necessary work to demonstrate a particularized economic problem in need of solving.
Mark Jamison, a professor at the University of Florida and a fellow with the American Enterprise Institute, draws parallels between the STB’s proposed rule and regulations in the telecommunications industry that were adopted under similar pretexts. His filing provides evidence that purportedly pro-competition regulations in telecommunications “generally slowed innovation and led network providers to compete less and invest less.” Those are questions of actual history, not economic theory, and he argues we have no reason to believe the same principles applied to railroads will turn out any better.
Reason Foundation’s filing points out that the STB’s economic analysis is largely based on a study that was released in 2010 based on data from 2008. “The U.S. railroad industry of 2022 looks quite different than the industry of 2008,” Reason’s Marc Scribner writes. “Most strikingly, the sharp decline of coal-fired electricity generation has led coal-by-rail tonnage to decline by nearly half since 2008.” Basing a regulation on data that old is not sound policy-making, regardless of the contents of the rule. Scribner isn’t impressed by the contents either, writing that the STB fails to adequately consider how the rule will affect railroads’ ability to compete with trucking.
The Progressive Policy Institute argues in its filing that “a 2016-vintage regulatory approach is totally wrong for the 2022 economy.” The institute’s chief economist, Michael Mandel, writes that the consequences of supply-chain disruptions we see today demonstrate the importance of prioritizing efficiency in the future. He argues that under the proposed rule, “railroads would have to give a high priority to moving goods in a way that met the reciprocal switching requirements, rather than lowering costs and speeding goods to their ultimate consumers.” The higher costs that would result would then be passed on to consumers, needlessly reducing purchasing power and possibly contributing to inflation.All Our Opinion in Your Inbox
That’s why the American Consumer Institute (ACI) opposes the regulation as well. ACI’s filing argues in strong terms that the proposed rule “would destroy the billions of dollars of annual consumer benefits” that have come since deregulation. ACI’s research found “no empirical evidence of a market failure to justify the calls [for mandated reciprocal switching] by shipping industry lobbyists, whose companies are collectively more profitable than the rail carriers they seek to subjugate.” Small businesses have also been beneficiaries of self-sustaining, deregulated railroads, and the Small Business and Entrepreneurship Council registered its opposition to the proposed rule on similar grounds.
The Intermodal Association of North America (IANA) believes that the proposed regulation in its current form would worsen supply-chain difficulties. Its filing says that the STB’s proposed rule would result in “a decline in rail infrastructure; decreased network velocity; a deterioration in domestic intermodal service; and an adverse impact on intermodal’s ability to compete with over-the-road trucking.” The IANA’s membership includes railroads, but also motor carriers, water carriers, port authorities, and logistics companies — all of whom believe that supply chains as a whole will be made worse because of the regulatory burden imposed on freight rail.
It’s not only the major Class I freight railroads that oppose mandated reciprocal switching. The American Short Line and Regional Railroad Association opposes it, too, saying in its filing that “while short lines often consider themselves ‘shipper representatives’ and we certainly have our share of frustrations with our Class I railroad partners, we see this rule as counterproductive and likely to cause more harm than good.”
Echoing Amtrak’s concerns from 2016, Chicago’s commuter-rail system, Metra, warned the STB that mandated reciprocal switching could cause more traffic delays in the Windy City’s dense railway network.
Aside from economic and operational concerns, there are also safety concerns. Patrick McLaughlin of the Mercatus Center is a former economist with the Federal Railroad Administration, the industry’s safety regulator. In his filing, he points out that switching is an inherently dangerous operation, and mandating more switching for no economic reason needlessly puts workers at risk of injury.
Rail workers aren’t too excited about reciprocal switching, either. SMART-TD, the largest railroad union in North America, opposes the rule for its effects on railroad safety and finances. It doesn’t help workers for railroads to make less money, and the union is concerned that its members could be laid off or face pay cuts if the regulation goes into effect. The Brotherhood of Locomotive Engineers and Trainmen is concerned about the effect the regulation would have on collective-bargaining agreements. Unions aren’t concerned about efficiency like other groups are. They’re just looking out for their members, and they still oppose the regulation.
What about environmentalists? The National Wildlife Federation, along with ConservAmerica, C3, and Third Way, wrote a letter to the STB arguing that the railroad industry “currently offers the most environmentally friendly way to move goods over land.” Freight that gets disrupted by new inefficiencies in railroads doesn’t just disappear. It “could shift to more carbon-intensive modes of transportation,” e.g., trucking. Making railroads less efficient is bad for the environment, too.
At this point, you’re probably wondering who on earth supports this thing. The answer: shippers. The dynamic is similar to that of the Ocean Shipping Reform Act, where shippers are trying to capitalize on dissatisfaction with supply chains to get regulatory changes they have wanted for decades. The Rail Customer Coalition’s letter to the STB argues that the regulatory hurdles that shippers currently face to get mandate reciprocal switching are too high and that “reciprocal switching would empower rail customers, including farmers, manufacturers, and energy providers, to choose a carrier that provides the best combination of rates and service.”
There will always be a strained relationship between shippers and carriers. Shippers are always going to want lower rates, and carriers are always going to complain that shippers are making unfair demands. But in this case, the evidence presented to the STB clearly leans in the railroads’ favor. It’s not often in Washington that economic analysis, consumer interests, small-business interests, safety analysis, organized labor, and environmentalism all point in the same direction.
The 3–2 Democratic majority on the STB has a choice. It can side with the evidence from all those groups that normally disagree. Or it can side with shippers and President Biden, as requested in his executive order on competition. If it does the latter, in the face of all the prevailing evidence, it will be adding new inefficiencies to supply chains at the worst possible moment.
Fighting climate change is at the center of President Joe Biden’s administration, because, Biden claims, “[Climate change is] the number one issue facing humanity.”
Biden’s solution, as outlined at the time and subsequently on multiple White House fact sheets, is to use a “whole of government approach,” achieving a 50-52 percent reduction from 2005 levels in economy-wide net greenhouse gas emissions in 2030, and being net-zero emissions for the nation as a whole by 2050.
Although Biden’s goals are clearly stated, his energy and climate policies have been inconsistent.
Energy is the lifeblood of the economy. The actions taken by former President Donald Trump to achieve energy independence delivered low prices, created jobs and kept the economy humming, until the pandemic hit. Biden’s policies have done just the opposite with the result that his and the Democrats’ electoral prospects in the coming elections are falling almost as fast as the average American’s energy, food, and fuel prices are rising.
As one of his first acts in office, Biden canceled the Keystone XL pipeline partnership with Canada. This may have been the first time in history a president used his first day in office to kill thousands of American jobs and disrupt critical infrastructure. It also told our allies, especially Canada, the United States can’t be trusted to keep its word.
In the following days, Biden implemented a moratorium on new oil and gas leases on federal lands. A federal court soon declared Biden’s moratorium illegal, ordering the administration to resume lease sales as the law demanded. For months, the Biden administration thumbed its nose at the court’s ruling and refused to resume leasing, only doing so months later under threat of court sanctions.
Despite rescinding federal approval of Keystone XL and supporting or leading efforts to block other pipelines, Biden waived sanctions the Trump administration had imposed on Russia’s Nord Stream 2 pipeline. This odd “pipelines for thee but not for me” action undermines U.S. interests, especially our efforts to expand U.S. liquefied natural gas exports to reduce Russia’s geopolitical influence in Europe.
Biden’s approval of the Russian pipeline is directly at odds with his domestic efforts to fight climate change. It makes no difference to the Earth whether natural gas comes from Russia or the United States, but it makes a huge difference to the people of those respective countries.
Since then, Biden has proposed methane emission restrictions that would make it harder and more expensive to develop, store, and transport oil and natural gas in the United States, and increasing the fees and royalty rate oil and gas producers must pay the federal government.
As high oil and gas prices have begun to hammer average citizens’ pocketbooks—and, more importantly to Democrats, poll numbers—Biden went hat in hand to Saudi Arabia and other OPEC members, pleading with them to open up the spigots and release more oil into world markets to moderate prices. In less than four years, Trump broke OPEC’s stranglehold over U.S. energy markets. In less than a year, Biden has made us once again beholden to hostile foreign powers for a growing portion of our energy needs. And the effect on the climate is likely zero at best.
As noted by Forbes, there are multiple ironies in Biden’s begging OPEC for oil, not the least of which is the “Biden Administration asked OPEC to pump more oil, undermining its COP26 messaging of reducing fossil fuel consumption.” Getting oil from OPEC increases emissions relative to producing it in the United States, because OPEC’s is produced under laxer environmental rules and enforcement, and must be shipped thousands of miles.
After OPEC predictably refused Biden’s request to shore up Democrats’ election prospects by putting more oil on the market to moderate prices at the pump, Biden decided on a desperate course of action: releasing oil from the U.S. Strategic Petroleum Reserve (SPR).
The SPR was established in 1975 after oil supplies were interrupted during the 1973-1974 oil embargo, to mitigate future supply disruptions in cases of international crisis or war. The SPR was not instituted as a plaything for presidents to use to manipulate energy markets or elections, but that’s what Biden did. Biden’s SPR release did little or nothing to reverse high gas prices or prevent climate change, but it did leave the United States with fewer reserves to draw on should a true emergency such as a war or large-scale natural disaster disrupt supplies.
Biden’s policies have been a contradictory mishmash of domestic energy restrictions which harm Americans, and foreign energy promotion benefitting international competitors. The climate is unimpressed.
If there is one bright spot in Biden’s bipolar energy policies, it is that, should 2022 be anything like 2021, it is likely Biden is a one-term president and Democrats are a one-term party in power.
While President Joe Biden and his administration tout what they say are successes as the end of the president’s first year in office looms, the spin from Psaki and others just doesn’t match the reality being experienced by Americans from coast to coast.
To highlight the breadth of the issues caused by Biden policies, the RNC released a video series on Biden’s “12 Days of Crises” to coincide with Christmas and highlight the pain being felt by Americans.
“Crisis, lies, and failure are the hallmarks of Biden’s presidency,” noted RNC Chairwoman Ronna McDaniel. “In less than a year under Biden’s watch, there has been a catastrophic withdrawal from Afghanistan, historic price increases, and a crisis at the border.” And that is where Biden’s 12 Days of Crises — as outlined by the RNC — begin, all of which have been covered by Townhall this year.
On the first day of crises Joe Biden gave us a border crisis.
Our own Julio Rosas has reported extensively from the U.S.-Mexico border in Del Rio, Texas and Yuma, Arizona — and several locations in between — showing the Biden administration’s lack of action to stem a record-setting number of illegal border crossings, apprehensions, and “gotaways” in addition to increasing human and drug smuggling operations. When Julio confronted Biden’s DHS secretary about the situation, Alejandro Mayorkas still wouldn’t call the status of America’s southern border a “crisis.” Biden continues to claim that the border is closed, but Julio’s reporting proves it’s just one of Biden’s many unmitigated crises.
On the second day of crises Joe Biden gave us a disastrous Afghanistan withdrawal.
As our loyal readers know, Townhall led the charge warning that what Biden said was going on in Afghanistan was little more than wishful thinking. While the White House claimed there was no diplomatic evacuation taking place in Kabul, Townhall reported that embassy staff were shredding documents and destroying computers. When Biden claimed that the Afghan government’s potential fall to the Taliban was anything but certain, Townhall told the truth Biden surely knew but wouldn’t say. We also warned that Biden’s withdrawal was setting up the largest hostage crisis in U.S. history, and when Biden and his administration lied about how many Americans were left behind, we kept telling the stories of those Biden stranded. Following the Kabul drone strike Biden’s defense officials called a “righteous strike,” Townhall warned that it may have been a botched attack. And it was.
On the third day of crises, Joe Biden gave skyrocketing gas prices to every American.
The pain felt by Americans at the pump is something Biden has also ignored, and his supposed fix of tapping into America’s Strategic Petroleum Reserve intended to be used in emergencies like natural disasters or disruptions caused by foreign wars did almost nothing to help the American people. Making things worse, Biden has spent his first year in office turning the United States from an energy independent country to one dependent on foreign supplies. One of his first acts after being sworn in was to kill the Keystone Pipeline, just part of his work to make fossil fuels so expensive that suddenly less-reliable “green” energy seems appealing.
On the fourth day of crises, Joe Biden gave us an unconstitutional vaccine mandate.
After saying that he wouldn’t issue a federal vaccine mandate, Biden — somewhat predictably — went back on his word and levied a requirement on federal employees, federal contractors, and tens of millions of Americans who work for private companies. His mandate was announced as an attempt to distract from his disastrous withdrawal from Afghanistan, and it was so haphazardly put together that it quickly encountered legal challenges from states’ attorneys general and companies who wanted to fight for their employees’ healthcare freedom. And, after many companies implemented Biden’s mandate, a growing number have also reversed the mandate, including Biden’s beloved Amtrak.
On the fifth day of crises, Joe Biden gave Americans a reckless tax and spending spree.
No matter how many times Biden, Psaki, Schumer, and Pelosi claimed that the cost of Biden’s Build Back Better budget was “zero dollars,” it’s just not true. As Townhall covered, the Congressional Budget Office — which Biden used to praise until it no longer served his purpose — confirmed what we’d reported for months: Build Back Better is really a plan to make America’s economy even worse.
On the sixth day of crises, Joe Biden put parents and students last.
One needs to look no further than Biden’s relationship with teacher unions to see he doesn’t value students or their families. School closures and remote learning? No problem for President Biden. Mask mandates for young children? It’s necessary. Terry McAuliffe thinks parents shouldn’t have a role in their kids’ education? Full endorsement from Biden. And don’t forget Biden’s Department of Justice took the National School Boards Association’s lead and directed the FBI to go after parents who are speaking up and demanding accountability from their school boards.
On the seventh day of crises, Joe Biden gave himself another vacation in Delaware.
It wasn’t a secret when he took office that Joe Biden loves Delaware. Almost more than he loves ice cream cones and Amtrak. What Americans may not have counted on was just how much time he would spend there, even amid some of his other crises. Perhaps most notably, his botched withdrawal from Afghanistan, during which Biden would return to the White House from the beach in Delaware to give a speech and then immediately get back on Marine One to go back to Delaware.
On the eighth day of crises, Joe Biden gave all Americans rising prices.
It seems as though every month brings a new record-high for inflation numbers under President Biden. At first, he said it was transitory, then members of his own administration killed that theory, but Biden still isn’t taking any action to alleviate the pressure. Prices on basically everything, from gas to grocery and utility bills, continue to rise. And while Biden keeps trying to tout wage growth as proof that his economic policy is helping Americans, he conveniently neglects to mention that inflation has wiped out any gains in wages. In fact in months such as October, the impact of Biden’s agenda meant that Americans actually saw real wages decrease by 0.5 percent.
On the ninth day of crises, Joe Biden created a nationwide supply chain crisis.
Here’s to hoping all your Christmas and holiday shopping happened without incident, but if you’re waiting for some goods on a ship from Asia, your gift might still be floating in the boat parking lot off the Ports of Long Beach and Los Angeles, or sitting in a container awaiting transport. Shortages caused rations on certain Thanksgiving meal items at grocery chains and, according to Biden’s statement earlier in the holiday season, Santa was the only one who could guarantee the tree is surrounded by gifts on Christmas morning.
On the tenth day of crises, Joe Biden put China first.
China, one of Biden’s first forays into foreign policy as president, went poorly from the start. Despite signing the Uyghur Forced Labor Prevention Act into law on Thursday, the Biden administration was hesitant to support the legislation and reports suggested that the White House was urging a delay on the bill. And don’t forget how often Biden and his administration have dismissed concerns about China’s rule in the outbreak of the Wuhan coronavirus.
On the eleventh day of crises, Joe Biden did nothing to address crime surges across the country.
In case there wasn’t already enough data to prove that America is getting less safe under President Biden, this week’s armed carjackings of an Illinois state Senator and member of the U.S. House Representatives should send a message to Biden and other Democrats that their defund-the-police agenda is endangering lives across the country. Homicides, carjackings, brazen smash-and-grab robberies, and other crime continue to hit records not seen in decades, but yet again Biden won’t take action
On the twelfth day of crises, Joe Biden’s approval rating plummeted lower and lower after each crisis.
So yes, there’s a lot of bad caused by the Biden administration, but within that is a silver line emerging for Republicans ahead of the midterms: Biden’s tanking favorability means the GOP’s fortunes are rising when voters across the country have — many for the first time since 2020 — a chance to register their opinion of Joe Biden at the ballot box. Things have gotten so bad that the White House is now frantically announcing new Biden pets in an attempt to change the narrative.
Looking to the year ahead, RNC Chairwoman McDaniel pledged to “continue to hold Biden and Democrats accountable for their failed policies and refusal to take responsibility” and predicted that “voters will soundly reject Biden and his failures, and we look forward to taking back the House and Senate in 2022.”
Both the so-called CLEAN Future Act and the Biden-Harris Administration’s $2 trillion infrastructure package, if enacted, will impose upon America substantially more expensive and less reliable energy, and it will reduce job growth and economic expansion. This will be particularly harmful to the working poor who can least afford these burdens.
We all want a clean future. We all want clean air to breathe, clean water to drink, and a clean environment. We also want our nation’s highways, bridges, airports and transportation infrastructure to be in good working order. But the “CLEAN Future Act” and the Administration’s $2 trillion infrastructure package do very little to ensure a clean environment, and precious little to build and maintain the nation’s highways, bridges, and airports.
Just like with the recently passed $1.9 trillion COVID stimulus, less than 10% of these plans actually do what they say they will do. The bills are largely an excuse to pack the proposals with a grab bag of pork, waste, and extreme regulation that will do far more harm than any good they could possibly do.
The House Energy and Commerce Committee put huge subsidies for Electric Vehicle (EV) chargers into its “CLEAN Future Act.” The Ways and Means Committee is devising new tax credits for EV chargers. And in the Senate, a bill would increase EV tax credits by almost 700% at up to $200,000 per unit.
One could argue that the intensions are good, but arguing that the impact will be good is very difficult. We could spend trillions of dollars to pursue good intentions, but not actually do much to encourage a clean environment or keep energy costs reasonable for the working poor. The marketplace will do a far better job of meeting our future needs and nimbly making adjustments to respond to changing needs.
For example, putting hundreds of billions into charging stations may be a waste of money. There are companies developing technology that would simply swap out an exhausted battery and swap it with a freshly charged one. This could be done in minutes. They would then charge your battery for another swap. I’m not endorsing this technology. I’m simply pointing out that we don’t yet know if consumers want EVs, and if they do, if they want to charge them for an hour or more or simply swap out the battery in an instant and continue driving, or maybe they want some mix of both. The marketplace will figure this out. But Government mandates will impose rigid mandates and lack the ability to balance consumer’s needs.
The truth is government’s push to outlaw the internal combustion engine is typical of its myopic approach. There are many ways to insure a clean environment. Our cleaner burning fuels and cleaner operating engines have done more to give America cleaner air than EVs have done for the environment.
Numerous studies show that EVs have their own massive negative environmental impact. The batteries EVs use are made from rare earth elements that must be mined and the manufacture of batteries produce acid waste and radioactive residues. Plus, an immense amount of energy is required to refine and produce batteries. Another problem is what to do with the batteries once they’ve reached their life cycle end. They are not environmentally friendly and won’t age well in landfills.
So rather than pumping billions or even trillions of America’s hard-earned dollars into programs designed to force consumers into EVs, why not allow the natural maturation of technology to help us make wise choices in the future? Perhaps EVs are the wave of the future. Perhaps not. Wouldn’t it be good to know the answer to that question before we force Americans to devote trillions of dollars into a technology that has not yet proven itself?
Often we are told that we must act now because if we wait, it will be too late. This is a conman’s pressure tactic. Our air quality is improving and has been for a long time. Additionally, America is one of the leading nations in reducing carbon dioxide emissions. It is also worth noting that carbon dioxide isn’t a pollutant. Humans exhale carbon dioxide and plants require it to grow and photosynthesize. So we ought not make carbon dioxide an environmental villain. It is required for life here on Earth.
Before every committee in Congress and the Administration race to see who can throw the largest sums of taxpayer money at EVs and charging stations, let’s allow the technology to mature. Let’s see if consumers want EVs. Let’s see if EVs meet our transportation needs. If they do, the marketplace can best figure out the way to charge or refuel an EV. Government’s attempt to make these decisions before we know the answer to important questions insures that we will waste trillions of dollars promoting things that won’t pan out. And that is money that cannot be invested in real solutions, real jobs or real infrastructure needs. So we ought not be forced to rush when the conman tells us that time is running out. It isn’t.
U.S. Representatives Steve Scalise (R-La.) and David B. McKinley, P.E. (R-W.Va.) introduced a resolution that, if passed, would express the sense of Congress that a carbon tax would be detrimental to the United States economy and harm working-class Americans the most.
This is self-evidently true. In fact, it is so obviously true, a reasonable person might ask why such a resolution is even necessary. Do we really need a resolution that is as obvious as the sun rises in the east?
Sadly, even though the resolution’s point — that carbon taxes are harmful — is painfully obvious, the resolution is necessary. There are many voices on the national stage that support virtually any new tax and particularly any energy tax. The Biden administration has made it clear it considers the energy sector the enemy — killing pipelines, proposing new taxes, and advocating for new burdensome regulatory regimes and mandates. But this is counterproductive!
A carbon tax — no matter who they tell you will pay it — will hit the economy hard and will hit lower-income Americans the hardest. A carbon tax would increase the cost of everything Americans buy — from groceries, to electricity and gasoline, to home heating in the winter, to everyday household products. Moreover, having a reliable source of affordable energy is foundational to a strong job market and strong economic growth. The rich don’t need a strong job market or strong economic growth to build a better future for themselves and their families. They’ve already got that. But the working middle class and the working poor need a robust jobs market and economic growth to push wages higher.
The additional costs imposed on the working class by a carbon tax are difficult to bear. Their budgets are already tight. Are they going to go to work less often or heat their home less in the winter? They are kind of stuck. If you increase their energy costs, they have to give up other necessities. And if you damage the economy, their hope for better times and brighter days ahead evaporates. That’s way too high a price to pay for whatever false promises the elites are offering.
America achieved energy independence when only a few short years ago, it was widely perceived that we would always be forced to import energy and rely upon energy from hostile nations. Energy independence had obvious economic benefits, but it also had national security benefits. For much of the last two generations, American foreign policy had to worry about keeping the oil flowing from the Middle East. Given the volatility of the region, that often forced some unpleasant foreign policy considerations on American policymakers. But with energy independence, hostile powers could no longer hold us hostage or use energy as a leverage point. Thus, we were more secure. A carbon tax would put all of this at risk.
Some privileged elites see their support for a carbon tax as some sort of virtue. And they think it makes them look good. But what is there to feel so superior about in forcing working-class Americans to pay higher energy bills, transportation costs, and higher costs for food and household items — all while also being forced to suffer lower or suppressed wages?
This resolution tells Congress and the Biden administration that Americans expect accountability in their government. The Biden Administration is attacking energy through its attempts to force us into expensive electric vehicles and to use legitimate infrastructure needs as cover for redistributing taxpayer money to favored technologies like windmills and solar panels. This is all reminiscent of Solyndra, which gave away hundreds of millions of taxpayer dollars to well-heeled political donors in the guise of energy policy but was ultimately a boondoggle and nothing more.
Rather than trying to use energy policy as a way to push Americans into the buying preferences of a few political elites, let’s unleash the power of the free market and human creativity! We can have reliable, affordable energy and a clean environment. But only if we allow and encourage innovation, rather than imposing government mandates and taxes.
Throughout the 2020 presidential campaign season, then-candidate Biden continually promised that he would not raise taxes on households making less than $400,000 per year. It was a promise echoed again by the White House just over a month ago, but the so-called American Jobs infrastructure plan rolled out by the administration pulls a bait-and-switch on the American people, particularly the working poor and ethnically diverse communities.
A key component of the Biden plan is the push for a nationwide transition to electric vehicles, which takes up some $174 billion in subsidies from the package, but one of the largest problems with the proposal is its disregard for the negative downwind effects it would have on those at the lower rungs of the economic ladder. As of 2019, the average cost of an electric vehicle was $55,600, far greater than the cost of other vehicles more affordable for lower income families. In fact, another recent study showed that the average income of electric car owners is at least $100,000 per year, well over even the middle-income line. While the Biden plan throws truckloads of money at other angles of the electric vehicle issue, it does nothing to address the fact that lower income households simply cannot afford electric vehicles. To make matters worse, electric vehicles only account for 2 percent of vehicle sales in the U.S., even though they have been an option for vehicle purchasers for a significant period of time. The Biden plan is catering to a niche segment of an industry, in a show of political nepotism for a pet campaign promise while slapping the American worker in the face in the process.
An aggressive plan like Biden’s calls for significant bumps in energy and electric grids. Even currently, with a transportation budget of $1.5 billion, electric companies have almost $1 billion more in requests for expansion, and this is the case notwithstanding the drastic increase in energy grids that the Biden plan would implement. More electric grids cost the utilities more to operate, meaning large spikes in utility costs.
California provides an example of this type of policy gone wrong, as it invests the most of any state into electric vehicle infrastructure yet has increasing issues with blackouts, high utility costs, and general cost-of-living increases. For instance, as of 2010, SDG&E, the major energy provider in the San Diego and southern California region, has seen consistent rate increases. Conversely, utility disconnections due to overdue bills and payments has also steadily climbed within this time period, suggesting that ratepayers are finding it more difficult to keep up with rising costs. Even more specifically, those burdened with these rate hikes are disproportionately minority groups in disadvantaged communities, who shoulder these costs for the benefit of disproportionately affluent areas that can afford EV’s.
Additionally, American seniors are keenly affected by these rate hikes. Per an AARP testimony in 2019 in Arizona, “twenty percent of Arizonans 65 and older rely on Social Security as their sole income source. Fifty percent get a substantial portion of their income from Social Security…[which] is about $17,500/year…Older Arizonans have much higher medical costs so many already [are forced] to choose today between, food, rent, medical care and very limited transportation…they cannot afford higher electric utility rates much less for electric vehicles.” Yet again, ratepayers are being conscripted to subsidize a service that they do not use, at the cost of their own well-being.
These specific examples are simply the tip of the iceberg. If the Biden E.V. plan is implemented, the consequences would be far more drastic than even the current rate hikes. If less fortunate groups are not benefiting from electric vehicles, why should they be forced to pay for them? Spiked electric utilities affect the poor and vulnerable more negatively than any other economic demographic. Utilities are a difficult commodity to live without, particularly within a family, and they should not be burdened with rate hikes for services they do not use. Simply put, lower income households are not driving electric vehicles, and the Biden plan not only gives them no incentive or ability to do so but punishes them for costs incurred by wealthier households, all while claiming victory because rate hikes caused by government action aren’t technically a tax. Tax or not, the cost to the American people is the same. The ploy is a cruel bait-and-switch tactic that misleads the American people and should raise red flags about the Biden administration’s friendliness to the American worker.
Democrats on the House Energy & Commerce Committee have introduced a relabeled and slightly revised bill from the past and given it the inaccurate and misleading name “the CLEAN Future Act.” This bill is aimed at restricting and reducing the use of reliable energy sources, and mandating and increasing the use of unreliable energy sources. This will make energy more substantially expensive and it will reduce jobs and economic growth. Simply stated, the bill, if passed, would do a great deal more to insure that more and more of America repeats the catastrophic widespread power outages that Texas experienced last month than it will ever do to provide a “clean future” as the act’s name implies.
The CLEAN Future Act is less focused on energy policy than it is on imposing an anti-energy policy and a virulent climate focused policy aimed specifically at destroying America’s current domestic energy supplies. In other words, the goal is to make it illegal to use clean fuels like natural gas or to use any fuel based on oil, or even clean coal technology — all abundant energy sources in the US. And it wants us to transition from these reliable energy sources to unproven and unreliable energy sources in the space of a little more than a dozen years. If they get their way, be ready for dramatically more expensive electric bills and for more Texas style blackouts which can cost lives and billions in damages.
The widespread use of those natural gas, oil and coal in conjunction with innovative clean technologies have caused American air quality to dramatically improve in the last thirty years. With air quality improving, there is no need to turn the economy on its head and endanger people’s lives with poverty, power outages, and economic disruption.
Even if you buy into the idea that carbon dioxide is harmful, America’s carbon emissions are on the decline. But the truth is, carbon dioxide is a natural occurring and necessary element for life. If we removed all carbon dioxide from the atmosphere, all life would shortly die out as there would be no plant life. Humans and animals require oxygen to respirate and live. Plants require carbon dioxide to live and do photosynthesis which provides animals and humans with food. So take away the carbon dioxide and you kill off life — both animal and plant life. But as I said, even if you buy into the idea that carbon dioxide is at harmful levels (it isn’t), no serious human can hope for a planet without CO2. That would be a dead planet.
The CLEAN Future Act will punish the production and use of our most reliable energy sources, and it will dramatically raise energy costs and destroy jobs. This seems to fit well with Biden’s agenda. He may have promised a “moderate” and “unifying” agenda, but his first months in office blew the lid off the idea that there will be anything moderate or unifying about the Biden-Harris administration.
The bill is also designed to give the Biden-Harris administration’s goal of “social justice” more teeth. For example, the bill would establish an Office of Energy Equity at the Department of Energy. Americans love the idea of equality before the law and the idea that we are all created equal. Justice is a founding ideal for any nation that promotes freedom. But when you add modifiers to the word justice, you are likely not talking about justice, but actually trying to co-opt the term to suit your ulterior motives and goals. With energy policy, the goal should be to provide all of America with reliable and affordable energy. That benefits everyone — the poorest among us, need affordable energy more than anyone else and they need the jobs and opportunity that affordable energy helps create.
So if you are really interested in “energy equity” or “energy fairness,” you would focus on providing reliable energy to Americans at reliable and relatively stable and affordable prices. But if you have another agenda, you might hide it by promising greater energy equity while forcing prices dramatically higher and making the reliability of the energy sources spotty and questionable. That’s exactly what “The CLEAN Future Act” does and it is in line with the Biden-Harris Administration’s goals.
If we imposed the same truth in labelling laws on Congress that apply to food products, this law would be named, “The Make Energy Expensive and Unreliable Act.” And if truthful labeling applied to the committee names in Congress, the committee would no longer be called the Committee on Energy and Commerce, but would be renamed the Committee Against Energy & Commerce.