Don’t blame Biden for energy prices

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Dear Editor:

There is a lot of political commentary that is misleading and sometimes just plain wrong, including in this paper, about how President Biden’s energy policies may have affected today’s energy prices.

The short answer is they don’t in the short term. Neither canceling the Keystone pipeline, scaling back on new drilling permits, rejoining the Paris Climate Accord nor pursuing renewable energy have caused energy prices to increase.

No president controls the price of oil. Why not? Capitalism. Supply and demand. Coming out of the COVID recession the global demand for oil increased faster than the supply, which drove up the global price. And since OPEC controls 80 percent of the world supply of crude oil, its policies set the price. US oil companies aren’t complaining; they are making record profits. Most of the price of gas or fuel oil you pay is tied to the cost of crude oil; the remainder covers refining, distribution and, of course, profit.

But what about “energy independence”? No matter how you define it, we are as energy-independent today as we were under President Trump. Which is to say “not very” as long as our economy is dependent on fossil fuels. We do pump a lot of oil in the US, but we also continue to import oil from over 70 countries. Why? Capitalism again; companies want to reduce costs and increase profits, so they continually make decisions on where to buy and sell to get the best prices. These decisions are made by individual companies, not the president in a free economy.

But aren’t oil and gas companies drilling less because of Biden’s policies? The Dallas Fed asked them recently, and the response was overwhelmingly “No.” Other factors such as investor pressure on a company’s capital structure are having a much bigger impact.

President Biden’s energy policies will help in the long run. Moving our economy off fossil fuels over time will make us energy-independent, reduce costs and also stop man-made climate change. No country controls the sun or the wind, the fuel is free, and unlike other forms of energy, wind and solar energy costs continue to steadily drop.

President Biden has the right strategy.

John Fehlauer

San Antonio, Texas and Mount Desert

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