Et tu, Kamala?; Biden's Janus-faced Energy Appeals; and Big Banks' Divestment Virtue Signaling.
Et tu, Kamala?; Biden's Janus-faced Energy Appeals; and Big Banks' Divestment Virtue Signaling.
In his editor’s column this week, Michael Walsh looks ahead to the 2024 presidential election and points out the manifest deficiencies of the various contenders for the White House. All but one of those contenders, you will note. Mr. Walsh intends to write about him next week.
'There is a Tide in the Affairs of Men'
While the country holds its breath awaiting the next Joe Biden disaster or the next supererogatory Donald Trump rally, or the next quixotic Mike Pence 2024 presidential campaign event, beneath the surface the political tides are running at Shakespearean levels. Seeking to enlist Cassius in his plot to assassinate Julius Caesar, Brutus says:
We at the height are ready to decline.
There is a tide in the affairs of men
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.
From our current vantage point, it looks as though the 2024 election might come down to a rematch between Trump and whoever survives the coming Democrat bloodbath this fall. Can senile Joe Biden continue to impersonate a sentient being behind the Resolute desk for another three years? Or will the likely loss of both houses of Congress to the unworthy Republicans motivate the donkey party to find fresh-faced replacements for both Biden and his manifestly unsuitable vice president, Kamala Harris? … [S]uch a decision will come with a hefty price tag. They'll have to explain to their black voters why Harris was discarded without ever being able to articulate the reason that dare not speak its name: she's simply too stupid to function:
So it should be a simple matter for the Republicans to point out the manifest real-world flaws in the Leftist program, sit back, run a bunch of guys named Moe, and wait for the election returns in 2022 and '24. The only problem is the elephant party has its own elephant in the room in the form of Trump, who seems bound and determined to run again and avenge his tainted loss to Biden in 2020. To that end, he's already embarked on a campaign of waving the bloody shirt in anticipation of settling the score in '24….
Can Trump pull it off? Maybe, but unlikely. Outrage over the election-night shenanigans will fade, and Trump will be 78 years old in November 2024, just a year younger than the superannuated Biden is now. The White House is no country for old men, especially one who never forgets a grudge and will spend much of his time seething and seeking revenge. The most a Trump primary candidacy can do is block the path for younger, more viable candidates, some of whom will steer clear of him and thus pre-emptively tank their own prospects.
New contributor Steven Hayward wrote about the Biden Administration’s odd Janus-faced approach to the oil and gas industry, on the one hand calling on producers to significantly increase output (even criticizing them publicly for not investing enough in expansion), while, on the other, continuing to wage war on the sector through regulation and discouraging capital investment.
Democrats’ Energy Spousal-Abuse Syndrome
Energy Secretary Jennifer Granholm, to whom Donald Trump’s famous epithet “low-energy” applies better and more literally than to any other target, is begging the oil and gas industry to ignore the administration’s repeated assaults, and to carry on as if Trump was still in office:
We are on war footing. That means [crude oil] releases from the strategic reserves all around the world. And that means you producing more right now if and when you can. I hope your investors are saying this to you as well. In this moment of crisis, we need more supply. [Emphasis added].
Would those be the same investors that the Biden administration and woke capitalists like Black Rock’s Larry Fink are trying to intimidate from investing in fossil fuel production? The same companies for whom the Biden regime has sought to raise the cost of capital (with partial success already) through administrative harassment, such as setting the Federal Reserve and the Securities and Exchange Commission after them? The same industry whose viability the Biden administration’s Federal Energy Regulatory Commission (FERC) is trying to hobble with restrictions on new oil and gas pipelines? Never mind proposed or half-built pipelines such as the Keystone XL….
Asking the oil and gas industry to produce more oil while preventing new pipeline construction and shutting down existing pipelines is like asking the auto industry to produce more cars and trucks while tearing up existing roads and prohibiting new ones…. On the surface a neutral observer might think the Biden administration’s current energy policy is schizophrenic. It is actually mendacious, and rests on a cynical calculation that both the oil and gas industry and finance capitalists won’t play along in the long run. The great irony of America’s self-inflicted energy disaster is that profits for incumbent oil and gas producers are soaring, as are their stock prices. So naturally Democrats are going back to the Jimmy Carter playbook and demanding a “windfall profits tax” on current energy producers. In other words, please produce more, but don’t expect to get to keep any profits from expanded activity!
Oil and natural gas, like real estate, have been prone to boom and bust periods for more than 50 years, as large global price epicycles have delivered fat profits in boom times and inflicted severe pain during recessions and cycles of overproduction. Following the most recent wave of bankruptcies in oil and gas over the last decade, the domestic industry and its investors have at last become more disciplined about production and investment strategies. Neither producers nor investors are likely to be taken in by the administration’s temporary relief of the government boot on their neck. They know that once the current “crisis” has passed, the beatings will resume.
One of the worst “beatings” to which Mr. Hayward referred is the concerted effort to choke off the resource sector’s access to capital. “Divesting” from oil and gas is a hot, virtue signaling trend in the investment world these days, and one which the Biden Administration is doing its utmost to encourage. Here’s Joan Sammon with the details.
Biden, Big Banks Declare War on Energy Sector
While Americans were locked down and their movements constrained by Covid-19-related policies, the Biden administration has been working in the shadows, making a slew of regulatory changes fundamentally harmful to America. Because this administration lacks the necessary majorities in Congress, it has been circumventing the legislative process by using administrative rules to create oil and gas supply scarcity that almost immediately has caused the price of everything to begin to rise.
The administration’s objective is simple—create scarcity via a series of unilateral regulatory changes at various government agencies that will predictably push the prices of oil and gas toward greater parity with alternative energy sources such as wind and solar. Fully understanding that alternative energy sources fall short of meeting the current and future energy needs of the American economy, the Biden administration has persisted with its “make it hurt” strategy that necessarily ignores the impact such a strategy is having and will continue to have on the larger economy. Threatening economic security, food security and national security, this circumvention strategy is a blatant overreach by the executive branch that began when Biden took office last year.
Sidestepping Congress entirely, their strategy includes using government agencies to dismantle oil and gas distribution systems, tightening regulations, and suspending leases and permits meant to impede future drilling activity. Where the administration could not sufficiently hamstring the energy sector through unilateral regulatory overreach, it sought allies to lend weight to the effort.
Enter investment bank giants like BlackRock and JP Morgan. Perhaps the most insidious element of the Biden administration’s anti-energy strategy has been its collaboration with investment banks to coerce and if necessary, force divestment in the energy sector. Like all industries, energy producers require capital in order to drill and produce oil and gas assets. By using the pseudo-sophisticated set of investments standards known as "environment, social and governance" (ESG) as the predicate, major investment banks are assisting the administration to destroy domestic energy independence by limiting available capital that would otherwise enable American energy producers to maximize oil and gas production.
The CEOs from these investment banks pronounced the death of fossil fuels in defiance of economic reality before the Biden administration even took office, with complete disregard for national security. They declared climate change an "existential threat" while boldly disregarding the actual threat their banks’ own relationships with China represent to the U.S.—and to the climate for that matter. Trying to sound socially and environmentally "woke" while being totally compromised by their own strategic decisions, these banks have helped beat back any competing views about the dangers of heedless divestment. Their self-interested efforts have unequivocally contributed to the difficult economic conditions Americans are now experiencing and the growing threat China represents to U.S. national security.
Tom Finnerty reported on the Biden Administration’s decision to tap into the Strategic Petroleum Reserve in order to control soaring gas prices. After suggesting that those gas prices are, in no small part, the president’s fault, Finnerty pointed out that this type of thing is decidedly not what the S.P.R. is for.
Biden to Tap Strategic Petroleum Reserve Yet Again
[The purpose of the Strategic Petroleum Reserve] is to defend against the kind of national crisis they had in the 1970s, when the fact that America imported more than 80 percent of our oil proved disastrous when OPEC declared an oil embargo on the western nations that had supported Israel during the Yom Kippur War. Oil shortages and rationing followed, creating not just a national energy crisis but a potential national security crisis as well. The S.P.R. was created to establish a cushion for just such an eventuality.
Thankfully, our present situation isn't like that at all, because we've developed our own natural-resource industry; the U.S. was a net energy exporter as recently as 2019. During the Trump administration we became less reliant on foreign dictators than ever. But Biden has worked hard to pull that all down, and now he's spending down the capital better leaders worked hard to build up.
Finnerty also wrote about Justin Trudeau’s increasingly tiresome April Fools Day joke.
April Fools, Redux
Two years ago, we at The Pipeline reported on Justin Trudeau's bizarre decision to go ahead with a planned doubling of Canada's Federal Carbon Tax -- on April Fools Day, no less -- despite the fact that the entire world was in the midst of a rapid economic downturn brought about by government imposed lockdowns intended to slow the spread of the then-extremely novel Wuhan coronavirus. Trudeau's defense of this move was more ludicrous than the decision itself. He said,
We know that it is important that we put more money in the pockets of Canadians at this point when they’re stressed. Our plan on pricing pollution puts more money upfront into people’s pockets than they would pay with the new price on pollution. We’re going to continue to focus on putting more money in people’s pockets to support them right across the country.
That is to say, Trudeau held that Canadians would be better off having their carbon emissions taxed -- "price on pollution" was at the time a newly developed p.r. consultant phrase whose object was to convince Canadians that the tax would be paid by Captain Planet villains rather than themselves -- because they would actually be getting more money back on the tax rebate than they'd paid in the first place.
This deal sounded too good to be true at the time, and it turns out it was: just last week, Yves Giroux of the Parliamentary Budget Office issued a report which found that "most households in Alberta, Saskatchewan, Manitoba and Ontario will see a 'net loss' resulting from federal carbon pricing." The National Post reports,
As the carbon pricing increases, lower income households should continue to receive rebates, but middle-class and upper-class households should be expecting to pay hundreds, if not thousands [of dollars per year] according to the P.B.O., depending on their carbon consumption. In Alberta, the PBO expects that lowest-income households could expect to receive up to $246 back in their pockets this year, but highest-income households can expect to pay up to $1,925. In the end, Albertans will end up paying $507 per household on average. In 2030, the PBO calculated that these same households in Alberta could be receiving $660 or paying up to $7,402. The net loss on average would be $2,282 per household.
These numbers are shocking, even to those of us who said at the time that the Liberals' math didn't add up.
Nevertheless, and despite the skyrocketing price of oil and record-breaking gasoline prices instigated in part by another international crisis, the Trudeau government is again pressing ahead with a carbon tax increase on April 1st. The new price will be $50 per ton of carbon emitted, a 25 percent increase on the present number…. Of course, Putin's war means that those increases will come from a higher baseline than they otherwise would have. And all in the service of hitting impossible emission reduction targets. As [Dan] McTeague explains in a recent post, the Trudeau government's stated goal is to cut Canadian carbon emissions by 40 percent over the next eight years, despite the fact that they've only succeeded in cutting them by 1 percent over the past fifteen years. And that was achieved via the low-hanging fruit of transitioning away from coal and towards natural gas.
Which is to say, at a perilous time for the world economy, Justin Trudeau and Co. are putting their ideological obsessions ahead of the welfare of regular Canadians.
And Clarice Feldman looked into the details of Joe Biden’s budget proposal. She found a lot of green, a lot of red, and no clue how to get the country back into the black.
Biden Announces 'Fiscally Responsible' Budget
That’s all for this week. Thanks for reading, and keep an eye on The Pipeline.