On the campaign trail, President Joe Biden said he would make Saudi Arabia’s Crown Prince Mohammad bin Salman (MbS) into an international pariah for the brutal murder and dismemberment of Washington Post journalist Jamal Khashoggi.
Like the campaign trail proclamations of so many candidates, though, Biden’s promise proved hollow. Indeed, instead of bringing the Crown Prince to his knees, it is Biden who has gone down on one knee to plead for Saudi assistance with high oil prices.
Biden is again planning a visit to the Saudi capital of Riyadh to beg the leader of the OPEC cartel for more oil.
The July trip is the latest example of how the energy crisis has caused the Biden administration to lose its way on foreign policy.
With consumers paying on average $5 a gallon for regular unleaded gasoline, and truckers paying close to $6 a gallon for diesel, Biden is desperate to tamp down prices that are contributing to runaway inflation, which is now at a 40-year high of 8.6 percent.
Comments by White House personnel suggest that Biden is planning to travel to Saudi Arabia in mid-July, including a sit-down with Crown Prince Mohammad bin Salman, which seemed impossible in the 2020 presidential election.
Biden vowed to reduce U.S. reliance on Saudi Arabia, the so-called “central banker” of global oil markets, and made reviving the nuclear deal with Iran – Riyadh’s arch-enemy – a top priority.
The best-laid plans of mice and men, as they say.
A nuclear deal with Iran that eases U.S. sanctions could increase global oil supplies by 2 million barrels daily, helping reverse the ongoing shortage.
However, reconciliation with Iran has never been popular with U.S. voters, which is why former President Donald Trump torpedoed the original Iran deal. Biden’s attempts to resurrect it have floundered, and officials in Washington and Tehran are pessimistic it will happen.
Without those extra Iranian barrels, Biden has few options to tame energy prices. He’s desperate, having already tapped the U.S. Strategic Petroleum Reserve at unprecedented rates, only to see crude prices climb above $120 a barrel.
Rather than call a truce with domestic producers, Biden remains wedded to his party’s ambitious – some would say unrealistic – climate agenda.
That means a continuation of unfounded accusations of “price-gouging,” threats to tax “windfall profits,” termination of federal oil and natural gas leases, blocking construction of pipelines, and imposing strict climate-related disclosure requirements on oil and gas companies.
No wonder producers are reluctant to increase investment in U.S. fields.
What’s baffling is why Biden considers foreign oil better than American oil? U.S. environmental regulations are far stricter than any OPEC member country. The lifetime emissions of American oil and natural gas is far lower than nearly every other producing country in the world.
And it’s not just Saudi Arabia that the White House is kowtowing to for more oil.
President Biden has eased sanctions on Venezuela, allowing European oil companies operating in the South American country to export more oil. The move empowers Venezuelan President Nicolas Maduro, a brutal dictator that the Trump administration hit with harsh sanctions to encourage regime change.
What kind of message is Biden sending the world?
Climate advocates and Democrats’ progressive constituents should understand that Venezuela’s heavy sour crude, a grade also referred to as “tar sands” because of its tar-like viscosity and high sulfur content, has some of the highest carbon intensity in the world.
Soaring gas prices have Democrats so worried that Biden will likely turn a “blind eye” to the sale of sanctioned Iranian oil. Iran’s oil is only a few notches above Venezuela in terms of its carbon intensity.
But perhaps Biden believes carbon emitted outside the United States doesn’t contribute to climate change. You know, out of sight, out of mind. What the Environmental Protection Agency (EPA) can’t see won’t hurt you.
Unfortunately, climate science doesn’t work that way.
Meanwhile, much of U.S. oil production is light sweet crude that produces less pollution and is more climate-friendly than barrels from Iran or Venezuela. American shale oil is also “short-cycle” supply, which means production can be ramped up relatively quickly depending on market conditions. In other words, it is perfect for addressing supply shortages like the current crisis – pump more now, throttle back production when prices recede.
Too bad Biden can’t bring himself to commit to American energy security and boosting domestic production. He may now openly call on U.S. producers to increase investments in new supply. However, his policies send the opposite message, and he still can’t resist blaming the oil industry for high prices in his public comments.
That is energy policy at peak dysfunction.
Energy security – the availability and abundance of affordable supplies – should be this administration’s top priority. Biden should be coordinating with energy CEOs to maximize U.S. supply in the most environmentally responsible way possible. It’s a conversation the oil industry would welcome, particularly since investors are already holding oil companies to greater environmental standards as the ESG movement intensifies in financial markets.
But Biden’s relationship with America’s oil industry looks permanently broken. And Biden is about to sacrifice long-term U.S. foreign policy aims for a temporary respite from high consumer gasoline prices.
The current energy crisis was avoidable – if only the President had taken an even hand with the world’s largest oil and gas industry in his own backyard.
Instead, America is back to begging dictators for energy scraps. It’s anyone’s guess what we’ll have to give up to get it.
