It looks like politics is interfering with Mr. Biden’s green energy build-back better plans.
As energy prices head higher he is finding himself in a bind.
President Joe Biden and his administration hardly planned for everything that happened this year. In fairness, no administration could have planned for it: soaring oil and gas demand, tight supply, rising prices fueling inflation that has quickly gone from nothing to worry about to the biggest worry for many.
Yet that’s not the worst of it for the Biden administration. The president came into office with the pledge to set the United States on a course towards a lower-carbon energy future. This would have been a challenging task even under the best of circumstances, the U.S. being one of the biggest polluters in the world. With the energy crunch, the task becomes almost impossible.
It is no wonder, then, that when Biden started calling on OPEC to boost crude oil production, nervous about rising gas prices at American filling stations, he instantly attracted accusations of hypocrisy. After all, he was pushing an energy transition agenda, he was clearly not in favor of boosting domestic oil production, and one of the first executive orders he signed was the one that killed the Keystone XL pipeline.
Trying to have OPEC and domestic oil producers pump more oil to lift your sagging poll numbers is just a temporary plan says climate poohbah John Kerry.
The White House’s climate envoy, John Kerry, got asked about Biden’s energy policy at the COP26 summit in Glasgow last week. How could the president urge OPEC to pump more oil while campaigning for the phase-out of fossil fuels, the media asked Kerry.
“He’s asking them to boost production in the immediate moment,” Kerry said in response, as quoted by the Wall Street Journal. “And as the transition cuts in, there won’t be that need as you deploy the solar panels, as you deploy the transmission lines, as you build out the grid.”
This is all non-sense and whether the administration wants it or not energy prices are going to move much higher. The lack of investment in new production and reserves means it is quite possible global demand for oil may exceed the world’s ability to pump it. This would mean a rapid rise in oil prices as the market finds the correct price to balance supply and demand.
The recent Q3 2021 report from Goehring & Rozencwajg makes it abundantly clear. We are in an energy crisis.
If the energy crisis has arrived, where does Goehring & Rozencwajg see things 12 months from now? By the end of 2022, we believe global oil demand will have exceeded pumping capability for the first time in history. Just as no one agreed with our assessment of an emerging energy crisis this time last year, almost no one agrees us today either.
The Actionable Intelligence Alert has been long oil and energy stocks for over a year. Our returns have been exceptional. I still think we have tremendous moves in the oil price and oil stocks ahead of us.