As you've probably heard, at its recent Ministerial Meeting on October 5, OPEC+ decided to cut oil production from "current baselines" by 2 million barrels per day starting in November.
Somewhat predictably, chaos ensued in the Biden administration following the announcement, which spells bad news for American consumers' prices at the pump, just weeks before the hotly contested midterm elections.
The White House tried to prevent OPEC+ from taking such a large cut to production by having administration leaders Amos Hochstein, Janet Yellen, and Brett McGurk plead with the Gulf Nations to change their mind -- with zero effect.
In a statement, National Security Advisor Jake Sullivan and NEC Director Brian Deese described the president as "disappointed" about the announcement, and made a veiled threat about "[reducing] OPEC's control over energy prices."
And CNN even reported that draft talking points circulated by the White House to the Treasury Department 'framed the prospect of a production cut as a "total disaster" and warned that it could be taken as a "hostile act."'
The timing of the cuts, which are so near the midterm elections and will almost certainly result in higher gasoline prices, is clearly a major irritation to the Biden administration -- which has been ludicrously bragging about lowering the very gas prices it was responsible for astronomically driving up in the first place.
But despite the obvious solution available, don't expect the OPEC+ oil production cut to spur new U.S. oil and gas production here at home.
Instead of using OPEC+'s rebuff as an opportunity to increase domestic energy production, U.S. shale production now faces more obstacles than ever, with supply chain issues limiting equipment, fewer workers, a lack of capital, and pressure from investors to increase returns rather than make investments.
And President Biden is sticking doggedly to his policy of transitioning out of oil and gas and into renewable energy -- even in the face of rising costs for financially stressed American consumers.
In fact, Biden's most recent climate/tax bill, the Inflation Reduction Act, mandates increasing costs for oil and gas produced on both federal and non-federal lands. And the Biden administration is actively hiring across the government to implement those anti-oil and gas policies.
If President Trump's energy policies were still intact the United States would be producing two to three million barrels of oil a day more, and U.S. oil production would be three to four times higher than the amount of oil depleted from the Strategic Petroleum Reserve (SPR).
Instead, Biden's policies of canceling pipelines, reducing drilling permits, and establishing anti-fossil fuel rules are costing the U.S. economy almost $2 billion a week -- and the SPR is at its lowest level since the summer of 1984.
And while it's easy for the Biden administration to moralize about OPEC+ while pointing fingers away from its own reckless, destructive energy policies -- as usual, it's American consumers who will pay the price for his failures.
Tom Pyle
American Energy Alliance
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