The Forced Energy Transition Without a Plan

What could go wrong?

The recent pronouncements from the bureaucrats in Washington D.C., specifically the Biden Administration’s Press Secretary saying that energy companies have a patriotic duty to make more gasoline to lower the price, clearly demonstrate that they do not understand the energy industry and are doing everything in their power to destroy it in pursuit of their “green” dreams. Appealing to the patriotic duty of energy companies is a barely concealed threat that the hammer is about to come down on them.

In addition to the high crude oil prices caused by the Biden attack on U.S. oil and gas companies, which started on day one of the Biden administration with the cancellation of the Keystone pipeline and halting drilling on federal lands, it is becoming apparent that there is a shortage of refining capacity in the United States that is about to ramp up energy prices and the left’s war on fossil fuels.

There is a shortage of refining capacity because no major refinery built in the US since 1970’s.  Why is that?  In part, it is because refining is a low-margin business that requires extremely large upfront investments.  A significant part of those investments is compliance with the multitude of federal, state, and local building codes and especially environmental rules and regulations that have been designed to make it difficult and costly to build refineries and oil and gas pipelines.

Now, the oil and gas industry including refining, has now been told that their products are being phased out.  On the campaign trail on September 6, 2019, in response to a question about the future of fossil fuels in his administration, Biden said with great emphasis: “I guarantee you we’re going to end fossil fuels.” 

During the Nashville debate with Donald Trump on October 22, 2020, Biden said about U.S. oil and gas companies “We need other industries to transition to get to, ultimately, a complete zero emissions by 2025.”

Why would any oil and gas company or refinery make a 20-to-50-year investment in something that is being phased out?  Of course, no one would so here we are with a shortage of refining capacity.

President Biden is now going one step further and clearly setting the stage for oil and gas price controls and “excess” profits taxes on oil and gas companies as the final blow to put US. Energy companies out of business.  The White House is considering a bill that closely resembles President Jimmy Carter’s failed Windfall Profits Tax. This bill would impose a tax on oil and gas companies with some of the proceeds sent to some consumers to demonstrate that something is being done about “big oil” and their high gas prices.

If that happens, expect shortages of gasoline, diesel, aviation fuel, heavy fuel oil, asphalt, kerosine and all other refined products.   This result is a 100% certainty because that is ALWAYS the result of price controls.

In turn, there will be shortages of the thousands of products that are made from refined petroleum such as clothing, aspirin, cosmetics, shampoo and everything that includes some form of plastic which is, well, everything used in modern life.

All of this

will make the U.S. more dependent on foreign countries that have sufficient refining capacity.  And the countries that have the next largest refining capacity in the world are…wait for it…China and Russia!

We are living in the energy transition that Joe Biden promised: a government forced and enforced energy transition away from fossil fuels without a plan for the replacement.  What could go wrong?