Op-ed: Inflation fueled by bad policy
A recent News and Sentinel opinion would have you believe the increases in the price of food, used cars, and fuel is a corporate conspiracy. Instead, the reality is that the current inflation is fueled in part by bad government policies that hurt energy development and investment, or which crimp our pandemic-hobbled supply chains.
It takes a major suspension of disbelief to believe that government policies like attempts to ban energy production or pipelines are not at all responsible for any of the pain we experience when paying higher utility bills or swiping a credit card at the grocery store or gas pump. To accept this, you’d have to believe that an energy industry which supports over 457,000 jobs throughout Ohio and West Virginia, and which is a major contributor to America’s position as the world’s top oil and natural gas producer, is not contributing to a greater supply of natural gas and hence, lower prices.
The math is simple, not conspiratorial algebra. Higher oil prices and increased regulatory burdens directly lead to higher gas prices at the pump.
Yes, it’s true that the liberal activist group Accountable.US released a report showing that the oil and natural gas industry has over $150 billion in profits this year. This is a great soundbite until it’s mentioned that these companies lost $1 trillion dollars last year during the government-mandated economic shutdown.
To use their logic, do you believe your favorite restaurant is unfairly making more money this year in comparison to last year when no one could go out? Even with the tight labor market caused by federal policies discouraging people from taking jobs, the answer appears to be yes. Despite the lingering effects of the government-mandated shutdown, the National Restaurant Association is projecting a 20 percent increase in sales this year.
But unlike a local restaurant which responds to local market signals and is heavily impacted by state and local policies, the energy industry is global — with impacts caused by the federal government and foreign governments, including cartels like OPEC.
Consider what has happened since January. On Day One of the Biden Administration, the president killed the Keystone XL Pipeline which would have delivered secure supplies of North American oil. Federal regulators are now reopening the permitting and approval process for existing energy infrastructure projects that are already in operation. They also initiated an immediate freeze on drilling on federal land.
And, now we have fewer investments in Ohio and West Virginia natural gas production, which cuts down on America’s own inexpensive supply, while the same administration is encouraging OPEC and Russia to pump more oil in a manner that has a greater carbon emissions impact than ours.
Instead of political posturing and scapegoating, offering solutions to help middle-class families and the working poor facing higher prices at the grocery store and a $13.6 billion increase in energy costs this winter might be more appropriate.
First, adequate energy infrastructure needs to be built and modernized to safely transport North American energy resources. Second, the production of American energy needs to be encouraged to bring down prices. Third, we need a financial regulatory policy that does not intentionally discourage investment in traditional forms of energy or put its finger on the scale to make it harder for American industries to access the capital they need to operate their business. Fourth, energy efficiency measures, from plug-in hybrid electric vehicles to methane capturing technologies, need to be supported to make the best use of the energy we currently have.
That energy has helped the United States deliver the world’s largest absolute emissions reductions, thanks to increased solar and wind energy usage and natural gas replacing older, dirtier ways of generating power.
That’s an American solution and a great success story that proves we can have record energy production, as we have seen since the 2008 shale boom, while simultaneously producing record emissions reductions. It is gratifying to see others sharing this reality with Congress. The best part is that it proves that we can lower America’s carbon footprint while ensuring energy remains reliable and affordable for all.
As Senator Manchin said, “I’m not depending on OPEC. I’m not depending on other countries for my energy anymore. We know how to do it. We have the technology. We should be relying on ourselves.”
By advocating for the buildout of energy infrastructure, increased energy production, and improved energy efficiency, the stage will be set for an equitable American energy future — a future where our families are no longer faced with the burden of constantly increasing energy costs.
Chris Ventura is the midwest director of Consumer Energy Alliance, a leading voice for sensible energy and environmental policies for consumers, bringing together families, farmers, small businesses, distributors, producers, and manufacturers to support America’s environmentally sustainable energy future.