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Everybody's mad at Biden

·Senior Columnist
·6 min read

President Biden is lucky to have a dog, because he’s losing friends within his own party while facing midterm combat from Republicans.

Surging inflation has forced Biden to seek ways to generate more oil and natural gas production, to bring down gasoline prices well above $4 per gallon, along with heat and electricity costs that have been soaring as well. Biden began his presidency with the most aggressive environmental agenda ever in the White House, including a pathway to a no-carbon power sector by 2035. Yet Biden has accomplished few of his climate goals, with little sign of a breakthrough any time this year. Meanwhile, climate activists who have strongly supported Biden are now charging him with abandoning the cause, leaving Biden unpopular on both sides of the energy and climate debate.

Late in the day on the Friday before Easter, the Biden administration said it would restart auctions for leases to drill on public land. As a presidential candidate in 2020, Biden vowed to ban new drilling on public land, and a week after he took office he did so, pending a review of the issue. Several states filed suit and Biden backed off, with lease auctions on again, then off again, for the last several months, based on court action.

A break from Biden's no-drilling stance

On April 15, with many people away for the Easter weekend, the Biden administration said it would offer leases on about 144,000 acres of federal land and offshore waterways, a clear break with Biden’s no-drilling stance as a candidate. But the area open to drilling will be just a portion of what it could have been, and the government will boost the royalty rate drillers must pay by 50%. Biden is trying to please everybody, by offering drillers something rather than nothing, while boosting the fees they must pay for mining on public land.

But he’s satisfying nobody. New leases for future projects won’t do anything to lower energy prices today, and oil executives say the royalty increase could raise costs rather than lower them. They’re frustrated Biden is asking foreign countries such as Saudi Arabia to pump more oil, instead of creating incentives for American companies to produce more.

US President Joe Biden pets his new dog Commander as he speak virtually with military service members to thank them for their service and wish them a Merry Christmas, from the South Court Auditorium of the White House in Washington, DC, on December 25, 2021. (Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images)
Biden's German Shepherd, Commander, could be the only constituent who's not upset with him. (Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images)

Environmentalists, meanwhile, accuse Biden of selling out to industry. The Center for Biological Diversity said the plan to move forward with drilling leases is “a reckless failure of climate policy.” The Sierra Club published objections to the Biden move from a number of regional activists, including one who pleaded, “how much more death, destruction and devastation do we have to see before this administration takes action?” Yes, they realize Joe Biden is president, not Donald Trump.

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What’s a guy to do? Biden seems sincere about his effort to move the nation off carbon, to address global warming and try to mitigate the damage. But Biden is also becoming a poster boy for facile campaign promises that can’t survive a collision with reality. Biden’s green-energy push is not the reason oil and gas prices are high and voters are angry. But the correlation of the two reveals a major weakness of the green-energy push: There may be no smooth pathway for moving from carbon to renewables without sharp price hikes that could punish consumers and turn them against the whole transition.

The president is pursuing two incompatible goals

When progressive Democrats launched the “green new deal” in 2019, oil prices were around $52 a barrel and gas was a comfortable $2.35 per gallon. Energy was cheap because U.S. drillers had overproduced for years, sacrificing profitability for growth. Green-energy advocates never really had to account for a costly transition from carbon to renewables because carbon energy prices were low while the cost of renewables was falling, making it seem as if one form of inexpensive energy would eventually replace another.

Biden never endorsed the sweeping provisions of the green new deal, which would have remade much of the U.S. economy in the name of social justice, with a heavy government hand in the power and transportation sector. Instead, Biden has backed the goal of a rapid energy transition, with less disruption than the green new deal would have caused. Like many climate activists, however, Biden didn’t foresee what would happen if the carbon energy we still depend on today soared in price, as it has during the last six months, and we’re still 10 or 20 or 30 years away from having enough renewable energy to replace it.

That’s how Biden now finds himself pursuing two incompatible goals: Promoting a transition to green energy while temporarily seeking more fossil fuels to help bring down prices today. What nobody seems to have foreseen is the changing business model in the oil and gas industry, where several years of terrible financial returns, combined with worldwide pressure to abandon fossil fuels, changed the whole equation of drilling. Lenders and investors now want higher returns in shorter periods of time, which means less money spent on new capacity and more returned via dividends and stock buybacks.

From the perspective of green energy, this should be terrific news. When fossil fuels are more expensive, wind, solar and other renewables become more attractive as an alternative and investors have a stronger incentive to back development projects. When one group of producers in any industry declines to expand capacity, it’s a chance for competitors to grab market share.

What Biden and other green-energy advocates can’t say is that high fossil-fuel costs could be the best way to speed the green-energy transition. Urban progressives who use public transportation might not care, but drivers in the suburbs and vast rural areas don’t want to hear it. Nobody ever told them they were going to bear an outsize share of the cost of transitioning to green energy. Nobody said there would even be a cost, period.

Biden is now stuck trying to explain, and his poor approval ratings reveal it’s not going well. In a coherent world, this could be better. Economists overwhelmingly favor a carbon tax that would make fossil fuels increasingly expensive over time, with rebates going to consumers to offset higher costs. But no politician, apparently, is willing to stand behind a carbon tax and battle the agitprop sure to be trained on anybody daring to raise energy taxes.

Democrats may yet muster a legislative package with green energy incentives this year, similar to what was in the “build back better” legislation that died last December. If Biden got the chance to sign such a bill, it would restore some of his credibility with environmentalists now reeling with disappointment. But Democrats still struggle with the thinnest possible majority in the Senate and an overpacked agenda that can’t seem to get off the ground. It seems worth asking if Biden should just pick a side, instead of offering crumbs to drillers and environmentalists and leaving everybody unhappy.

Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips.

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