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Busting MAGA Myths: Biden caused inflation and high gas prices [1]
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Date: 2022-10-11
Here’s one amazing fact that apparently most of the MAGAs don’t know. There are two Keystone pipelines, as shown in the map below.
Keystone and Keystone XL Pipeline
The “Keystone” Pipeline already exists and is already delivering Canadian Tar Sands oil to refineries in the U.S. The “Keystone XL” was an extension of that pipeline that took a lateral shortcut across Montana to Steele City, Kansas. There isn’t any additional oil that would go through that shortcut, it would be the same oil that is going through the main “Keystone” pipeline. It would merely be delivered somewhat faster.
The amount of oil that has been prevented from being transferred by the Keystone pipeline is zero. All that oil is still going to exactly the same place.
The Keystone XL pipeline extension, proposed by TC Energy (then TransCanada) in 2008, was initially designed to transport the planet’s dirtiest fossil fuel, tar sands oil, to market—and fast. As an expansion of the company’s existing Keystone Pipeline System, which has been operating since 2010 (and continues to send Canadian tar sands crude oil from Alberta to various processing hubs in the middle of the United States), the pipeline promised to dramatically increase capacity to process the 168 billion barrels of crude oil locked up under Canada’s boreal forest. It was expected to transport 830,000 barrels of Alberta tar sands oil per day to refineries on the Gulf Coast of Texas. From the refineries, the oil would be sent chiefly overseas—not to gasoline pumps in the United States.
A second problem is that all this oil belongs to Canada. It is being refined in the US but it's foreign oil; if the US wanted to buy the fuel that is produced by these Canadian wells, we would have to import it from the international market where it goes once it’s fully refined. This isn’t domestic oil, it’s foreign oil.
Dirty energy lobbyists claimed developing tar sands would protect our national energy security and bring U.S. fuel prices down. But environmental reviews by both the Obama and Trump administrations concluded that the Keystone XL pipeline would not have lowered gasoline prices. NRDC and its partners also found the majority of Keystone XL oil would have been sent to markets overseas—aided by a 2015 reversal of a ban on crude oil exports.
Thirdly, it’s Tar Sands oil. That means it can’t be refined to produce regular gasoline, it can only be used to produce diesel.
Some three million miles of oil and gas pipelines already run through our country, but KXL wasn’t your average pipeline, and tar sands oil isn’t your average crude. It's derived from a sludgy, sticky deposit found beneath the wilds of northern Alberta’s boreal forest. These sands contain bitumen, a gooey type of petroleum that can be converted into fuel. It’s no small feat extracting oil from tar sands, and doing so comes with steep environmental and economic costs. Nevertheless, in the mid-2000s, with gas prices on the rise, oil companies ramped up production and sought additional ways to move their product from Canada’s remote tar sands fields to midwestern and Gulf Coast refineries.
Lastly, the already existing Keystone pipeline is an environmental disaster prone to leaks.
Tar sands oil is thicker, more acidic, and more corrosive than lighter conventional crude, and this ups the likelihood that a pipeline carrying it will leak. Indeed, one study found that between 2007 and 2010, pipelines moving tar sands oil in Midwestern states spilled three times more per mile than the U.S. national average for pipelines carrying conventional crude. Since it first went into operation in 2010, TC Energy’s original Keystone Pipeline System has leaked more than a dozen times; one incident in North Dakota sent a 60-foot, 21,000-gallon geyser of tar sands oil spewing into the air. Less than two years before the project was finally pulled, the Keystone tar sands pipeline was temporarily shut down after a spill in North Dakota of reportedly more than 378,000 gallons in late October 2019. And the risk that Keystone XL would have spilled was heightened because of the extended time the pipe segments were left sitting outside in stockpiles. “A study published in early 2020, co-authored by TC Energy’s own scientists, found that the anti-corrosion coating on the project’s pipes was damaged from being stored outside and exposed to the elements for the last decade,” notes NRDC senior attorney Jaclyn Prange, who spent years working on KXL litigation.
So in the end, canceling the XL extension didn’t reduce our domestic oil production by one barrel. We’re still processing the oil, it’s foreign oil that we would have to pay to import, and it’s Tar Sands oil that only produces diesel fuel that has nothing to do with the price of standard gas.
When it comes to drilling permits for ANWR or from public lands — the issue is that there isn’t currently any oil being produced from the permits that they don’t have. Allowing the drilling permit is the first step in the process. Once a company has a permit they then establish a lease, and then proceed to erect a drilling rig, and eventually — that rig starts to produce oil.
worldwarzero.com/...
This week the Department of the Interior moved to suspend all oil drilling leases in the Arctic National Wildlife Refuge (ANWR), undoing a highly contested move made by the Trump administration last year. The Department said it would suspend all leasing program operations "pending completion of a comprehensive analysis under the National Environmental Policy Act (NEPA)." As one of the last expanses of untouched wilderness in the US, ANWR's coastal plain is also home to nearly 200 wildlife species, including polar bears, musk oxen, and caribou, making a spill in this fragile ecosystem unthinkable.
For ANWR there were leases in place for drilling, but none of those drilling rigs were yet producing oil because the Trump administration didn’t fully open the refuge to drilling until January of 2021 right at the end of his term.
No oil was being drilled using permits, leases, and drilling rigs that didn’t exist.
Canceling these leases and permits only affected future oil production, not current production. And the constant refrain from the WH was always that the oil industry already had 9,000 other leases for drilling on public and private land that they weren’t using.
In summary, the Biden administration did not stop any domestic oil production — their decisions only impacted the potential for some oil production in the future while the oil industry already has plenty of potential for future production from other sources.
So then the question is, why has domestic production slowed?
Well, it was because of the pandemic as you can see from this chart — production dipped in March of 2020 during the Trump administration before Biden came into office and it has largely recovered since then back to 12,000 barrels per day — which is equal to production in 2019 — after it reached a peak of 13,000 barrels per day in 2020.
Domestic Oil Production
In short, Biden didn’t “cut” domestic oil production at all. The lockdown during the pandemic is what caused the decrease in production, and during Biden’s term things have been gradually coming back.
Similarly, the rise in the cost of gas actually began two months after the drop in production in May of 2020. Again, this was during Trump’s administration and the pandemic, long before Biden came into office.
Gas Prices
Biden didn’t cause any of this to happen. The change in production and the rise in gas prices were both byproducts of the Covid pandemic before he came into office. As a matter of fact, because of growing production and the release of oil from the strategic reserve, US Gulf Coast oil exports have reached an all-time high.
HOUSTON, June 27 (Reuters) - Exports of crude oil from the U.S. Gulf Coast could hit a record 3.3 million barrels per day (bpd) this quarter, analysts said on Monday, as Europe chases U.S. crude to offset sanctioned Russian oil. U.S. exports have risen in the last three months, helped by Washington's decision to release 180 million barrels of oil from the nation's Strategic Petroleum Reserve, which have flooded the domestic market. Exports to Europe are expected to average about 1.4 million (bpd) this quarter, about 30% higher than the year-ago quarter, while export to Asia is set to drop to under 1 million bpd, according to energy data firm Kpler. The higher purchases by European buyers have more than offset the decline in flows to Asian countries, which have been buying heavily discounted Russian crude.
There’s also the fact that just as all this was happening in April, Trump strong-armed the Saudis into cutting their oil production.
WASHINGTON/LONDON/DUBAI (Reuters) - As the United States pressed Saudi Arabia to end its oil price war with Russia, President Donald Trump gave Saudi leaders an ultimatum. In an April 2 phone call, Trump told Saudi Crown Prince Mohammed bin Salman that unless the Organization of the Petroleum Exporting Countries (OPEC) started cutting oil production, he would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the kingdom, four sources familiar with the matter told Reuters. The threat to upend a 75-year strategic alliance, which has not been previously reported, was central to the U.S. pressure campaign that led to a landmark global deal to slash oil supply as demand collapsed in the coronavirus pandemic - scoring a diplomatic victory for the White House. Trump delivered the message to the crown prince 10 days before the announcement of production cuts. The kingdom’s de facto leader was so taken aback by the threat that he ordered his aides out of the room so he could continue the discussion in private, according to a U.S. source who was briefed on the discussion by senior administration officials.
In contrast, this year Biden visited Saudi Arabia in an effort to have them increase oil production which would help lower the international price for oil. They refused, likely because of the profits they’re raking in.
Even in this chart of International Oil prices, you can see that they begin to rise before January 2020, peaking in July 2022, and then slowly starting to decline. And who was President in 2022 again?
International Oil Prices
Another telling factor here is the fact that inflation is not just something that has affected the US, it’s a worldwide phenomenon that has impacted most of the countries in the world.
Here are all the countries where inflation is higher than in the U.S.
Inflation by Country
Turkey, Argentina, the Netherlands, Russia, Europe, Germany, England, Spain, Italy, Brazil, and Mexico all have inflation rates that are higher than the US.
How exactly did Biden accomplish that? How could US domestic drilling policy affect Brazil and Argentina?
I think what is more telling is the list of countries with the lowest inflation rates.
Lowest Inflation by Country
As you can see that includes China, Saudi Arabia, and Japan. These happen to be countries that also have a fairly low level of Covid casualties. China to date has only 5,226 Covid deaths. Saudi Arabia has only had 9,369 Covid Deaths. Japan has had 45,511 Covid deaths.
Only the other hand Turkey had twice as many Covid deaths as Japan with 101,179. Argentina had 129,958. And so on.
Still, the correlation between Covid and Inflation isn’t perfect because the real cause of inflation has been the loss of workers within the supply chain, and that chain can be affected by other countries that supply goods and parts who may have grown sick, died, or may have been in a lockdown.
Inflation is a serious problem that affects all of our pocketbooks, I’m not trying to downplay its importance or its impact. But the GOP has tried to lay all of this at Joe Biden’s feet arguing that he’s a doddering semi-senile old fool who doesn’t know how to handle the economy. (And leaders of Turkey, Spain, England and Germany, Brazil, Italy, and Mexico are doddering fools too?)
This is not Biden’s fault. He doesn’t actually have control of the levers that either create or could stop inflation. It’s not really in his hands. He didn’t cause this problem and he only very limited ability to fix it — but it is gradually getting better. Oil production is recovering while oil prices and gas prices are both coming down.
Eventually, this problem will be over. And then what will they blame Biden for?
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