I saw something disturbing this past week. Diesel fuel has topped $6 per gallon in Parker. I also saw that, nationwide, the average price of regular gasoline has topped $5 per gallon.
Rising fuel prices affect everything in the economy. I’m convinced the main reason for inflation today is the rising price of fuel.
Some want to blame the Biden Administration for the high fuel prices, noting how much cheaper it was when Donald Trump was President. Is this a fair assessment?
I’ve read reports on high fuel prices in respected business publications like Fortune, Forbes, and Kiplinger’s. Independent journalist John Stossel has a video about the subject on You Tube. The consensus is market forces were what drove fuel prices up. This means fuel prices would’ve increased even if Trump was elected to a second term.
During the pandemic, people drove a lot less. With less demand for fuel, the price went down. Oil companies shut down some production because it wasn’t cost effective to keep it up.
With people driving again, the demand for fuel has increased. However, it takes time for production that’s been shut down to be restarted. The demand has gone up, but the supply hasn’t kept up. That’s why fuel prices have increased.
This is the law of supply and demand. It’s Economics 101.
With that said, however, has the Biden Administration been helping things? The consensus I saw is it hasn’t, and is likely making things worse.
President Joe Biden has cancelled pipelines and proposed oil leases, which has thrown confusion and uncertainty into the market. This drives up prices. Fuel companies have to wonder if new exploration, or even increasing current production, is a good investment if they’ll face opposition from the current administration.
President Biden is definitely hostile to the fossil fuel industry. He appears to be catering to the environmentalist/climate change crowd. They’re the ones who say that, to save the Earth, we must end our use of fossil fuels like coal, oil and natural gas. We can’t do it today, we need to do it yesterday! The “Green Agenda” is to force Americans to stop using fossil fuels.
I’ve got news for them. Right now, we have no alternative to fossil fuels. There are promising technologies, but we have no viable alternatives unless you consider nuclear power, which the climate change crowd is against. There is no panacea, no magic bullet to replace fossil fuels.
Consider solar power. I’m excited for the possibilities for solar power, but we need to realize it’s not the full solution. Solar power on a mass scale needs a lot of infrastructure, and what do you do when the sun goes down? You can either have huge batteries, or you’ll need a second source of power generation, like fossil fuels.
How about electric cars? The process of making an electric car, down to the extraction of resources, is as dirty as making a gasoline-powered car. Besides, where do you think the power comes from to charge up the car’s batteries? You guessed it: most likely a power plant using fossil fuels.
We also use coal, oil and natural gas in products we use every day, including plastics and the clothes we wear. Fossil fuels made the modern world possible.
For the climate change people to demand we stop using fossil fuels is like telling an addict he needs to quit cold turkey while ignoring the fact the substance he’s addicted to is what’s keeping him alive.
So, we’re going to be dependent on fossil fuels for the foreseeable future. However, that doesn’t mean we can’t decrease our use of them, or that we can’t burn them cleaner.
In fact, that’s what we’re already doing, and have been doing for some time. Today’s cars, even our SUVs and pick-up trucks, are a lot cleaner and fuel-efficient than they were when I was a kid. They’re even better than they were just a few years ago.
One of the proposals in the “Green New Deal” was building high-speed rail lines so people won’t have to fly. Given the environmental damage such a project would create, it makes more sense to me to focus on more fuel-efficient and cleaner aircraft engines. Aircraft designers are doing just that because the airlines demanded it.
Consider those big Burlington Northern-Santa Fe container trains that comes through on the Arizona & California Railroad. Every one of those containers is a truck that’s not on the highway. Sure, diesel locomotives use a lot of fuel. However, having each of those containers being pulled by a semi-tractor would use a lot more.
The main reason I’m excited about solar power is its potential for dramatically decreasing our use of fossil fuels. Granted, they will not replace them completely, but large-scale solar power, and using solar panels for residences and businesses, means we will be able to cut back on fossil fuel use.
All this will make for a cleaner world.
What I’m trying to say is this: if we want to help our environment, we need to keep doing what we’ve been doing, and do more of it. We also need to recognize we need fossil fuels, and act accordingly. We don’t need to divide our nation into “good guys” and “bad guys.” That’s not the way you get things done. It’s amazing what can be accomplished when people work together, and that includes fossil fuel companies.
In Stossel’s video, Ben Lieberman of the Competitive Enterprise Institute had perhaps the best advice to the Biden Administration on fuel prices.
“You can either have lower fuel prices or the green agenda,” he said. “You can’t do both.”