CONLEY COMMENTARY (WSAU) – Every time Joe Biden opens his mouth about gas prices, he criticizes “big oil” for record profits. He accuses them of war profiteering. He says those profits should be passed on to drivers. He threatens a windfall profits tax.
He’s wrong on all of that.
First, who owns the oil companies? They’re publicly traded companies. Your stock portfolio and your retirement accounts probably hold stock in Exxon-Mobil, or Royal Dutch Shell or British Petroleum. Those profits belong to the shareholders – you and me. Who does Joe Biden think he is, telling companies how to spend their profits? That’s my money, not his.
And oil is a boom and bust business. When crude oil drifts below $60, the oil companies lose money. Why? Because of government policies. The federal government arbitrarily blocks new pipelines. So oil moves by train, which is less efficient and more expensive. Drilling on federal lands is choked in red tape. So it’s easier to drill off-shore, but that oil is much more costly to get at and has greater environmental risks. Why aren’t new refineries being built? Because as government policy shifts towards electric vehicles, those refineries will become obsolete before they’re recouped their costs. Six oil refineries have closed since 2000; because of new environmental standards they can’t be operated profitably.
And the war in Ukraine, which Biden blames for high prices, has been horribly mismanaged. Russia is still a huge oil exporter. They’re selling to India and China at $90 a barrel. Vladimir Putin is getting rich, and is financing his military misadventures off the profits. Instead, our policy should be to flood the world markets with oil. As the price goes down, Russia loses money and we become the world’s energy supplier.
Remember, it’s government manipulation, not oil company greed, that’s sucking up your dollars at the gas pump.
Chris Conley
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