April FERC’in Fools
After significant opposition from the public, the Federal Energy Regulatory Commission (FERC) is scaling back their pipeline emissions rule. Rather than becoming immediately binding, the rule is now open for public comment until April 25.
Freedom of speech matters. Participation in democracy matters. This FERC rule change proves both points. Through regular public order, unelected regulators proposed a change that would significantly increase costs for American businesses and families. Then after overwhelming public opposition, the regulator amended their approach to better reflect the will of the people.
Please know, this is not over. The rule is still out there and subject to public comment. American families and businesses are able to enact change by participating in this public comment period.
Bottom Line: Like a bad April Fools joke, FERC put out a terrible policy proposal that would slow down pipeline approval. After serious backlash from the industry and its allies, they began to walk it back. That’s how it should work.
Perhaps the public is being tricked for April Fools Day a few days early. Democrats released a plan this week that would make America Energy Independent. Which seems like a great sound bite and one that would typically be supported in the Common Sense section of this newsletter, (also credit to the Dem’s pollsters for trying to get ahead of a groundswell of interest in energy independence), except their proposals are complete nonsense.
Among the proposals put forward by Senator Markey (D-MA) and the Climate Change Task Force are more releases from the Strategic Petroleum Reserve (SPR), the resurrection of the Civilian Climate Corps, and using presidential emergency power to set energy efficiency targets.
The SPR is intended to be a reserve for emergency only. Instead, this Administration and the Democrats in Congress are using it for an electoral emergency. After a year of attacks on America’s energy infrastructure creating market uncertainty (and as Americans are watching their monthly bills skyrocket) Democrats are trying to gloss over the problems they created by further weakening America’s energy security. Tapping into the SPR leaves the country with less of a cushion in the event of a real economic necessity. Using it to correct course after their mistakes is another example of nonsense.
Bottom Line: We will never be energy independent with 100% renewable energy, and Senator Markey knows that. His bill is a wolf in sheep’s clothing, intended to score political points in a time where “energy independence” polls well.
The additional lanes fallacy, or in economic terms ‘induced demand,’ is something with which California is very familiar. So it is something of a mystery why California Governor Newsom is using gas payments as a way to relieve the burden of higher gas prices. It isn’t really a mystery … who doesn’t want ‘free’ money?
But who is actually going to get this money? All CA residents are eligible for up to two $400 checks per person with no limit on family receipts. All vehicles are also eligible. Note, California has the highest number of EV registrations. So, the California elites with multiple luxury electric vehicles who in all likelihood do not care about the price of gasoline are all getting more money. Meanwhile, the family sharing one gasoline-powered vehicle to get between multiple jobs and schools gets one payment. The governor claims to care about economic justice but his actions prove otherwise.
In taking a higher level look at this issue it makes even less sense. Governor Newsom’s $400 check proposal is meant to provide relief from high gas prices, but it will likely cause prices to rise even more.
To lower gas prices, one of two things needs to happen: supply increases, or demand decreases. $400 checks will not have any effect on supply, and will theoretically increase demand as people have extra money to gas up, take trips, etc. So Newsom’s proposal will increase demand causing prices to rise further.
In addition, instead of suspending the state gas tax for 6 months, CA Dems have proposed a tax on profits of oil producers in its place. We all know taxes will be passed down to the consumer, so this would also increase prices that CA drivers are paying at the pump.
Bottom Line: CA is the birthplace of bad policy. Newsom claims to want to lower gas prices, but his $400 checks will do the opposite. Instead of suspending the gas tax, the CA legislature wants to increase taxes on oil companies. Great work!
Boy oh boy, gas prices have really become a hot button issue haven’t they? Prices dipped slightly this week but remained very high, with the national averagecurrently at $4.21.
The gas price issue has gotten so bad for the White House, President Biden held a press conference yesterday to address it.
The big news from his press conference is that the U.S. would be releasing one million barrels of oil from the SPR for the next 6 months to help lower costs. Sure, this should help in the short term but depleting our reserve by nearly a third is dangerous without a plan to replace it. Experts suggest that releasing this much oil could take as many as 10 years to replace. While we appreciate the President’s gesture, he still failed to provide the clear green light to American oil and gas companies to begin producing more, which is the single most important thing he could do.
Hearing On The 2022 Farm Bill And Energy: On Tuesday, April 5, the House Agriculture Committee will hold a hearing called “A 2022 Review of the Farm Bill: Energy- Renewable Energy Opportunities in Rural America.”
Hearing On Electrifying The Postal Fleet: On Tuesday, April 5, the House Oversight and Reform Committee will hold a hearing called “It’s Electric: Developing the Postal Service Fleet of the Future.”
Hearings On Gas Prices: On Tuesday, April 5, the Senate Commerce, Science, and Transportation Committee will hold a hearing “to examine the effect of elevated petroleum prices on American commerce and consumers.” And, on Wednesday, April 6, the House Energy and Commerce Committee will hold a hearingcalled “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump.”
Hearing On Proposed EPA Budget: On Wednesday, April 6, the Senate Environment and Public Works Committee will hold a hearing to examine the President’s proposed FY 2023 Environmental Protection Agency budget.
Hearing On Critical Minerals: On Thursday, April 7, the Senate Energy and Natural Resources Committee will hold a hearing to “examine the scope and scale of critical mineral demand and recycling of critical minerals.”
COMMON SENSE POLL OF THE WEEK
New poll shows Biden FAILING on his energy agenda:
– 47% concerned a “great deal” about cost/availability of energy (up from 37%)
– 44% describe U.S. energy situation as “very serious” (up from 32%)
– Only 38% approve of Biden energy policy
Check out this Gallup poll.