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    GOP senators call for fewer regulations, more oil production


    May 19, 2022 - Charles Boothe, Bluefield Daily Telegraph, W.Va.

     

      May 19—A group of Republican senators, including West Virginia's Sen. Shelley Moore Capito, on Wednesday urged the Biden Administration to do all it can to support and encourage more domestic energy production.

      Sen. Lisa Murkowski, R-Alaska, said during the joint press conference aired on social media that if President Joe Biden stops stifling energy companies with regulations and recognizes domestic production as an asset and not a liability, it will be a "signal" to the market that can be "immediate and transformative" to investors who have been holding back.

      The signal will make a difference in the cost of energy, especially gasoline and diesel, which drive up the cost of all products, she said, as more supplies are available.

      "You can hear the frustration in everybody's voices," Capito said of her colleagues, adding that rural states in particular are hit hard because people must drive everywhere.

      Capito echoed her fellow senators in saying the Biden Administration wants to blame everyone for the record high gas prices, which hit $4.56 a gallon nationwide Wednesday.

      "They want to see somebody take responsibility and the president is the one who said when he was first elected, 'I'll take responsibility instead of blaming others,'" she said. "And honestly, all he's done in this instance, something that hits everybody, every day in their pocketbook, is blame everybody else. He blames Vladimir Putin. He blames COVID. He blames even American businesses....the prices were escalating well before Vladimir Putin ever invaded Ukraine. They've been escalating for a year before we even heard him talk about it with any kind of meaningful discussion."

      Capito said American energy sources need to be "unleashed."

      "We know the solutions are there," she said of oil, natural gas reserves as well as coal. "I come from an energy state that can be a contributor."

      Murkowski said the high fuel prices impact every product and will drive home heating costs so high it will not be "sustainable."

      "How can any of this be sustainable?" she asked. "How can you have sustainable communities?"

      Murkowski said it "really comes down to basic supply and demand."

      "Domestic supply matters," she said, urging the Biden Administration to reverse course and restart development of resources and approve crucial projects that can increase supply.

      Sen. John Kennedy of Lousiana also said it is a supply and demand issue and can be remedied by changing the landscape in energy regulations.

      Gas prices fuel inflation, he said, and when the supply shrinks, "prices increase every time."

      Kennedy said there are other reasons for inflation, but the "main reason" is Biden's energy policies.

      He said 80 percent of energy still comes from fossil fuels but Biden's policy is based on "wind, solar and wishful thinking."

      Kennedy said prices don't just reflect the current situation.

      "Markets are forward looking," he said, and prices also reflect what investors think will happen in the future.

      Those investors look ahead, he said, and right now they expect the Biden Administration to continue to stifle fossil fuels.

      "They are still producing," he said of energy companies, "but they look at the future and are afraid of what may happen with regulations."

      Texas Sen. Ted Cruz said what is happening was deliberate on the part of the Biden Administration, from stopping the Keystone pipeline to halting all new oil and gas leases on federal land to rejoining the Paris Climate Accord.

      The purpose, he said, is related to pushing "green new deal" policies and "impose enough pain" on Americans they will want to seek green energy.

      Cruz said too many regulations are "hammering" the energy industry and they cannot even get loans from banks for new production because of Biden Administration policies.

      The senators did not offer any specific solutions that can ease gas prices in the short term, other than changing those energy policies to make it easier to increase production.

      "That can be immediate and that can make a difference," Murkowski said, but did not specify a timeframe or how much of a difference it would make.

      Sen. James Lankford from Oklahoma pointed out, though, that even with Biden's release of 1 million barrels a day from the U.S. Strategic Reserves, prices still keep going up.

      According to various sources, including Forbes and Kiplinger, Biden's push to transition the U.S. economy away from fossil fuels has contributed to higher prices because of a slower pace of domestic production.

      But even with the pandemic-related production decrease, the independent U.S. Energy Information Administration (EIA) ranked the U.S. at the top of the list of the world's largest oil producers, with Saudi Arabia second and Russia third in 2021. Also in 2021, about 35 percent of crude oil produced in the U.S. was exported, the EIA said.

      Both Forbes and Kiplinger reported that the pandemic was the main factor in higher gas prices initially as demand fell drastically during 2020 and production slowed accordingly. At one point in 2020, crude oil was trading in negative territory.

      When demand started increasing last year, supplies struggled to keep up so prices went up significantly. That was followed by Russia invading Ukraine, creating a worldwide energy crisis as Russian oil in many instances was off the market and subsequently supplies decreases as demand continued to rise.

      The outlook for a significant decrease in prices soon does not look good, the publications say.

      "Unfortunately, it doesn't look like gas prices are going to head much lower anytime soon," a May 5 article in Kiplinger said. "The war in Ukraine shows no sign of ending, global oil demand is straining available supply, and Wall Street wants publicly traded energy companies to grow their production slowly so that they can keep returning cash to shareholders. Indeed, in our own energy forecast, we say 'there's a good chance that the national average will surpass the $4.33 record high set in March.'"

      The article goes on to say, "At this point, only an economic recession caused by the Federal Reserve's coming interest rate hikes — which some economists are starting to warn about — would be able to really lower gas prices. and that's probably not how anyone wants to save money at the pump."

      — Contact Charles Boothe at cboothe@bdtonline.com

      ___

      (c)2022 the Bluefield Daily Telegraph (Bluefield, W.Va.)

      Visit the Bluefield Daily Telegraph (Bluefield, W.Va.) at bdtonline.com

      Distributed by Tribune Content Agency, LLC.

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