By Steve Pociask

Winter is coming – and record inflation is rising, on consumer goods including the price of gasoline.

American consumers are suffering as the 8.2 percent annual inflation rate eats away at paychecks with higher energy prices at the pump, and temperatures plummet.

Yet, despite this harsh reality, President Joe Biden continues the administration’s assault on the American energy sector, started on his first day in office with the cancellation of the Keystone XL Pipeline, and continuing through the 2022 midterms by advocating a “windfall tax” on oil and gas companies. Instead of unleashing the bountiful supply of oil and natural gas reserves in the United States, more taxes and regulations are being proposed.

In a White House speech on Oct. 31, Biden kept up the pressure on oil and natural gas producers, like ExxonMobil and Chevron, stating that “they’re going to pay a higher tax on their excess profits and face other restrictions.” He boldly stated that “their profits are a windfall of war.” Except, gas stations are not racking in strong profits in 2022, according to a study in Barron’s.

Top Democratic Economist Larry Summers has spoken out against a windfall profits tax stating, “If you reduce profitability, you will discourage investment which is the opposite of our objective.” And we agree. This potential move will undoubtedly drive up annual inflation and consumer prices.

In a new TIPP survey for October of 2022, most Americans expressed serious dissatisfaction with the current administration’s energy policies. Of the 1,376 adults, 76 percent agreed “strongly” or “somewhat” that the U.S. should pursue energy independence even with fossil fuels.

Further, most Americans rated Biden’s energy policy with below-average scores, with more than half giving him a “C,” “D,” or “F.” (The TIPP survey was conducted via an online survey from Oct. 5 through Oct. 7, 2022. The results have a margin of error of +/- 2.8 percent.)

Despite Biden’s prior assertion that the U.S. today is the “largest producer of oil and petroleum products in the world,” 69 percent of surveyed Americans believe the U.S. is not producing enough domestically.

And, that is the truth, as the current refinery capacity cannot keep up with demand. Moreover, pulling from our Strategic Petroleum Reserve (SPR) for now the fourth time since November 23, 2021, will not boost capacity but artificially manipulate the markets for a short-term fix.

Instead of more government, less government is a solution, especially with the arduous process of permitting in the energy sector, which can take 10 to 15 years. Decades of overbearing regulations, which Biden has exacerbated, have slashed U.S. refining capacity to its lowest benchmark in eight years of 17.9 million barrels per calendar day (b/cd) as of Jan. 1, 2022, with five of these refineries being shut down in the past two years.

Reimaging the permitting process to eliminate regulatory barriers and not submit to extreme environmentalists will help boost energy capacity, production, and development. According to a study in the Project No Project initiative by the U.S. Chamber of Commerce, 351 proposed projects, both fossil fuel and renewables, could generate approximately $3.4 trillion in GDP, which includes $1.4 billion for employment earnings and over a million jobs annually if constructed and operated for two decades.

The expedited approval for energy projects of merit, which range from solar, wind, wave, bio-fuel, coal, gas, nuclear, to energy transmission projects, would not only create sustainable economic development and job creation, but would unleash American energy in a bipartisan, above-all approach which 70 percent of Americans support according to a TIPP survey last year.

The October of 2022 TIPP survey strongly corroborates with prioritizing a diverse energy portfolio. Seventy-four percent of Americans believe in the coming decade the U.S. will depend “a lot” and “quite a bit” on natural gas. Of those surveyed, 72 percent said the same for oil, 62 percent for solar power, 53 percent for both wind and nuclear power. And, finally, 48 percent believed the U.S. would need to depend on coal.

With more than half of surveyed Americans believing in the dependence on nuclear energy, the Biden administration should invest in this sector, which is also green. Our allies in Europe like Poland, France, and Germany have ramped up nuclear power ahead of freezing temperatures, as they seek to fully withdraw from Russian gas. While on our side of the pond, Canada committed $970 million to develop its first grid-scale small modular reactor (SMR).

Other countries like the U.K. (before Prime Minister Rishi Sunak) have lifted fracking bans. Germany has also floated hydraulic fracking, which is still a divided idea in government.

The U.S. should follow suit to discuss and explore all necessary options for energy production of both fossil fuels and renewable, especially now as the U.S. Energy Information Administration recorded in their Oct. 21 weekly report that the U.S. has only 25.9 days of supply left for diesel, its lowest since 2008. Although this number should be taken into context if the U.S. stops production and imports, there is still a fossil fuel problem.

This fossil fuel drought will subsequently hit farmers, the backbone of American society. Production costs will only go up and the same with transportation costs for trucks and trains. Thanksgiving will be costly for American consumers.

The U.S. has an opportunity to listen to American voters by investing in domestic energy to make the nation self-sufficient, rather than relying on our own emergency reserve and the Saudis that control OPEC+. Accelerating permitting of worthy energy projects and implementing an all-of-the-above energy approach is critical to reverse pain at the pump, at the heater, and overall, in our wallets.

Steve Pociask is the president and CEO of The American Consumer Institute, a non-partisan, public policy think tank.

Editor’s note: The article first appeared on The Hill website on Thursday, November 3, 2022. Reprinted with the author’s permission.

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