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Biden’s Oil Policy Gamble – Future View/WSJ

  • Students debate increasing domestic fossil-fuel production or limiting it to fight climate change.
A part of the Trans Alaska Pipeline System near Delta Junction, Alaska, May 5.
A part of the Trans Alaska Pipeline System near Delta Junction, Alaska, May 5. (Masrio Tama/Getty)

Future View

Energiesnet.com 10 02 2023

Editor’s note: In this Future View, students discuss domestic oil production. Next we’ll ask: “What do you think of Elon Musk’s rebranding of Twitter to X? What do you make of Instagram’s attempt to compete with Twitter with Threads? Will X be successful or will a new social-media platform take over?” Students should click here to submit opinions of fewer than 250 words before Sept. 26. The best responses will be published that night.

The Empty War on Climate Change

The day President Biden was inaugurated, the price of oil was $55.66 a barrel. Today the price has soared to $94.58. While everyday Americans are concerned about putting food on the table and gasoline in their cars, the Biden administration is making performative sacrifices to climate-change deities and undermining national security.

Restrictions on domestic oil production do almost nothing to combat global warming. If the U.S. and other countries implemented their commitments under the Paris Agreement from 2030 onward, it would cost $1 trillion to $2 trillion a year and only reduce the global temperature increase by 0.05 degree Fahrenheit by 2100. The only way to address climate change substantively is to find clean-energy alternatives that undercut the price of fossil fuels. Yet the Biden administration pours hundreds of billions into inefficient regulations and subsidies, while neglecting research and development on new energy technology.

While not doing much about climate change, the Biden administration has managed to increase the cost of living and weaken national security. Canceling oil leases signals to markets that making new investments won’t be profitable. This restricts domestic supply, increases prices and weakens Western economies. It also bankrolls our adversaries. Russia depends on higher oil prices to finance its war. Mr. Biden has also drawn down the strategic petroleum reserve and, more recently, allowed huge Iranian oil sales to China. The climate-change war on domestic fossil-fuel production is truly an all-around disaster.

—Anika Horowitz, University of Wisconsin-Madison, economics

Climate Change Is the True Enemy

While canceling the seven oil and gas leases in Alaska’s Arctic is indeed a step forward, it is just a drop in the bucket of what this country needs to do to reach its 2050 climate goals. We need a much more radical approach to fighting climate change. We have money for endless wars but climate change is a much more serious threat.

We must treat climate change like the enemy it is. We should refuse to negotiate with greenhouse-gas-producing entities and do everything possible to mitigate their effects by subsidizing incentives that help move people away from carbon-producing roles and actions. The Biden administration, for example, can create more incentives for job-training programs that help folks make the transition from oil-producing roles into clean-energy-producing roles.

Not only do we need to continue our policy of limiting oil production, but we must supercharge our efforts because the world is changing before our eyes. Policy created these problems, and policy can fix them.

—Samer Hassan, University of Chicago, public policy

Goodbye Oil, Hello Nuclear

Oil production is not going to last forever. There is no denying that renewable energy is a “must” for generations to come. At the moment, however, mainstream green-energy methods are not sustainable. Wind is too unreliable, and solar is too expensive. To power New York City for a single year, you’d need a solar farm larger than Florida’s

Walt Disney

World, which is just shy of 30,000 acres.

The U.S. must shift to nuclear energy. When asked about nuclear energy, the first thought on everyone’s mind is Chernobyl in 1986 or Three Mile Island in 1979 or Fukushima in 2011. The word “nuclear” scares many, but it’s time for policy makers, energy executives and the American people to take it seriously.

According to the Lawrence Berkeley National Laboratory, a single gram “of uranium or plutonium per day liberates about 1 MW. This is the energy equivalent of 3 tons of coal or about 600 gallons of fuel oil per day.” Mines throughout the U.S. extract hundreds of pounds of uranium daily. There is no reason some of it can’t be diverted toward clean energy use.

—Guillermo Díaz, Loyola University Maryland, economics and history

Save the Caribou

We must restrict oil drilling in order to protect the climate. The most important part of the decision to cancel these leases is the location, Alaska’s Arctic National Wildlife Refuge. This is a protected area for wildlife, fish and plants, and drilling for oil in that area undermines that purpose. One species that would have been greatly affected by the oil drilling is the Porcupine caribou—a type of reindeer that is native to Alaska, the Yukon and the Northwest Territories. The proposed oil pipelines would run through the caribou’s calving grounds.

This is one example of the negative effects of oil drilling that are felt through ecosystems. While moving away from oil is scary as it shifts the entire economy, it is necessary. The Exxon Valdez oil spill, for example, damaged the Prince William Sound ecosystem and the economy in 1989. The seafood, housing and tourism industries all felt the burden of this oil spill. Oil is a finite resource, so building up clean-energy infrastructure is investing in the future of the nation.

—Elizabeth Connelly, Quinnipiac University, environmental science

Get Ready for a Price Surge Again

The president’s decision to cancel oil and gas leases in Alaska’s Arctic National Wildlife Refuge is especially baffling at a time when foreign nations are cutting oil production, pushing up oil prices. Already, last Wednesday’s inflation report has painted a picture of consumer prices overall being pushed much higher by energy prices.

There might be a time in the future when we no longer rely as much on fossil fuel, but the nation isn’t there yet and probably won’t be for many years. If oil becomes harder to get, the price of everything will go up, since it will be harder to move goods to market and travel will become more difficult. We’ve seen what happens when oil-rich nations restrict production and domestic production fails to keep up with demand. Inflation becomes so terrible that people have to curtail their spending.

The complications surrounding the price of oil also threaten the Federal Reserve’s efforts to engineer a soft landing by hampering the nation’s path to 2% inflation. As the U.S. economy stares down a high-yield maturity wall that could bring about a prolonged period of elevated default rates, as well as ever-increasing consumer debt, the prolonging of tight interest-rate conditions threatens to worsen the impact of high-yield bond maturities and potentially cause sustained pessimism similar to what we saw in Japan 30 years ago.

—Jason Gu, New York University, economics

wsj.com 09 19 2023

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