On Sept. 15, I testified to Congress about the unfolding energy crisis in Europe. When I explained how President Biden’s own energy policies are harming our allies abroad and consumers at home, Rep. Ro Khanna (D-Calif.) said to me, “If there was a war on energy, how is Exxon, Chevron, BP and Shell making over 200% profits? You can’t have a war on an industry and then they’re having record profits.”
The reason, I told Khanna, is precisely because the Biden administration has been stifling oil and natural gas production, thereby reducing supplies, and increasing prices and profits.
Do Democrats really not understand how supply and demand work? Of course they do. They know that, by repressing oil and natural gas production, they’re making these resources scarce and expensive. That’s how they want it. They think high gasoline prices will force people to buy costly electric cars. But they know that their position of effectively rationing energy is highly unpopular, so they seek to scapegoat oil and gas companies — an easy target.
It’s true that the Biden Administration is not the sole cause of high energy prices. Russia’s invasion of Ukraine rightly led President Biden in March to ban Russian oil and natural gas imports into the US. But the main reason for expensive energy prices is President Biden’s suppression of oil and gas production.
It would have been easy for Biden to make up for loss of Russian oil imports through expanded domestic drilling. Where the US imported around 18 million barrels of Russian oil per month, we produce 19 million barrels of oil domestically per day. Instead, Biden has leased less public land for oil and gas production during his first 19 months in office than any other administration since World War II, according to a Wall Street Journal analysis.
But all this is a prelude to the main way Democrats plan to make energy more expensive, which is by spending $370 billion of taxpayer money through the new (and misnamed) “Inflation Reduction Act” to subsidize solar panels and wind turbines made in China.
Renewables make electricity more costly everywhere they are deployed at scale. Just look at California. It has the second most expensive electricity in the US after Hawaii, but it can barely keep the lights on. Why? Because the unreliable nature of weather-dependent energy sources requires more backup power plants, transmission lines and people who can make electricity reliable.
Consider what happened last month. On Aug. 25, California’s government announced that a ban on all gasoline-powered vehicles would go into effect on 2030. Five days later, on Aug. 30, California’s electric grid operator begged residents not to charge their electric cars and trucks between 4 and 9 p.m. for fear of overwhelming the grid and causing a catastrophic blackout.
You can’t make it up.
Renewables also cause inflation by driving up the cost of materials used in many other industries. Solar and wind energy projects require 300% more copper and 700% more “rare earth” elements per unit of energy than fossil fuels.
Wind, solar and batteries require 1,000% more steel, concrete and glass, and 4,200% more lithium, 2,500% more graphite and 1,900% more nickel than fossil fuels to produce the same amount of energy, according to International Energy Agency. Minerals comprise 60-70% of the cost of producing solar panels and lithium batteries.
Worst of all, our need for these materials means we become increasingly reliant on China. China’s market share of renewables and EV minerals is already twice OPEC’s share of oil. The US depends on imports for 100% of 17 renewables and EV-critical minerals. For 28 others, we import more than 50% of domestic demand.
Warnings from business leaders are falling on deaf ears. In early September, 40 CEOs of European metal companies warned of the “existential threat” to their industries due to energy shortages. They noted that “50% of the EU’s aluminum and zinc capacity has already been forced offline due to the crisis.” European leaders mostly yawned and re-committed themselves to producing more electricity from . . . renewables.
If renewables are doomed for fundamental physical reasons, why do so many educated people believe we will transition to them? Most are just ignorant. They have been surrounded by professional ideologues who have deceived them for decades. They insist that the US will somehow be able to quickly build the massive solar factories, rare earth mines and mineral refiners that took China 20 years to build.
It’s a sad joke. While we should repatriate those industries to the US, doing so will take decades, not years, and doing so will make renewables even more expensive than they are today.