Part 1 of 2
Joe Biden has been quite busy piling executive order on top of executive order. The purpose, he says, is to correct injustices and make life better for all Americans. But do they? Examination of a few of the orders tells a different story.
Orders to cancel the Keystone XL Pipeline and place moratoriums on all drilling and fracking on federal lands:
The Keystone XL pipeline was designed to greatly increase the efficiency of transporting oil from Alberta, Canada, to Texas while significantly lowering cost. Drilling and fracking on federal lands has been a practice in the U.S. for many years and is a major contributor to our current, soon-to-be-lost, energy independence. It is instructive to examine the winners and losers that the orders bring about.
Winners: Environmental groups, Iran, Russia, China:
Environmental groups win by achieving goals, they think, first to limit fossil fuel usage to save the planet, and second to prevent potential pipeline oil spills. Neither goal is really achieved. Canada will sell its oil somewhere, currently via trucking and rail to the U.S. If the oil and rail shipments continue, the risk of oil spills is markedly higher along with the oil’s cost. If Biden shuts down shipments of oil by truck and by rail to the U.S., as some have advocated, Canada will still find a market for its oil even if this requires building a pipeline to the east or west on its own territory.
Iran and Russia win because the orders reduce the availability of oil from our controllable North American sources and increase demand for Iranian and Russian oil.
China wins on several fronts: First, the increase in the price of oil will raise the cost of manufacturing in the United States, which will encourage more companies to shift manufacturing elsewhere, with significant amounts going to China. Secondly, China will encourage Canada to (and may even pay to) build an alternate pipeline to Canada’s west coast where they could either build their own refinery or ship the oil to a refinery in China, thus stabilizing both a reliable market for Canada’s oil and a supply of oil for China’s economy. In the end, in this scenario, China will be a huge winner while the environmentalists will have achieved nothing other than the shifting of jobs and manufacturing from the U.S. to China, where irrational environmentalist protesters are put in jail rather than heard.
Losers: American workers, U.S.-Canada relations, Canada, European allies:
American workers lose on several fronts: First, there are immediate layoffs of 10,000 or more mostly union, high-paying jobs on the pipeline and in the oil fields, which began on Jan. 25 and which threaten those workers with financial ruin. Secondly, all workers who support those laid-off workers, from burger flippers to home builders, are threatened by layoffs in their own industries. Third, the inevitable downturn in the economy that will come from these types of policies will threaten all workers. President Biden, represented by his “Climate Change CZAR,” the “venerable” and supercilious John Kerry, on Jan. 27, made some bold claims about the millions of new jobs that are soon to be created in the new clean-energy economy, which would be in place by 2035. Kerry opined that the skilled jobs of pipe-fitters, welders, etc., that pay six-figure salaries, could be replaced by jobs, at some future time, that will command a minimum wage, by building things like solar panels. Meanwhile, presumably, those laid-off workers can subsist on welfare or, perhaps, they’ll be able to sign on to help Canada to build a pipeline west? Both Biden and Kerry, neither of whom has spent as much as one day in their entire lives working in a real business in the real economy, seem to have forgotten that solar panels are built in China. Previous attempts to establish the industry in the U.S. have met with abject failure — anyone remember Solyndra?
U.S.-Canada relations lose because the Keystone XL pipeline is widely popular in Canada and has been supported by the Canadian government. Its cancellation is seen as a stab in the back to Canada’s economy by Canada’s supposed ally to the south.
Canada loses both by this attack on one of its major industries and by the decrease in economic activity caused by the increase in oil prices.
European allies are impacted similarly by the increase in oil prices but also must now become increasingly reliant on oil from unfriendly actors like Russia and Iran. German Chancellor Angela Merkel was roundly criticized for supporting a pipeline from Russia to Germany. She should rely, critics claimed, on oil and gas from the U.S. and sources in the West. In retrospect, thanks to Joe Biden, it seems that Russia was the more reliable supplier after all.
States will lose, in general, by the effects of oil price increases on general economic activity. Some states lose more because of their circumstances. New Mexico, for example, stands to lose many jobs and more than one-third of its tax revenue because of Biden’s moratorium on drilling and fracking on federal lands.
America is the big loser. Losses of jobs, manufacturing and energy independence are obvious consequences. But, more importantly, Biden and his cronies seem bent on replacing President Donald Trump’s “Make America Great Again” with a new slogan, “Make America Poor and Dependent Again.”
John Weaver is a more-than-20-year resident of Santa Clarita. He carries degrees in physics and mathematics from Carnegie Institute of Technology (Now Carnegie Mellon University). “Right Here, Right Now” usually appears on Saturdays, and rotates among local Republicans.