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Supply Chain Issues
All "Jammed Up!"

The Challenge of
Energy Inflation

US firms are being taxed twice due to
IRS overreach

Published in the Post Newspaper
March 29, 2022

Crude oil prices are skyrocketing, while the White House is desperately seeking to control the massive political damage. A mid-February poll found two-thirds of Americans blame the Administration for high fuel prices. The shutdown of the economy in 2020 over Covid-19, with the associated reduction of demand, impacted the petroleum industry with many plants drastically reducing production levels or shutting down entirely. It takes time to gear up production to meet increased demand, but that's a short-term challenge and only part of the story.

A recent statement claims the Biden Administration has produced more oil than during Trump's 1st year. Although true, it's not the complete story. During Trump's third year (2019), the United States produced a million-and-a-half barrels more crude oil than is currently being produced. The narrative that gas price increases are being caused by Putin's actions is somewhat deceptive. The truth: the rapid increase in prices began within weeks of the change of Administrations, with drastic policy changes including: canceling the XL-Keystone Pipeline; refusing to issue new Federal drilling permits; and the brow-beating of major oil companies regarding further investment in fossil fuels.

A brief explanation of U.S. oil usage might help to understand the dilemma. America uses approximately 20 million barrels of fossil fuel a day of which 6 million barrels are imported with approximately 3 ½ million coming from Canada, the rest comes from other counties including 0.6 million barrels from Russia. The world oil markets are tight making it difficult to replace Russian oil. Additionally, to get a substitute for heavy Russian crude (the import of which the Administration has now prohibited) only four viable sources remain; Venezuela, Iran, Saudi Arabia and Canada. The first three are not friendly, or consistently friendly, and for Canada the U.S. canceled the badly needed XL-pipeline which by now would have been operational at helpful levels.

The White House press secretary claimed the Keystone pipeline wouldn't help. She didn't mention the transportation systems from Western Canada into America are operating at full capacity; nor that Canada has the production capacity to increase output and recently offered to supply the balance of our import needs. Lacking is the ability to transport the additional product. It turns out the Keystone pipeline, even at limited production levels, could completely replace Russian heavy crude oil without having to rely upon our enemies. Of note, light American crude can't directly replace the heavy crude without an expensive, and time-consuming rebuild of U.S. refineries.

The administration's effort to move to total renewable energy, while brow beating major oil companies, is compounding the problem. As noted in The Wall Street Journal "private investment for meeting petroleum demand remains $600 billion short" and will, given the current Administration, through 2030.

We don't oppose renewable energy as part of the overall supply of America's energy needs as long as it's done in a competitive/cost effective manner. But we do oppose efforts to use it exclusively.

With the energy inflation being the primarily cause for inflation, Americans needlessly suffer. We deserve better than being treated with deception and inept polices and politicians.

About the Authors and Columnists
Bill Sargent and Mark Mansius


Bill Sargent and Mark Mansius have written
over 250 guest columns since 2014 and continue to do so.
Bill lives in Galveston, Texas and Mark in St. Georges, Utah