It will be expensive heating homes this winter, blame Biden and the left's energy policies

Biden's anti-oil policies result in lower production, low inventories, and high energy costs. The solution is easy, help US producers produce more oil.

Heating oil prices have soared this year as a result of tight distillate fuel market conditions globally and in the US. This year it will cost $2,690 for 500 gallons of heating oil at the current price of $5.29 per gallon. This is the price I paid today. Last year the same number of gallons cost $1,450 —$2.89 per gallon. The extra $1,250 is 86% higher. It will be a cold and expensive winter for many people that live in the Northeast.

Inventories are low because of reductions in refining capacity, which are in large measure due to Biden’s executive orders and Democratic Party climate-change policies. The average price is estimated to increase 28% this year and is 86% higher than the average price the 2017-2020 period.

Almost 90% of U.S. homes are primarily heated by natural gas or electricity; heating oil and propane are regionally concentrated. share of U.S.

Households from 2021:

• natural gas (46%)

• electricity (41%)

• propane (5%)

• heating oil (4%)

• other 3%)

Biden and the left got everything they wanted with high gas prices, now they blame others for their own sins of reducing oil and gas production. And the resultant low inventories. Our current energy crisis was self-inflicted, a foreseeable outcome of wrong-headed policy choices. A very short supply market — due to the Biden administration's actions that ended America's energy independence — means that inventories are pulled down to satisfy the demand. Lower than average inventory results in higher prices at the pump.

Newsom, Biden, and Energy Secretary Granholm know — but refuse to admit — the real goal of their energy-killing policies.

In California, due to Governor Newsom's administration, the closure of California refineries has necessarily eliminated their working inventories which lowered overall state inventories levels. As to why Californians are paying more than anyone else in America for gas, Valero blames Newsom and the state's Democrats:

• California is the most expensive operating environment in the country and a very hostile regulatory environment for refining. California policy makers have knowingly adopted policies with the expressed intent of eliminating the refinery sector.

• California requires refiners to pay very high carbon cap and trade fees and burdened gasoline with cost of the low carbon fuel standards. With the backdrop of these policies, not surprisingly, California has seen refineries completely close or shut down major units. When you shut down refinery operations, you limit the resilience of the supply chain.

• California is the most challenging market to serve in the United States for several additional reasons. Regulators have mandated a unique blend of gasoline that is not readily available outside of the West Coast.

• California has imposed some [of] the most aggressive, and thus expensive and limiting, environmental regulatory requirements in the world. California policies have made it difficult to increase refining capacity and have prevented supply projects to lower operating costs of refineries.

• California cannot mandate a unique fuel that is not readily available outside of the West Coast and then burden or eliminate refining capacity and expect to have robust fuel supplies. Adding further costs, in the form of new taxes or regulatory constraints, will only further strain the fuel market and adversely impact refiners and ultimately those costs will pass to California consumers.

California's Democrat leaders aren't ignorant. They know exactly what they're doing and what it does to gas prices for their residents. As with the Biden administration's energy policies, the pain is the point. They're just blaming oil and gas companies in the meantime to try passing the buck until the energy crisis does irreparable damage. But as Valero points out, the California Energy Commission understands its role in advancing the left's radical, so-called "green," agenda.

Here’s a recap of some of Biden’s anti-oil policies since taking office on January 20, 2021.

January 20, 2021: One of Biden’s first actions was to revoke approval for the Keystone XL pipeline and impose a moratorium on oil and gas leasing on federal lands and waters. Roughly 25% of U.S. production comes from federal areas. The Keystone XL cancellation confirmed to many policy-watchers Biden’s willingness to use one of climate activists’ favorite tactics – blocking "midstream" pipelines – to restrict "upstream" production. The moves were part of Biden’s broader climate agenda and target to reduce U.S. greenhouse gas emissions by 50% by 2030 and achieve net-zero emissions by 2050.

February 26, 2021: Biden updates the "social cost of greenhouse gas emissions," dramatically altering the way the U.S. government calculates the real-world costs of climate change. The move could reshape a range of consequences, from whether to allow new fossil fuel leasing on federal lands and waters to what sort of steel is used in taxpayer-funded infrastructure projects. The administration plans to boost the figure it will use to assess greenhouse gas pollution's damage inflicts on society to $51 per ton of carbon dioxide – a rate more than seven times higher than that used by former president Donald Trump. But experts say it could reach as high as $125 per ton once the administration conducts a more thorough analysis. This would apply to any new oil and gas lease sale, raising producers’ costs to deliver new supplies.

June 1, 2021:  Biden proposed eliminating a slew of tax benefits for oil, gas and coal producers in favor of electric vehicles and other low-carbon energy alternatives as part of his $6 trillion budget for the next fiscal year. It proposed repealing: the pass-through exemption from corporate income tax for partnerships that derive at least 90% of gross income from natural resources; use of percentage depletion for oil and gas wells; expensing of intangible drilling costs; capital gains treatment for royalties; enhanced oil recovery credit; $3.90 per barrel credit for marginal oil wells; expensing of exploration and development costs, and other tax incentives. Eliminating these tax provisions imperils U.S. energy security by raising costs for domestic producers and would increase America’s reliance on foreign energy supplies.

August 11, 2021: Biden calls on OPEC+ producers to increase supply to help curb rising oil prices, even though the U.S. is one of the three largest producers in the world and can deliver supply with a lower carbon footprint than most unregulated national oil companies in the cartel. He would do this several times in the months that followed, including after Russia’s February 24, 2022 invasion of Ukraine.

October 29, 2021: Biden and Democrats propose a "methane fee" in the proposed budget bill. The fee would start at $900 per ton in 2023 and increase to $1,500 in 2025. Methane is a potent greenhouse gas, and industry has been working to reduce fugitive emissions of it on its own. The industry has also embraced executive regulatory efforts to reduce methane emissions, including support for the Global Methane Pledge, which requires a 30 percent cut in methane emissions by 2030, one of the Biden administration’s priorities for the COP26 climate summit in Glasgow. But the fee structure would effectively serve as a tax on natural gas production, which is counterproductive to energy security and economic growth in the U.S.

November 17, 2021: Biden sent a letter to Federal Trade Commission Chair Lina Khan encouraging an investigation into oil and gas companies and retail gasoline prices. The move infuriated oil executives, who Biden portrayed as scapegoats for rising inflationary pressures on Americans. In four months, it marked the second time that the White House requested a probe into retail fuel prices, even though gasoline prices are set in a global commodity marketplace and were only following market trends in crude and refined product prices. The surge in crude oil and gasoline prices reflects tightness in supply amid a rapid demand recovery from the Covid-19 pandemic.

March 12, 2022: Congressional Democrats propose to tax top U.S. oil producers and importers and direct the collected money to Americans, an effort they said will curb profiteering in an era of high gasoline prices. The "windfall profit" legislation would put a 50% tax, charged for a barrel, on the price difference between the current cost of a barrel of oil and the average cost for a barrel between 2015 and 2019. Lawmakers contend it would raise an estimated $45 billion a year at $120 a barrel of oil. The measure proposed by Biden’s Democratic party completely ignores the reality that oil prices are set in a global commodity marketplace, not by individual companies.

March 21, 2022: Biden’s Securities and Exchange Commission (SEC) proposes landmark climate rules. If finalized, the rules would fundamentally overhaul how publicly listed companies divulge detailed information about their climate risks and mitigation strategies. Large companies that do business in the U.S. would be required within three years to lay bare their contributions and vulnerabilities to climate change – including, in some cases, the greenhouse gas emissions associated with their customers and suppliers. The move is designed to divert investment away from fossil fuel producers, even though investors are already planning for the energy transition using their own environmental, social and governance (ESG) standards.

The critical question is when will the Biden administration and Newsom be ready to prioritize energy security over climate goals and help US oil and gas producers.  Until they change course, Americans will continue to suffer.