I woke up this morning (8/3/2022) and decided to edit out all the preparedness portion of this post and stick to the politics.
This will be a politics blog post about gas prices. First, I apologize for making inexcusable factual errors about the Inflation Reduction Act of 2022 and Build Back Better Act. Somehow, I forgot key details that Build Back Better got stalled in the Senate and that the Inflation Reduction Act of 2022 didn’t pass last week – Senator Manchin, who tanked the Build Back Better legislation, last week decided to support the Inflation Reduction Act of 2022. I apologize for getting my facts wrong and I will try to provide more links to the sources I use. The reality though is the Build Back Better Act was really the Great Reset in America push and the Inflation Reduction Act is a scaled back version of the Build Back Better Act.
Gas prices at the pump have been steadily dropping in America. Here’s a President Biden tweet from this morning and my quote retweet:
The link I added was to the WH fact sheet, released July 26, 2022. It’s become common practice for this administration to stealth edit documents, so anything they release to the public could get the “recession” treatment of being “redefined” or stealth edited without warning.
Here’s the second paragraph:
“The Administration is also announcing steps to repurchase oil for the SPR in future years, likely after FY2023, to help stabilize the market and encourage near-term supply. These actions will enable the Administration to continue the work of shoring up supply and bringing prices down.”
The third paragraph:
“Since the President authorized the historic release of one million barrels per day from the SPR earlier this spring, the Department of Energy has already sold more than 125 million barrels into the market, including nearly 70 million barrels that have already been delivered to purchasers and additional barrels planned to be delivered to customers in the weeks and months to come.”
The administration is releasing one million barrels per day, but the repurchase will “likely” be after 2023. This seems like a very poorly thought out and short-sighted plan.
So, the question to ask is why wouldn’t the Biden administration make resupplying the Strategic Petroleum Reserve quickly a top priority?
The White House explanation in that fact sheet explains a change of locking in a fixed price at the time of the contract of that oil as opposed to the current policy of the price paid being determined at the time of delivery being worked out.
The Biden administration is recklessly depleting the SPR at an unprecedented rate and level of over a million barrels a day and one can only wonder when they intend to stop.
While depleting the SPR with no resupply plan in place, the current WH plan is to stop the releases in October, according to this Blomberg piece, “The US Is Depleting Its Strategic Petroleum Reserve Faster Than It Looks,” from June 17, 2022 :
“If Washington sticks to its current pace, the reserve will shrink to a 40-year low of 358 million barrels by the end of October, when the releases are due to stop. A year ago, the SPR, located in four caverns in Texas and Louisiana, contained 621 million barrels. As the oil market looks today, it’s difficult to see how Washington can halt sales in October. Removing that additional supply would mean commercial inventories quickly deplete, putting upward pressure on oil prices.”
In the Bloomberg article, there’s an explanation of the two types of crude oil, medium-sour and light-sweet, and how most of the oil released so far has been medium-sour, which is what US refiners prefer, so it’s not just a matter of straight numbers of barrels in the SPR, it’s how many barrels of medium-sour crude are left, that will make it difficult for the Biden WH to continue to release oil from the SPR after October. That’s why President Biden made that trip to Saudi Arabia in July to try to work out an oil deal.
In a July 16, 2022, Reuters piece, Biden ends trip with U.S.-Saudi relations on the mend but few other wins, all the way down at paragraph 10, after going through all the media hype about the Biden fist bump with MBS, the crown prince of Saudi Arabia, who is alleged to have ordered the murder of Washington Post journalist, Jamal Khashoggi:
“Biden came to Saudi Arabia hoping to convince the OPEC heavyweight to boost oil production, but the kingdom held firm on its strategy that it must operate within the framework of the OPEC+ alliance, which includes Russia, and not act unilaterally.”
The oil was the main reason for the trip, but Reuters gets to that at paragraph 10.
The news media in America, across the spectrum, like to divert attention to drama, and often the details are skipped in videos and TV news, but buried way down in print news articles. The news media know most people don’t read through news articles and as more and more print newspapers die and fewer and fewer people bother to read online news article, who knows, we may end up with news told in short videos or just some quick photos, with no deeper context.
Before I end this post, since this post is about Biden oil policy, it’s important to ask more questions about things you hear politicians say and new policies and legislation they propose. The Inflation Reduction Act of 2022 is a top-tier piece of legislation Democrats and the Biden administration want to ram through quickly, before the November elections. The soaring price of oil was high on the minds of most Americans, who have been feeling the pinch at the gas pump. The problem is this act has nothing to do with reducing inflation. It’s about speeding up the green-energy transition, even though the infrastructure isn’t in place to support a green-energy transition.
An August 1, 2022 Forbes article, Will The $670 Billion Inflation Reduction Act Cut Soaring Costs?:
“According to the Penn Wharton Budget Model (PWBM) there’s low confidence that the legislation will have any impact on inflation. PWBM is a nonpartisan, research-based organization at the University of Pennsylvania that creates economic analysis of public policy’s fiscal impact.”
The Inflation Reduction Act has $80 billion in spending for the IRS. At paragraph 8, in this Marketwatch article selling the Dem plan, The Inflation Reduction Act would send $80 billion to the IRS, but some tax experts wonder if it’s enough to help the backlogged agency, I found this line:
“More than half of the $80 billion will fund more audits and staff for tax code enforcement aimed at the well-off at a time when audit rates have been dropping over the years thanks to shrinking staff.”
In this July 28, 2022 Bloomberg piece, Biden Poised to Get Win on IRS Funding in Reconciliation Package, here’s this:
“The bill also includes hiring flexibility for the IRS, a nod to the agency’s recruiting challenges. It would allow the IRS to using an expedited hiring process, as well as higher rates of pay for a limited number of employees. The administration estimated last year that an $80 billion IRS funding increase could allow the agency to hire about 87,000 additional employees over a decade, doubling the size of its workforce.”
So, let’s add this together and keep in mind that the Inflation Reduction Act of 2022 is really about speeding up the green energy transformation (the Great Reset in America project), then add together over half of the money slotted for the IRS will fund more audits and that the IRS will be able to double its workforce over a decade, hiring about 87,000 new employees.
Despite the smokescreen of IRS woe-is-me stories, I think carbon footprint laws, where individuals and businesses are taxed on their consumption of energy, are headed our way and this large increase in funding, doubling the number of IRS personnel, funding more audits and staff for tax code enforcement, are for the green transition. They’re investing all of this effort to fund green-energy, while kicking the can down the road on replenishing the Strategic Petroleum Reserve…
Priorities?
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