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The War on Fossil Fuels is Destroying Everyday Americans

Show Notes

The enormous spike in gas prices has been driven by inflation, supply-chain problems, and to a lesser extent the war in Ukraine. But environmental policies relentlessly pursued by the Biden administration have hurt, too, as they have both limited where oil companies can explore and retrieve oil and natural gas, and also made it economically difficult to refine the fuel they produce.

For large segments of the Left, the focus is on reducing emissions of carbon dioxide, which contributes to climate change. Big tech and major industries pledge to become “carbon-neutral” and show off solar panels on their headquarters roofs, purchasing their electricity from wind turbines and other renewable resources, or by encouraging their employees to bike to work or drive electric cars.

There are problems with all of those ideas, but on the most recent episode of The Drill Down, Peter Schweizer and Eric Eggers discuss another one, what we might call the emerging “carbon market.”

As a tax incentive, the idea of purchasing “carbon credits” has been around for a few years. Businesses use it to offset their own carbon emissions by spending money to plant trees or by adopting other green technologies to power their operations. But some companies, pressured  by activist investors pushing so-called Environmental, Social, Governance (ESG) policies, are going farther, seeking to pay for carbon to be sucked out of the air and stored underground, dissolved into what some call a “bio-oil.”

An MIT publication describes a company called Charm International that is paid $600 per ton of carbon it puts underground by companies like Microsoft, Shopify, and Stripe. These companies are paying to offset their own carbon emissions, but say they also wish to encourage an industry they believe has the potential to pull huge amounts of greenhouse gas out of the air and store it away. This has never been done on a large scale.

In fact, the promise of this carbon-removal technology has led to market speculation and a race to develop new removal methods. Startups have recently raised tens of millions from investors including Bill Gates’s Breakthrough Energy Ventures and an innovation competition bankrolled by Elon Musk. Some, like Climeworks, build machines that bring air into contact with chemicals that absorb and transform the carbon dioxide so it can be stored underground (“bio-oil”). [Joe, I don’t quite get this. Is the CO2 changed into some sort of clean-burning fuel (bio-oil)? Or is it “stored’’ in the way that spent nuclear rods are stored?] Others envision accelerating natural processes that lock up carbon in rocks or oceans.

The Biden administration has upped the ante, pledging to spend more than billions in carbon capture and storage (CCS) technologies in the coming years. Last week, the U.S. Department of Energy stated that it was beginning to distribute $2.3 billion earmarked for CCS technology in President Biden’s Bipartisan Infrastructure Law. Energy Secretary Jennifer Granholm explained why the U.S. is investing in CCS, on top of other clean energy initiatives. “Certainly our first preference is to make sure that we are powered by clean, zero carbon-emitting energy. And we’re doing all of that. But you can walk and chew gum,” explained Energy Secretary Jennifer Granholm.

So, if that’s the “gum-chewing” part of what the Biden administration is doing, what is the “walk?”

Well, as Peter says, that would be things like trying to stop all new oil drilling in Alaska and the Gulf of Mexico, which they have also tried. It would include blaming gas prices on “greedy oil companies” while simultaneously thwarting them from producing more oil and gas domestically and returning the US to being a net importer of oil.

Or, as Exxon stated after yet more criticism from Biden this past week: “In the short term, the U.S. government could enact measures often used in emergencies following hurricanes or other supply disruptions – such as waivers of Jones Act provisions and some fuel specifications to increase supplies. Longer term, government can promote investment through clear and consistent policy that supports U.S. resource development, such as regular and predictable lease sales, as well as streamlined regulatory approval and support for infrastructure such as pipelines.”

As Peter says, “And now it looks like Joe Biden’s going to go to Saudi Arabia, and the plan is to ask them in the name of ‘energy security’ to ramp up production. We know the independent petroleum producers in the United States want to increase production. What are Venezuela and Saudi Arabia going to demand to increase production? And is Joe Biden going to give it to them? That’s the real question that nobody is talking about.”