The Subsidy and the Stranglehold

The pincer move of President Joe Biden’s energy policy has the energy industry trapped between the twin prongs of subsidy and stranglehold. Biden championed stunning spending on green energy – most notably, the many slush funds created by his signature Inflation Reduction Act, whose cost seems likely to spill well over $1 trillion. Meanwhile, President Biden committed himself to a muscular regulatory effort to squeeze the air from the lungs of more traditional (and more viable) energy sources. These efforts include crackdowns gas-powered cars and heavy-duty vehicles, methaneemitted by the oil and gas industry, a host of home appliances, fossil fuel–fired power plants, liquid natural gas exports, and so very many more.

Now, in a final fit of environmentalist pique, Biden has moved to block future offshore oil and natural-gas leasing in stretches of ocean spanning more than 625 million acres in total. The protected areas include the entirety of the Atlantic coast and the Eastern Gulf of Mexico, much of the Pacific Coast, and parts of the Northern Bering Sea Climate Resilience Area in Alaska. “The withdrawals have no expiration date, and prohibit all future oil and natural gas leasing in the areas withdrawn,” the White House says.

Whether President-elect Donald Trump can reverse the policy once he enters office remains unclear. Murky and unresolved legal questions will dog any attempt he makes. However, even if executive action proves ineffectual, another solution – indeed, the best solution – lies on Capitol Hill. Congress can, at any time, erase Biden’s blunder with legislation. Trump would surely sign such a bill. Sitting back and allowing policy debates of such significance to resolve themselves in courtrooms or executive-branch office buildings would amount to a staggering dereliction of the duties the Constitution vests in the legislature.

Biden assumes that drilling, refining, and burning more fossil fuels will inflict more harm on the environment. It’s true that economies gobble up energy as they grow. Humans want good things for themselves, after all, and human flourishing requires abundant energy. But the advance of technology has also allowed the consumption of ever-increasing amounts of energy with an ever-shrinking effect on the natural world. As Johan Norberg has written:

“[T]here is no race to the bottom in environmental standards. Rich countries do not imitate the environmental standards of poor ones; instead, poor countries are catching up with rich ones in environmental sustainability. The richer countries are, the more they protect their environment, and free markets also speed up the transition to new and greener technologies around the world. As long as markets are open and trade is free, there is no race to the bottom, but there is one to the top.”

From this vantage, on his own environmentalist terms, Biden’s last stand against offshore leasing is as quixotic as it is likely to dampen economic growth.

Historic is a funny word. It’s often used sloppily by copywriters seeking to impart the sense that the thing or person described is very significant and very virtuous. For example, the White House’s fact sheet crows about Biden’s “Historic…Climate Legacy.” However, if dictionaries can be believed, historic need not mean something good. Failures, too, can be historic. If Biden’s climate and energy record proves notable enough to make the history books, it will appear as a misadventure – a detour – embarked upon by starry-eyed technocrats, whose misperceptions about the needs of a functioning energy sector were exceeded only by their misperceptions about economics generally.