“Stop making excuses!”
Oh boy, I hate that phrase.
It might be my least favorite phrase in the English language.
But it’s not the words I dislike; it’s how that phrase is used.
Too often, “stop making excuses” is used as a response to what really amounts to a reasonable explanation. And when someone is unhappy with an explanation, they’ll often use the phrase as what’s known as a “thought-terminating cliché,” popularized by dystopian authors Aldous Huxley and George Orwell.
These are reductive and loaded platitudes that are intended to end an argument with a definitive-sounding cliché, rather than a counterpoint. Examples include, “you just don’t want it bad enough” and “everyone is entitled to their own opinion.”
But sometimes, excuses are just excuses. And there is simply no better way to respond to how President Biden and his administration are handling rising oil and gasoline prices…
Stop making excuses, Joe.
If you do a Google search for “excuse vs. explanation,” you’ll find millions of results which (I can only assume) contain thousands of different definitions and interpretations of those words. And this will be another one.
Here are my interpretations:
- An excuse is a highly defensive, emotional response used to shift the blame of a failure or unwanted outcome.
- An explanation is a less defensive, less emotional response used to clarify the circumstances of a failure or unwanted outcome.
With this interpretation, Biden has not given the public any real explanations for rising oil and gasoline prices.
He’s only given us excuses.
Most recently the Biden administration has (and continues to) blame rising oil and gas prices on Russia. Three weeks ago The New York Times even reported that Biden is “urging Americans to blame rising prices on Putin.”
On March 14, Biden said at a conference put on by the National League of Cities, “We’ve seen the price of gas go up over $1 just since he put his troops on the border of Ukraine. It went up $1.05. A big part of that reason is Putin began amassing troops along the border and then crossed (it). And guess what? The world took notice. The market anticipated; prices went up.”
“Make no mistake,” Biden continued, “The current spike in gas prices is largely the fault of Vladimir Putin. It has nothing to do with the American Rescue Plan.” (We’ll talk about how that complete BS in just a bit.)
But blaming Russia for rising oil and gas prices is only a half-truth, at best.
While there is no doubt the Russian invasion of Ukraine has, in fact, added to energy prices, Putin’s invasion is not wholly responsible for $100 oil.
Crude prices have been increasing since bottoming out during the height of the COVID pandemic two years ago.
Brent Crude — Three Years
What does Russia’s invasion of Ukraine have to do with the increase in oil prices until the end of last month?
Nothing.
Even “the current spike in gas prices,” as Biden put it, is not “largely the fault of Vladimir Putin.”
In fact, accusing Russia for driving higher oil and gas prices in any regard is just an excuse meant to shift the blame. The truth of the matter is this…
Russia didn’t decide to cut its oil exports to the world. The world decided to stop buying Russian oil exports.
Any supply-side issue stemming from a drop in Russian oil exports is because nations stopped buying Russian oil. The Russians would be glad to sell it to them.
Now, I am NOT defending Putin’s actions against Ukraine. But I am saying the Russians have very little to do with rising oil prices.
Fact is, the world’s largest supplier of oil and gas is the United States. Biden is worried about oil and gas supply from Russia. Meanwhile he spent his entire campaign and first several months as President assaulting U.S. oil and gas energy that could be helping ease prices now.
On his first day as President, Biden signed an executive order to rejoin the Paris Climate Agreement, a legally binding effort to reduce fossil fuel production.
On his second day in office, Biden killed the Keystone Pipeline XL deal, which would have brought 830,000 barrels of Alberta tar sands oil per day to refineries on the Gulf Coast of Texas.
And throughout all this, he’s continually threatened banning new oil- and gas-permitting on public lands and water.
Biden started off doing almost everything he could to hinder U.S. oil and gas production. But now it’s Russia’s fault there’s an oil and gas supply-side problem?
Honestly, it feels almost insulting that Biden thinks so little of the American people that we’d forget about how he treated the U.S. oil and gas industry.
We didn’t forget, Joe.
Nor did we forget all the other excuses Biden has made for rising oil and gas companies.
Back in November the Democrats tried a different excuse: Blame the evil, greedy oil and gas companies for higher prices.
In a letter to FTC Chair Lina Khan, Biden wrote there was “mounting evidence of anti-consumer behavior by oil and gas companies” that was causing gasoline prices to rise. He even called for an investigation into “illegal conduct” of those businesses.
For some reason, this letter is difficult to find via a Google search. But here it is in full.
Elizabeth Warren said at the time, “We know exactly what the oil companies pay attention to, what is their main number one priority: profit. If this were just ordinary inflation, we might see prices go up. But prices at the pump have gone up, why? Well, let me give you a hint: Chevron, Exxon have doubled their profits.”
“This isn’t about inflation… This is about price-gouging for these guys,” Warren continued.
So before it was Russia’s fault for higher oil and gas prices, it was corporate greed driving costs.
Before that, Biden blamed high oil prices on OPEC withholding supply.
At a UN Climate Change Conference in early November, Biden said, “First of all, the significant reason why prices are up is because of COVID affecting the supply chain. If you take a look at… gas prices, and you take a look at oil prices, that is a consequence of thus far the refusal of Russia or the OPEC nations to pump more oil.”
So here’s where we’re at…
Biden and his administration blamed rising oil prices on (among other things):
- OPEC’s refusal to increase supply,
- Oil and gas companies for price gouging,
- And now Russia’s invasion of Ukraine.
What’s next?
What new boogeyman will Biden try to pin soaring gas prices on next?
Because there definitely is another excuse coming.
As I mentioned, excuses are a defensive, emotional response. Psychologist Jenise Harmon writes, “Although it can sometimes be unclear, there is a difference between an excuse and an explanation. People make excuses when they feel attacked. They become defensive.”
There’s no doubt that Biden has been attacked for rising energy prices since the beginning of his presidency. And there’s little hope for him that Republicans are going to let up anytime soon. So we can most definitely expect another excuse.
What will it be?
Well, if he can’t blame rising oil prices on Russia, he could blame higher prices on unusually heavy travel during the spring and summer seasons. Everyone is already preparing for the busiest travel season in three years.
Later in the summer, we’ll be getting into hurricane season. And then Biden and crew can blame the weather and climate change.
But it will all just be more of the same…
Excuses… excuses… excuses.
Biden will certainly have more excuses for rising oil prices going forward, especially on the supply side.
He’ll blame one thing or another for lower supplies.
But he won’t address the government-driven demand side.
In response to the COVID-19 pandemic, the U.S. government — under both the Trump and Biden administrations, by the way — handed out trillions of dollars in freshly printed money.
From the beginning of the pandemic in February 2020 to date, the Federal Reserve has created more than $6.3 trillion in new U.S. dollars.
U.S. Dollar Supply — 2017 to Date
Doing this has increased the total supply of U.S. dollars by 41%.
For every 10 U.S. dollars that existed in January 2020, 14 dollars now exist.
Most of this newly printed cash ended up in the hands of large corporations, especially healthcare providers and drug companies. But a lot of it also went to the public.
The public got so much money, in fact, the personal savings rate in the United States jumped to an all-time high in 2020.
U.S. Personal Saving Rate — 1960 to 2021
The public was flush with cash.
And what do people do when they’re flush with cash?
They spend it.
Again, I want to point out that all this money printing took place under BOTH the Trump and Biden administrations.
We can’t pin any fallout from that $6.3 trillion in new U.S. dollars on either Trump or Biden specifically. They’re BOTH responsible.
But it is here, dear reader, where we find the main explanation for rising oil and gas prices…
Certainly, supply is part of the price equation. But without demand, you’ve got no market for prices to move at all. And because Americans have been flush with cash, there’s more demand for gasoline and fuel products.
During the shutdowns, there was a large drop-off in gasoline demand. That was expected. April 2020’s worst day saw a +60% drop in gas purchases over the previous month.
But with newly printed money getting stuffed in people’s pockets, gasoline demand quickly rebounded. By July 2021, the EIA says gasoline demand hit an all-time record high.
Earlier I mentioned Biden recently blaming Russia for rising oil prices. At the National League of Cities conference he said, “Make no mistake. The current spike in gas prices is largely the fault of Vladimir Putin. It has nothing to do with the American Rescue Plan,” referring to his $1.9 trillion stimulus package.
That is complete BS.
Rising oil prices don’t have everything to do with Biden’s American Rescue Plan. But it absolutely contributed heavily to inflation of everything from oil to food.
There’s little the U.S. oil and gas industry can do now to ease prices in the short term. But there is one country that can: Argentina.
For the past several years, Argentina has been developing its shale oil and gas resources. And, unfortunately for the country, the world hasn’t had a strong need for Argentina’s shale resources.
But now with oil prices now back over $100 per barrel, and little the U.S. energy industry can do to help, Argentina is positioned to become a major exporter of oil and gas from shale.
I’ve recently put together a report that details the massive shale resources contained in the South American country and shows how investors can get a piece of Argentine shale before the rest of the market learns about it.
The report will be ready for you next week. We’ll get you access to it as soon as we can.
