Roth: Why are gas prices REALLY so high?

You have seen it at the pump. The price of gas jumped and has continued to climb.

The media and other elite geniuses who have discovered that the weather during summer can be hot want to weaponize the reality of changing weather, seasons, and climate as a “Climate Emergency™.” First, they have warned you not to go outside (really) because weather-related factors may have made it too dangerous. Now, they want to blame the weather for gas prices being too high.

I guess, in a way, that is partially accurate, although not in the way they are portraying it (of course).

One of the wonders of living in an advanced, modern society is that we have many conveniences that help make dealing with normal changes in the weather, or even those that only happen once in a while, easier to manage.

Is there anything more American than air conditioning and ice? Whether it is cooling you down or refrigerating your food, most Americans have access to these modern miracles (around 90% of Americans have air conditioning). The more abundant and cheaper the sources of energy we have to power them, the more available and efficient they become for the end users.

But under the Biden administration, along with the climate catastrophizing cult heavily centered in Europe, major developed countries have shunned traditional fossil fuels without having any realistic, scalable alternative, let alone alternatives that provide superior outcomes.

Last winter, both in the U.S. and Europe, there wasn’t a huge spike in energy costs as anticipated because there was a mild winter. That was a gift, not a strategy. Nothing was done to try to bring online more fossil fuels that would ensure that more heat or cold wouldn’t wreak havoc on the nations' economies.

Back to the increasing oil prices. As always, increases in temperatures can take oil refineries offline for a time or reduce output. This isn’t particular to this year; it happens regularly when temperatures climb. And yes, this year we have seen some reduction in output.

But before that played a role, we had an overall increase in the market price for oil, based on a shift in demand expectations. With fewer concerns for major recessions around the world, oil went on a rally past $80/barrel for West Texas Intermediate.

Oil pricing is also impacted by ongoing supply cuts from OPEC+, including a million-barrels-per-day cut from Saudi Arabia that was extended through the end of September. This posturing by OPEC+ is understandable. The U.S., Europe, and other allies are trying to move away from fossil fuels — and there is an estimated multitrillion underinvestment in those fossil fuels. So why wouldn’t OPEC+ countries want to save their supply and maximize their profits?

The only emergency we have today regarding climate is that it has been hijacked and catastrophized by profiteers, central planning power-mongers, and other useful idiots.

Tracy Shuchart, CEO and founder of Hilltower Resource Advisors and commodities expert, told me, “With the recent OPEC cuts, supply is going to get extremely tight as demand remains strong. Saudi Arabia’s extra voluntary cuts have not yet filtered into the market, which will only make a tight market even tighter. I expect that we will see higher oil prices and higher gasoline prices because of this dynamic.”

You can blame the weather, or you can be realistic and blame the Biden administration and other climate catastrophizers — none of whom are acting like there is a real emergency in their own lives and behaviors — for moving us away from energy independence.

Shuchart also noted that Biden is running out of political tricks. She said, “The Biden administration drained the Strategic Petroleum Reserve by about half over the last two and a half years; it is getting too low to release much more without causing structural, damaging complications. So the administration will not be able to use this as a tool to try and lower prices by flooding the market with supply again.”

If we want to be competitive as a country in the decades to come and we want to support human flourishing domestically and throughout the globe, we need a giant reality check and to be the global energy leader.

The countries that produce abundant, cheap energy are going to have the power and the benefits going forward. The U.S. should be leading that energy effort, responsibly and powerfully.