In the intricate web of modern economies, one thread stands out for its sheer indispensability: oil. Not just the lifeblood of transportation, oil’s influence permeates every facet of consumer life, from the mundane to the sophisticated. Yet, under the Harris-Biden administration, what appears as a war on oil could well be the unseen hand inflating prices across the board, touching every product we use or consume.
Consider your morning routine. That cup of coffee from Starbucks? Oil isn’t just in the fuel that transports the beans; it’s in the cup itself, lined with petroleum-based plastics. The makeup you applied before going to work… those are petrochemicals. Petrochemicals are integral to cosmetics. And let’s not forget your smartphone or laptop, where oil derivatives are crucial in manufacturing components like plastics, synthetic rubbers, and even the tiny amounts in circuits.
The agricultural sector, the backbone of food production, is deeply oil-dependent. From the fuel for tractors to the fertilizers made from natural gas, a byproduct of oil extraction, to the plastic packaging of your groceries, oil’s footprint is undeniable. Water purification? It relies on energy-intensive processes, often powered by fossil fuels. But water additives, filters, piping … every component is a product of oil; synthesized from petroleum derivatives.
Your clothes, your shoes, your eye glasses or contacts. Your hair products (or hair dryer), shampoo bottles (and even the shampoo) are all petroleum based. And let’s not forget that everything you purchase was shipped to that store … or your door. Shipping is a huge oil based industry. It’s not just the fuel, it’s the cardboard box, the tape, the sticky print labels and even the ink on those labels. It’s even the road… the additives in the asphalt. The paint of the lines on the road. The traffic lights or reflective road signage.
Even the most eco-conscious choices, like electric vehicles, aren’t free from oil’s influence. The manufacturing of EVs, from batteries to tires, involves oil at every step and in every part. The plastic dash, the leather seats, the electronics. The last thing in the line is the electricity to charge them. While renewable sources are growing, a significant portion still comes from oil or natural gas. Even if the source of the energy comes from a renewable source, the wires that bring it to your house are copper & rubber, which is made from petroleum. Oil.
Every single thing in your home is made with, by or shipped using petroleum … oil. Everything.
This pervasive reliance on oil sets the stage for understanding the economic repercussions of the Harris-Biden administration’s energy policies. By imposing restrictions on new oil and gas leasing on federal lands, as seen in early 2021, and signaling a shift away from fossil fuels, these policies have inadvertently tightened the oil supply, pushing prices up. This isn’t just about filling up your car; it’s about the cost of everything.
Inflation, therefore, isn’t merely a monetary policy issue but a direct consequence of energy policy. When oil prices surge, not due to market demand but policy-induced scarcity, every sector feels the pinch. Manufacturers face higher production costs, which inevitably get passed on to consumers. The ripple effect is clear: higher oil prices lead to higher costs in transportation, manufacturing, agriculture, and beyond, culminating in the inflation we’re witnessing.
The administration’s approach, while aimed at combating climate change, overlooks the immediate economic realities. By not fully supporting domestic oil production or infrastructure like the Keystone XL Pipeline, they’ve contributed to a scenario where oil prices could have been moderated, thus potentially alleviating some inflationary pressures.
In essence, oil isn’t just a component of our economy; it’s the lifeblood. The policies that inadvertently restrict its flow are akin to tightening the economic arteries, leading to a systemic increase in costs across all goods and services. As we navigate this complex landscape, understanding oil’s role beyond just fuel for our vehicles might just be the key to untangling the inflation conundrum we face today. The Harris-Biden administration’s energy strategy, while well-intentioned for the environment, might be the unseen force inflating our everyday expenses, reminding us that in economics, as in life, everything is interconnected.