U.S. Energy Policy Promises Only High Gas Prices

With gas prices spiraling ever upward, a schoolyard taut from my youth, “Like or Lump It” comes to mind. A bit more in your face than “take it or leave it”, like it or lump it means either you get with the program or suffer the consequences regardless.
Texaco Gas Station 1 photo
Photo: Falkenpost/Pixabay
Having gone from being a net exporter of oil and gas in just over a year, America must lump gas prices that have topped $4 per gallon nationally and are closing in on $6 per gallon in California. All this with no indication the government is inclined to spur domestic production,

The ongoing war resulting from Russia’s invasion of Ukraine is a major factor in the most recent price spike, but earlier moves by the Biden Administration to cancel the Keystone XL pipeline, curtail oil leases on federal lands and generally jawboning major corporations to scale back their domestic production have caused the price of gas to climb long before Putin’s incursion.

These higher prices result in higher transportation costs, not a small factor in the recent run of inflation. While the U.S. government continues to limit the ability to return to energy independence, its scurrying about the world asking OPEC to pump more oil and seeking additional supplies from the repressive regimes in Iran and Venezuela. These recent moves have taken on new urgency now that the administration has taken step to cut off oil imports from Russia.

Its understandable that the green agenda is behind this push to limit fossil fuel production in the U.S., but it does little to help the environment if the government looks elsewhere to meet our energy needs from countries that could care less about climate change. In fact, by undercutting U.S. energy impendence and causing the price of oil rise, the unintended consequence is an economic windfall to some pretty bad actors.

It also underscores that we are still a long way away from relying on renewable energy to meet our basic needs, especially when it comes to personal mobility. Transportation Secretary Pete Buttigieg believes consumers can cope with higher gas prices by simply buying electric cars.

According to Kelley Blue Book the average transaction price of a new car in February stood at just over $46,000. The average transaction price for electric vehicles was $62,876. Granted, all electric vehicles, except those sold by Tesla and General Motors, are eligible for a federal tax credit of $7,500. But that won’t go very far when you’re looking at an average sticker of over $60k.

In fact, there are only seven new electric vehicles for sale with MSRPs less than $40,000. The least expensive model you can buy is the 2022 Nissan Leaf, which starts at $27,400 and offers a range of 149 miles. Other EVs with similar pricing also don’t offer much bang for the buck when it comes to range. The MINI Cooper SE electric is $30,750 and can go 114 miles. The new Mazda MX-30, which just went on the market in California only, goes 100 miles and costs $33,470.

The Chevrolet Bolt hatchback, which is expected to return to the market in April after its battery recall for fires, is perhaps the best deal when it comes to range and price at $31,000 for 259 miles. While the Hyundai Kona offers similar range and a slightly higher $34,000 price, its cousin, the Kia Niro, offers slightly less range, costs more at $39,990 and is sold in only 12 states.

There are several new EVs, like the Ford Mustang Mach-e, Volkswagen ID.4, Kia EV6 and Hyundai Ioniq 5 with entry-level price tags between $40,000 and $50,000, but those are for hard-to-find base models that are more for dealer ads than customer hands. Step up a trim level and you’re quickly at or above $50,000. And we’re still waiting for the $30,000 Tesla Model 3, which now costs $44,990, up 18 percent from December 202. Even Elon Musk says the rising cost of raw materials like nickel and lithium in the wake of the Ukraine crisis, will delay his dream of building a $25,000 electric car.

Perhaps the silver lining in all these dark clouds is that soon there will be a realization of the true cost of the green agenda. The goals are noble, but costs and benefits must be weighed. It takes time to develop alternatives and manufacturers are committed to a transition, but it’s not going to happen overnight. In the meantime, when it comes to gas prices, I guess we’re just going to have to lump it.
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