Attention and Energy Prices: A Tangled Web

It’s often said that social media and the overwhelming amount of content we encounter daily have significantly affected our attention spans. Sometimes, it really feels like our ability to remember things is fading, you know? Back in the day, we used to connect current events with past choices, learning to make different decisions almost instinctively.

Currently, the high energy prices we’re facing are being attributed to the war in Iran, which kicked off seven months ago. And while that’s partly true, there are plenty of other factors behind these price hikes that aren’t just due to this recent development.

A myriad of federal and state policy choices over the past decade or so has also contributed to our current challenges at the pump. Just think about it: back in 2024, discussions about energy rarely happened without mentioning “sustainability.” Advocates often meant a shift away from reliable fossil fuels towards less consistent energy sources, though they didn’t always say it outright.

Actions reflected this rhetoric. Right when he took office, President Joe Biden canceled the Keystone XL pipeline project and received quite a bit of praise for that. However, if he had allowed it to proceed, more crude oil might have flowed into U.S. refineries, increasing fuel supplies and potentially lowering prices. The Biden administration has been quite resistant to boosting fossil fuel exploration and production, implementing stringent rules to limit emissions from fossil fuel power plants, which, in turn, could lead to several plants shutting down due to noncompliance.

Then, we can’t overlook the pause on LNG exports in 2024, where the then-Energy Secretary Jennifer Granholm claimed that LNG was “in the rear-view mirror” at one of the largest energy events, CERAWeek. At a moment when U.S. LNG companies were stepping up to help fill the void from Europe’s shift away from Russian gas, it seems our policymakers opted to apply the brakes instead.

Also, there’s the small refinery exemption (SRE) tied to the Renewable Fuel Standard. This federal requirement mandates that fuel sold in the U.S. includes a minimum amount of renewable fuels. Since its inception in 2005, it has encouraged many refineries to limit their production to below 75,000 barrels per day to avoid stringent renewable blending rules. While intentions might have been good, the execution has resulted in bureaucratic headaches and depressed production.

Various state policies are explicitly aimed at elevating energy costs as well. Some states have adopted cap-and-trade programs that assign a price to emissions, leading to increased fuel expenses as refineries deal with extra fees for gasoline and diesel production. Similarly, low-carbon fuel standards exist in several states, introducing compliance costs that further reduce refinery flexibility and consequently, raise pump prices.

The efforts by states like California and New York extend beyond just expensive emissions strategies. They’ve gone as far as banning fracking and imposing tight restrictions on oil and gas exploration. In the Northeast, states have also fought hard against pipelines that transport crude oil and refined products to the market.

The politicians in these states seem to have overlooked how these policies impact energy availability and prices. They were too focused on achieving net-zero ambitions, sustainability, ESG agendas, and promoting “renewable” intermittent energy sources.

Now they’re all sounding the alarm about energy affordability as if it can materialize out of nowhere whenever it’s needed.

Residents in states like California, Washington, Oregon, New York, and Maryland are experiencing firsthand the long-term effects of decades of policies aimed against fossil fuels. But discussing this isn’t exactly convenient, is it?

Amid rising prices, those seeking a quick political fix are, predictably, dusting off familiar strategies: imposing export bans and adding taxes on companies simply trying to meet market demands. While these ideas might seem appealing, especially with elections approaching, we know from experience that they’re unlikely to achieve their desired outcomes.

What our leaders at both state and federal levels really need to do is take a serious, objective look at current and proposed energy policies, asking a straightforward question: will this really make energy more plentiful and, therefore, more affordable?

It shouldn’t require an expert to see which direction makes the most sense.

If I recall correctly, we’ve navigated better paths before. Let’s hope we can figure it out again.