Biden's Midterm Gamble

Recent global events continue to profoundly shape the nation and, in turn, dominate the domestic political spotlight. The 2020 outbreak of COVID-19 in Wuhan, six-thousand miles from our borders, upended all segments of American life, making Washington’s response central to the 2020 presidential election. Today, an entirely different international crisis, one manufactured by a strongman’s irreverence for sovereignty, continues to have acute impacts at home and will likely play a featured role in the upcoming 2022 Midterm Elections. Upon entering office, the Biden Administration made a deliberate calculation to catalyze renewable energy modernization at the expense of domestic production or Canadian inflows needed to bridge this transition, leaving our energy security exposed.

With national gas prices well-surpassing $4 dollars, the administration is now reeling, evidenced by recent pivots that recognize the strategic significance of energy production, including expanding LNG supplies to Europe. After correctly banning Russian oil imports, the President continues to make another high-stakes gamble: blaming Putin for soaring energy prices and inflation.

With Midterm Elections looming, Biden is in a race against time. The longer war in Ukraine persists, the greater the administration’s energy policy, which has largely left us beholden to democracy’s great offenders, will gain rightful blame among a financially fatigued populace. If such a scenario materializes, it will make historically tedious midterm elections all-the-more challenging for the president’s party to stem a GOP clamoring for Congressional control.

Rather than pursuing an incremental clean-energy transition, the president, under intense pressure from climate-hawks, prioritized an ambitious, accelerated renewable development program at the expense of domestic fuel production and, in turn, energy security, at large. While energy modernization is certainly needed, curbing domestic energy production ignores the immediate need of natural resources to sustain the nation’s immediate needs, including Department of Energy assessments that petroleum and natural gas will remain the most-consumed energy source through 2050.

These ambitions were illustrated both through the administration’s words and actions. In addition to verbal commitments to halve U.S. carbon emissions by 2030, rhetoric also highlighted administration officials’ appetites to squeeze the oil and gas industry. As an example, Biden’s nominee for the Comptroller of the Currency, a senior Treasury position, even professed the need for small to medium companies to go bankrupt to ensure a successful renewable transition.

On the regulatory front, the administration has and continues to leverage an arsenal of tools to skew the market in renewable energy’s favor. Included in this approach are gas hikes, renewable-focused tax credits, burdening pipeline approval processes, and even carbon emissions disclosures for publicly listed companies. Despite current shortfalls, Biden’s FY 2022 budget proposes 12 taxes on American energy.

The administration’s ambitious climate agenda also became a cornerstone of U.S. national security doctrine, reflected in their 2021 Interim National Security Guidance. While “defense investments in climate resiliency and clean energy” were prioritized, glaringly absent were the geopolitical risks posed by insufficient diversification of energy mixes and distribution sources.    

While clean energy innovation must undoubtedly be embraced, suppressing near-term petroleum production cannot be compromised, as it is detrimental the pump, but damaging geo-politically.

Critics defending POTUS cite that U.S. oil production and federal drilling permits issued outpaced his predecessor’s first year in office. Those points, however, fail to contextualize that daily barrel production remains 10-15% below the pre-pandemic high and overlook that issued drilling permits plunged by over 85 percent since April 2021.

Others attribute the energy hike to market factors, namely labor shortages and forty-year high inflation. However, the administration’s dramatic expansions of public spending were at best indirect and, at worst, direct contributors to damaging financial conditions, despite forewarnings by top Obama economists, Jason Furman and Larry Summers.  

To alleviate energy squeezes at home, the president looked abroad to autocrats instead of like-minded partner Canada, dismissing prime opportunities to expand oil imports through the cancellation of the Keystone Pipeline, his first day in office.

Rather than prioritize energy security, the administration sought to secure political mandates, approaching OPEC and Russia for relief in August 2021. Today, with immediate supply shortfalls, Biden is reportedly considering sanctions relief for human rights and democracy’s most flagrant abusers, including Iran and Venezuela. With net oil imports only expected to increase, the administration is confronted with a dilemma of profound moral and strategic consequence.

Both near- and long-term, the administration must determine if bankrolling autocratic depravity is morally and strategically superior to the moral or political merits of hitting emission reduction targets at the detriment of domestic energy security. Alternatively, if the president deviates to an “energy-agnostic” approach, including continuing Keystone pipeline production and prioritizing energy innovation, he can ensure a responsible transition. Mr. Biden should be commended for commitments to increase LNG exports to Europe, but such a commitment will require cultivating the pre-conditions to encourage production and the ability to stave off climate-hawks undeterred by the current security climate.

With challenging domestic conditions, conventional wisdom indicates significant 2022 Midterm losses for Democrats, in which precedence is steeply not in the president’s favor. Surprisingly, however, rising poll numbers suggest that Biden has successfully refracted an energy-hike, reversing historical trends linking gas hikes to presidential unpopularity. While the majority of America rightly believes in disciplining Mr. Putin’s inhumanity, it remains unclear if the populace will also find the administration culpable for its curtailing production at home.  

If the president can continue to successfully disassociate himself from dismal economic conditions, he will likely continue to consolidate public support impressively defiant in confronting Putin’s territorial appetites. If such an event occurs, his efforts could blunt largely assumed Democrat losses and reinvigorate the Administration’s agenda. If not, global events could yield devastating losses for Democrats and greater headwinds for the Commander-in-Chief.

Adam Stahl is a former Capitol Hill and DHS national security advisor and now works in the private sector.