The American Trucking Associations recently urged the Biden Administration to do everything possible to increase domestic oil production as escalating prices threaten freight hauling companies.
ATA President Chris Spear reportedly penned a letter to the White House that put the current fuel cost and 40-year-high inflation crisis in context. Without some sort of solution or lifeline, companies could start to fold and leave workers unemployed.
“Right now, escalating fuel prices are driving up the transportation cost of all goods, adding yet another layer of inflationary pressure on every sector throughout the entire economy,” Spear reportedly wrote. “The impact is particularly hard on the 97 percent of motor carriers that operate 20 trucks or fewer and are designated as small businesses. These fleets do not operate at a scale necessary to negotiate lower fuel prices or to offset costs from shippers. Lacking the financial reserves to weather this storm, many of these companies are at risk of failing given current projections for global crude prices over the next 12 months. This would decimate U.S. trucking capacity, unleashing catastrophic consequences for a supply chain that’s already overstressed.”
To say the demand to ramp up oil production and churn out less expensive diesel is less than subtle would be something of an understatement. The White House recently went on the record claiming the war between Russia and Ukraine is driving inflation and fuel costs. But wide-reaching experts point to data that indicates the dual-threat crisis began before the conflict. In fact, Pres. Joe Biden went on the record during the run-up to the 2020 elections saying he would lead an anti-fossil fuel administration.
“I would transition away from the oil industry, yes,” he reportedly said. “The oil industry pollutes, significantly. … It has to be replaced by renewable energy over time.”
Oil industry insiders and analysts point to the Biden Administration creating anti-fossil fuel policies and a business climate that leaves speculators nervous about investing. Some worry they will lose investments on oil and natural gas speculation, given the White House pro-electric vehicle positions. Everyday Americans paying high gas prices at the pump would like to hear the mantra “drill baby drill.” However, a recent Wall Street Journal article explained why that is unlikely to occur.
“Feeding into the U.S. industry’s self-imposed choke valve on aggregate oil volumes is the outlook for restricted drilling growth and market access in coming years, which is where the Biden administration’s anti-fossil-fuel policies come into play,” the Wall Street Journal stated. “… the Biden White House is canceling or slow-walking leases on federal lands while clawing back acreage for national monuments. The administration also is taking advantage of environmental and endangered-species statutes to curtail drilling on private land.”
If the non-partisan business news outlet is correct, the ATA’s demands and public dissatisfaction over rising diesel, gasoline, home heating oil, and inflation are falling largely on deaf ears.
These and other costs are driven by the price of crude oil that topped $130 per barrel recently. Although it recently retreated under $100 per barrel, energy experts attributed that to modest foreign output increases and millions of users going under lockdown in China’s Shenzhen and Hong Kong region.
Sources: ttnews.com. foxbusiness.com, thetrucker.com, wsj.com
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