When President Joe Biden revealed that he would end the oil and gas sector during the final presidential debate, he was channeling the spirit of former President George Washington: "I cannot tell a lie." So far, he is ostensibly keeping his promise after putting the kibosh on the multi-billion-dollar U.S.-Canada Keystone XL pipeline system. But the newly sworn-in president is not stopping with pipelines.
Putting the Biden on Energy
The new administration recently announced a 60-day suspension of new oil and gas leasing and drilling permits for U.S. lands and waters. The directive applies to coal leases and permits, prevents approval of new mining plans, and suspends land sales.
Market observers assert that this could be the first step in the White House's long-term objective of prohibiting all leases and permits from drilling on federal lands. But while the decision to hit the pause button as the Department of Interior reviews a broad array of programs will affect the oil and gas sector, it will not dismantle the industry right away. The order does not extend to existing oil and gas operations with valid leases. Companies may have had the foresight to expect this as they piled up a large number of drilling permits in the waning days of the previous administration to keep pumping oil and gas for a few more years.
Still, the energy industry and Republicans slammed the measure, warning that it would lead to a return of foreign crude imports, lower tax revenues, and lost jobs.
Since arriving at 1600 Pennsylvania Avenue, President Biden has been a one-man wrecking crew, from killing Keystone to rejoining the Paris Climate Accord to ordering departments and agencies to review Trump-era rules on the environment, science, and public health. Thirty-two executive orders in less than a week? He must have taken former President Barack Obama's pen and phone.
The War on Exports
Liberty Nation has gone in-depth regarding the coming international food crisis and growing price inflation. The world is now beginning to see the effects the COVID-19 global pandemic is having on their dinner plates – and pocketbooks – as markets are beginning to impose export taxes.
Late last year, the Russian government slapped a levy on producers exporting wheat and soybeans. Officials applied the tariff on shipments to curb domestic prices. Since the measure failed to lower grocery bills, Moscow doubled down and raised and extended the export tax. Effective March 1, according to the Ministry of the Economy, Russia will institute an export penalty of 50 euros ($61) per ton, double the initial proposal.
Argentina, facing soaring food inflation, is exploring an export tax on corn. Authorities want to ensure ample corn inventories this year, and they believe a levy on exports would suffice. So far, nothing is set in stone – or crops – as the government weighs its options, including a two-month suspension of exports and a daily limit on global shipments. This would not be the first time Buenos Aires has implemented export taxes. In March, the socialist regime imposed export taxes on soybeans, corn, wheat, and sorghum, ranging from 12% to 33%.
The Kazakhstan government is mulling over a 15% export tax on sunseeds to stem inflation and protect local crushers from climbing prices. Ukraine leaders are considering export taxes on corn and wheat. Malaysia will boost its palm oil export tax.
When governments are instituting tariffs on their exports, it is evident that rampant food inflation is on the horizon. This may not seem like a big deal to a typical U.S. household, but Buenos Aires and Moscow are huge players in the global agriculture market, so their lack of supply could affect supermarket prices, from Biloxi, MS to McMullen, AL.
The Eh Team Shuts Down?
The death of small business has not been confined to the United States. According to the findings of a new study, the cemetery of entrepreneurial hopes and dreams has been planted in the Great White North, where tens of thousands of small businesses could face extinction.
In a recent report, the Canadian Federation of Independent Business (CFIB) warned that 181,000 small business owners are thinking about shutting down their companies. This would be in addition to the already 58,000 enterprises that shuttered their doors in 2020. Simon Gaudreault, CFIB's senior director of national research, described the survey of its members as alarming:
"We are not headed in the right direction, and each week that passes without improvement on the business front pushes more owners to make that final decision. The more businesses that disappear, the more jobs we will lose, and the harder it will be for the economy to recover."
This would be devastating for an already fragile economy, especially since more than 2.4 million people, or 20% of private-sector employment, would be out of work if these companies became inactive. Although the Bank of Canada (BoC) expects the economy to return to steady growth this year, central bank head Tiff Macklem noted that the nation is "moving in the wrong direction right now, so the hole is going to be a little bit deeper."
Laura Jones, the executive vice-president of the CFIB, might have said it best when she described the start of 2021 to be "more like the fifth quarter of 2020 than a new year."
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Read more from Andrew Moran.
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