Back in June, we reported that overall US Nat Gas exports had exploded thanks to soaring LNG flows to Europe which has grown increasingly desperate for any “friendly” nat gas now that Russia has almost shut off all pipelines toward Europe, in the process pushing US nattie prices sharply higher – if nowhere near where they are in Europe currently.

And while these exports fizzled after the Freeport LNG explosion in June, it was clear that nat gas prices (and to a lesser extent, inventory) in the US would be a factor not only of domestic demand, but increasingly also of European imports from the US.

The same of course, can be said for oil, which is seeing growing demand in Europe – which finds itself increasingly locked out of Russian oil output, which is expected to shrink even more once a Russian oil ban is imposed at the end of the year – as part of gas-to-oil switching which is becoming increasingly prevalent in Europe, and is why US crude sales overseas are also set to hit fresh records through next year as American oil increasingly takes market share in Europe.

Earlier this month, weekly government figures showed an unprecedented 5 million b/d of US crude being exported. Shipments are poised to average over 4 million b/d over the next few months and into next year, according to the most optimistic in the oil industry.

And just like in the case of gas, rising oil exports to Europe mean not only higher US oil and gas prices – as supply/demand dynamics of the two asset classes converge – but also shrinking US inventories which end up in Europe. Which is a problem for US oil because while prices are dropping for now, they are oblivious of the fact that commercial US inventories have slumped to near record lows.

So wouldn’t you know the Biden Administration – the same administration that has been draining record amount of oil from the US strategic petroleum reserve in hopes of pushing gas prices lower by the midterms – now wants to limit fuel exports to Europe.

That’s the message Energy Secretary Jennifer Granholm sent last week in a letter imploring seven major refiners to limit fuel exports. The WSJ obtained a copy of the letter (see below) which the Administration didn’t release publicly, but has since leaked courtesy of Bloomberg’s Javier Blas and others.

Granholm warned that gasoline inventories on the East Coast are at a near-decade low, and diesel stocks are nearly 50% below the five-year average across the region. And while she didn’t address it – as the SPR drain is hardly something the White House is proud of – total crude oil inventories including the SPR have seen a spectacular collapse since the Ukraine war.

“Given the historic level of U.S. refined product exports, I again urge you to focus in the near term on building inventories in the United States, rather than selling down current stocks and further increasing exports,” she writes.

“It is our hope that companies will proactively address this need,” she adds. “If that is not the case, the Administration will need to consider additional Federal requirements or other emergency measures.” In New Jersey they call that an offer you can’t refuse.

This, as the WSJ notes, is a political escalation from President Biden’s June command to refiners to immediately lower gasoline prices. As average gasoline prices nationwide have fallen to $3.88 from about $5 in mid-June, he has been taking a media victory tour. However, the drop in prices is largely a function of the market expecting an imminent recession, hardly something worthy of a victory tour, and in any case, Biden can thank Americans for driving less.

Yet fuel storage levels are running low heading into hurricane season when it’s not unusual for Gulf Coast refineries to be damaged or shut down. The Administration fears a refinery outage that causes fuel prices to spike in the runup to the November election. Hence, Granholm’s threatening letter.

But, as the WSJ editorial board explains, the problem isn’t U.S. exports. It’s the political and regulatory assault on U.S. production and refining. One culprit is the 2019 closure of the Philadelphia Energy Solutions refinery, which removed about 335,000 barrels a day of refining capacity from the Northeast. This made the region more dependent on Gulf Coast and overseas refineries.

Additionally, fuel storage levels would be much higher in the Northeast if not for New York state’s natural gas pipeline blockade, which has made the region more dependent on oil for energy. One-third of New England residents still use oil to heat their homes, and New York this month is generating more electricity from oil than from solar or wind.

Most ironic, however, is that the Granholm export threat is also a slap in the face to European allies trying to diversify energy sources from Russia. Fuel supplies are tight globally amid sanctions on Russia, which had accounted for 40% of Europe’s oil imports. Europe has had to look elsewhere for diesel fuel, which some manufacturers and power generators are turning to as a substitute for natural gas. U.S. refiners have recently been exporting more fuel to Europe, but Granholm is now telling them to stop.

Restricting fuel exports is one more counterproductive Biden policy on fossil fuels that would merely drive up global fuel prices, including U.S. imports. As the WSJ concludes, “Granholm’s bullying of energy companies shows how little she understands about energy markets.”

This post was originally published at Zero Hedge

Remarkable scenes unfolded at the White House Thursday as reporters demanded to know how on earth the Biden administration can say its student loan forgiveness plan is fiscally responsible when they cannot give any details on costs or who is paying for it and how.

One reporter went straight to the crux of the matter, telling Karine Jean-Pierre “you said said a couple of times that this is a fiscally responsible way of doing this. But can you explain a little bit about how you guys think it is fiscally responsible? Because you can’t say how much it’s going to cost. You can’t say exactly how it’s going to be paid for. And you can’t say exactly who is paying for the cost.”

Jean-Pierre had no answers to give whatsoever:

The rest of the briefing was a complete shit show, with reporter after reporter asking the simple question, ‘how much is this going to cost?’:

Reporter: "Do you all believe this student loan program is fully paid for?"

Jean-Pierre: "We do believe it will be fully paid because of the work this president has done with the economy." pic.twitter.com/X89yhf0HhG

— Greg Price (@greg_price11) August 25, 2022

She doesn’t have anything to share at this time… again:

Reporter 1: "You could say 'this is how much it's going to cost if everyone who is eligible applies.'"

KJP: "We just don't want to get ahead of ourselves."

Reporter 2: "If you don't know how much it's going to cost, how can you guarantee that it's going to be paid for?" pic.twitter.com/MFtIlFXvYl

— Townhall.com (@townhallcom) August 25, 2022

Wouldn’t want to ‘get ahead of yourself’ by actually knowing how much a massive debt forgiveness plan will cost, right? How silly.

Q: "How is COVID a national emergency when it comes to student debt?"

KARINE JEAN-PIERRE: "It's a very good question." pic.twitter.com/6RIfiVvFE4

— RNC Research (@RNCResearch) August 25, 2022

KARINE JEAN-PIERRE: "We don't believe that [Biden's student loan debt bailout] is going to increase the deficit."

FACT: It will increase the deficit by more than $350 BILLION, according to the Tax Foundation. pic.twitter.com/Jh0aFTvfRg

— RNC Research (@RNCResearch) August 25, 2022

The day after Biden announced a half-trillion-dollar student loan bailout — which will immediately worsen inflation — Karine Jean-Pierre claims Biden's "record on fiscal responsibility is second to none." pic.twitter.com/IdcYE7Dy4H

— RNC Research (@RNCResearch) August 25, 2022

It’s taken two whole briefings of asking and there still is no answer as to who is paying for this:

Don’t forget, there is no recession and the economy is stronger than it has been in some time:

Karine Jean-Pierre: "The economy is stronger than it’s been in some time." pic.twitter.com/PalLxnbghQ

— RNC Research (@RNCResearch) August 25, 2022

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After Joe Biden declared that so called MAGA Republicans are “semi-fascists” and “a threat to our democracy,” and charged that they “embrace political violence,” White House Press Secretary Karine Jean-Pierre refused to explain what Biden meant.

Earlier in the day, a yelling Biden blurted “The MAGA Republicans don’t just threaten our personal rights and economic security,” and further declared that “MAGA Republicans” are “a threat to our very democracy. They refuse to accept the will of the people. They embrace — embrace — political violence. They don’t believe in democracy.”

“It’s not hyperbole,” he continued, adding “America is at a genuine inflection point. It occurs every six or seven generations in world history,” and further proclaiming “What we’re seeing now is either the beginning or the death knell of an extreme MAGA philosophy… It’s not just Trump, it’s the entire philosophy that underpins the — I’m going to say something — it’s like semi-fascism.”

“I respect conservative Republicans,” Biden said, adding “I don’t respect these MAGA Republicans.”

In a later appearance on CNN, Jean-Pierre attempted to word salad her way out of explaining what “semi-fascism” is.

Host Don Lemon directly asked “the President likened what he called extreme MAGA philosophy to semi-fascism. What exactly is semi-fascism, Karine?” 

When the Press Secretary immediately veered off the subject, Lemon interjected and stated “with all due respect. We have a short amount of time. I want to get to all those things  But if you’ll answer my question, we can get to those things.” 

He again asked “what exactly is semi-fascism?” 

Jean-Pierre again refused to answer and testily snapped “by having this back and forth we are actually taking away from the time.” 

Jean-Pierre repeated the claim that “this MAGA element of the Republican Party” is “attacking our democracy, they are taking away our freedom.”

Despite not answering the question, Lemon thanked her for answering the question.

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