White House Cancels Energy Projects; An Unusually Nasty Biden Feud

by Greg Valliere, AGF Management Ltd.

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Insights and Market Perspectives

TALK ABOUT BAD TIMING: As gasoline prices hit record highs yesterday, the Biden Administration announced that it is cancelling plans to drill for oil in Alaska’s Cook Inlet and has halted plans for new leasing in the Gulf of Mexico.

THE ALASKA OFFSHORE LEASE PLAN would have opened drilling opportunities over a span of more than 1 million acres for 40 or more years of production. The new activity would have led to new underwater pipelines and platforms in the environmentally-sensitive area, according to CBS News, which broke the story.

DECISIONS WERE DUE NEXT MONTH for the Alaskan leases and two other projects in the Gulf of Mexico, but the Interior Department cited conflicting court rulings and a lack of interest among drillers, which energy officials adamantly denied.

A TOP OFFICIAL at the American Petroleum Institute called the move “another example of the administration’s lack of commitment to oil and gas development in the US.” He added that Biden has failed to take steps to increase supply — a hot political issue.

SEPARATELY, A BIPARTISAN GROUP IN CONGRESS is working on compromise legislation that would increase exploration, drilling and more use of fossil fuels, but like many bills in Congress, progress has been glacial.

MEANWHILE, the national average price of regular gas hit an all-time high of $4.40 yesterday.
* * * * *
OBVIOUSLY WASHINGTON IS BITTERLY DIVIDED: There are nasty feuds between — and within — the political parties. But one feud has stunned insiders with its ferocity: Joe Biden vs. Sen. Rick Scott, the Florida Republican who has managed to alienate many in his own party with his call for tax hikes.

SCOTT IS THE GOP’s top Senate fundraiser, and he’s been scathing toward Biden, proclaiming that the president is “incoherent” and “incapacitated” and demanding his resignation. Biden responded in unusually personal terms this week, proclaiming that Scott “has a problem.”

IN PRIVATE, GOP LEADERS — like Sen. Mitch McConnell — are miffed at Scott, who has proposed higher taxes, which is verboten within the Republican caucus. “All Americans should pay some income tax to have skin in the game, even if a small amount. Currently over half of Americans pay no income tax, ” Scott said earlier this year.

THE IDEA OF HIGHER TAXES does not appeal to Republican leaders, who also dislike Scott’s plan to “sunset” all laws every five years — theoretically putting Social Security and Medicare on the table. Biden is having a field day with Scott’s plans.

CYNICS BELIEVE SCOTT IS TRYING TO BE HEARD in a state where presidential candidates are everywhere. Scott may run in 2024, along with Marco Rubio, Ron DeSantis and Donald Trump. Four candidates from one state are scrambling for attention.

SO IT’S HARDLY A SURPRISE WHEN SCOTT says “Joe Biden is unwell. He’s unfit for office. He’s incoherent, incapacitated and confused,” Scott said in a news release Tuesday. Biden “doesn’t know where he is half the time,” Scott alleged.

BIDEN IS PREPARED TO HIT BACK, citing financial irregularities at a health firm Scott once headed; the company paid $1.7 billion in federal fines because of Medicare fraud and related wrongdoing.

EVERYTHING SEEMS TO BE ON THE TABLE, including Biden’s mental acuity, which worries the wily McConnell, whose message to Republicans is simple — we can smell victory in November, so why rock the boat by getting specific on issues like abortion or Biden’s health? Can McConnell run out the clock for another six months? That’s the plan.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

This post was first published at the AGF Perspectives Blog.

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