What do you get when a government tanks the industry responsible for roughly a fifth of its income and half of its national exports? The answer is obviously nothing good. Nevertheless, Colombia’s Marxist President Gustavo Petro seems determined to find out firsthand.
When Petro ran for the presidency in 2022, he declared his intention to cease granting licenses for oil exploration and ban fracking for natural gas. His stated goal was to wean Colombia off fossil fuels and transform it into a green “global powerhouse for life.” That sounds nice in the abstract, but in practice, forcefully halting one of Colombia’s largest industries was bound to throw the nation’s already vulnerable economy into freefall.
Colombian business gave a sigh of relief when, upon his election and inauguration, Petro appointed the comparatively mainstream José Antonio Ocampo as his finance minister. For a while, it seemed checks and balances within the government might prevent the new president from pursuing his most extreme goals.
But the time for cautious optimism is no more, because Petro clearly seeks to deliver on his climate fanaticism. In November 2022, he raised taxes on the oil and coal industries as part of a massive 20 trillion-peso tax hike. In January 2023, Petro’s energy minister confirmed his aspiration to decarbonize the Colombian economy. And during the last week of April, the president removed Ocampo from his cabinet and replaced him with someone even further to the left.
It should come as no surprise that ExxonMobil announced they are pulling out of the country. The Colombian peso has fallen to record lows, while the price of energy has gone up 26 percent, more than double the rate of inflation. Things will only get worse from here, especially if the administration goes forward with banning oil exploration and fracking.
The United States can speak from experience. When President Joe Biden announced he would end fossil fuels and reduced the number of new licenses for oil and natural gas exploration, the energy industry contracted, fuel prices went up, and inflation got out of control. President Biden eventually had to tap into the strategic petroleum reserve to prevent an economic meltdown, endangering national security. He claimed it was Vladimir Putin’s invasion of Ukraine that drove up energy prices, but we all saw through that political spin. It is primarily the Biden Administration’s ridiculous climate policies (together with Democrats’ outrageous spending) that has harmed the U.S. economy.
The Colombian economy is already in trouble, and it will become far weaker if the Biden-Petro anti-energy agenda succeeds. Oil and related products make up less than 20 percent of U.S. exports, while they are Colombia’s flagship goods. Attempting to aggressively decarbonize the South American nation will end in disaster.
Moreover, such a disaster would primarily harm the poor and vulnerable, the same people Petro pledged to help during his presidential campaign. Pursuing climate resiliency within the bounds of common sense is perfectly reasonable. But pursuing it at the expense of millions of people’s welfare is unjust. I hope Colombia’s leaders don’t have to learn that the hard way.