It’s Time For Policy To Match Rhetoric To Increase U.S. Oil & Gas Production
During this energy crisis, as American drivers continue to pay sky-high prices for gasoline, the Biden administration has continuously ignored the most obvious answer in the world: increase oil production in the United States.
Instead, as demonstrated yet again on Wednesday, President Biden continues to put Americans under the boot of OPEC+, which announced that “it would slash oil production by 2 million barrels per day, in a rebuke to President Biden that could push up gas prices worldwide, worsen the risk of a global recession and bolster Russia’s war in Ukraine,” as the Washington Post reported.
This latest “rebuke” comes after a year of the Biden administration repeatedly begging OPEC+ (and failing) to boost oil production to alleviate rising gasoline prices.
Reacting to the news of this unsuccessful OPEC+ outreach, the White House is now claiming the opposite, that the “U.S. needs to be less dependent on OPEC+,” as Reuters reported.
In a statement, National Security Advisor Jake Sullivan and NEC Director Brian Deese even said that the United States should boost domestic oil production and reduce the reliance on imports:
“[Biden] is directing the Secretary of Energy to explore any additional responsible actions to continue increasing domestic production in the immediate term. … Finally, today’s announcement is a reminder of why it is so critical that the United States reduce its reliance on foreign sources of fossil fuels.”
Yet those words are not being followed by actions.
This summer, the U.S. Dept. of the Interior allowed the existing Outer Continental Shelf five-year offshore leasing program to expire without having a new plan in place. When the department’s proposed plan was finally released in August, which opened the door for blocking all new lease sales, it acknowledged their policy would further undermine domestic production.
As E&E News reported:
“The Biden administration estimates that slashing offshore oil sales would both increase the amount of crude the U.S. buys from other countries and depress oil demand by hiking fuel prices, validating a common industry criticism of climate policy.” (emphasis added)
The comment period for the new plan is scheduled to close on Friday, months after the Obama administration plan expired. It will likely be several more months before another offshore sale can be held.
Also, this summer, when the administration finally held its first onshore lease sales, it brought in $22 million in bids, showing the strong demand for domestic production despite the Interior Department hiking the royalty rates by 50 percent and significantly cutting the amount of acreage offered.
Pres. Biden failing to hold an onshore lease sale for 18 months came with massive consequences, with the Wall Street Journal reporting that federal lease sales “slow to a trickle” under the Biden administration:
“The Biden administration has leased fewer acres for oil-and-gas drilling offshore and on federal land than any other administration in its early stages dating back to the end of World War II, according to a Wall Street Journal analysis.” (emphasis added)
Worsening this “trickle,” Interior recently again missed the deadline for announcing onshore lease sales in Q3, meaning there will likely not be another sale until at least the end of the year if not 2023.
Further still, instead of addressing these obvious answers to increasing domestic oil production, the Biden administration continues to use the Strategic Petroleum Reserve (SPR) as a political lever, ignoring its intended purpose. Heading into hurricane season and the winter months, the SPR is already at historic lows. Yet in an attempt to clean-up concern over OPEC+’s decision that will likely raise gas prices – notably, ahead of the midterms – the White House announced it will continue to use the SPR as its own personal band aid:
“At the President’s direction, the Department of Energy will deliver another 10 million barrels from the Strategic Petroleum Reserve to the market next month, continuing the historic releases the President ordered in March.”
Bottom Line: Instead of encouraging domestic oil production, the Biden administration chose to rely on OPEC+ and the oil whims of foreign countries. Now, that move backfired. While White House officials are scrambling to walk back their rhetoric, their actions over the past 18 months tell a different story. OPEC+’s announcement, in combination with the SPR being nearly tapped to its max, leaves the Biden administration with the one solution they should have looked to all along: clean, affordable U.S. oil.