With Winter Coming and Energy Prices Soaring, Biden Administration Doubles Down On Anti-Energy Domestic Policies
Thanks to the development of America’s abundant shale resources, energy supply shocks seemed to be a thing of the past. But with winter approaching, the Biden administration’s refusal to allow timely lease sales for production on federal lands is set to contribute to the highest energy prices in years.
Now that summer has come and gone (with no leasing report to speak of!) energy security is back in the headlines. In Europe, countries are beginning to ration natural gas as on-hand supplies of fuel dwindle and renewables fail to provide enough electricity to pick up the slack.
But the prospect of looming global energy shortages and high domestic prices is not enough to push the administration to reconsider its anti-production stance. In a recent interview, Interior Secretary Deb Haaland explained that the department’s review of oil and gas leasing would reflect “where we are in this climate catastrophe that we’re in right now.”
“We’re not going to stop gas and oil overnight — that’s just an impossibility right now,” Haaland said, but explained that her goal was to restore balance to the use of public lands, saying that she wants “this era to end” and alluding to greater restrictions to come for the federal oil and gas program.
Those may not sound reassuring to observers fearing supply constraints and high energy prices this winter.
Lease Sales Delayed As Energy Crunch Looms
While the administration may not be able to halt production outright, it has continued to delay federal lease sales and permitting decisions. A judge in Louisiana recently ruled in favor of 13 states that filed suit in federal court against the government for violating its legal responsibility to hold quarterly lease sales.
U.S. District Judge Terry Doughty ruled that the Outer Continental Shelf Lands Act and the Mineral Leasing Act required the Interior Department hold regular lease sales. However, Interior claims that no lease sale can be held until February 2022 because of the need to complete environmental analysis and scoping—even though this work was completed for many parcels under the Trump administration.
Kathleen Sgamma, president of the Western Energy Alliance, told The Center Square:
“So, they’re dragging their heels kicking and screaming, but they are moving forward with lease sales. My problem with it is that they’re redoing work that’s already been done and presenting that to the judge as if it’s progress.”
The impacts of this delay are already being felt, particularly in the west, where energy production is an important part of states’ economies.
Peggy Trenk, executive director of the Treasure State Resource Association, explained the situation in the Helena Independent Review:
“As courts go back and forth on the legality of the Department of Interior’s federal oil and gas leasing ban, Montana’s energy companies and others throughout the country have been subjected to long periods of uncertainty, hurting local economies and state revenues. Oil and gas operations on federal lands have been repeatedly stopped, and then subsequently started, and then stopped again as this issue plays out in the courts, and it remains to be seen what the final verdict will be.”
The result is that residents and small business owners across the country – from Rhode Island to Chicago to Colorado – are expecting to pay much more for natural gas this winter.
Activists are also contributing to the problem, as groups including WildEarth Guardians and Center for Biological Diversity successfully brought forward a lawsuit that require new environmental reviews of previously issued drilling leases in Colorado.
Biden Continues To Beg OPEC To Increase Production
Since taking office, President Biden has enacted a slew of policies to restrict energy access in the United States—revoking permits for the Keystone XL Pipeline, transferring Interior’s permitting authority to a handful of bureaucrats, and finally banning federal leasing while Interior reviewed its leasing program.
All of these policies succeeded in curtailing domestic production, causing both energy prices and imports to increase. This summer, oil imports from Russia hit a 10-year high. Now, with winter on the way, President Biden is back asking for foreign production increases, rather than allowing American producers to do what they do best.
Asked how the administration was handling the budding energy crisis, Press Secretary Jen Psaki had no mention of domestic production:
“We continue to speak to international partners, including OPEC, on the importance of competitive markets and setting prices and doing more to support the recovery.”
Industry analysts are coming to similar conclusions. RBC analyst Helima Croft said in report quoted by Bloomberg:
“With oil prices at multi-year highs, we think that OPEC will come under increasingly intense pressure from Washington to increase production.”
Supply Constraints Reflect Anti-Industry Priorities
Low energy supplies reflect a lack of investment in new production—a situation that will continue to impact energy markets in the future. This situation makes it all the more important for the administration to end its illegal leasing ban and to clarify the regulatory situation governing energy production on public lands.