When Energy Secretary Jennifer Granholm addressed the National Petroleum Council on Tuesday, she announced that the administration would not impose a ban on crude oil exports in an effort to tamp down gasoline and diesel prices.
That was the right move, as doing so would only have created more rigidity in energy markets and exacerbated high energy prices and supply challenges.
Perhaps hoping the gesture would appear as an act of good faith (by taking off the table something that should never have been on it), the secretary went on to tell oil producers to fix the administration’s problems: “Please, take advantage of the leases you have. Hire workers. Get your rig count up.”
The conversation sounded very different a few weeks ago in the Senate Natural Resources Committee.
Asked why oil production in the U.S. had not yet caught up to demand, the acting administrator of the Energy Information Administration—the Department of Energy’s data arm—explained to senators that American producers were “trying to reposition for the long term.”
It was a bureaucratic euphemism conveying what Granholm was unwilling to acknowledge on Tuesday as anything other than a “disagreement”—that the administration’s policies are causing problems for American consumers.
To state it more bluntly, the Biden administration and its allies in Congress have made it very clear that they intend to put the oil industry in America out of business. What does it look like to “work together” with an administration that promised “to get rid of fossil fuels” and advised that oil company executives be “thrown in jail”?
If that is the future Granholm is working toward, who can blame American companies for being hesitant to invest hundreds of thousands to billions of dollars in exploration, equipment, and employees to produce oil?
So far, the Biden administration has tried to relieve the political pressure of gasoline prices that are the highest they’ve been since 2014 by trying to cajole more production from OPEC+ countries, releasing oil from the Strategic Petroleum Reserve, and investigating the oil industry for price gouging.
But solutions are under the administration’s noses.
Along with counterproductive policies such as export bans, President Joe Biden should put an end to:
- The Build Back Better Act, which increases bonding requirements, royalty rates, and fees while restricting access to energy resources in Alaska and on the Outer Continental Shelf for oil and gas development.
- The Environmental Protection Agency’s more stringent rules on methane emissions from existing and future oil production, cars and trucks, particulate matter, and ozone (which will impose higher costs for little to no environmental benefit) and plans to continue implementing the ethanol mandate beyond 2022.
- The Department of Interior’s paralysis by analysis of oil lease sales in Alaska, on federal lands, and on the Outer Continental, which amount to a multiyear ban. Interior hasn’t held a single oil and gas lease sale on federal lands under the Biden administration, and only one in the Gulf of Mexico under duress from the courts. It further published plans to severely curtail exploration and production of conventional energy on federal lands.
- The Securities and Exchange Commission’s proposed regulations for additional climate disclosure by public companies.
- The Department of Labor’s proposed regulations requiring federal pension investment plans to prioritize climate and “environmental, social, and governance” factors over returns to employees.
- The Department of Transportation’s more stringent fuel-efficiency regulations and a state carbon dioxide reduction mandate created by the infrastructure bill.
- The administration’s social cost of carbon and other greenhouse gases as a shadow carbon tax through federal regulatory and permitting processes.
- The Council on Environmental Quality’s removal of reforms to streamline and improve federal environmental-review permitting processes, which will make it harder to build energy infrastructure.
- The administration’s expected ban on offering technical assistance to other countries or using taxpayer-subsidized international finance for oil and other fossil fuel projects.
- Informal actions by members of the administration to pressure private banks into withhold financing for oil companies.
This is to say nothing of policies the administration and congressional allies have pushed to keep workers at home, or the bad energy policies that have been on the books for years (even a century, in the case of the Jones Act).
The president did himself no favors when he nominated for comptroller of the currency Saule Omarova, who is on record saying that she wants the oil industry “to go bankrupt. While Omarova’s nomination has been withdrawn, Americans should not miss how extreme it was that such a candidate was nominated in the first place.
The U.S. Energy Information Administration’s International Energy Outlook projects no scenario in which global demand for oil does not increase through at least 2050. But the Biden administration seems determined that none of that oil will be produced in the United States.
What is required for prices to come down is a total change in direction on energy policy away from mandates and forward to customer choice and free competition.
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