Biden Administration Reverses Course, Requests that the U.S. Oil and Gas Industry Boost Production

Amid persistent criticism over rising inflation and high gasoline prices at the pump and faced with falling approval ratings, the Biden administration, in an about-face, has asked the U.S. oil and gas industry to raise production on existing leases as quickly as possible.

Hoping to reassure an industry it has blamed for climate change, the administration also says it will not reinstate a decades-old ban on the export of crude oil.

The move comes after the White House\s effort to get OPEC to boost production of oil fell on deaf ears.

‘Get Your Rig Count Up’

The Biden administration’s request was delivered by Jennifer Granholm, the U.S. Energy Secretary, to oil executives at a mid-December meeting of the National Petroleum Council.

“Consumers as you know are hurting at the pump,” Granholm said. “I hope you will hear me say that please, take advantage of the leases you have, hire workers, get your rig count up.”

Earlier in 2021 Granholm had given speeches discussing the “sacrifices” the public would have to make as the nation transitions from fossil fuels to green energy.

Changing Message

The administration’s recent plea for increased production marks a sharp contrast with policies it has imposed to curtail oil and gas production.

On his first day in office, President Joe Biden cancelled the Keystone XL pipeline that could have transported up to 830,000 barrels of crude oil per day from Alberta to refineries on the U.S. Gulf Coast.

Shortly thereafter, the administration issued a moratorium on new oil and gas leases on federal land and in the Gulf of Mexico.

The Biden administration subsequently instituted new regulations limiting methane emissions from oil and gas production, making the construction of new wells, storage, and transportation, and the maintenance of existing facilities more expensive.

In addition, in early January, the administration, through the Federal Energy Regulatory Commission approved a plan to block a natural gas power plant in Connecticut capable of powering 500,000 homes.

Reversing Trump, Harming America

The Trump administration did everything it could to promote U.S. energy independence, and it worked, says Craig Rucker, president of the Committee for a Constructive Tomorrow (CFACT), which co-publishes Environment & Climate News. By contrast, and to America’s detriment, the Biden administration has focused on restricting domestic energy production in order to fight climate change, Rucker says.

“Thanks to advances in hydraulic fracturing (fracking), horizontal drilling, seismic imaging, and the Trump administration’s policy of “American dominance” in energy production, U.S. oil production reached a record high of 13 million barrels per day in the months before the outbreak of COVID-19,” Rucker said. “The sole consideration behind the Biden administration’s energy policy is the alleged influence fossil fuels have on the climate.

“Abandoning fossil fuels for renewable energy is unilateral geostrategic disarmament that will greatly benefit China, which is delighted to pay lip service to the climate while cornering the market on materials used in wind and solar power,” Rucker said.

‘Mixed Messages’

The Biden administration is being pulled in different directions by its climate commitments and its desire not to lose the next election, and thus is sending inconsistent signals about the value of oil and gas production, says Tom Randall, president of Winningreen LLC, an energy and environment communications firm.

“Condemning fossil fuels in one breath and pleading for more production of oil and gas in the next is part and parcel of the mixed messages we have seen across the board,” Randall says. “From its handling of COVID-19 to its withdrawal from Afghanistan, we have experienced chaos punctuated by contradictory statements and policies.

“As soon as its energy policies, predictably by the way, led to higher prices at the pump and rising utility bills, the White House changed course, at least temporarily,” Randall said. “However, this appears to be nothing more than an expedient tactical and rhetorical adjustment, not a recognition they are going down the wrong path.”

‘A Little Skeptical’

People in oil producing states don’t necessarily trust that Biden’s current pleas for more oil and gas production represents a firm commitment to the well-being of the industry, says Bette Grande, a former North Dakota state legislator and current president of the Roughrider Policy Center.

“In North Dakota, we are a little skeptical when we hear the energy secretary tell producers to ‘get their oil rig count up,’” said Grande. “It strikes some that the Biden administration is coming ‘hat in hand’ after being rebuffed by OPEC+ and only then do they turn back to domestic producers and the industry they tried to cripple.

“Under Executive Order 14008, the U.S. Bureau of Land Management (BLM) halted quarterly lease sales on federal lands, including all four scheduled quarterly lease sales in North Dakota, so the state filed a lawsuit to compel BLM to resume sales, which, responding to court decisions, the BLM announced it will resume,” Grande said. “A degree of regulatory certainty would be welcomed by the oil and gas industry, but it remains to be seen how far the Biden administration is willing to go to address energy costs, especially since actions by Treasury Department and other Biden administration agencies in pursuit of Environmental, Social, and Governance goals are choking off the capital and insurance needed to ramp up production.”

Bonner R. Cohen, Ph.D., (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with the CFACT.