Biden’s energy policy has two faces
Domestic oil production and the climate agenda are playing tug-of-war
On Thursday, President Joe Biden presented a plan to address the high gas prices across the United States—what the White House calls “Putin’s price hike.” He ordered the release of 1 million barrels from the Strategic Petroleum Reserve each day for the next six months to boost supply. The energy policy move is the latest illustration of a recent Biden administration shift from its previous focus on climate change and alternative energy sources.
Earlier this month, Energy Secretary Jennifer Granholm told assembled energy executives at the annual CERAWeek conference in Texas that they need to extract more oil and gas to tackle rising costs: “We are on war footing, we are in an emergency, and we have to responsibly increase short-term supply. That means … you producing more right now.”
Granholm’s message departs from the administration’s push to reduce domestic oil production. On the day President Joe Biden took office, the Department of the Interior suspended the Bureau of Land Management’s authority to approve new leases, drilling permits, and mining operations. A couple of months later, Principal Deputy Assistant Secretary Laura Daniel-Davis extended the suspension and required most permits to get her personal approval. Biden also shuttered the Keystone XL pipeline and pushed agencies to work toward reducing fossil fuel use as soon as possible.
But then Russian President Vladimir Putin invaded Ukraine on Feb. 24, and the emphasis changed. Biden’s State of the Union address the next week referenced climate and green energy plans only once. The U.S. president banned all Russian oil imports, insisting that the United States would not finance the dictator’s war. Since then, prices have continued to climb. As of Wednesday, the Brent crude global benchmark price stood at $112 per barrel (up from under $100 before the Russian invasion), and the average gasoline price in the United States was $4.23 per gallon, according to data from AAA.
At the same time, European countries are reckoning with their own dependence on Russian oil and have asked Biden for help. The Energy Department began allowing additional natural gas exports to Europe in light of the war. Frank Macchiarola, senior vice president at the American Petroleum Institute, told The Hill the administration’s shift to promote more production and its new rhetoric are “encouraging signs for the industry.” But the new balancing act does not appear to be appeasing either production leaders or environmentalists.
Critics say the whiplash is unfair and unsustainable. American Enterprise Institute senior fellow Benjamin Zycher called the administration’s policies thus far “incoherent.”
“They want to constrain U.S. investment, but they also want to avoid the adverse political effects of high gasoline and other fossil fuel prices,” Zycher said.
In a news briefing on March 8, White House press secretary Jen Psaki rejected the premise that the administration has tried to muzzle the oil and gas industry by pointing to 9,000 drilling leases that have yet to be acted on.
“Federal policies are not limiting the supplies of oil and gas,” she said. “The suggestion that we are not allowing companies to drill is inaccurate. The suggestion that that is what is hindering or preventing gas prices to come down is inaccurate.”
But Zycher and others said Psaki’s defense was too simplistic. The thousands of leases are currently stalled in litigation from environmental lawsuits, and the practical ability to drill after securing a lease can take up to two years, former Bureau of Land Management executive Chad Padgett told National Review.
Despite pressuring American production, Biden might also be courting other countries to fill in the gap. A U.S. delegation visited Venezuelan President Nicolás Maduro earlier this month. After the administration received backlash for the trip, the official reason for the meeting changed from “energy security” to “democratic aspirations of the Venezuelan people.” The U.S. severed diplomatic relations with Venezuela in 2019 and has refused to recognize Maduro’s presidency following fraudulent elections.
The Wall Street Journal reported Biden has been calling Saudi Arabia royalty since gas prices started climbing, despite earlier calling the country “a pariah” and blasting its human rights record. Both Maduro and Saudi Arabian leaders have close ties with Putin and Russia. Granholm hosted oil ministers and leaders from Saudi Arabia, Qatar, and Canada at a Net-Zero Producers Forum earlier this month in a meeting advertised as a discussion on cutting emissions.
“The Biden policy was to reduce investment domestically, while begging foreign producers like the Saudis and others to produce more,” Zycher said.
Republican Sens. Kevin Cramer of North Dakota, Dan Sullivan of Alaska, and Cynthia Lummis of Wyoming introduced their own climate and energy plan in November and renewed their push for it this week. They propose that under the American Energy, Jobs, and Climate Plan the country could avoid inflation and job cuts by reducing greenhouse gas emissions more slowly. While Biden set the ambitious goal of achieving net zero emissions by 2050, the plan pushes for a 40 percent cut by then.
“Your administration’s energy policies—which focus on restricting, delaying, and killing the production of American energy—have had the predictable but catastrophic effect of driving up energy prices for American working families, increasing pink slips for American energy workers, and significantly empowering our adversaries, especially Putin, who has used energy as a weapon for decades,” Cramer, Sullivan, and 21 Republican senators said in a letter to Biden just before the State of the Union address.
Amos Hochstein, the White House special envoy and coordinator for international energy affairs, said the administration’s push for short-term increases in oil supply won’t deter from long-term energy goals: “As we move to renewables and green and clean technologies, we are not developing a new dependency that is repeating the mistakes of the 20th century.”
In his budget proposal released this week, Biden allotted the Interior Department $17.5 billion for fiscal year 2023, directing $254 million toward renewable energy and $478.9 million for oil and gas programs across three agencies. The Energy Department is slated to receive $48.2 billion, a more than $3 billion increase from the last proposal.
Included in Biden’s latest response plan is a request for Congress to impose fines on oil producers who have permits to drill but have left wells unused. Biden criticized such companies for trying to make a profit during a war and said they will have to choose: Start producing or pay.
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