With his presidency in peril and his approval ratings lower than Donald Trump‘s, President Joe Biden has belatedly discovered the value of domestic energy production.
“The bottom line is: if we want lower gas prices, we need to have more oil supply right now,” Biden said on March 31 as he announced the withdrawal of 180 million barrels of oil from the Strategic Petroleum Reserve (SPR).
Biden’s acknowledgment of basic economics departs sharply from everything he’s done since day one of his administration, when he set about fulfilling his campaign pledge to end oil and gas activity on public lands while weaving a basket of red tape around the entire industry.
As one of his first executive orders, Biden killed the Keystone XL pipeline, and then suspended congressionally mandated lease activity in the 1002 area of the Arctic National Wildlife Refuge, “paused” federal lease sales, and ordered up an extravagant “social cost of carbon” from the Environmental Protection Agency to be added to any oil and gas projects seeking permits.
According to the American Petroleum Institute, 47 lease sales were held during the first 14 months of the Obama administration. The Biden administration has held just one (court-ordered) federal lease sale, and the issuance of federal drilling permits has slowed to a trickle since clearing the pending permits inherited from the Trump administration.
After issuing 643 drilling permits in April 2021, the Bureau of Land Management approved only 95 in January 2022.
The Biden administration’s hostility to the oil and gas industry—which pre-dates the Russian invasion of Ukraine—did not go unnoticed by the markets.
Combined with runaway inflation reaching a rate not seen in 40 years, the price per gallon is setting records daily with no end in sight.
During his March 31 announcement to draw down the SPR by 1 million barrels per day for six months, Biden predicted that the release would lower prices “fairly significantly.”
“It could come down the better part of—you know, anything from 10 cents to 35 cents a gallon,” the president said.
On March 31, the average price per gallon was $4.22. On June 13, it was up nearly 80 cents to $5.01.
Apparently nobody told Biden that oil from the SPR is sold on the open market, and companies paid between $103 and $111 per barrel at the first sale in April.
While members of Congress and the administration accuse oil companies of price gouging, the federal government is selling oil for the same prices as ExxonMobil or Shell, which makes the SPR release not only pointless, but dangerous.
As of May, the SPR is at its lowest level since 1987, and refilling it may cost as much or more as the government received for selling it, all without doing anything to lower prices.
Yet rather than reverse course and implement policies that encourage production and investment, the Biden administration has instead adopted an attitude that the beatings must continue until morale improves.
Even though it already takes four and a half years on average to complete an environmental impact statement, the Council on Environmental Quality is moving forward with plans to make the process worse by complicating National Environmental Policy Act regulations that were streamlined under Trump.
The Federal Energy Regulatory Commission is bogging down natural gas export terminal permits with new climate rules; the Securities and Exchange Commission published a new proposed rule in March requiring vast new climate disclosures for public companies; and the Department of Interior has failed to issue a new five-year offshore leasing program due by June 30 as required by law. While the constrained West Coast market is paying the highest prices in the country, the Biden administration has also moved to take half the National Petroleum Reserve-Alaska off the table for development.
Despite all these acts to appease a far-left environmentalist base that only represents about 10 percent of the population, Biden insisted that “nothing is standing in their way” when it comes to oil companies’ ability to increase production.
In other words, the beatings will continue, and the American people will keep taking the worst of it.
Mike Dunleavy is the 12th Governor of Alaska.
The views expressed in this article are the writer’s own.
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