As his administration now scrambles to solicit supply oil shortages from OPEC, Venezuela, and Iran to reduce skyrocketing energy costs ahead of Democrat congressional mid-term election casualties, let’s remember this contradicts former 2019 candidate Joe Biden’s campaign pledge that “I guarantee you we’re going to end fossil fuels.”
Let’s also recall that President Biden then inherited an America that was not only energy independent, but also a leading global oil and gas exporter, and that gas prices began going up long before Putin’s invasion of Ukraine recently provoked a bipartisan ban on Russian oil, gas and coal imports.
That ban was likely influenced by a March 8 Reuters/Ipsos poll which found that 80% of all likely voters surveyed responded that the U.S. “should not buy oil or gas from Russia during this [Ukraine] conflict, even if it causes American gas prices to increase.”
Simultaneously, inflation over the past year has risen to a 40-year high of 7.9%, most all occurring prior to the Ukraine conflict catastrophe.
Also, recall that immediately upon taking office, Joe Biden revoked a permit essential for the Keystone XL pipeline to deliver oil from Canada.
Shortly thereafter, his administration launched an effort to overturn an oil drilling program in the Arctic National Wildlife Refuge (ANWR) in Alaska, and empowered Department of Interior regulatory efforts to delay drilling permits.
Blaming U.S. companies—not Biden policies—for not producing more oil and gas, White House press secretary Jen Psaki asserted that there are 9,000 available unused drilling permits, while only 10% of onshore oil production takes place on federal land.
A big problem here, is that the companies first must obtain additional permits for rights of way to access leases and build pipelines to transport fuel, a requirement that the Biden administration’s Interior Department has made more difficult.
Next, the companies must build up a sufficient inventory of permits before they can contract rigs – requiring added regulatory difficulties of operating on federal lands.
For example, it takes 140 days or so for the feds to approve a drilling permit versus two for the state of Texas.
The Administration has halted onshore lease sales, and producers are developing leases more slowly since they don’t know when more will be available. Offshore leases were snapped up at a November auction because companies expect it might be the last one.
Interior’s five-year leasing program for the Gulf of Mexico expires in June, and the administration hasn’t promulgated a new plan or appealed a liberal judge’s January order revoking the November leases…whereas it has appealed another judge’s order requiring that it hold lease sales.
The Federal Energy Regulatory Commission (FERC) has recently revised its policy for approving natural gas pipelines and export terminals to include greenhouse gas emissions in this assessment.
The U.S. has enormous capacity drawing upon Marcellus and Utica shale deposits in Appalachia to export liquid natural gas to Russia-dependent Europe which depends upon gas pipelines controlled by FERC to supply them with gas. Many LNG projects are stalled due to FERC pipeline constraints.
Nearly all approved and proposed LNG export terminals are located on the Gulf Coast because Democratic states and greens have blocked pipelines in the Northeast.
Without pipelines, U.S. gas remains stuck in the ground.
Since companies can’t explore and drill, or build pipelines, without capital, Biden administration financial regulators allied with progressive investors are working to cut that off as well.
Last November the U.S. Labor Department has proposed a rule that would require pension plans and asset managers to account for Environmental, Social, and Governance scores (ESG) in determining 401(k) retirement plan decisions.
Such woke considerations will include assessments of impacts on workforce diversity, climate change, and investments in sanctioned “green” energy projects.
The proposed new Labor ruling scraps and reverses a Trump administration proviso within the Employee Retirement Income Security Act (ERISA) requiring retirement plan fiduciaries to act “solely in the interest” of participants and based upon a “material effect on the return and risk of an investment.”
ESG requirements may be challenged in courts as the greatest antitrust violation in history as “green” Wall Street banks and money managers brag about their coordinated efforts to choke off investment in fossil energy, making it nearly impossible to raise money for oil and gas projects.
As a consequence, 2021 investment financing for oil and gas exploration was nearly 25% below 2019 levels.
Small independent producers who relied on private equity during the last shale boom can’t get loans because woke lenders are cutting them off.
Then, enter the Biden administration’s Securities and Exchange Commission (SEC), an oversight agency responsible for regulating financial securities markets, is mandating burdensome disclosure details from companies about so-called Scope 3 emissions greenhouse gas climate risks produced by a company’s suppliers and by customers using its products.
SEC’s stated intent is to guide future rule-making, with the goal of “combatting climate change” and nudging investors to deploy more capital toward “greener businesses,” as a priority.
Nevertheless, despite everything his administration has done to weaponize government regulations against fossil energy, Joe Biden has asked the Federal Trade Commission (FTC) to investigate whether oil companies were illegally exploiting the Putin Ukraine invasion to keep gasoline prices high.
“Russia’s aggression is costing us all,” the president said, “and it’s no time for profiteering or price gouging.”
Simply put, Joe Biden and his Democrat party’s policies have made it clear to the American hydrocarbon industry that their business isn’t welcome.
Now, as they beg OPEC, Venezuela and Iran for help to reduce onerous price and inflation consequences of their own policies ahead of 2022 midterm elections, they are likely to discover that maybe Putin and petroleum companies really aren’t their biggest problems after all.