Energy Institute Report: 175 Obstacles Created by Biden for Oil and Gas Production
The Biden Administration’s Assault on the Oil and Gas Industry
The Biden administration has taken a series of aggressive actions against the oil and gas industry in the United States, causing significant damage to the sector’s operations. These actions include terminating leases, proposing higher tariffs for drilling, and implementing policies that impose “uneconomic” greenhouse gas emission regulations.
In May, the Institute for Energy Research (IER) published a report that shed light on President Joe Biden’s plans to make American energy production more difficult and expensive. The report, updated in September, details the 175 measures taken by the administration that have harmed the U.S. oil and gas sector.
In May 2023, the Environmental Protection Agency (EPA) proposed new regulations that require power plants to reduce their greenhouse gas emissions and implement carbon capture measures, despite the fact that these technologies are considered uneconomical, according to the report.
President Biden’s assault on the oil and gas industry continued with his decision to impose a 20-year ban on oil and gas leasing within 10 miles of Chaco Culture National Historical Park in New Mexico. This move went against the wishes of the Navajo Nation and resulted in mineral owners losing out on $194 million in royalty income from their resources.
In June, the Fish and Wildlife Service (FWS) proposed three new rules under the U.S. Endangered Species Act (ESA) that the report claims will weaken the standards for identifying endangered or threatened species. These rules would also limit the areas available for energy resource development and increase costs and permit requirements for investors.
The FWS also proposed listing the Dune Sagebrush Lizard under the ESA in June, affecting the Permian Basin in Texas and New Mexico, one of the most productive oil regions in the country.
In July, the Biden administration’s Bureau of Land Management (BLM) proposed a rule to raise royalties for oil and gas drilling on federal lands and increase leasing fees. The BLM also suggested a significant increase in the minimum bond required for drilling leases, making it more challenging for developers. These new rules are estimated to cost energy firms an additional $1.8 billion by 2031.
In August, the EPA updated greenhouse gas reporting requirements for the oil and gas industry, potentially overestimating industry emissions and imposing stricter regulations.
The same month, the BLM proposed closing over 1.5 million acres of land in Colorado’s Piceance Basin to oil and gas leasing, impacting significant natural gas reserves.
President Biden’s anti-oil and gas policies have been in effect since he took office in 2021.
Crushing the Oil and Gas Sector
The president wasted no time implementing measures to limit fossil fuel use. He canceled the Keystone XL pipeline, placed a moratorium on oil and gas leasing in the Arctic National Wildlife Refuge, and reversed Trump-era orders that reduced regulations on federal land and expanded domestic energy production.
President Biden issued executive orders to halt new oil and gas leases on public lands and offshore waters and directed agencies to eliminate federal fossil fuel subsidies. He also rejoined the Paris Climate Agreement, which the IER argues benefits Russia, OPEC, and China, while detrimental to American interests.
In August 2022, Biden signed the Inflation Reduction Act (IRA), which imposed new taxes on methane leaks, natural gas extraction, crude oil, and related products.
In April 2023, the EPA released rules aiming to ensure that electric cars make up a significant percentage of new car sales in the United States. The IER criticizes these rules for their potential to force combustion engine cars out of business and the country’s heavy reliance on China for critical minerals needed for renewable energy technologies.
Impact of Biden’s Policies
While President Biden’s policies continue to harm the oil and gas sector, American consumers are feeling the impact through higher gasoline prices.
When Biden took office in January 2021, retail gasoline was priced at $2.478 per gallon. As of September 18, gas prices have soared to $4.001 per gallon, representing a 61 percent increase. Some states, like California, are experiencing prices close to $6 per gallon.
U.S. crude oil production remains below the peak achieved under the Trump administration.
For the week ending September 15, the United States recorded its highest oil output during the Biden administration, producing 12.90 million barrels. However, this falls short of the 13.10 million-barrel output in March 2020 under President Donald Trump.
President Biden has also significantly depleted the country’s Strategic Petroleum Reserves (SPR). When he took office, the SPR held 638 million barrels, but by June 2023, it had been reduced to 347 million barrels—the lowest level since 1983.
Despite facing some pushback, President Biden’s policies against the oil and gas industry continue on their current trajectory.
Recently, the Department of the Interior announced the withdrawal of over 13 million acres in the National Petroleum Reserve in Alaska from oil and gas leasing. Additionally, seven leases covering 365,000 acres granted to the Alaska Industrial Development and Export Authority in 2021 will be canceled.
Senator Joe Manchin criticized this move, labeling it as part of a “radical left” agenda that harms American energy security and increases dependence on foreign oil imports.
A Pew Research poll conducted in June revealed that only 31 percent of Americans support a complete phase-out of fossil fuel energy. A significant portion of the population believes that the United States is not ready for such a phase-out or should never stop using fossil fuels to meet its energy needs.
How would the requirement for incidental take permits for activities harming migratory birds affect oil and gas operations and industry companies
That would significantly impact the oil and gas industry. The first rule would revise the definition of “habitat” under the Endangered Species Act, allowing the FWS to designate areas as critical habitat based on future climate change projections. This would greatly expand the areas deemed off-limits to drilling and increase costs for oil and gas companies.
The second rule would reinstate protections for the gray wolf under the Endangered Species Act, which could restrict oil and gas development in certain regions. This move is in direct opposition to the Trump administration’s decision to remove the gray wolf from the endangered species list.
The third rule would require industry operators to obtain incidental take permits for any activities that may harm migratory birds. This rule could hinder oil and gas operations and add more bureaucratic hurdles for companies in the industry.
In addition to these regulatory actions, the Biden administration has signaled its intention to increase tariffs on imported steel used in drilling operations. This would raise costs for the industry and further hamper its competitiveness.
Furthermore, the administration has promoted the transition to renewable energy sources, such as wind and solar, while neglecting the potential of the oil and gas industry to create jobs and contribute to economic growth. The oil and gas sector has long been a major contributor to the U.S. economy, providing millions of jobs and generating significant tax revenue for local and federal governments.
The assault on the oil and gas industry by the Biden administration is concerning for several reasons. Firstly, it undermines U.S. energy independence, as the country will become more dependent on foreign oil and gas imports. This not only threatens national security but also exposes the U.S. to the volatility of global energy markets.
Secondly, the actions taken by the administration will result in job losses and economic decline in regions heavily dependent on the oil and gas industry. States such as Texas, Oklahoma, and Louisiana will be particularly affected, as their economies are closely tied to the success of the oil and gas sector.
Lastly, the assault on the oil and gas industry undermines the potential for innovation and technological advancements in the sector. Rather than stifling the industry, the government should encourage investment in research and development to enhance the industry’s environmental sustainability.
In conclusion, the Biden administration’s aggressive actions against the oil and gas industry have already caused significant damage and threaten to further harm the sector’s operations. These actions not only undermine U.S. energy independence and national security but also result in job losses and economic decline. It is crucial for the government to reconsider its approach and recognize the importance of a balanced energy strategy that includes both traditional and renewable sources.
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