White House, energy industry point fingers over high gas prices

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White House, energy industry point fingers over high gas prices

Who’s to blame?

In recent weeks, the Biden administration has criticized energy companies over record-high gas prices, arguing the industry is restricting supply by allowing thousands of drilling permits to go unused.

By contrast, industry officials and Republicans in Congress say the White House’s own policies are to blame for reducing domestic energy production.

All the while, the price at the pump keeps going up and up and up.

“There are 9,000 approved drilling permits that are not being used,” White House press secretary Jen Psaki told reporters Monday. “So, 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.”

According to the Department of the Interior’s Bureau of Land Management (BLM), there are 9,173 unused applications for permits to drill (APD) that have been approved as of December 2021. Another 4,621 APDs are pending approval. 

According to White House press secretary Jen Psaki, there are 9,000 approved drilling permits that aren't being used.
According to White House press secretary Jen Psaki, there are 9,000 approved drilling permits that aren’t being used.
Michael Brochstein/ZUMA Press Wire

In FY 2021, the government approved 5,145 ADP, up from 4,631 from the year before.

However, Kevin O’Scannlain of the American Petroleum Institute has called the unused leases frequently cited by Psaki and other administration officials “a red herring” and “a smokescreen for energy policies that have had a hamstringing effect on the world’s leading producer of natural gas and oil.”

“For more than a year it [the White House] has halted new federal leasing — key to future energy investment and production,” O’Scannlain wrote in a March 4 post on API’s website. “It canceled energy infrastructure, blocked development in parts of Alaska, entertained new taxes to punish the US energy industry and chilled future investment by signaling that oil and gas wouldn’t be part of America’s future energy mix. All last summer, the administration called on OPEC+, the oil cartel, to increase its production more rapidly in the face of rising energy costs, bypassing American producers.”

Undeterred, Psaki doubled down on Wednesday, insisting that oil companies do not require “an embroidered invitation to drill.”

Psaki called the suggestion that the White House is preventing companies from being able to drill for oil "inaccurate."
Psaki called the suggestion that the White House is preventing companies from being able to drill for oil “inaccurate.”
EPA/TANNEN MAURY

That triggered an angry response from Sen. Marco Rubio (R-Fla.), who told Fox News he had “never seen such a level of disingenuity” as demonstrated by Psaki.

“First of all, not every lease is approved,” he explained. “Companies apply for all kinds of leases, and they make the determination, ‘Well, that area’s more productive, it makes sense [to drill there]’ … others may not make as much sense. You’ve also got a bunch of these places tied up in litigation, and then you’ve got an unfriendly administration … that has made very, very clear that it wants America to produce less natural gas and less oil and become greener. That has been a fundamental fact.

“And so who is going to risk capital under an administration whose entire administrative power is focused on making it harder than ever to explore and produce fossil fuels like oil or natural gas?” Rubio added. “They’re not going to do it.”

As of fiscal year 2020, there are approximately 37,496 leases in effect. Out of those, only 23,878 were considered to be “producing” leases. 

However, these leases appear to be obtained well in advance of applying for a permit to drill.

In order for a leaseholder, operator or designated agent to apply for a permit to drill, they must first identify “an oil and gas deposit on a Federal lease,” BLM’s website reads. 

In a statement to The Post, the Department of Interior said, “The BLM processes applications for permit to drill in a timely manner. The review process for an application for a permit to drill is comprehensive to ensure oil and gas development will be done in an environmentally sound and responsible manner.”

Beyond the issue of unused leases, some in the industry have accused the White House of a lack of communication about the issue of high prices.

High gas prices seen at a station in Washington, DC on March 8, 2022.
High gas prices seen at a station in Washington, DC on March 8, 2022.
Photo by MANDEL NGAN/AFP via Getty Images

On Feb. 28, Devon Energy Corp. CEO Rick Muncrief told Bloomberg he was “mystified” there had not been any dialogue between the administration and his company on increasing oil output. 

“If they were to reach out and maybe be a little more collaborative, it might provide some cover,” he told the outlet.

API president and CEO Mike Sommers agreed Tuesday, tweeting: “American producers are developing more energy from leases than we have in two decades. The facts support regulatory clarity on leases and fewer restrictions on U.S. energy leadership.”

However, official data indicates a clear downturn in overall US energy production.

According to the US Energy Information Administration, America produced 11.18 million barrels per day (MBD) in fiscal year 2021, down from the 12.28 MBD coming out in FY2019 and 11.28 MBD produced in FY 2020. 

“The fact that matter is today, we are producing 1.2 million barrels of oil less a day than we were in 2019,” Rubio said Wednesday. “And if we just got half of that back, it more than makes up for whatever we were getting from Russia, and it would help lower prices and it would have an immediate impact, by the way, on oil prices.”

“This administration’s policy when it comes to energy is completely incoherent,” Sen. Ted Cruz (R-Texas) said earlier Wednesday.

“President Biden started, literally his first day in office, basically declaring war on domestic energy production,” added Cruz, referring to the cancellation of the Keystone XL pipeline.

“He halted all new leasing on federal lands, both onshore and offshore. And he stopped development in ANWR, a small region of Alaska that is incredibly rich in oil reserves. He shut them all down,” Cruz continued. 

“His agencies have been waging war on domestic production, and we’ve seen domestic production dropping and dropping and dropping.”

Cruz also blasted the administration for sending officials to Venezuela and Iran for talks on oil supply, and claimed the decision to waive sanctions on the Nord Stream 2 natural gas pipeline — which runs directly from Russia to Germany — “caused the invasion of Ukraine.” 

“Their policy just makes no sense,” he insisted.

API President and CEO Mike Sommers called for less restrictions on energy companies and "regulatory clarity" on drilling leases.
API president and CEO Mike Sommers called for less restrictions on energy companies and “regulatory clarity” on drilling leases.
Twitter / Mike Sommers

On Wednesday, Psaki reaffirmed that the administration has no intention to restart construction of the Keystone Pipeline.

“The pipeline is just a delivery mechanism. It is not an oil field. So it does not provide more supply into the system,” she said, adding that resuming construction “would not address any of the problems we’re having currently.”

The White House did not immediately respond to The Post’s request for additional comment. 

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