The Biden administration has taken numerous steps against the oil and gas industry in the country, including ending leases, proposing raising tariffs for drilling, and imposing “uneconomic” greenhouse gas emission policies, dealing a blow to a proper functioning of the sector.
In May 2023, the Environmental Protection Agency (EPA) proposed new regulations that require power plants to reduce their greenhouse gas (GHG) emissions and implement carbon capture measures despite the fact that “these are uneconomic technologies,” the report said.
On June 2, President Biden ordered a two-decade ban on oil and gas leasing within 10 miles of Chaco Culture National Historical Park, New Mexico. The move was against the wishes of the Navajo Nation and prevented mineral owners from netting $194 million in royalty income from their oil and gas resources.
On June 22, the Fish and Wildlife Service (FWS) proposed three new rules under the U.S. Endangered Species Act (ESA), which the report claims will “erode” the standards of what qualifies as an endangered or threatened species. The rules would classify some areas as critical habitats. The consequence of these rules is that fewer regions will be open for the development of energy resources. And in areas open for development, increased costs and “unjustified permit requirements” would make things complicated for investors.
On June 30, the FWS proposed listing the Dune Sagebrush Lizard under the ESA, with the listing affecting the Permian Basin of Texas and New Mexico, one of America’s “most prolific oil-producing regions.”
On July 20, the Biden administration’s Bureau of Land Management (BLM) proposed a rule to raise royalties for oil and gas drilling on federal lands from 12.5 percent to 16.67 percent and to increase the leasing fees of these lands. The BLM also proposed raising the minimum bond that oil and gas developers must pay while buying a drilling lease, from $10,000 to $150,000—a 15-fold increase. Other rules were also proposed by the agency. The Interior Department estimated that the new rules would result in additional costs of $1.8 billion to energy firms by 2031.
On Aug. 1, the EPA updated greenhouse gas reporting requirements for the oil and gas industry. “The rule attempts to overcount GHGs as a means to eventually impose a carbon budget on the industry. By manipulating emissions factors that are used to calculate emissions, the rule could overestimate industry emissions nearly three-fold,” the report said.
In August, the BLM proposed closing over 1.5 million acres of land in the Piceance Basin on Colorado’s West Slope to oil and gas leasing, which is estimated to have five of the top 50 natural gas fields in the country when it comes to proven reserves.
Crushing Oil and Gas Sector
President Biden’s anti-oil and gas policies began immediately after he came to power in 2021.The president implemented a series of measures aimed at limiting fossil fuel use. This included canceling the Keystone XL pipeline, issuing a moratorium on all oil and natural gas leasing activities in the Arctic National Wildlife Refuge, and revoking Trump-era orders that decreased regulations on federal land while expanding the ability to produce energy domestically.
The president issued an executive order announcing a moratorium on new oil and gas leases on public lands or in offshore waters and signed an executive order that directed agencies to eliminate federal fossil fuel subsidies wherever possible.
In February 2021, President Biden made America officially rejoin the Paris Climate Agreement, which the IER pointed out is “detrimental to Americans while propping up oil production in Russia and OPEC and increasing the dependence of Europe on Russian oil and natural gas.”
It also benefits China, which “dominates the supply chain for critical minerals that are needed for wind turbines, solar panels, and electric vehicle batteries.”
In August 2022, Biden signed into law the Inflation Reduction Act (IRA) which included new taxes on methane leaks and natural gas extraction as well as taxes on crude oil and related products.
In April 2023, the EPA released rules aimed to ensure that electric cars make up 54–60 percent of all new cars sold in the United States by 2030—a target that rises to 64–67 percent by 2032.
Impact of Biden’s Policies
While President Biden implements policies harming the oil and gas sector, the American people have been paying higher gasoline prices over the past years.In January 2021 when President Biden assumed office, retail gasoline was priced at $2.478 per gallon. Now, gas is selling at $4.001 per gallon as of Sept. 18, which is an increase of 61 percent. Gasoline prices in some U.S. states like California are reaching nearly $6 per gallon at the moment.
U.S. crude oil production is still below the peak achieved under the Trump administration.
For the week ended Sept. 15, the United States recorded the highest oil output under the Biden administration’s term of more than two years now, producing 12.90 million barrels. This is below the 13.10 million-barrel output in March 2020 under President Donald Trump.
President Biden has also depleted the country’s critical Strategic Petroleum Reserves (SPR).
When he took over in January 2021, the Trump administration had left the SPR at 638 million barrels. By June 2023, the Biden administration had drained it down to 347 million barrels—the lowest it’s been since 1983.
President Biden’s policies against the oil and gas industry are facing pushback although not enough to reduce the intensity of the current trajectory.
Earlier this month, the Department of the Interior said it would withdraw over 13 million acres in the National Petroleum Reserve in Alaska (NPR-A) from oil and gas leasing. In addition, seven leases covering 365,000 acres granted to the Alaska Industrial Development and Export Authority (AIDEA) in 2021 would be canceled.
Sen. Joe Manchin (D-W.Va.) slammed the move, calling it a “radical left” agenda. “I can’t explain to the American people why we would willingly become more dependent on foreign oil imports, eliminate good-paying American jobs, and drive up the cost of our electric bills and gas prices across the country,” he said in a statement.
“This is yet another example of this administration caving to the radical left with no regard for clear direction from Congress or American energy security.”
“Canceling valid leases, removing acreage from future sales, and attempting to reduce production in Alaska while taking steps to allow Iran and Venezuela to produce more oil—with fewer environmental regulations—makes no sense and is frankly embarrassing.”
According to a Pew Research poll published in June, only 31 percent of Americans support the full phasing out of fossil fuel energy. While 32 percent said the United States is not currently ready for the phase-out, 35 percent stated that the country should “never” stop using fossil fuels to fulfill its energy needs.
