Biden’s Oil Policies Threaten the Next Energy Crisis, Trade Group Warns

(Bloomberg) -- US oil and gas production is booming, but policies being imposed now could jeopardize the country’s energy might, the industry’s top trade group is warning Washington.

That sobering outlook is being delivered by the American Petroleum Institute as it holds an annual gathering in the nation’s capital Wednesday to highlight top policy priorities, amid concerns about climate change and conflicts around the globe that have heightened tensions over fossil fuel supplies.

US oil production hit a record in 2023, and it’s on track to surge to new highs this year, according to a forecast from the government’s Energy Information Administration. That’s yielded real dividends for American consumers and the industry, but it’s an outgrowth of activity by previous administrations that could be undone, API President Mike Sommers said in an interview Tuesday.

“Despite the silver lining of increased production, we’re very concerned about what the clouds look like ahead if we don’t get the policies right now,” Sommers said. “The continued signals from this administration and the policies they are pursuing — we have real concerns that is sowing the seeds for the next energy crisis.”

According to an API analysis, the US has increased production by about 1.6 million barrels per day since President Joe Biden took office — a historically high number. However, 1 million of those barrels came from private lands and 500,000 came from leases offshore and onshore sold during previous administrations. In general, oil and gas leases granted under Biden’s watch could take years to yield results.

Biden is under increasing pressure from climate activists to block oil and gas projects seen out of step with a warming world and the urgent need to phase down the use of fossil fuels. 

The API — which represents some of the nation’s largest oil, pipeline and supply companies — is pressing for swifter permitting of energy projects, including licenses to broadly export liquefied natural gas around the globe, and more opportunities to pursue production on federal lands. That includes across the Gulf of Mexico, where Congress forced the Biden administration to sell drilling rights last year. That’s set to be the last auction of its kind until at least 2025, when there may be tighter limits and less available territory.

The industry is worried that three potential future Gulf lease sales — tentatively planned by the Interior Department because they are required to issue new offshore wind rights — may be significantly scaled back or canceled altogether. It’s a “huge concern,” Sommers said, noting the relatively better environmental footprint for oil and gas production in the Gulf of Mexico versus other regions.

While the trade group would welcome changes to a methane fee imposed as part of the 2022 Inflation Reduction Act, oil and gas companies are warning lawmakers against wholesale rewrites that could jeopardize tax incentives supporting carbon capture, hydrogen production and other ventures. 

The API is launching a new, multiyear, eight-figure advocacy campaign highlighting the importance of American oil and natural gas to the nation’s economy as well as meeting growing global energy needs. The effort will also underscore the risk of enacting policies that the group sees imperiling domestic production — ahead of an election where energy and climate issues are set to figure prominently. 

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