Biden energy policy blasted for sending mixed signals
The Biden administration is sending mixed signals to the energy sector by both tightening the rules for oil and gas while advocating for more hydrocarbons to help alleviate inflationary pressures, a US trade group said November 26.
The US Interior Department announced last week it was pursuing “significant” reforms for domestic oil and gas programmes. Among the major proposals are limiting leases for exploration in areas with historical, cultural or natural significance, pursuing only new acreage with well-known resource potential and adjustments to royalty rates.
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Those royalty rates would be on top of further costs proposed in a methane abatement scheme.
Frank Macchiarola, a senior vice president of policy, economics and regulator affairs at the American Petroleum Institute, complained the federal government wanted it both ways on energy.
“Days after a public speech in which the White House said the president ‘is using every tool available to him to work to lower prices and address the lack of supply', his Interior Department proposed to increase costs on American energy development with no clear roadmap for the future of federal leasing,” he said.
Facing slumping poll numbers and mounting concerns that high commodity prices could dampen economic growth, US president Joe Biden called on OPEC members to put more oil on the market. OPEC has so far rebuffed those calls, prompting the US government to tap into the nation’s strategic petroleum reserves.
Biden responded to claims that his energy policy was duplicitous by saying the energy transition will not happen overnight.
In mid-November, the government secured nearly $200mn in high bids for 308 tracts covering 1.7mn acres in the US territorial waters of the Gulf of Mexico. The sale came despite an early-year pledge from the US president to suspend new drilling and exploration on federal lands pending a comprehensive environmental review.
Federal data show oil production from the Gulf of Mexico averaged 1.5mn b/d in August, the last full month for which data are available. Natural gas production averaged 2bn ft3/d.