Another week, another example of the Biden Administration’s energy dissonance. On Tuesday, the President blamed record gasoline prices on Vladimir Putin. The next day, the Interior Department announced the cancellation of three offshore oil and gas leases, setting out the possibility of none during his presidency.
It’s been almost a year since a federal judge blocked President Biden’s ban on oil and gas rentals on federal lands. However, the Administration interpreted the order as mere exhortation. After faltering, last November, the Interior staged an offshore sale in the Gulf of Mexico under a five-year lease plan finalized by the Obama Administration.
A libertarian federal judge overturned that sale in January, on the legal grounds that the government did not consider the greenhouse gas emissions of oil to be produced by the leases and consumption abroad. The administration has decided not to appeal and now blames the judge for the decision to cancel three auctions that were scheduled for this year under Obama’s five-year plan.
Furniture also indicated a lack of interest from the industry, but the November sale attracted strong demand. Two leases will be made in the Gulf of Mexico and the other in Alaska’s Cook Inlet. Alaska manufacturers submitted comments with Interiors in favor of the sale. Looks like Interiors simply don’t care.
The Gulf of Mexico has the lowest breakeven production costs (about $30 per barrel) and greenhouse gas emissions of any oil field in the world. However, offshore production, unlike shale drilling, requires significant upfront investment and therefore legal certainty.
Liberals say overseas sales will not immediately increase oil production or lower gasoline prices. But the cancellation would create more uncertainty and send another signal that the Administration wants to keep American oil and gas investment on the ground.
Russian production could be in decline for a long time due to sanctions and the departure of Western manufacturers. This makes it more likely that oil prices will stay high even with a ceasefire in Ukraine – that is, unless US investment and production pick up. The Saudis have repeatedly rejected President Biden’s pleas for more money.
However, his Administration is doing everything to limit US investment and manufacturing. Obama’s five-year plan to go abroad expires in June. However, the Administration’s budget indicates it has no plans to hold another sale in the Bay Area until at least fiscal year 2024.
Some investors are starting to rethink their aversion to fossil fuels as prices and producer profits soar. BlackRock was once a climate curse. But this week, the finance firm said it did not support shareholder resolutions that limit investments in oil and gas “because we do not consider them to be in the long-term financial interests of our clients.” . They also don’t care about the consumer.
Now is also the time for Mr. Biden to pivot, but he refuses. The only explanation is that he and his advisers do not want to challenge the climate theorists in his party. The middle class dominates the middle class. As a result, Americans could pay higher energy prices long after he leaves the White House.
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Appears May 14, 2022, print.
https://www.wsj.com/articles/does-joe-biden-want-higher-gas-prices-oil-leases-offshore-11652468751 Does Biden Want Higher Gas Prices?