EPA Targets Permian Basin, Widening Biden’s War On Oil And Gas

During an interview with Brazil’s Agencia Estadio news service this week, I told the reporter that one of the reasons why I characterized the Biden energy policies as “confused” in a recent story is because we so often see the President saying one thing in public as his appointees in the federal bureaucracy are doing the opposite. We have seen this phenomenon take place repeatedly this year, as Mr. Biden has frequently called for the domestic industry to produce more oil and gas, refine more gasoline and ramp up exports of liquefied natural gas to Europe, while his agencies continue to hold up permitting, issue restrictive new regulations, and issue rulings that directly inhibit companies’ ability to get their business done.

It happened again this week, when the Environmental Protection Agency (EPA) announced it may soon issue a ruling declaring that vast parts of the Permian Basin are in “non-attainment” status under the agency’s ozone regulations. If such a declaration is made, it will constitute a direct governmental assault on what is by far America’s most active and productive oil-producing region and its second most-productive natural gas area. The Permian currently accounts for fully 43% of total U.S. daily oil production and is home to almost 40% of the nation’s active drilling rigs according to the Enverus daily rig count.

Thursday’s decision by the Supreme Court of the United States in the West Virginia v. EPA case is not expected to impact the agency’s ability to set standards on ozone levels and enforce them. If anything, it seems likely the agency, at least under a Biden presidency, will seek to become more aggressive in this realm as a backdoor means of continuing to force coal-fired power plants out of business and, as in this case, hamper the domestic oil and gas industry.

Placing the Permian Basin in non-attainment status would force a significant reduction in the region’s rig count, severely limiting the domestic industry’s efforts to increase U.S. oil production at a time when the global oil market is already severely under-supplied. Thus, while the President claims to want to “work like the devil” to lower gasoline prices and Energy Secretary Jennifer Granholm claims Mr. Biden is “using every tool” at his disposal to do so, the EPA is working to create the exact opposite impact.

The EPA’s announcement comes just a week after Secretary Granholm summoned a group of refining company CEOs to Washington, D.C. where she urged them to somehow increase their refining efforts, despite the fact that her own Energy Information Administration (EIA) reports that the industry is already running at a historically high 95% capacity. It also comes after both Granholm and the President himself have repeatedly called for the domestic industry to increase production levels of oil and gas to try to mitigate high prices for gasoline and diesel at the pump.

So, which is official administration policy? Does President Biden want more oil production and more gasoline to be refined from it, or are the actions by his agencies, now directly targeting the nation’s most prolific oil-producing region, his real goal?

To Texas Governor Greg Abbott, the answer seems obvious. “The EPA’s process could interfere in the production of oil in Texas which could lead to skyrocketing prices at the pump by reducing production, increase the cost of that production, or do both,” The Governor wrote Biden this week. “Your administration’s announced action is completely discretionary. Thus, you have the power to stop it.”

Governor Abbott is correct to point out that the President has the power to rein his regulators in, but, as the Wall Street Journal points out, Mr. Biden appointed Joe Goffman, another of the many anti-fossil fuel activists that now hold senior posts at his various agencies, to head up EPA’s Office of Air and Radiation on an acting basis. That appointment might have been made with this specific policy action in mind.

So, here we have a crystal clear example of a “tool” that Mr. Biden has available to him to positively impact consumer costs on gasoline. All he has to do is issue an order instructing Mr. Goffman and the EPA to stand down. The clear history of this presidency indicates no one should hold their breath waiting for that to happen.

This is the Biden Green New Deal plan, and high prices at the pump are a fundamental piece of it.