America Wants More Oil, But Only From Other Countries

Biden administration officials are considering a pair of actions that could make the domestic situation related to oil and gas worse, not better. They are preparing to ease sanctions on the Nicolas Maduro regime in Venezuela, allowing it to pump more oil in exchange for “constructive talks” with the political opposition, as reported by the Wall Street Journal.

The move would be designed to allow Chevron and other U.S. companies with interests in the authoritarian country to ramp up exploration and production efforts there. This is another case where the Biden administration is pursuing an energy policy that demands more oil from nations other than the United States.

Upon learning of the administration’s plan, Alaska Senator Dan Sullivan tweeted that “This is national security suicide. [President Biden] shuts down energy production in America—particularly in Alaska—then goes on bended knee to dictators in countries like Iran, Saudi Arabia & Venezuela, begging them to produce more energy. Does anyone in America think this makes sense?”

The last question is valid, but no one in the Biden presidency seems willing to ask and answer it in their zeal to cling to their domestic green energy narrative, which seems to demand that they take any action to inhibit domestic oil production regardless of the consequences. The outreach to the Maduro regime seems especially senseless from an environmental perspective, given that oil produced in the U.S. is conducted under vastly more rigorous standards than in Venezuela.

Assuming Biden and his officials recognize that all countries share the same climate and atmosphere, a true “green” energy agenda would logically seek more oil production in the United States and less from Venezuela and other high-polluting countries.

This has not been the logic driving Biden’s policies since he assumed office. On day one, he cancelled the cross-border permit for the northern extension of the Keystone XL pipeline. This would have transported oil into the U.S. from Canada via a modern, environmentally secure pipeline, rather than on higher-polluting trains and trucks that currently bring crude across the border.

A second development popped up Thursday, where Fox Business reported Biden administration officials are still actively considering a complete shutdown in oil and gas lease sales in federal offshore waters like the Gulf of Mexico and offshore Alaska. These areas supply as much as 15% of domestic oil and natural gas.

In a long-delayed decision on a new five-year plan for offshore leasing, the Interior Department is considering a structure that would allow for a range of “0 to 11” lease sales to be held across that span of time. Since Secretary Deb Haaland has a history of actions against the oil industry, one could expect the actual number of sales conducted end up far closer to zero. But any number along that range would represent a dramatic reduction in the frequency of lease sales held under every previous administration since the Ronald Reagan years.

The Biden plan would further inhibit America’s oil production abilities as administration officials continue to solicit supplies from other countries with looser environmental regulations. These moves also help explain why the Biden administration reacted so aggressively to the big, 2-million-barrel per day production cuts announced Wednesday by the OPEC+ cartel.

If the Biden presidency continues to move to restrict the U.S. domestic oil industry, it will need more production from OPEC+ and other nations, not less, to avoid major spikes in gasoline prices, which have recently been back on an upward trend.

Many in the industry believe more sensible, domestically-focused approach to short-term U.S. oil needs would involve action by the federal government to ease restrictions on their ability to get their business done. One obvious step the Biden administration could take would be to implement an offshore leasing plan that is more robust than is currently being contemplated. Another might be for the President to order his agencies to take steps to speed up their permitting activities, steps that have been achieved in previous administrations, including that of Bill Clinton. Unfortunately, any actions designed to encourage domestic drilling seem out of step with the Biden agenda.

In a panel discussion on September 15, former Obama Economic Advisor Larry Summers characterized the Biden energy policies as “kind of insane.” This week’s developments indicate that Mr. Summers may not be far off in that assessment.