The Administration’s Encouraging Path on Energy

Mark Green
Posted December 16, 2021

Two thumbs up to U.S. Energy Secretary Jennifer Granholm for this week’s appearance at the National Petroleum Council, during which she said the Biden administration isn’t considering a renewed ban on U.S. crude oil exports and also more broadly signaled administration support for American natural gas and oil production.

That there won’t be a retreat on exporting U.S. crude – President Obama and Congress lifted a 1970s-era ban in 2015 – is certainly welcome. The benefits of exporting U.S. oil – in trade, jobs, economic growth and American energy security and leadership – far outweigh what could be gained by shutting them down again.

As API’s Dean Foreman and Kevin O’Scannlain explained recently, exports help spur American energy production and refining, boosting economic growth, and they provide energy to friends and allies abroad. Conversely, halting crude exports could hinder American production and increase dependence on unreliable foreign suppliers. In the long run, banning oil exports probably wouldn’t have the effect on prices at the gasoline pump that proponents hope for.

Beyond the news on exports, the overall tenor of Secretary Granholm’s NPC remarks was encouraging as well. According to various reports, Granholm wanted to ease tensions between the administration and the natural gas and oil industry. The gesture is welcome. When it comes to ensuring that Americans have safe, reliable, affordable energy – developed in ways that protect the environment and build toward a lower-carbon future – our industry is all in.

Granholm asked American producers to hire more workers and increase drilling, and said the administration is open to “conversations to address challenges you’re facing on that front.” Granholm:

“By and large the issues around current production do not stem from decisions made by the Biden administration. I understand you may disagree with some of our policies, but it does not mean that the Biden administration is standing in the way of your efforts in meeting current demand.”

Still, policy matters. Policy has impacts. And, unfortunately, the administration spent much of its first year in office sending mixed messages and signals, contributing to the less-than-robust recovery of American natural gas and oil production at a time when domestic production is greatly needed.

It paused new federal leasing for much of the year, halted potential development in parts of Alaska, canceled the Keystone XL crude oil pipeline and more. Then, amid price hikes, the administration asked an oil cartel to increase the ramp-up of its oil production, instead of looking to American producers and workers first.

As the world leader in natural gas and oil production, America has the energy, world-class technical expertise and highly skilled workforce to develop energy the country can count on 24/7/365 – especially critical as America’s economy and those around the world seek stable footing.

In reaching out to natural gas and oil companies at the NPC meeting – as well as last month’s offshore lease sale – the administration is on a better path to support increased American production, which can make a difference to American families and businesses.

In the weeks and months ahead, it will be important for President Biden and members of his administration to follow up with actions to further support American natural gas and oil production.

We’ve mentioned the need for a new five-year offshore leasing program to replace the one that expires next summer. The program is essential for future offshore planning, investment and production.

The administration also should shelve consideration of tax and fee proposals that could increase the costs of natural gas and oil production. Increased costs are a factor in energy investment decisions.

We hope the administration follows Secretary Granholm’s lead at the NPC and engages in more constructive dialogue on the future of an industry that is essential to America’s economic, environmental and geopolitical future. That’s the productive way forward, the smart way forward, for America.