Administration Should Walk the Talk on American Oil and Natural Gas

Mark Green
Posted April 11, 2022

President Biden got a number of things right recently when he described the chief factors driving prices at America’s fuel pumps.

The pandemic slowed world economies, and crude oil production slowed as well, the president said. Then economies recovered and oil demand shot back up faster than supply, driving prices higher for American families and businesses. Russia’s invasion of Ukraine has been another big driver. “There isn’t enough supply,” Biden said. “We need to have more oil supply right now.”

We agree, Mr. President. So do the American people.

Recent polling conducted by Morning Consult for API of Democratic, Republican and Independent voters in eight key states show Americans are acutely aware of the need for the U.S. to develop its own oil and natural gas, instead of relying on others. They also believe producing American oil and gas makes the U.S. and its allies more secure in the world.

Yet, we take issue with the president, as well as some members of Congress, on this important point: At a time when American oil and natural gas production needs to keep increasing to meet challenges, there’s too much negativity that continues to be aimed at American producers.

We noted the president’s mixed messages earlier this month – a step or two forward and one step back – when he acknowledged the need for more American production and calling for it, and then he accused some producers of taking advantage of Russia’s aggression to enrich themselves.

Meanwhile, during a hearing last week, some in Congress pushed the false, unsubstantiated narrative of price gouging while criticizing company CEOs for not producing more oil and gas – only about six months after some of these same officials pressed CEOs to cut American production.

In a new op-ed for Fox News, API President and CEO Mike Sommers wrote:

• Global markets – not individual natural gas and oil companies – set the price of crude oil that is the biggest factor in retail fuel prices.
• American oil and gas producers are not holding back on production.
• A switch can’t be flipped to rapidly increase production – which the president and others seem to suggest.

Sommers wrote that industry is rising to meet today’s challenges but that continued politics-as-usual rhetoric vilifying producers is counterproductive. Sommers:

It is important to get the facts right as people grapple with historic inflation, high energy costs and unprovoked war. Acknowledging reality is the first step to bringing relief at home and abroad. … Investors react to signals from policymakers, so what is said and done in Washington makes a difference. Recently the administration has approved LNG export projects, established a plan to increase U.S. LNG exports to Europe, and announced resumed planning for federal oil and gas lease sales. Good first steps, but policymakers need to build on all of it to truly strengthen American energy leadership.

The reality is that today, America’s and world economies are powered by oil and natural gas – and they are projected to continue as the leading energy sources for decades to come. Sommers called it a “dose of reality” – independent studies say nearly half of all energy used globally in 2040 will come from natural gas and oil even if all 196 nations that have agreed to the Paris Climate Agreement meet their emission reduction goals. America needs more oil and gas now and well into the future.

To get there, Sommers noted four actions to support increased American production:

• New five-year offshore leasing program – The current program is scheduled to expire this summer and developing a new one would strongly support the long-range planning and investment needed for offshore projects that can take seven to 10 years to begin producing. Delaying the program could result in lost production, lost jobs and lost revenues to government, according to a new analysis.
• Hold robust onshore federal lease sales – 47 lease sales onshore and offshore were held in the first 14 months of the Obama administration; the Biden administration has conducted one lease sale that a court invalidated and the administration chose not to appeal.
• Approve LNG export applications – U.S. Energy Department approvals would help support natural gas exports to allies abroad. The department also seek changes from Congress to allow swift approval of exports to non-Free Trade Agreement nations.
• Support infrastructure – The administration should support reforms to the National Environmental Policy Act and other permitting regulations so that pipeline projects aren’t blocked.

We’re at a pivotal moment in the nation’s and the world’s history, in which crises identified by President Biden make the clear case for increased American oil and natural gas production. Not just in the short term, as the president and others say, but over the long term.

For that to occur false attacks, demonizing and mixed messages should cease and be replaced by sound policy, a realistic view of America’s future energy mix and supportive communications from the White House and Congress. As one congressman put it last week, a “temporary green light” from the Biden administration for increased production isn’t enough. Sommers wrote:

America has a history of stepping up. It can do so again. The president has said his administration is using every tool to address the current energy crunch. He and some allies have belatedly acknowledged the need for ever-cleaner U.S. oil and gas production. But they must walk the talk … That can happen if policymakers get out of their own way – and ours.