Administration’s Half-Truths Muddle the Message on American Energy

Mark Green
Posted December 13, 2023

When Biden administration officials point to current record American oil production – and insist they are not standing in the way of the nation’s oil and natural gas development – they’re not telling the full story. Half-truths from the administration mislead American families and businesses that depend on oil and natural gas for reliable, affordable energy.

The administration’s pattern has been to mix its messages on oil and natural gas, stoking confusion and undermining investment and project development decisions that could weaken America’s future energy security.

Three examples:

Half-truth: U.S. oil production is doing fine under President Biden.

Whole truth: Today’s strong production has little to do with this administration’s policies – and America’s future energy security could be harmed.

Because it can take up to 10 years to develop an oil project, today’s record-breaking production largely results from investment, research and development decisions made years ago, under previous administrations – namely those led by Barack Obama and Donald Trump.

Biden policies have restricted new oil and natural gas development on federal lands and waters to an extent that future production could be affected. America must consistently plan for and develop new wells and infrastructure to meet projected increases in domestic and global demand, and to replace production from existing wells as it naturally declines.

This is not being done.

Take offshore development. The administration’s minimalist approach to future offshore leasing is seen in a five-year offshore leasing program proposal that schedules just three lease sales through 2029 – and none in 2024, which would be the first year without a single lease sale since 1966. It will be the smallest offshore leasing program ever. Look at how the administration’s offshore record pales in comparison to the records of prior administrations:

API President and CEO Mike Sommers:

“At a time when inflation runs rampant across the country, the Biden administration is choosing failed energy policies that are adding to the pain Americans are feeling at the pump. This restrictive offshore leasing program is the latest tactic in a coordinated strategy to reduce energy production, ultimately weakening America’s energy dominance, limiting consumers access to affordable reliable energy, and compromising our ability to lead on the global stage. For decades, we’ve strived for energy security and this administration keeps trying to give it away.”

Likewise, during 2021 and 2022 the administration basically ignored the legal mandate to hold quarterly lease sales – conducting a sale in just one of the seven quarters for which it was responsible.

Similar to the need for regular offshore leasing, the government must provide consistent onshore leasing opportunities to help guard against future production and supply gaps – because demand is increasing and because production from existing wells declines naturally over time.

That’s one reason why the law requires quarterly leasing opportunities.

Half-truth: No need for alarm – there’s an offshore lease sale next week.

Whole truth: The administration tried everything to disrupt and minimize next week’s sale!

Gulf of Mexico Lease Sale 261 is scheduled Dec. 20 – the last of three offshore lease sales required by Congress in the Inflation Reduction Act, which President Biden signed into law.

Think about it: Even though 15% of all of America’s oil is produced offshore, it took an act of Congress to get the Biden administration to protect future American energy security.

Yet the administration still pulled out all the stops trying to water down and/or delay Lease Sale 261 – with the knowledge that the sale likely would be America’s final offshore lease sale until 2025. That’s because the administration’s new offshore leasing program didn’t schedule any sales for 2024.

First, the administration cut 6 million acres from what originally was proposed for Lease Sale 261. Then it proposed onerous vessel restrictions for the leasing area – but only for industry ships – setting up a de facto blockade of Gulf Coast ports that service the industry. A federal judge in Louisiana said the government’s actions looked like a “weaponization” of regulation.

Eventually, the U.S. Fifth Circuit Court ordered that the acreage be restored and that the added vessel restrictions be eliminated, mandating the sale to go forward next week. Even so, it’s clear the administration opposes offshore development.

Holly Hopkins, API vice president of Upstream Policy:

“From issuing the weakest five-year program for offshore leasing in U.S. history to repeatedly delaying congressionally mandated lease sales, the Department of the Interior continues to demonstrate its willingness to ignore the clear and growing need to expand American energy leadership and reduce reliance on foreign energy sources. … The U.S. oil and natural gas industry stands ready to support the nation's energy security through reliable, lower carbon-intensive energy produced here in the U.S. Gulf of Mexico, but the Interior Department’s inconsistent policies undermine the certainty needed to invest in future production.”

It’s good that next week’s sale is scheduled and that the courts rejected the administration’s attempts to undermine the sale.

But it’s just one sale.

More is needed from America’s offshore, yet less than 4% of it is open for new oil and natural gas leasing. Lease Sale 261 should be followed by many more offshore leasing opportunities than the three the Biden administration has scheduled through 2029.

Half-truth: Oil and natural gas development is proceeding in Alaska.

Whole truth: The administration is blocking far more Alaska development than it is allowing.

Earlier this year the White House gave the go-ahead for the Willow Project within the National Petroleum Reserve-Alaska (NPR-A), which absolutely is an important step forward.

But it has taken more steps backward:

• Canceled previously issued leases in a 2,000-acre section of the 1.5 million-acre coastal plain of the 19 million-acre Arctic National Wildlife Refuge in northern Alaska.
• Withdrew 2.8 million acres of the Beaufort Sea in the Arctic Ocean from future oil and natural gas leasing.
• Announced plans to prevent future leasing in more than 13 million acres elsewhere in the NPR-A.

In all, the Biden administration has eliminated nearly twice as much acreage for leasing in Alaska than it has issued nationwide – including millions of acres in NPR-A, which Congress created specifically for developing oil and natural gas.

In official comments on proposed regulatory changes that would restrict NPR-A energy development, API said the administration is ignoring congressional intent while further undermining future investment and development:

“The Proposed Rule would adopt numerous provisions that unduly burden the exploration, development, and production of oil and natural gas within the Petroleum Reserve, contravening Congress’s directive that these activities occur expeditiously. … The Proposed Rule would also enable BLM [Bureau of Land Management] to broadly condition, restrict, delay, or deny proposed actions within the Petroleum Reserve and require procedural determinations that appear intended to promote litigation in opposition to any oil and gas related activities. Instead of any semblance of ‘balance,’ these measures are clearly designed to burden domestic energy production.”

More broadly, the comments state, the NPR-A proposal sends another negative signal to energy producers:

“If this reflects BLM’s approach to regulation of other lands within its jurisdiction, it will cause significant uncertainty and undermine the investment-backed expectations of lessees on all public lands.”

This is the wrong energy posture for America at a time of projected increasing energy demand and actions by other nations to cut supply. The U.S. has the resources and modern industry to help protect itself against market pressures caused by other countries, as well as geopolitical events. But these could be wasted under Washington policies that discourage new development instead of supporting it.

In its words and actions, the Biden administration is treading a dangerous path for future American energy security by not planning for or allowing new, safe and responsible oil and natural gas development to go forward.

These strategic assets cannot be turned on and off with the flip of a switch.

America’s energy security should not be made vulnerable because our oil and natural gas policy is shortsighted and, in some cases, at odds with the realities of growing energy demand.