API Responds to President’s Remarks on Gas Prices, SPR and Domestic Production

WASHINGTON, March 31, 2022 – Following remarks from President Biden today on energy prices and an announcement to release 180 million barrels of oil from the Strategic Petroleum Reserve (SPR), the American Petroleum Institute urged the administration to embrace a government-wide approach to energy security and signal that America is open for energy investment.

“There are many factors behind rising energy costs, from geopolitical volatility and supply chain constraints to policy uncertainty, and the American people deserve real solutions,” API President and CEO Mike Sommers said. “The SPR was put in place to reduce the impact of significant supply chain disruptions, and while today’s release may provide some short-term relief, it is far from a long-term solution to the economic pain Americans are feeling at the pump.”

Earlier this month, API sent a letter to the administration outlining several steps to ensure long-term American energy security, including fully restoring federal leasing and holding lease sales; implementing a new 5-year program for offshore leasing before the current program expires at the end of June; swiftly approving all LNG applications and ensuring a timely and efficient permitting system.

“The best thing the White House can do right now is to remove barriers to investment in American energy production and infrastructure,” Sommers said. “Unfortunately, today we heard more mixed signals about developing affordable, reliable and secure American natural gas and oil.”

API also responded to the administration’s continued misleading claims on “unused leases” and a proposal to “make companies pay fees on wells from their leases that they haven’t used.” In fact, companies already begin paying rent on leases to the federal government as soon as leases are granted.

“The administration once again has a fundamental misunderstanding of how leases work,” Sommers said. “The percentage of producing leases is at a two-decade high, with nearly two out of three leases producing natural gas and oil. With nearly 5,000 permits awaiting approval from the administration and thousands more tied up in litigation, we stand ready to work with the administration to expand domestic production and ensure the U.S. and our allies have access to the affordable, reliable energy that’s needed not only today but for years to come.”

New API analysis shows that in the first 14 months of the Obama administration, the Department of the Interior held 47 federal lease sales, while the Biden administration has held only a single lease sale since January 2021, which was later invalidated. Leases are issued prior to exploration, and not every permit on leased land has resources, despite substantial investments by developers. Recent reports show the US Bureau of Land Management approved 95 permits to drill in January 2022, compared with 643 in April 2021.

API represents all segments of America’s natural gas and oil industry, which supports more than 11 million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. Its nearly 600 members produce, process and distribute the majority of the nation’s energy, and participate in API Energy Excellence®, which is accelerating environmental and safety progress by fostering new technologies and transparent reporting. API was formed in 1919 as a standards-setting organization and has developed more than 700 standards to enhance operational and environmental safety, efficiency and sustainability.

###