More Administration Mixed Signals, More Confusion for American Energy

Kevin O'Scannlain
Posted April 27, 2022

Mixed signals from the Biden administration on American natural gas and oil are coming so regularly, we can practically serialize them.

Since the first week of March the president and or administration officials have been back and forth on increased production of American oil and gas:

• At CERAWeek in Houston, U.S. Energy Secretary Jennifer Granholm invited oil companies to produce more “right now and where and if you can.” This came after the administration spent much of 2020 impeding American production and energy infrastructure – including suspension of new federal leasing and cancellation of the Keystone XL crude oil pipeline.
• Officials repeatedly sparred with the industry on federal leasing, incorrectly blaming American producers for sitting on unused leases.
• The Interior Department approved permits for two liquefied natural gas (LNG) export projects and announced a resumption of lease sale planning. The president unveiled a security agreement with the European Commission that would send more U.S. LNG to Europe.
• At times, the administration has been for and against increased American oil production in nearly the same breath – as Interior announced a new round of lease sales coming this summer, but also a 50% increase in onshore royalty rates.

But wait, there’s more.

John Kerry, the president’s climate envoy, told Bloomberg last week that the American natural gas industry has a future of no longer than six to 10 years and that “no one should be making it easy for the gas interests to be building out 30- or 40-year infrastructure.” The Wall Street Journal editorialized: “President Biden’s climate envoy John Kerry a few months ago said he could see natural gas being a ‘bridge fuel.’ Apparently he meant a bridge to nowhere.”

How’s that for chilling the investment climate for needed natural gas projects, including pipelines? Not unlike Massachusetts in the dead of a New England winter, where in the past the lack of adequate natural gas pipeline capacity probably had many Bay Staters thinking about snow-birding it to Arizona or Florida.

Then there’s Gina McCarthy, the president’s senior climate advisor, telling MSNBC last week:

“President Biden remains absolutely committed to not moving forward with additional drilling on public lands. The challenge that we faced was that we had a court that ordered a new lease to be done. The Department of Energy had no choice but to put it out. But they also found ways to reduce the size of that and its impact. And we'll keep doing what we need to do to appeal.”

So much for the president saying on March 31 that if American oil and natural gas producers want to produce more, “nothing is standing in their way.” It sounds like Team Biden needs to huddle up and get on the same playbook page.

These recent developments follow last year’s overtures to OPEC+ (including some courting of Iran), begging foreign suppliers to more rapidly ramp up their crude production while bypassing American producers. Bottom line: It’s clear the administration’s bewildering stances don’t help the increased investment and production of American oil that the president specified as key to his plan to help families and businesses hit by high fuel prices. As for his plan to send more American LNG to Europe, that’s great – if lawmakers also enact policies to encourage more American natural gas production.

Americans must wonder where this all leads – like a season-ending episode of a popular streaming series, but with critical implications for the nation’s economy and energy security. The administration should stop the mixed signals and clearly support safe and responsible development of American oil and gas. Speaking to the Economic Club of Florida earlier this month, API President and CEO Mike Sommers said the administration must act, and that means “recognizing energy from natural gas and oil as the critical strategic asset it is to America.” Sommers:

“This nation has accessible oil and natural gas reserves to match any stretch of earth ruled by any regime or cartel. It was our goal for decades to break free of dependence on foreign suppliers. We talked about energy security forever, and then we finally achieved it. We worked hard to put America in that position of strength and greater energy independence. We would be foolish to ever give it up.”

For an energy story with far too many twists and turns, that’s the conclusion Americans deserve to see.