White House’s Mixed Messages Muddle Path Ahead for U.S. Energy Leadership

Amanda Eversole
Posted July 24, 2023

Shot: In a Saturday interview with CNBC, U.S. Secretary of Energy Jennifer Granholm described “a volatile environment” for American energy users. She added that Biden administration officials “have deep concern about trajectories of where things are headed” when it comes to consumer costs. Secretary Granholm then called for additional oil production – “more supply” – in a bid for “prices to come down.”

Chaser: Barely two days earlier, Secretary Granholm’s colleagues in the Biden administration imposed a pair of new restrictions that would hamper the energy production they say they want. The two new measures mirrored two years of hostile policies aimed at millions of American oil and natural gas workers.

Bottom Line: Washington needs to stop its mixed messaging now. President Biden and his team know oil and natural gas production cannot merely “happen” overnight. Policymakers should send signals that America is open for long-term energy investment. Americans are looking for solutions, not finger-pointing.

Since Day One, the Biden administration has hampered American energy – canceling the Keystone XL pipeline project, limiting production on federal lands and more. Now they are continuing their crusade against domestic oil and natural gas protection in two new ways.

Adding Nearly $2 Billion in New Fees: On Saturday, Secretary Granholm said she wants American companies to step up their oil output to bring prices down. But it’s unclear whether she spoke with officials at the Department of the Interior, which moved Thursday to raise rates and fees to produce on public lands. Government estimates say energy companies will incur $1.8 billion in new fees between this year and 2031. “After that,” The New York Times wrote, “rates could increase again.”

Using the Courts to Push an Anti-Industry Agenda: On Friday, the government and the Sierra Club negotiated a private settlement agreement that complicates companies’ ability to produce energy in the Gulf of Mexico, which is responsible for some of the world’s lowest carbon-intensive barrels of oil. Sierra Club’s stale “sue and settle” strategy undermines the integrity of legitimate conservation and habitat protection efforts, violates the directives of Congress in enacting the Inflation Reduction Act and hamstrings our ability to produce American energy.

Here's why DC should drop the restrictions and send a clear signal supporting American energy.

Countrywide Conservation: Tax revenue from offshore oil and natural gas production in particular is vital to the economies of coastal states and individual communities–and is the primary funding source for the Land and Water Conservation Fund (LWCF). Since 1965, LWCF has supplied billions of dollars for parks, conservation and recreation areas across all 50 states, as well as Secretary Granholm’s home of Washington, DC. Many of these projects contribute to the nation’s green space to be enjoyed by all.

Economic Engine: In 2021, the American natural gas and oil industry supported more than 10.8 million jobs in all 50 states and DC, and also contributed nearly $1.8 trillion to U.S. GDP. That’s nearly 8% of our national total and close to Canada’s entire GDP. Why weaken that kind of economic power? Instead, official Washington should recognize these contributions as significant and strategic national assets.

Besides nullifying the new restrictions, what should Washington do instead? Three big things.

1. Follow the Law: Issue a robust and congressionally mandated 5-year federal offshore leasing program for the Outer Continental Shelf. Hold quarterly onshore lease sales with equitable terms.
2. Build on Permitting Progress: Permitting reforms in the Fiscal Responsibility Act must be fulfilled and expanded to move needed American energy supplies across the U.S. and worldwide.
3. Cut Red Tape: EPA’s proposed tailpipe emissions rule and power plant rule need to be revised.