Following months of opposing expenditures on fossil fuels and seeking to establish anti-drilling legislation, President Biden’s move to ban all Russian dependence on imported oil prompted his administration to focus almost exclusively on local energy sources in a few days.
Industry officials and analysts agree with the administration’s goal of increasing domestic supply; however, they disagree with its previous attitude, which stressed climate change mitigation and attempted to curtail drilling.
It was disconcerting for several business leaders, not least since the administration has refused to recognize the shift.
Pushing the Solution to Manufacturers
In announcing the moratorium, Biden stressed his administration is not stifling American energy development.
It is “up to the oil industry to evaluate whether they will make investments from these war profits, from premium costs back into the local economy to raise output and reduce costs to American consumers,” White House press secretary Jen Psaki said later.
Officials say the message is paradoxical, blaming them for the tight supply and resultant rise in gas prices, while also asking for their assistance.
Dr. Ellen Wald, a senior researcher at the Atlantic Council’s Global Energy Center, thinks the administration could help people make more energy.
When you account for inflation, oil prices are high, but value of a barrel of oil is not yet at levels reaching 14 years ago. But how high CAN they go?#OOTT #oil #Russia #Ukraine #inflation
Oil Prices Are On A Wild Ride, But, For How Long? – https://t.co/AUNeZVnnt6
— Ellen R. Wald Ph.D.🛢 (@EnergzdEconomy) March 10, 2022
During times of national crisis, the federal government and oil companies have collaborated to ensure adequate gasoline supplies for Americans.
“Companies will respond to that story and make changes if necessary,” said Jeff Kupfer, former acting deputy head of the Program of Energy under President George W. Bush.
He noted just because prices are rising now doesn’t mean corporations will suddenly decide to manufacture.
While the management claims there are 9,000 oil and gas licenses open for drilling, businesses also need federal licenses, which have “slowed to a trickle” in recent months.
The sector has little motivation to expand under a president that ran on regulatory policies and anti-climate change efforts that threatened to suppress drilling actively.
It's amazing how the Biden administration can try to pawn off high gas prices on Putin when prices have been rising since he first took office.
One look at a chart of gas prices will show you this, yet Biden continues to lie to your face. https://t.co/FoymxQmAUg
— Dan K. Eberhart (@DanKEberhart) March 10, 2022
“You can’t anticipate tremendous outcomes by telling us to do something for a week or two. It’s slower.”
Even if corporations increase production, “that doesn’t absolve the administration of its policies over the last year,” Kupfer says.
“Their message to the oil and gas industry is about whether or not to invest in extra resources and capital to be able to produce.”
On how long it’d take for U.S. manufacturers to increase supply enough to ease the pain at the pump, Eberhart said, “I would think three or four months to go back to pre-COVID 13 million barrels a day.”
Though, he added, “that would take a big lift from the business, and a tailwind from the administration.”
Businesses don’t know what to anticipate from the administration, Wald said. “Uncertainty is the worst for businesses,” she remarked. “Regulatory uncertainty undermines any expansion drive.”