Biden to tap oil reserves and pressure oil sector to increase production


While U.S. oil production has increased since Biden entered the White House, the rate of growth has not been as rapid as energy experts typically expect when crude prices rise above $100 a barrel.

“We believe these companies need to step up their efforts,” a senior administration official said in a phone call with reporters. “There is nothing stopping them.”

The news: The United States will press again the Strategic Petroleum Reserve as it has done twice before, with limited effectiveness. But this new effort will be a sustained release for six months, bringing up to 180 million barrels to market. The addition of 1 million barrels per day represents an increase in US supply of 8.5%.

The White House also said Biden would use the Defense Production Act to develop domestic supply chains for key minerals used in batteries for the power grid and electric vehicles as he seeks to restart manufacturing of clean energy, in turn reducing dependence on foreign supply chains and volatile energy markets.

The context: The White House said it had coordinated with its allies in its decision to open the reserves, noting that gasoline prices had eclipsed $4.20 a gallon after averaging $3.30 in the beginning of the year. These rising costs are the result of supply chain bottlenecks in the oil and gas sector and the United States’ decision to abandon Russian imports in response to its invasion of Ukraine.

Biden has had to balance his campaign promises to fight climate change — which is largely caused by the burning of fossil fuels — with the swings in the energy market hitting Americans’ pockets.

As such, the White House’s war on gas prices and the political troubles it entails have put Biden in a position to harass oil companies to increase production at least in the short term. The White House is asking Congress to charge oil companies a fee for any federal acres they’ve leased but aren’t using to produce oil – citing the fact that the companies are sitting on 9,000 unused permits to drill on federal lands.

The White House bought into Biden’s message that rising fuel costs underscored the need to move quickly away from fossil fuels. But many of the resources used in clean energy are also under foreign control. China and Russia are major producers of key minerals for clean energy production.

The White House said Biden would use the Defense Production Act to foster a domestic supply of critical minerals such as manganese, lithium, cobalt, graphite and nickel, which are used to make high-capacity batteries. for the power grid and electric vehicles. The White House said the effort would not circumvent environmental reviews and permits.

Some Democrats have come out to support efforts to accelerate mining, including a review of permitting rules, as the United States seeks to boost manufacturing jobs and accelerate its transition to low-emission energy. But Republicans and industry argue the regulations have prevented the United States from developing a robust domestic mining field, leaving it dependent on China and other countries.

“Unless the President streamlines the authorization, we should not expect to see a significant increase in U.S. mineral production,” Sen. John Barrasso (R-Wyo.)the senior member of the Senate Energy and Natural Resources Committee, said during a hearing Thursday.

Kelsey Tamborrino contributed to this report.

Source link


Comments are closed.