The Biden administration needs gas prices to fall rapidly. But that requires increased oil and gas production over the long term. This is the opposite of what we want to do to combat climate change.

Important reason: The result so far is a message and heightened tensions with the energy industry, and the White House needs to lower gas prices.

  • The relationship between the industry and the White House affects the real world. Because if it is controversial and frayed, it can be difficult to bring relief to the pump.
  • And for consumers, gas prices are likely to remain high for the foreseeable future, despite the proposed gasoline tax holidays.

Big picture: The Byden administration has called on the oil industry to increase production and refinery production in the short term, but the White House is working on a long-term transition from fossil fuels to mitigate the severity of climate change. ..

  • “We can cope with the imminent crisis of rising gas prices and seize the future of clean energy,” Biden said Wednesday.
  • For oil industry players, this does not indicate a willingness to implement policies that encourage companies to spend money on new drilling or refining capacities. This is what they say is needed to increase enough supply to lower prices.

The industry was not subtle about that requirement. While increasing drilling permits on public land, approving pipelines, and taking other steps, we will refrain from certain regulatory measures and encourage funding for energy infrastructure.

  • Bob McNally, Founder and President of Rapidan Energy, said: The White House’s view is that “we need more oil now, we need more refining capacity now,” instead of “celebrating the new long-term infrastructure,” because we need to move to a clean energy source. It is that.
  • “There’s a disconnect,” he told Axios in an interview...

Zoom in: Zoom in: Moreover, given the stress of the recent boom cycle, the industry is now reluctant to spend money to pump more oil. It wasn’t long ago that oil prices plummeted during the first coronavirus blockade.

  • “When the industry sees oil prices rise like a month, the next thing to think about is the other side,” McNally said. This is the next sharp drop in prices.
  • Last week, Biden sent a letter to the CEO of the largest oil refiner in the United States, urging him to produce more gasoline. However, most refineries are already operating at or near their maximum capacity. Energy Secretary Jennifer Granholm will meet with these CEOs on Thursday.

conspiracy: The industry is trapped in a verbal war with the White House, which is fully exhibited this week. The friction was evident, for example, in a written response by Chevron CEO Mike Worth to a letter to Biden’s refiner.

  • “To deal with this situation requires discreet action and willingness to cooperate, not political rhetoric,” Wirth writes.
  • According to McNally, the Biden administration does not seem to understand that the oil industry cannot turn spigots on or off given timeline, fixed investment and supply chain issues.
  • Oil production is slowly increasing, but the industry says it is partly based on investors’ calls to curb spending.
  • Part of the friction can be due to a lack of personal involvement with industry leaders at sparse meetings compared to the time Biden spent with executives in other sectors.

Conclusion: McNally said the industry would be more comfortable with the policies and rhetoric of the Obama Biden era when the White House publicly supported “all of the above” energy strategies.

  • Instead, the Biden administration is enthusiastic about moving away from fossil fuels, along with efforts to implement the Paris Agreement.
  • “We can walk and chew gum at the same time,” a senior government official told reporters Tuesday night. “We still have a need for climate. In fact, climate science is only getting worse in that respect, and we need to accelerate a clean energy transition.”

..

By Author

Leave a Reply

Your email address will not be published.