European Climate Hypocrites Confronted By African Delegates At COP 27

At the 2022 United Nations Climate Change Conference (COP27), climate issues relating to Africa took center stage. Uganda President Yoweri Museveni noted the “brazen double standards” of Europe’s climate process “hypocrisy.” ”The Ugandan leader characterized the Western nations’ agreement to allow some fossil energy investment while blocking Uganda’s rights to retrieve oil and gas for itself as the “purest hypocrisy.” Europe claims that its recent investments in fossil energy are temporary and brought on by the war in Ukraine, but its investment in African energy is restricted to wind and solar which creates intermittent electricity and not the baseload generation required to power factories and productive employment. According to the Uganda President, European jobs are made possible by diversity in electricity production, while Africans are forced to make life-threatening crossings of the Mediterranean Sea to obtain jobs in Europe. The gathering at the exclusive luxury resort town of Sharma El Sheikh, Egypt, is revealing inconvenient truths about the importance of energy availability and reliability to the developing world.

Europe’s Climate Hypocrisy

Africa sees Germany demolishing a wind farm to make way for a new open-pit coal mine as a reprehensible double standard that Africa has come to expect. One of the farm’s wind turbines was taken down last month, and two others are expected to be taken down next year, with all being dismantled by the end of 2023.  Europe is also bringing mothballed coal power plants back online to deal with its energy shortages stemming from less Russian natural gas supply due to sanctions on Russia for its invasion of Ukraine. Museveni noted that while new Western investment in African fossil fuels is possible, it is only available for oil and gas resources that will be piped and shipped to Europe. Uganda President Museveni wrote, “It is morally bankrupt for Europeans to expect to take Africa’s fossil fuels for their own energy production but refuse to countenance African use of those same fuels for theirs.” The European Union called for a delay in the development of an oil pipeline that Uganda was building with Tanzania citing violation of human rights and destruction of the climate.

Museveni continued, “When decisions like these are being made, and without a shred of self-awareness or honor, it is no surprise some of my counterparts call for reparations or handouts. But this is the last thing Africans need or most want. Dialing down the brazen double-standards is what we desire, along with the lifting of the moratorium on fossil fuel investments for Africa herself so we can meet the needs of our own people.” The United States, Canada and 18 other countries committed at the COP26 climate summit to stop public financing for fossil fuel projects abroad, instead steering their spending into renewable energy. That agreement did not include major Asian countries responsible for much of the fossil fuel financing abroad.

Africa Looks Elsewhere for Investment

Africa has turned elsewhere for investment that comes without lectures attached. Africa has turned to China, and more recently to Turkey and India to help build the infrastructure Africans need to raise their continent out of poverty. Even the United Kingdom is taking a more “enlightenment” approach than the rest of Europe.

If Africa increased electricity production by using domestic reserves of natural gas, the continent’s share of global emissions would increase from 3 percent to just 3.5 percent. Instead, Western money poured into wind and solar projects that leave Africans without electricity when the wind does not blow and the sun does not shine. Along with wind and solar power, Africa needs continuous baseload power produced by coal, natural gas, hydroelectricity, and nuclear power as backup to solar and wind and to maintain a solid manufacturing base. Even the International Energy Agency (IEA) is calling for Africa to be empowered to use natural gas and other hydrocarbons for industrialization. According to IEA, $25 billion per year would raise 600 million people out of energy poverty by 2030 through diversification.

COP27 Calls for a Radical Overhaul of the World Bank and International Monetary Fund

There is interest behind a set of ideas that would overhaul the World Bank and the International Monetary Fund, which loan or grant money from industrialized nations to developing countries. If implemented, the reforms being considered would make more money available to developing nations, deploy funds faster, offer countries lower interest rates and allow them to pause debt payments after major disasters. The changes could enable these institutions to attract trillions of dollars in private capital to help nations transition to wind, solar and other “clean” energy. Note that these reform ideas are not in line with the comments from the Uganda President as they are directed to funding only non-carbon energy.

These institutions have operated largely unchanged since their establishment after World War II, with wealthy nations essentially financing loans to developing nations and holding much of their debt and thus exercising a large degree of control over their growth and progress. Among the most transformative changes discussed is a new approach to the risk ratings and resulting interest rates developing countries must pay on loans from the World Bank. Currently, some countries can borrow at 3 percent while others borrow at 14 or 15 percent. Paying higher debt is a huge drain on national budgets, leaving governments without needed financial reserves when they face a crisis.

Nearly every country is a member of both the World Bank and I.M.F., but power is distributed through a quota system that gives the United States a dominating position in decision-making and leadership. Janet Yellen, U.S. Secretary of the Treasury, said she would make a formal request to the World Bank that it comes up with an “evolution road map” by the end of the year.

Conclusion

According to Uganda’s President: Europe’s “reprehensible double standard” on energy is something that Africa has “come to expect.”  Europe’s re-investment in fossil energy makes a mockery of Western commitments to climate targets and their promises to help speed African development in renewable energy. Europe’s determination to write one set of rules for Europeans and a different set for Africans makes Europe complicit in forcing poverty on Africa and limiting their opportunity.

Africans want to use their own fossil fuel resources to develop their countries, bring electricity to households, provide jobs and move people out of poverty. Europe, however, has agreed with the United States and Canada not to finance fossil fuel projects in Africa. Yet, Europe wants to buy African oil and natural gas for its own use, has brought coal plants back online and is opening new coal mines while destroying a wind farm. That is pure hypocrisy to Africa, and should be to most thinking Americans.


*This article was adapted from content originally published by the Institute for Energy Research.

The Unregulated Podcast #108: Tribes

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the midterms and what the pending results mean for the rest of the Biden presidency and 2024.

Links:

Climate Jet-Setters Divvy Up “Aid” Funds At Mediterranean Resort

COP27 began in Egypt over the weekend, as about 200 nations meet to supposedly agree on climate policy. The Conference of the Parties of the UNFCCC, or COP27, is the 27th United Nations Climate Change conference and this year is being held in the luxury resort town of Sharm El Sheikh, Egypt. Global greenhouse gas emissions have increased since last year’s Glasgow climate conference, exceeding their pre-pandemic levels. A recently released United Nations report shows global emissions on track to increase by 10.6 percent by 2030 compared with 2010 levels. According to the Paris Climate Agreement of 2015, those emissions need to drop 43 percent by then for temperatures to be 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels. For the first time since climate talks began, delegates at the U.N. climate summit have agreed to discuss compensating poor nations for damage that may be linked to global warming, placing the topic on the agenda. The loss and damage funding is to be paid by the world’s largest emitters for ecological reparations to developing countries. One study estimates that funding for loss and damage could run up to $580 billion a year by 2030.  This is noteworthy since the U.S. Senate has never bound the United States to the agreement, as is customary in a treaty establishing obligations upon signatories.

Developing countries want wealthier nations to help finance their transitions from fossil fuels. To date, wealthy nations have fallen short of their promises on transition funding and they have not agreed to new funding beyond what they already provide. They failed on a promise to provide $100 billion per year by 2020 to help developing countries cut carbon dioxide emissions. In 2009, developed countries promised that by 2020 they would transfer $100 billion per year to vulnerable countries. In 2020, they provided $83.3 billion – falling $16.7 billion short of the target, according to the Organization for Economic Co-operation and Development. Recently, two small countries have offered funding. Denmark committed 100 million Danish crowns ($13 million), and Scotland pledged £2 million ($2.28 million).

South Africa, for example, wants wealthy countries, along with international development banks, to pay over 400 billion rand ($26.6 billion) to transform its power system out of coal. At COP26, the U.S., Germany, France, the U.K. and the EU said they would mobilize $8.5 billion over the next three to five years to help South Africa quit coal by replacing coal plants with renewable energy and finding new livelihoods for mining communities. Note that the pledge is not enough money to even transition one country — South Africa —out of coal and into renewable energy.  South Africa is the fifth largest coal producer in the world.

The International Energy Agency indicated that just two of the 55 components needed for the world to reach net-zero emissions by 2050 are on pace to be achieved. Those two are electric-vehicle deployment and switching to LED lighting. Factors such as shutting down coal plants and capturing carbon dioxide from the atmosphere are lagging behind.

New Ideas and Issues Abound

The United States is focusing on a new plan for carbon credits, which the Biden administration is hoping to announce at the summit meeting. John Kerry, President Biden’s climate envoy, is supposedly gathering support for a system in which governments would earn credits for cutting their power sector’s emissions, which companies could then buy to offset their own output. In many ways, it resembles the “Cap and Trade” bill promoted by Congressmen Henry Waxman and Ed Markey in 2010. Kerry’s plan lacks key details, however. Also, centering the plan on credits is contentious, because they do not always result in a reduction of emissions. Despite that, credits have grown in popularity as a way for companies and governments to incentivize reducing carbon output.

Corporate commitments to addressing climate change also appear uncertain. Mark Carney, the former governor of the Bank of England who now leads the Glasgow Financial Alliance for Net Zero, indicated that the group’s members were no longer required to follow a U.N. initiative to phase out fossil fuels. Members of the coalition, which have a combined $150 trillion in assets, raised antitrust concerns. Bank of America and JPMorgan Chase, for example, are worried that they could be sued for following global decarbonization pacts. There has been no major climate-related litigation on antitrust grounds thus far, but a number of regulators and officials are exploring it and it has all the hallmarks of collusion in restraint of trade.

Senators including Tom Cotton and Chuck Grassley have sent letters to 51 major law firms warning them of potential antitrust violations for advising clients on environmental, social and governance (ESG) issues. The letter advises the law firms that they and their clients should preserve documents relevant to the clients’ ESG practices in preparation for Congress’s oversight of antitrust violations due to ESG collusion. The letter stated: “The ESG movement attempts to weaponize corporations to reshape society in ways that Americans would never endorse at the ballot box. Of particular concern is the collusive effort to restrict the supply of coal, oil, and gas, which is driving up energy costs across the globe and empowering America’s adversaries abroad.”

The billionaire Mike Bloomberg, a special U.N. envoy on climate change, is focused on reducing coal use. He announced a new international initiative to help 25 developing countries in Africa, Asia, and Latin America phase out coal by 2040 with some wealthier countries ending coal use by 2030. (Bloomberg provided more than $500 million to help green groups phase out coal use in the United States.) Bloomberg’s initiative would include devising business plans, national policies and technical resources to increase the use of renewable energy, but it does not include a new financial commitment.

The alliance of governments — under a partnership with Bloomberg Philanthropies and Sustainable Finance For All, a United Nations body — intend to concentrate on countries where energy demand is projected to grow, and where renewable energy potential is plentiful. Attracting private-sector dollars for wind, solar and other renewable power has been a challenge, particularly in developing countries. Indonesia, for example, is the third-largest coal producer after China and India, and its energy plan foresees coal providing a quarter of its power mix by 2050. Shutting down its 118 coal plants could cost $37 billion, according to a recent report. Many nations in Africa have enormous wind and solar resources but because of potential risks, financing costs may be higher.

Conclusion

Nearly 200 countries are meeting in Egypt as part of COP27 to discuss ways and finances to reduce their greenhouse gas emissions, which are growing globally. European countries have turned to coal as a means to fuel their economies and to keep their residents warm this winter as Russia has drastically reduced its exports of natural gas to them as a means of retaliation against sanctions imposed due to its invasion of Ukraine. Other countries such as China and India have enormous coal potential and use and do not intend to reduce that consumption any time soon as they grow their economies and, in the case of India, electrify its country.

Developing countries want wealthier countries to pay for their transition to renewable energy as reparations for their industrialization. New ideas are coming from John Kerry and Mike Bloomberg for emissions reductions, but the global situation is such that any true and lasting developments are unlikely. U.S. taxpayers should be aware that new obligations may be agreed to at the conference which would seek to raise their tax and energy bills in pursuit of the U.N.’s COP27.


*This article was adapted from content originally published by the Institute for Energy Research.

The Unregulated Podcast #107: Closing Argument

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the final stories shaping the upcoming midterm elections.

Links:

After Trying To Regulate Oil Producers Into Bankruptcy, Biden Threatens Them With New Tax

The Energy Information Administration indicates that U.S. oil production is nearing pre-pandemic levels, but President Biden wants to ruin that by placing a “windfall profits” tax on oil company profits. “Their profits are a windfall of war,” Mr. Biden said, referring to the Russian invasion of Ukraine as the reason for high prices for oil and gasoline. Biden could easily increase domestic oil production by changing his anti-oil and gas policies that began on his first day in office. Gasoline prices per gallon were in the mid-$2 range when Biden took office, increased to $5 a gallon in early June and then slowly declined to $3.76 per gallon by his temporary manipulation of the market through record-breaking releases of oil from the Strategic Petroleum Reserve (SPR) that was set up to be used during emergencies—not for high prices caused by his own government policies. By releasing oil from the emergency reserve and adding supply to the market, Biden recognizes that markets determine oil prices, not oil companies. But he still wants oil companies to give up their profits, despite not helping them when they incurred enormous losses during the pandemic lockdowns. Increasing taxes on oil company profits will just discourage investment in new production and raise prices higher, hurting American consumers even more. And by offering the fewest amount of federal lands for leasing since WWII, the president limits the ability for oil companies to invest in U.S. resources.

Biden needs to act quickly if he is committed to a tax on oil profits as both houses of Congress would need to pass it and he would need 60 votes in the Senate to break a filibuster. A group of Democrats did introduce legislation earlier this year that would impose a per-barrel tax equivalent to 50 percent of the difference between the current price of crude oil and the average price between 2015 and 2019.

Besides releasing 260 million barrels of oil from the SPR, Biden asked the Federal Trade Commission (FTC) to investigate whether oil-and-gas companies are participating in illegal conduct aimed at keeping gasoline prices high. The FTC has yet to get back to him, although his request was made in November, 2021.

Biden also indicated that if companies do not increase capital expenditures, they would face other restrictions beyond a prospective windfall profits tax. He has threatened to place restrictions on fuel exports, due in part to diesel shortages where stocks are at a 25-day low, particularly affecting the Northeast, where distillate is still used to heat homes. Refinery closures, outages, and conversion to biofuel production where profits are much higher due to government subsidies have put pressure on the remaining refineries that recently needed to undergo routine maintenance, which was postponed earlier in the year to assist in meeting demand.

A significant share of existing oil refining capacity, including facilities operated by some major refiners like Phillips 66 and Marathon, has been or is being converted to manufacture biofuels due to the subsidies and to make progress toward Biden’s net zero carbon economy. In California, refiners producing biofuels currently receive a premium of $3.70 per gallon due to government policies. More than 1 million barrels per day of U.S. capacity has been shut or converted over the last few years. Investors are wary of building new refineries due to the changing energy market and pressures of the transition to “green” energy, as well as onerous government regulation. Even if fuel markets are well supplied with oil, the ability to refine oil into gasoline and diesel would be reduced if existing refineries continue to shutter.

The Energy Information Administration (EIA), an independent government statistics agency, indicated that U.S. oil output increased 0.9 percent to about 12 million barrels per day in August and September—the highest level since March 2020 and the onset of the COVID-19 pandemic. That level was close to the average oil production in 2019 of 12.3 million barrels per day. Overall U.S. output peaked at 13 million barrels per day in late 2019, and has not returned to that level since the pandemic started as costs for equipment and labor increased rapidly and President Biden started imposing his anti-oil and gas policies in January of 2021. EIA projects that next year, the country will produce an average of 12.4 million barrels per day in 2023, which would beat 2019’s record-high production. The agency estimates that this year’s average oil production will be 11.7 million barrels per day.

Conclusion

President Biden keeps trying to make oil companies out to be the bad guy when he is the one who is escalating oil and gasoline prices and causing shortages of diesel fuel by his anti-oil and gas policies. While blaming others for his policies, candidate Biden promised “to end fossil fuels.” He has been working to fulfill that guarantee since his first day in office. Now he is threatening to make matters even worse by asking Congress to pass a windfall profits tax on oil company profits, which will just reduce supply more and increase prices higher. Typically basic economics tells you that if you want less of something, you tax it. And, this is not the first time that Biden has threatened such a tax but he must get 60 votes in the Senate to counter a filibuster to do it. His boasts are all rhetoric to get Americans to believe him before they go vote. Americans need to understand the issues and not fall for his rhetoric.  His policies are creating the problems, all in pursuit of his climate agenda, which he has stated repeatedly is “an existential threat” to the United States.


*This article was adapted from content originally published by the Institute for Energy Research.

125 Ways the Biden Administration and Congress Have Made it Harder to Produce Oil & Gas

WASHINGTON DC (11/02/2022) – Joe Biden and Congressional Democrats have a plan for American energy: make it harder to produce and more expensive to purchase. Since President Biden took office, his administration and Congressional Democrats have taken over 125 actions deliberately designed to make it harder to produce energy here in America.

A PDF of the full list is available to download here.

AEA President, Thomas Pyle, issued the following statement:

“Publicly, the Biden administration claims to be working to lower energy prices through temporary measures, like releases from the SPR, that won’t solve the long-run problems plaguing energy markets. But as our list shows, behind the scenes, the Biden administration and Congressional Democrats are doing everything in their power to block the production of reliable and affordable energy. This is exactly what the Green New Deal agenda is, making the sources of energy needed every day for families around the country too expensive to afford.”


Additional Resources:


For media inquiries please contact:
[email protected]

125 Ways Biden and the Democrats Have Made it Harder to Produce Oil & Gas

Joe Biden and Congressional Democrats have a plan for American energy: make it harder to produce and more expensive to purchase. Since Biden took office, his administration and Congressional Democrats have taken over 125 actions deliberately designed to make it harder to produce energy here in America.  A list of those actions appears below. A PDF of the full list is available to download here.


On January 20, 2021, 

  1. Besides canceling the Keystone XL pipeline, 
  2. President Biden restricted domestic production by issuing a moratorium on all oil and natural gas leasing activities in the Arctic National Wildlife Refuge. 
  3. He also restored and expanded the use of the government-created social cost of carbon metric to artificially increase the regulatory costs of energy production of fossil fuels when performing analyses, as well as artificially increase the so-called “benefits” of decreasing production.
  4. Biden continued to revoke Trump administration executive orders, including those related to the Waters of the United States rule and the Antiquities Act. The Trump-era actions decreased regulations on Federal land and expanded the ability to produce energy domestically. 

On January 27, 2021,

  1. Biden issued an executive order announcing a moratorium on new oil and gas leases on public lands 
  2. or in offshore waters 
  3. and reconsideration of Federal oil and gas permitting and leasing practices. 
  4. He directed his Interior Department to conduct a review of permitting and leasing policies. 
  5. Also, by Executive Order, Biden directed agencies to eliminate federal fossil fuel “subsidies” wherever possible, disadvantaging oil and natural gas compared to other industries that receive similar Federal tax treatments or other energy sources which receive direct subsidies. 
  6. This Biden Executive Order attacked the energy industry by promoting “ending international financing of carbon-intensive fossil fuel-based energy while simultaneously advancing sustainable development and a green recovery.” In other words, the U.S. government would leverage its power to attack oil and gas producers while subsidizing favored industries. 
  7. Biden’s EO pushed for an increase in enforcement of “environmental justice” violations and support for such efforts, which typically are advanced by radical environmental organizations and slip-and-fall lawyers hoping to cash in on the backs of energy consumers.  

On February 2, 2021,

  1. The EPA hired Marianne Engelman-Lado, a prominent environmental justice proponent, to advance its radical Green New Deal social justice agenda at the EPA, a signal to industry that it plans to continue its attack on American energy. 

On February 4, 2021,

  1. At the behest of the January 27th Climate Crisis EO, the DOJ withdrew several Trump-era enforcement documents which provided clarity and streamlined regulations to increase energy independence. 

On February 19, 2021, 

  1. Biden officially rejoined the Paris Climate Agreement, which is detrimental to Americans while propping up oil production in Russia and OPEC and increasing the dependence of Europe on Russian oil and natural gas. It also benefits China, who dominates the supply chain for critical minerals that are needed for wind turbines, solar panels, and electric vehicle batteries.

On February 23, 2021,

  1. Biden administration issued a Statement of Administration Policy in support of H.R. 803 which curtailed energy production on over 1.5 million acres of federal lands. 

On March 11, 2021,

  1. The President signed ARPA, which included numerous provisions advancing Biden’s green priorities, such as a $50 million environmental slush fund directed towards “environmental justice” groups, including efforts advanced by Biden’s EO. 
  2. ARPA also included $50 million in grant funding for Clean Air Act pollution-related activities aimed at advancing the green agenda at the expense of the fossil fuel industry.

On March 15, 2021,

  1. Biden’s Securities and Exchange Commission sought input regarding the possibility of a rule that would require hundreds of businesses to measure and disclose greenhouse gas emissions in a standardized way, hugely increasing the environmental costs of compliance and disincentivizing oil and gas production.

On April 15, 2021,

  1. The Federal Energy Regulatory Commission’s policy statement outlines — and effectively endorses — how the agency would consider market rules proposed by regional grid operators that seek to incorporate a state-determined carbon price in organized wholesale electricity markets. This amounts to a de facto endorsement of a carbon tax that would be paid by everyday Americans in their utility bills. 

On April 16, 2021, 

  1. At Biden’s Direction, Secretary of the Interior Deb Haaland revoked policies in Secretarial Order 3398 established by the Trump administration including rejecting “American Energy Independence” as a goal; 
  2. rejecting an “America-First Offshore Energy Strategy;” 
  3. rejecting “strengthening the Department of the Interior’s Energy Portfolio;” 
  4. and rejecting establishing the “Executive Committee for Expedited Permitting.” These actions set the stage for the unprecedented slowdown in energy activity by the Interior Department, steward of 2.46 billion acres of federal mineral estate and all its energy and mineral resources.

On April 22, 2021,

  1. Biden issued the U.S. International Climate Finance Plan to funnel international financing toward green industries and away from oil and gas.  

On April 27, 2021,

  1. The Biden administration issued a Statement of Administration Policy in support of S.J. Res. 14 which rescinded a Trump-era rule that would have cut regulations on American energy production. 

On April 28, 2021, 

  1. Biden’s EPA issued a Notice of Reconsideration that would propose to revoke a Trump-era action that revoked California’s waiver for California’s Advanced Clean Car Program (Light-Duty Vehicle Greenhouse Gas Emission Standards and Zero Emission Vehicle Requirements).

On May 5, 2021,

  1. This proposed Fish and Wildlife Service Rule revokes a Trump administration rule and expands the definition of “incidental take” under the Migratory Bird Treaty Act (MBTA). The rule would impact energy production on federal lands, increasing regulatory burdens. 

On May 20, 2021,

  1. Biden issued an executive order on Climate-Related Financial Risk that would artificially increase regulatory burdens on the oil and gas industry by increasing the “risk” the federal government undertakes in doing business with them.

On May 28, 2021,

  1. Biden’s FY 2022 revenue proposals include nearly $150 billion in tax increases directly levied against the oil and gas energy producers. 

On July 28, 2021,

  1. This Department of Energy determination increases regulatory burdens on commercial building codes, requiring green energy codes to disincentivize natural gas and other energy sources. DOE readily admits they ignored efforts private industry is making on their own and utilized the questionable “social costs of carbon” to overstate the public benefit. 
  2. The Executive Order also kicked off the development of more stringent long-term fuel efficiency and emissions standards, a backdoor way to compel the electrification of vehicles. 

On August 11, 2021,

  1. The White House released a letter from Jake Sullivan begging OPEC+ (OPEC plus Russia) to produce more oil.

On September 3, 2021, 

  1. Biden’s Department of Transportation issued a proposed rule that would update the Corporate Average Fuel Economy Standards for Model Years 2024–2026 Passenger Cars and Light Trucks to increase fuel economy regulations on passenger cars and light vehicles. The modeling calculated “fuel savings” by multiplying fuel price with ‘avoided fuel costs’ to disincentivize gasoline by making it more costly to afford ICE cars and trucks.

On September 9, 2021,

  1. NASA and the FAA launched a partnership to reduce “fuel use and harmful emissions” by strong-arming industry to adopt elements of their green agenda. 
  2. Department of Education’s Climate Adaptation Plan (CAP) includes efforts to incorporate the green agenda into as many guidance and policies as possible, effectively leveraging the department as an anti-fossil fuel propaganda tool. 

On October 4, 2021,

  1. The FWS published its final rule revoking Trump-era actions which eased burdensome regulations on energy action. 

On October 7, 2021,

  1. The Council on Environmental Quality revoked Trump administration NEPA reforms that reduced regulatory burdens by reinstating tangential environmental impacts of proposed projects. 
  2. Biden announced plans to designate the Northeast Canyons and Seamounts Marine National Monument, a move counter to Trump’s reversal of a similar Obama-era proclamation. Trump aimed to allow energy exploration in the area to increase energy independence. 
  3. The U.S. Department of Agriculture’s (USDA) CAP includes efforts to switch fuel away from oil and natural gas and subsidize more costly, less efficient fuel sources. 
  4. As part of its CAP, EPA intends to incorporate Biden’s Green New Deal agenda throughout its rulemaking process. 

On October 21, 2021,

  1. This report paints climate change, and therefore oil and gas producers, as a “risk to financial stability.” The report recommended the “climate disclosures” later set forth by the Biden administration. 

On October 28, 2021,

  1. Rep. Rho Khanna interrogated oil CEOs about why they were increasing production as their ‘European Counterparts’ were lowering their own.

On October 29, 2021, 

  1. The Bureau of Land Management announced the use of social costs of carbon in decision-making for approving permits for oil and gas drilling. This devalues the economic benefits of energy production on federal lands.

On October 30, 2021, 

  1. The Department of Labor issued a final ESG Rule that would require fiduciaries to consider the economic effects of climate change and other so-called environmental, social and governance (ESG) factors when evaluating funds for retirement plans. The rule would strongly encourage fiduciaries to draw capital from domestic energy development in oil and natural gas to renewables.

On November 2, 2021, 

  1. The Biden administration led a “Global Methane Pledge” to reduce global methane emissions by 30 percent by 2030. Neither Russia nor China signed the pledge, increasing the world’s reliance on these two countries for energy-related imports and disadvantaging the U.S. oil and natural gas industry, as well as large consumers of energy such as industrial manufacturing and agriculture.

On November 4, 2021, 

  1. Biden committed to “ending fossil fuel financing abroad,” targeting the global fossil fuel industry, thereby disadvantaging them, which increases global oil and gas prices. Further, key countries, like China, did not sign the pledge, so the pledge harms signatories while empowering adversaries. This is another case of unilateral economic and energy disarmament. 

On November 5, 2021,

  1. Biden Energy Sec. Granholm laughed at questions about boosting oil production.

On November 12, 2021,

  1. New Source Review: These broad, overreaching regulations target new, modified, and reconstructed oil and natural gas sources, and would require states to reduce methane emissions from hundreds of thousands of existing sources nationwide for the first time. The Proposed Rule follows the President’s Day 1 Climate EO and the passage of the S.J. Res. 14, a CRA rescinding Trump-era energy independence policies. The proposed rule spends several paragraphs dismissing the effects of the rule on the oil and gas industry and misleadingly applies its effects on the industry to only the “140,000” (an underestimate of the over 220,000) employees directly involved in extraction. This means it ignores the nearly 10 million other people working in the oil and gas industry and the impacts to the oil and gas economy more broadly. 

On November 15, 2021, 

  1. Biden’s Interior Department announced plans to withdraw Chaco Canyon from oil and gas drilling for 20 years.
  2. The Biden administration nominated Saule Omarova to serve as Comptroller of the Currency. Omarova’s past comments speak for themselves: “A lot of the smaller players in [the fossil fuel] industry are going to, probably, go bankrupt in short order—at least, we want them to go bankrupt if we want to tackle climate change,” she said. 

On November 17, 2021,

  1. HUD’s CAP leverages the Community Development Block Grant to advance ‘environmental justice’ efforts. 
  2. Biden calls on FTC to probe “anti-consumer behavior” by energy companies.

On November 19, 2021, 

  1. Biden endorsed several oil and gas provisions in the Build Back Better Bill, including a new tax on methane, of up to $1500 per ton; 
  2. prohibiting energy production in the Arctic and offshore leasing on the Outer Continental Shelf (OCS) in the Atlantic, Pacific and Eastern Gulf of Mexico Planning Areas; 
  3. increased fees and royalties for onshore and offshore oil and gas production; 
  4. a new $8 billion tax on companies that produce, process, transmit or store oil and natural gas starting in 2023;  
  5. limited ability of energy producers to claim tax credits for upfront and royalty payments in foreign countries – amounting to a tax increase on domestic energy producers; 
  6. and a 16.4 cent tax on each barrel on crude oil – up from 9.7 cents – a $13 billion tax increase on oil production.

On November 26, 2021, 

  1. Biden’s Interior Department issued its report on the Federal Oil and Gas Leasing Program includes recommendations to raise rents and royalty rates on oil and gas producers, even though federal energy production already lags that from state and private lands.

On December 14, 2021,

  1. The EPA launched a revamp of its Office of Civil Rights to add so-called environmental justice enforcement as a key pillar in enforcing Title VI civil rights complaints. The agency’s announcements mean social justice claims against, among others, the oil and gas industry will increase costs and penalties that have specious connections to its environmental mission. 

On December 21, 2021, 

  1. Biden’s Department of Transportation issued its Final Rule revoking Trump-era actions which prevented California from arbitrarily becoming the national standard for fuel emissions. The rule set the stage for the administration to reinstate California’s waiver, and, since automakers do not make different cars for different states, the rule would allow California’s radical environmental policies to reach nationwide, forcing people nationwide to pay for vehicles meeting California’s standards. 

On December 30, 2021,

  1. Biden’s EPA issued its Final Rule for increased “fuel efficiency standards.” According to the Final Rule, “These standards are the strongest vehicle emissions standards ever established for the light-duty vehicle sector. The rule, in responding to comments, claims “energy security benefits to the U.S. from decreased exposure to volatile world oil prices” suggesting that decreasing oil and gas production in the U.S. will result in less exposure to the international oil and gas market because they will be disincentivizing vehicles that use oil and gas. The rule also claims that it will result in “fuel savings” entirely due to less use of fuel.

On January 13, 2022,

  1. DOE announced an initiative to hire 1,000 staffers for their Clean Energy Corps, a group of staff dedicated to Biden’s promise to destroy fossil fuels. 

On January 14, 2022,

  1. Biden nominated Sarah Raskin to serve as Vice Chair of the Federal Reserve. She was deemed so radical on her belief that fed policy should be dictated by environmental policy that she gained a bipartisan opposition and had to withdraw her nomination.

On February 9, 2022, 

  1. A proposed rule on Coal and Oil Power Plant Mercury Standards would revoke a Trump-era rule that cut red tape on coal and oil-fired power generators and followed the Supreme Court’s rejection of an earlier Obama administration rule. This would effectively reinstate Obama-era regulations which sought to increase regulations on coal and oil-fired power plants.

On February 18, 2022,

  1. FERC updated a 23-year-old policy for assessing proposed natural gas pipelines, adding new considerations for landowners, environmental justice communities, and other factors. In a separate but related decision, the commission also laid out a framework for evaluating projects’ greenhouse gas emissions.

On February 21, 2022, 

  1. The Biden administration paused working all new oil and gas leases on Federal land in response to a judge blocking their arbitrary use of social costs of carbon, unnecessarily hurting domestic oil and gas production.  

On February 28, 2022, 

  1. The Ozone Transport Proposed Rule would expand federal emissions regulations over a wider geographic region and over a wider array of sources, including the gathering, boosting and transmission segments of the oil and gas sector. Integral energy production states like Nevada, Utah and Wyoming would be required to jump through more red tape.

On March 1, 2022,

  1. Refusal To Appeal adverse leasing court decision: The Biden administration refused to appeal an unprecedented decision to vacate an offshore oil and gas leasing sale held in November 2021. This means under Biden, the U.S. has not held one successful lease sale offshore. 
  2. Certification of New Interstate Natural Gas Facilities: This policy statement increases climate change regulations for new interstate natural gas facilities. 

On March 8, 2022,

  1. President Biden tried to deflect from his anti-energy record saying there are 9,000 issued leases on federal lands without current drilling. This is true and it’s also true that this is the lowest percentage of unused leases in at least 20 years — in other words, lease utilization is at a multi-decade high.

On March 9, 2022,

  1. EPA Reinstates California Emissions Waiver: The EPA reinstated California’s emissions waivers, allowing the state to set its own greenhouse gas emissions standards, standards which will likely be adopted nationwide and are sure to make vehicles more expensive. The practical effect is that California is setting policy for people in all the other states despite their terrible record of energy inflation.

On March 11, 2022,

  1. Natural Gas Infrastructure Project Reviews: This interim regulation will increase the regulatory burden on natural gas facilities by, among other things, requiring climate change impacts be considered when determining whether a project is in the public interest.

On March 16, 2022,

  1. Doubling Down on Social Costs of Carbon: The 5th Circuit Court of Appeals reinstated the dubious social costs of carbon metric which had been rejected by another court by issuing a stay on the lower court’s ruling. The ruling itself cast doubt on the lower court’s ruling. The Biden administration argued against the lower court’s ruling to reinstate the SCC metric. The Social Cost of Carbon is a “made-up” number designed to make any hydrocarbon project in the U.S. more expensive. It is an “end-around” the politically difficult carbon tax most of the Green Establishment supports. 

March 21, 2022,

  1. SEC Proposed Rule on Mandatory Climate Disclosures: The SEC’s proposed rule would require public companies to disclose greenhouse gas emissions 
  2. and their exposure to climate change. This rule would massively increase so-called environmental costs of compliance and, in tandem with so-called social costs of carbon, artificially disincentivizing oil and gas production. 

March 28, 2022,

  1. Army Corps of Engineers’ Review of its Nationwide Permit 12 for Oil or Natural Gas Pipeline Activities: The corps announced it would be reviewing NWP 12 late last month as part of Biden’s day-1 executive order on climate change mandating all federal agencies ensure their work is in line with its climate and environmental objectives. The review is part of a long list of actions that confuse and delay permitting for critical infrastructure. This makes pipelines harder to build and improve in the U.S.

March 30, 2022

  1. Environmental Justice Advisory Council Meeting: The WHEJAC will hold its first two meetings to, among other things, advance Green New Deal priorities including “environmental justice and pollution reduction, energy, climate change mitigation and resiliency, environmental health, and racial inequity.”

March 31, 2022

  1. President Biden announces that he will sell one million barrels of oil a day from the Strategic Petroleum Reserve for the next six months. 
  2. Biden wants to penalize oil companies with unused leases: President Biden called on Congress to pass legislation enacting “use it or lose it” fines on wells that oil companies have leased from the federal government but have not used in years and “on acres of public lands that they are hoarding without producing… Companies that are producing from their leased acres and existing wells will not face higher fees.” The extra fees on federally leased land are on top of rents that the oil companies pay to hold the leases, “bonus bids” paid by the winning bidder at lease sales and the fact that 66 percent of federal leases are currently producing oil. This is simply a deflection from the Biden administration’s war on affordable North American energy supplies. 
  3. Biden’s Budget Contains More Anti-Oil Proposals: President Biden’s budget for the fiscal year 2023 is $5.8 trillion. It contains large amounts of climate spending and anti-oil and gas policies that did not get passed in his Build Back Better bill last year. 
  4. Biden is seeking $50 billion for programs to address climate change, 
  5. including $18 billion to build the U.S. government’s resilience to climate change, 
  6. $3.3 billion in funding for clean energy projects and at least $20 million for a new “Civilian Climate Corps.” 
  7. To help pay for the increased climate spending, Biden is asking Congress to eliminate tax provisions that aid domestic energy production, 
  8. including tax deductions for intangible drilling costs and low-production wells that enable small producers in the United States to produce oil. Removing these deductions will lower domestic output while further raising already high oil and gasoline prices.

April 5, 2022,

  1. Biden’s Department of Energy Office of Fossil Energy and Carbon Management releases a “Strategic Vision” with no discussion of increasing domestic fossil energy production: The Department of Energy is statutorily required to carry out research and development with “the goal of improving the efficiency, effectiveness, and environmental performance of fossil energy production, upgrading, conversion, and consumption.” (42 USC 16291) However, the Biden Department of Energy has no interest in increasing fossil energy production. Despite the requirements of the law, the Strategic Vision is only about “Advancing Justice, Labor, and Engagement; Advancing Carbon Management Approaches toward Deep Decarbonization; and Advancing Technologies that Lead to Sustainable Energy Resources.”  

April 12, 2022,

  1. Biden extended the availability of higher biofuels-blended gasoline during the summer to lower gasoline costs and to reduce reliance on foreign energy sources. The measure will allow Americans to buy E15, a gasoline blend that contains 15 percent ethanol from June 1 to September 15. Oil refiners are required to blend some ethanol into gasoline under a pair of laws, passed in 2005 and 2007, known as the Renewable Fuels Program, intended to lower the use of oil and greenhouse gas emissions and reduce dependency on foreign oil by mandating increased levels of ethanol in the nation’s fuel mix every year. However, since the passage of the 2007 law, the mandate has been met with criticism that it has contributed to increased fuel prices and has done little to lower greenhouse gas emissions. With looming food shortages already acknowledged by President Biden, turning his back on domestic energy production while dedicating even more food to make energy inefficiently is not wise.  

April 15, 2022,

  1. Biden announced 144,000 acres of the federal mineral estate opened for oil and gas leasing — just 0.00589 percent of the 2.46 billion acres the American people own.  White House Press Secretary Jen Psaki said, “Today’s action…was the result of a court injunction that we continue to appeal, and it’s not in line with the president’s policy, which is to ban additional leasing.”
  2. The administration announced it would resume leasing, but with a royalty rate almost 50 percent higher
  3. Withdrawal of M-37046 and 
  4. reinstatement of M37039: “The Bureau of Land Management’s Authority to Address Impacts of its Land Use Authorizations Through Mitigation” The Interior Department reversed a Trump administration decision which limited the scope of “compensatory mitigation” the Department could force upon projects on federal land as a condition of receiving a permit, which will hit energy and mining projects especially hard. Under the new guidance, opponents in the federal government could require mitigation located far from the project with little relevance, effectively giving bureaucrats a blank check to request whatever they wish of a permit seeker with little controls. This decision was made less than a week after the DOI Inspector General reported that there were no controls or apparent records justifying previous versions of this program, and warned they may have to review the overall program again. This is a “3rd world” approach giving government officials the latitude to effectively deny a project by assessing “compensatory mitigation” so expensive as to make it uneconomic, or to fund their pet projects by extorting additional funds from a permit-seeker.

April 19, 2022,

  1. Biden Restores Climate to NEPA: The Biden administration completed reforms on how agencies implement the National Environmental Policy Act, effectively undoing one of the Trump administration’s most important environmental regulatory rollbacks. This opens the door for officials to cook up whatever justification they desire to impede energy development under the guise of NEPA. 

April 20, 2022,

  1. White House Climate Advisor Gina McCarthy states on MSNBC that “President Biden remains absolutely committed to not moving forward with additional drilling on public lands.”

April 21, 2022,

  1. U.S. Climate Envoy John Kerry said the world’s reliance on natural gas should be limited to a decade. He said, “We have to put the industry on notice: You’ve got six years, eight years, no more than 10 years or so, within which you’ve got to come up with a means by which you’re going to capture, and if you’re not capturing, then we have to deploy alternative sources of energy.” Repeated statements like this from administration officials tell investors not to sponsor energy investments in the U.S., since it implies the use of those energy sources will be limited by the government. 

April 25, 2022,

  1. Biden reverses Trump’s Alaska oil plan: The Biden administration released a management plan for the National Petroleum Reserve Alaska, an Indiana-sized area reserved for oil and gas leasing. The final decision reverses a Trump-era plan that had opened most of the reserve to oil and gas leasing and withdraws some of the most prospective oil and gas areas from consideration.  

April 28, 2022,

  1. The Biden administration admitted to using faulty modeling which overestimated wildlife effects, delaying permitting on existing leases.

May 18, 2022,

  1. The Biden administration announced they were canceling a lease sale of over one million acres in the Cook Inlet in Alaska.
  2. At the same time, the Biden administration announced they were canceling a lease sale in the Gulf of Mexico.

May 19, 2022,

  1. HR. 7688 is named the “Consumer Fuel Price Gouging Prevention Act,” and it would give the President vast powers to set price controls by executive fiat. If passed, this legislation will cause even more harm to American energy consumers. Price controls don’t work, and our experience during the gas lines of the 1970s should remind us that price controls will lead to shortages
  2. S.4214 is a similar “price gouging” bill taken up in the Senate.

June 2, 2022,

  1. The Biden administration settled with environmental litigants to do what the Biden administration wanted to do and more thoroughly analyze the climate impacts of oil and gas leasing on 4 million acres of federal lands. This provides more delay, potential litigation about sufficiency, and more uncertainty about investment.
  2. Biden’s EPA announced they were allowing states greater power to stop roads, dams, shopping malls, housing developments, wineries, breweries, pipelines, coal terminals, and other projects using Section 401 of the Clean Water Act.  

June 7, 2022,

  1. Biden’s EPA deals a death blow to Pebble Mine in Alaska.  Citing its authority under the 1972 Clean Water Act, EPA proposed a legal determination that would ban the disposal of mining waste rock in the Bristol Bay watershed. Pebble is one of the world’s largest copper deposits –essential for electrification—and holds enormous quantities of additional minerals, including strategic ones. 

June 8, 2022,

  1. Biden reduces fees on renewables while raising them on oil and gas.  President Biden’s Interior Department announced it will reduce the fees on renewable projects on federal lands after announcing recently that royalty rates and rents would increase as much as 50% for oil and gas projects on federal lands.

June 28, 2022,

  1. President Biden considers new regulations that would hamper the largest oil-producing area in the world.  His latest consideration is EPA implementing new requirements that would curb drilling across parts of the Permian Basin—the world’s biggest oil field that straddles Texas and New Mexico.

July 6, 2022,

  1. President Biden releases his draft offshore lease plan.   The plan includes an option with zero lease sales. There is the potential for ten potential new leases in the Gulf of Mexico and one in the Cook Inlet off the southern coast of Alaska. There are no new leases in federal waters off the Atlantic and Pacific coasts. Biden’s plan is in sharp contrast to President Trump’s proposed offshore lease plan that had 47 new offshore drilling leases, including in the Atlantic and Pacific oceans. President Trump had proposed a vast expansion of drilling sales to cover more than 90 percent of coastal waters, including areas off California and new zones in the Atlantic and Arctic. The earliest Biden’s offshore lease program could be finalized is likely late fall.

July 7, 2022,

  1. The Biden administration proposes a strict appliance standard rule for furnaces, the goal of which is to increase the upfront cost of using natural gas furnaces so great that people will switch to electric heating.   

July 14, 2022,

  1. Biden sells oil to China from the SPR.  Biden has sold more than five million barrels of oil from the SPR to European and Asian nations instead of U.S. refiners, compromising U.S. energy security. Biden’s Energy Department in April announced the sale of 950,000 barrels from SPR to Unipec, the trading arm of the China Petrochemical Corporation, which is wholly owned by the Chinese government.  China purchased that oil from U.S. emergency reserves to bolster its own stockpile. China has been buying large amounts of oil for its reserves since the early COVID lockdowns when prices were low due to demand destruction.

July 15, 2022,

  1. Biden’s Federal Highway Administration, without authority to do so, proposed requiring all states to track and reduce on-road vehicle greenhouse gas emissions.

August 16, 2022,

  1. President Biden signs the Inflation Reduction Act (IRA), which includes new taxes on natural gas extraction and methane leaks, and 
  2. Superfund taxes on crude oil and its related products, and
  3. An extension of biofuel tax credits and a new tax credit for sustainable aviation fuel. These biofuel tax credits will encourage existing petroleum refining capacity to convert to biofuels, making it harder for Americans to get the petroleum fuel products they need for transportation and home heating. These incentives will make the United States import more petroleum products from countries with additional capacity such as China and the Middle East, while committing more agricultural products to fuel, rather than food.  
  4. IRA:  The law also encourages states to adopt California’s plan to phase out gas-powered vehicles by 2035.

August 17, 2022,

  1. A federal judge reinstated a moratorium on coal leasing from federal lands that had been implemented during the Obama administration and was lifted under President Donald Trump. The ruling from U.S. District Judge Brian Morris requires government officials to conduct a new environmental review prior to resuming coal sales from federal lands. According to the judge, the government’s previous review of the program had not adequately considered the impacts of climate change from coal’s greenhouse gas emissions, among other effects. 

August 18, 2022

  1. Secretary of Energy Jennifer Granholm sent a letter to refiners threatening “to deploy emergency actions” against the industry if they continue to export refined products or otherwise fail to build refined product inventories. This ignores the record of increasing exports of petroleum coinciding with rising production in the U.S.

August 22, 2022,

  1. U.S. Appeals Court reinstates Biden’s ban on oil and gas leasing 

September 6, 2022

  1. The Biden administration reached an agreement with environmental groups to and halt drilling permits on over 58,000 acres of land in a sue and settle case.

September 12, 2022,

  1. EPA announced they rejected Cheniere Energy’s LNG appeal to exempt two turbines at LNG export terminals from a hazardous pollution rule despite the needs of the Europeans and others for LNG and Biden’s promises to help allies with supplies. 

September 19, 2022

  1. The Department of Energy announces the sale of an additional 10 million barrels of oil from the SPR

September 20, 2022,

  1. The Biden administration is expected to soon finalize a rule banning oil and gas leasing near Chaco Culture National Historical Park opposition from local Indigenous leaders, who say the administration’s rule would prevent them from collecting royalties on their land.

September 30, 2022,

  1. Secretary of Energy Jennifer Granholm and senior White House officials met with U.S. refiners. The Biden administration officials threatened the refiners with an export ban

October 5, 2022,

  1. The Biden administration is reportedly working to wind down sanctions against Venezuela’s authoritarian government in exchange for oil production.  This ignores that Venezuelan crude oil is much more carbon intensive than the domestic oil the Biden Administration is restricting, or Canadian oil which would have been transported via the Keystone XL pipeline.  

October 7, 2022,

  1. The Securities and Exchange Commission announced that was reopening the comment period on the ESG rule because a “technological error” resulted in the deletion of some public comments. But the SEC only gave people 14 days to figure out if their comment was deleted and to submit a comment again.  

October 2, 2022,

  1. Biden administration officials lobbied the Saudis and other members of OPEC+ to hold off reducing oil output until after the mid-term elections.  

October 6, 2022,

  1. The Department of the Interior moves forward with some leasing but notes that they are “mandated” by the Inflation Reduction Act. In other words, DOI is trying not to lease unless mandated by an act of Congress. This ignores that current law requires them to lease periodically, which they are honoring in the breach. 

Sen. Raphael Warnock (D-GA) Receives Failing Grade From American Energy Alliance

WASHINGTON DC (11/1/22) – The American Energy Alliance (AEA), the country’s premier pro-consumer, pro-taxpayer, and free-market energy organization, released its annual Congressional Scorecard last week.  The AEA scorecard scores voting and co-sponsorship decisions on legislation affecting energy and environmental policy, educating voters on how their senators vote and holding members accountable for those decisions.  This year’s Senate scorecard compiles 28 votes and 1 co-sponsorship decision from the full 6-year terms of the Senators up for reelection in 2022.  

Sen. Raphael Warnock (D-GA) received a score of zero percent from the American Energy Alliance. 

The American Energy Scorecard is guided by the following core principles:

  • Promoting affordable, abundant, and reliable energy
  • Expanding economic opportunity and prosperity, particularly for working families and those on fixed incomes
  • Giving Americans, not Washington bureaucrats, the power to make their own energy choices
  • Encouraging private sector innovation and entrepreneurship
  • Advancing market-oriented energy and environment policies
  • Reducing the role of government in energy markets
  • Eliminating the subsidies, mandates, and special interest giveaways that lead to higher energy costs

 AEA President Thomas Pyle issued the following statement: 

“Georgia’s economy depends on reliable and affordable energy.  It is home to the world’s busiest passenger airport and natural gas accounted for 49 percent of the state’s electricity generation in 2020.  Yet time and again, Sen. Warnock has voted to make energy more expensive for Georgia families. Senator Warnock promised to be an independent voice in the Senate, but he voted in lockstep with New York Senator Chuck Schumer to support President Biden’s anti-energy agenda. 

Senator Warnock said he ran for office to make life better for Georgia families, but has consistently voted for policies that make electricity, gasoline, and home heating more expensive for Georgians and make America more dependent on other nations – like China and the Middle East – for our energy. 

Instead of working to provide relief for Peach State residents from high energy and gasoline prices, Sen. Warnock sided with proponents of the Green New Deal. That’s a bad deal for Georgia.”

Additional Resources:


For media inquiries please contact: 

[email protected]

Biden’s Energy Policies Leading To Fuel Shortages

According to the Energy Information Administration (EIA), the United States now has less than 25 days of diesel stocks, the lowest level since 2008—and down from 34.2 days during the previous four weeks. The fuel is already being rationed in the Northeast, with suppliers in several states forced to conserve heating oil as the winter months approach. New England’s stockpiles are at less than a third of their usual levels for this time of year and the lowest levels since April 1992, which is concerning since those states rely on the fuel for heating more than any other part of the country. Diesel is also used for transporting goods as well as powering construction, farming and military vehicles and equipment. Unlike gasoline and jet fuel, demand for diesel recovered at a much faster pace from the coronavirus pandemic. In 2021, the U.S. transportation sector consumed 46.82 billion gallons, or 1.11 billion barrels of diesel fuel — at an average of about 128 million gallons a day.

Total national diesel stockpiles are at 106.187 million barrels, down about 34 percent since Biden took office. According to EIA, demand eased in the past week, coming in at 4.072 million barrels, although consumption is still up nearly 20 percent compared to the previous four weeks.

The national average price of diesel as of October 24 was at $5.34 a gallon — $1.63 more than last year. Traders are paying more for prompt deliveries than longer-term deliveries as they expect prices to drop in the future — a downward market structure known as “backwardation.” The market usually moves into “contango” — the opposite of backwardation, where demand is lower and suppliers build up inventory with the expectation of higher future prices in the summer. However, strong domestic and international demand, shrinking domestic refining capacity and sanctions on Russian petroleum imports have kept the diesel market tight throughout the year.

The Northeast Home Heating Oil Reserve holds one million barrels of diesel in case of a disruption in supplies. However, diesel demand is so high, that if a million barrels of diesel were delivered from the Northeast reserve, those barrels would be depleted in less than six hours.

Biden’s Strategies

The Biden administration recently announced it would be tapping into the country’s emergency oil reserves again to counter rising gasoline and diesel prices, despite concerns over the long-term efficacy. Due to the Biden Administration’s depleting the reserve since November 2021, the Strategic Petroleum Reserve is at levels not seen since June 1984. In November, Biden tapped the reserve for 50 million barrels of oil ahead of Thanksgiving. In March, Biden tapped the reserve again for 30 million barrels at the onset of Russia’s war with Ukraine. Shortly thereafter, Biden followed up that release with the 180 million barrel drawn down. Biden is now tapping the last 15 million barrels of the 180 million barrels just before Election Day to keep prices from rising as the electorate goes to the polls.

By the end of the year, Biden will have depleted 260 million barrels of oil from the reserve, which has an authorized capacity of 714 million barrels. The reserve now holds about 400 million barrels of oil, marking its lowest level since June 1984. The emergency petroleum reserve, established in the 1970s to prepare the United States for a sudden and severe disruption in supply is being used by the Biden administration to keep gasoline and diesel prices from rising.

White House officials are also considering petroleum export restrictions. Banning or limiting the export of refined products would likely decrease inventory levels, reduce domestic refining capacity through closures or conversion to biofuels, put upward pressure on consumer fuel prices and alienate U.S. allies during a time of war. In California, refiners producing biofuels currently receive a premium of $3.70 per gallon. Setting minimum inventory levels could also affect the number of exports being sent out to foreign countries. And even if domestic supply sees some relief, prices could still be pushed up around the rest of the world.

Meanwhile, two vessels carrying about 90,000 tons of diesel and jet fuel are scheduled to arrive in New York after being diverted from their original European destinations. In addition, Delta Air Lines’ Trainer refinery in Pennsylvania is poised to return from seasonal maintenance, which will help increase diesel output. Since 2020, the United States lost about 1 million barrels per day in operable refining capacity. Over the past decade, the number of refineries dropped to 129; in the Northeast, only seven refineries remain. Refinery utilization rates have been averaging above 90 percent. Despite knowing how tight the refinery market is, Biden is doing nothing to encourage more refineries to be built or expanding existing ones.

Conclusion

U.S. diesel inventories are unacceptably low as demand is surging ahead of winter — with only 25 days of supply left. The low level of inventory and the escalating prices, over $5 a gallon, has gotten the attention of the White House going into the mid-term elections. Diesel is the second largest cost to the trucking industry, after labor, and the high diesel prices will continue to affect inflation through the production and delivery of food and merchandise. As the SPR is being decimated of the quality of oil that U.S. refiners need, Biden is running out of ways to bring prices down. Further, the Northeast is in dire shape as winter approaches with distillate stocks down by about a third, inadequate pipeline capacity and fracking bans. The Northeast is taking on many of the characteristics of Europe when it comes to energy.


*This article was adapted from content originally published by the Institute for Energy Research.

The Unregulated Podcast #106: Goodnight Everybody

On this episode of The Unregulated Podcast, Tom Pyle and Mike McKenna discuss the future of the Yankees, midterm elections, and Bono’s midlife crisis.

Links: