Biden’s Latest PR Stunt Only Worsens Gas Prices

Both oil and gasoline prices increased after each and every time President Biden announced the release of oil from the Strategic Petroleum Reserve. Biden clearly does not understand the oil industry, as his actions have resulted in price increases rather than the decreases he predicted. He continually blames the increases on everyone else but his administration is following his own executive orders. By now, it would seem he would realize that he needs expertise from someone knowledgeable about the industry, but instead he seems to relish throwing up his hands and telling the American public that he is doing all he can. He clearly is not, because all he needs to do is start reversing the executive orders he put in place beginning day one of his Presidency that have attacked the oil and gas industry.

Biden announced he was releasing oil from the Strategic Petroleum Reserve (SPR) on November 23, 2021; March 1, 2022; and March 31, 2022. The first SPR release was a 50-million-barrel release, the second was a 30-million-barrel release and the third was a 180-million-barrel release. On May 31, national average gasoline prices reached an all-time high of $4.62 per gallon, according to AAA data, while domestic oil prices topped $120 a barrel, far higher than their 2015-2021 average of $53.15 per barrel and 2021 average of $68.14 a barrel, according to Federal Reserve data. As shown by the graph below, oil prices have more than doubled since Biden took over the Presidency. They have pretty steadily increased.

Source: Research Department at the Federal Reserve Bank of St. Louis

Gasoline prices are 52 percent higher than they were a year ago, but almost double what they were when Biden took office. While he likes to blame the high prices on the Russian invasion of Ukraine, the unused leases that the oil companies rent on federal land, and a myriad of other excuses, the truth of the matter is that he campaigned on ending oil and gas drilling and he and his administration are working toward that goal without regard to the American people and their needs. Besides that, he keeps promising American oil and gas to Europe in their time of need but does nothing to increase oil and gas production at home. Oil and gas exploration and production is expensive and no company is going to invest those funds if the policies from the Presidency are anti-oil and gas.

Source: Energy Information Administration

SPR Releases

On November 23, 2021, Biden announced that the Department of Energy would accelerate the congressionally-mandated SPR release of 18 million barrels of oil and release an additional 32 million barrels. He said other nations including China, India, Japan, South Korea and the U.K. also agreed to release oil from their strategic reserves. At that time, the oil price was $76.75 a barrel and the gasoline price was $3.40 per gallon—43 percent higher than when Biden took office.

On March 1, 2022, Biden announced a second SPR release of 30 million barrels that was in conjunction with 30 other International Energy Agency member nations. Together the global release was to total 60-million-barrels. The oil price was $95.72 a barrel on February 28 and increased to $103.41 per barrel on March 1 and $123.70 a barrel on March 8—the highest oil price since the 2008 recession. The average price of gasoline increased from $3.61 a gallon on February 28 to $4.10 per gallon a week later—72 percent higher than when Biden took office. According to the Energy Information Administration, the gasoline price has not dipped below $4 a gallon since the March 1 release.

On March 31, 2022, Biden announced the largest release to date, ordering the Department of Energy to release 180 million barrels of oil from the SPR between April and September. Biden predicted it would lower gasoline prices by 10 to 35 cents per gallon. The price of oil was $107.82 a barrel on March 30 and while it dropped a bit on March 31, remaining around $100 per barrel through April, it increased to $114.20 per barrel on May 16. In mid-May, gasoline prices hit multiple all-time highs and the price was $4.62 a gallon on May 31—the day after Memorial Day.

Lack of Refineries

A shortage of refining facilities is pushing U.S. gasoline and diesel prices to record levels. Gasoline prices topped $4 a gallon in all 50 U.S. states in May for the first time, even though global crude oil prices have pulled back from highs reached during the early days of Russia’s invasion of Ukraine. U.S. oil prices are hovering around $115 a barrel, down from over $120 a barrel in March. Because of the COVID lockdowns and the decreasing demand for petroleum products, some U.S. refineries shuttered and or are converting to biofuels in line with Biden’s preferences and massive subsidies favoring biofuels. The situation could worsen because there are no plans to add significant refining capacity due to the severe regulations governing them. In fact, by the end of 2023, an additional 1.69 million barrels of U.S. refining capacity is expected to close.

Around 3 million barrels a day of global refining capacity have already closed during the COVID pandemic and about 1 million barrels a day of that was in the United States. Besides the closures and retooling to biofuels, some U.S. refineries near the Gulf of Mexico were damaged due to hurricanes last year and some are undergoing maintenance, keeping even more capacity offline. The utilization rate for U.S. refineries is at about 90 percent, at the top of the five-year range. Refinery margins have been pushed to record levels, meaning that the refineries still operating will produce as much as they can.

Conclusion

President Biden needs an education in the oil and gas industry and he should seek out the appropriate expertise if he is at all serious about lowering gasoline prices for the American public. Blaming others will not help Americans struggling with historically high energy prices. The situation is dire and expectations are that they will get worse. There is insufficient refining capacity to meet gasoline and diesel demand to the point that Biden is considering restarting idle refineries, but that would produce opposite results from what Biden’s goals are with respect to the oil and gas industry and his administration’s assaults against fossil fuels. Americans should expect higher gasoline prices to come if Biden’s current policies continue.


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

Supply Chain Reality Crashes Biden’s EV Agenda

Automakers are raising prices on their electric vehicles due to rising commodity costs, specifically for key materials needed for EV batteries. According to the International Energy Agency, while battery costs have been declining for a decade, EV battery costs are expected to increase 14 percent this year to $150 per kilowatt hour. Another firm expects the demand for battery minerals over the next four years to increase the price of EV battery cells by more than 20 percent on top of already-rising prices for battery-related raw materials. Korean battery makers are talking about a 30 to 40 percent rise in prices soon. Prices have been rising because of supply-chain disruptions related to the COVID lockdowns, Russia’s invasion of Ukraine as Russia is a major nickel exporter, and not enough mineral supply to meet demand.

Source: International Energy Agency

Tesla

Tesla had to raise its prices several times over the last year, including twice in March after Elon Musk warned that Tesla was “seeing significant recent inflation pressure” in raw materials prices and transportation costs. Most Tesla models are significantly more expensive than they were at the beginning of 2021. The cheapest “Standard Range” version of the Model 3, Tesla’s most affordable vehicle, now starts at $46,990 in the United States, up 23 percent from $38,190 in February 2021.

Rivian

Rivian indicated on March 1 that both of its consumer models, the R1T pickup and R1S SUV, would get large price increases. The R1T would increase 18 percent to $79,500, and the R1S would increase 21 percent to $84,500. At the same time, the automaker announced new lower-cost versions of both models, with fewer standard features and two electric motors instead of four, priced at $67,500 and $72,500 respectively, close to the original prices of its four-motor vehicles.

Lucid

Lucid Group indicated that it will raise the prices of all but one version of its Air luxury sedan by about 10 percent to 12 percent for U.S. customers who place their reservations on or after June 1. Customers making reservations for a Lucid Air on June 1 or later will pay $154,000 for the Grand Touring version, up from $139,000; $107,400 for an Air in Touring trim, up from $95,000; or $87,400 for the least expensive version, called Air Pure, up from $77,400. The Air Grand Touring Performance, a new top-level trim announced in April with a 446-mile range, is unchanged at $179,000, but it is $10,000 more than the limited-run Air Dream Edition it replaced.

General Motors

GM increased the starting price of its Cadillac Lyriq crossover EV, raising new orders by $3,000 to $62,990. The increase excludes sales of an initial debut version. The price increase puts it closer to the price of the Tesla Model Y, which GM wants the Lyriq to compete against. The company is also including a $1,500 offer for owners to install at-home chargers. GM expects its overall commodity costs in 2022 to come in at $5 billion, double what the automaker previously forecast.

GM’s 2022 Bolt EV starts at $31,500, up $500 from earlier in the model-year, but down about $5,000 compared with the previous model year and roughly $6,000 cheaper than when the vehicle was first introduced for the 2017 model-year.

Ford Motor

Ford plans to maintain the pricing on its new electric F-150 Lightning pickup, which recently started shipping to dealers, at $39,974. Ford expects $4 billion in raw materials this year, up from a previous forecast of $1.5 billion to $2 billion. If the Lightning does see a price increase, the 200,000 existing reservation holders would be exempt.

Nissan

Nissan indicated an updated version of its electric Leaf, which has been on sale in the United States since 2010, would maintain similar starting pricing for the vehicle’s upcoming 2023 models. The current models start at $27,400 and $35,400. Nissan Americas plans to absorb as much of the external price increases as possible, including for future vehicles such as its upcoming Ariya EV. The 2023 Ariya will start at $45,950 when it arrives in the United States later this year.

The Electric Car Market

Gasoline prices have increased 93 percent since Joe Biden became President, with American families now having to spend $5,000 on gasoline—a huge increase from a year ago when it cost American families about $2800 for gasoline. While Secretaries of Transportation and Energy Buttigieg and Granholm expect those prices to make Americans purchase electric cars that are more expensive than gasoline cars, they may want to think twice given the price increases in most EVs mentioned above. The electric car sales in the United States have not put a dent in the demand for gasoline, which is still growing.

As noted above, all-electric manufacturers are raising prices more steeply than mixed-fleet manufacturers, because mixed-fleet manufacturers can shift costs to buyers of internal combustion engines. For example, GM was reportedly losing $9000 per Chevy Bolt in 2017, although battery costs have declined since then. Those losses are absorbed by purchasers of Chevy trucks and other vehicles with internal combustion engines. This helps make the cars most Americans buy increase in price while solely electric companies must raise prices across the board. It also means that Americans indirectly subsidize the cost of electric vehicles when they buy a car, truck, or SUV with an internal combustion engine.

Electric vehicles currently make up less than 1 percent of the U.S. car fleet, about 3 percent of new car sales. While EV sales in China and Europe are higher than those in the United States, it will still take decades to replace the ~1,300 million oil-based cars around the world since there are only ~13 million electric cars globally, particularly since most of the developing world isn’t purchasing electric vehicles.

Conclusion

While President Biden wants EVs to garner 50 percent of the new car market by 2030, that doesn’t look likely. With EV prices increasing due to a mineral shortage that is raising the cost of batteries, EVs are being priced out of the range of most American families. Further, Biden’s energy price increases are not just with gasoline and oil, they extend to natural gas and coal, which generate 60 some percent of U.S. electricity. Since Biden became President, natural gas prices to electric utilities have almost doubled and residential electricity prices have increased by almost 10 percent, according to EIA data through February. Natural gas futures for June delivery rose to $9.30 per million British thermal units having tripled over the past year. Americans can expect to see further electricity price increases, which will impact the cost of operating EVs.


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

The Unregulated Podcast #86: Lived Experience

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the disparity between the pronouncements being made by the Biden administration and the lived experience of American families struggling due to Biden’s policies.

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Will Europe Learn From Its Most Recent Energy Crisis?

Did Vladimir Putin awaken the West from its dangerous and reckless sprint to renewable energy? Are they realizing that the world needs all forms of energy? Diversity of supply was once an important message for energy security, but diversity of supply no longer is mentioned. However, some overtures seem to be baby steps in the right direction:

  • U.S. LNG exports are gaining American interest,
  • Europe is talking about drilling in the North Sea,
  • California may keep its Diablo Canyon nuclear plant online,
  • Germany plans to put idled coal plants on standby in case Russian natural gas is cut, and
  • FERC is pulling back on its “social cost of carbon” estimates when considering gas pipeline approvals.

Survey on U.S. LNG Exports

Pew Research Center conducted a survey on climate and energy issues, surveying 10,282 U.S. adults from May 2 to 8, 2022. Those who took part in the survey are members of the Center’s American Trends Panel—an online survey panel that is recruited through national, random sampling of residential addresses. The survey is weighted to be representative of the U.S. adult population by gender, race, ethnicity, partisan affiliation, education and other categories. About 61 percent of Americans indicated they would favor the United States expanding production to export large amounts of natural gas to European countries. That compares to a smaller share (37 percent) that would oppose it.

Source: Pew Research

Europe May Drill in the North Sea

Germany and the Netherlands are moving closer to drilling for natural gas in the North Sea as part of broader efforts to reduce Europe’s reliance on Russian energy imports. The German state of Lower Saxony and Dutch energy company ONE-Dyas BV are looking to produce natural gas from undersea deposits 20 kilometers (12 miles) north of the islands of Borkum and Schiermonnikoog. A final investment decision is expected by summer, and drilling could start by the end of 2024.

Russia cut gas supplies to Poland and Bulgaria due to their refusal to pay in rubles and to Finland for wanting to join NATO. The urgency behind political efforts to reduce dependence on Russian energy could prompt authorities to set aside environmental concerns about new drilling. While the European Union plans to phase out oil and coal imports from Russia, natural gas is harder to offset because of the large volumes imported from Russia and because of pipelines and other infrastructure in-place.

California May Keep Its Last Nuclear Plant On-line

California Governor Newsom is reconsidering shuttering the Diablo Canyon nuclear plant—the last nuclear plant remaining in California and its largest source of electricity. Newsom indicated that the state would seek a share of $6 billion in federal funds meant to rescue nuclear reactors facing closure. Diablo Canyon owner Pacific Gas & Electric is preparing to shutter the plant—which generated 6 percent of the state’s power last year—by 2025. While Newsom still wants to see the facility shut down long term, his willingness to consider a short-term reprieve reflects a shift in California politics of nuclear power. About six years ago, PG&E agreed to close the plant near San Luis Obispo, rather than invest in expensive earthquake-safety upgrades.

UC Berkeley poll co-sponsored by The L.A. Times found that 44 percent of California voters support building more nuclear reactors in California, with 37 percent opposed and 19 percent undecided. The poll also found that 39 percent of voters oppose shutting down Diablo Canyon, with 33 percent supporting closure and 28 percent unsure.

Germany May Put Idled Coal Plants on Standby

Germany plans to order coal-fired power plants that were due to be shut down to be placed in reserve to help ensure the country can keep the lights on if supplies of natural gas from Russia are abruptly cut. The country wants to be able to fire up its remaining coal, lignite and small amount of oil plants (8.5 gigawatts of total capacity) on short notice. The measure if approved by the cabinet would remain in effect through March 31, 2024. Participation would be voluntary and operators would be compensated from public funds for holding feedstock ready and for providing the necessary technical assistance. Power prices should not increase because coal-fired generation is relatively cheaper than natural gas generation in Germany.

Natural gas, much of which is imported from Russia, accounted for 15 percent of Germany’s electricity generation in 2021. Germany has imported abundant supplies of natural gas from Russia as a replacement for coal in order to meet its goal of reducing carbon dioxide emissions by 55 percent of 1990 levels by 2030. Last year, due to high natural gas prices, coal-generated power in Germany increased almost 5 percent, accounting for about 30 percent of Germany’s electricity production.

FERC Delaying Its Move to Use Climate Change in Approving Gas Projects 

Amid pushback from industry and lawmakers in both parties, in March, federal energy regulators scaled back plans to consider how natural gas projects affect climate change and environmental justice. According to the Federal Energy Regulatory Commission (FERC), its plan to consider climate effects will be considered a draft submitted for comment and will only apply to future projects, rather than taking effect immediately. Industry groups and lawmakers criticized the proposal approved in February by a 3 to 2 vote to tighten climate rules because it was poorly timed amid a need for increased natural gas exports, as Europe wants to wean off its dependence on Russian natural gas. Senate Energy Committee Chairman Joe Manchin said the agency’s “reckless decision to add unnecessary roadblocks” to approval of natural gas projects “puts the security of our nation at risk.”

FERC approved three natural gas projects that have been pending for months. Two of the projects will expand gas production in the U.S. Gulf Coast, while the third is located in New York State.

According to the Energy Information Administration (EIA):

“FERC approved two projects that connect to LNG terminals in Louisiana. The Evangeline Pass Expansion Project is a 1.1 billion cubic feet (Bcf/d) project owned by Tennessee Gas Pipeline Company. The project includes 13.1 miles of new pipeline and two new compressor stations that will deliver natural gas to the proposed Plaquemines LNG Project in Plaquemines Parish, Louisiana. The Alberta Xpress Project is a 0.17 Bcf/d project owned by TC Energy that will use existing capacity on the Great Lakes Gas Transmission (GLGT) system and the ANR pipeline and will add a new compressor station in Evangeline Parish, Louisiana. The project expands capacity from the GLGT receipt point at the Minnesota-Manitoba border to delivery points in the U.S. Midwest and U.S. Gulf Coast, increasing the available capacity for LNG export facilities in the region. This project also improves the domestic natural gas infrastructure in those areas.”

EIA estimates that over 0.43 billion cubic feet per day of new natural gas pipeline capacity was completed in the first quarter of 2022. In 2021, EIA estimated that the United States added 7.44 billion cubic feet per day of new pipeline capacity—the lowest amount added to interstate transmission since 2016, when President Biden was then Vice President.

Conclusion

The tides may be slowly turning for the energy transition touted by Europe for decades and the push in the United States to follow along. Newsom is considering keeping California’s last operating nuclear plant online instead of shuttering it by 2025, Europe may drill for natural gas in the North Sea, Germany may put idled coal plants on standby, FERC is holding off considering climate change effects in approving natural gas pipelines, and most Americans want to produce more natural gas to sell as LNG to Europe. Russia’s invasion of Ukraine may have awakened politicians and lawmakers as they seek to reach net-zero carbon by 2050. The impossibility of the task may be becoming reality. Let’s hope so, for diversity of supply is the only way to ensure national security.


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

Biden Ignores Real Problems Driving High Gas Prices

The White House is looking at issuing an emergency declaration that would empower President Joe Biden to release diesel from the federal Northeast Home Heating Oil Reserve to address diesel shortages on the east coast. The release, however, would provide limited, short-term relief since the reserve only contains 1 million barrels of fuel. Further, it is reminiscent of Biden’s much larger release from the strategic petroleum reserve where oil prices only declined for a very short period. Since Biden started releasing oil from the strategic petroleum reserve last November, oil is up 42 percent and diesel is up 51 percent. The President continues to look for short term fixes, band-aiding the problem, rather than actually solving it with by promoting more oil production and refining capacity, which would increase supply.

The East Coast Diesel Shortage

The East Coast is reporting its lowest seasonal diesel inventory on record. The region, which typically stores around 62 million barrels of diesel during the month of May, is reporting under 52 million barrels.  According to DOE figures, the price per gallon of diesel has reached $5.613 per gallon nationally and $5.944 on the East Coast—more than double last year’s price.

In the past 15 years, the number of refineries on the U.S. East Coast has halved to seven, reducing the region’s oil processing capacity to 818,000 barrels per day, down from 1.64 million barrels per day in 2009. As recently as mid-2020, it was 1.224 million barrels per day. The drop in refining capacity occurred while East Coast oil demand remains strong. Refineries suffer from intense regulations that have limited the opening of new refineries. While the Great Recession of 2008 led to several East Coast refineries shuttering, shutdowns are continuing. One major Philadelphia refinery shuttered in 2019 after a fire and subsequent opposition from anti-oil groups and another refinery in Newfoundland shut down in 2020.

The Northeast has increasingly relied on diesel from the Gulf region, which is mostly shipped to the Northeast through the Colonial Pipeline–—a 5,500-mile pipeline that takes diesel 18 days to reach Linden, New Jersey from its source in Houston. In that amount of time, a company could send a shipment of diesel and find that its value dropped by $1 per gallon by the time it reached New Jersey. That could mean hundreds of thousands or more in lost profits, so traders prefer to avoid the situation, which is called backwardation. Backwardation refers to the market condition in which the spot price of a commodity is higher than its futures price. Press reports had indicated that volumes on the Colonial pipeline were at lower levels than usual, but more recent reports are that the pipeline is fully subscribed.

New England diesel retail prices are up 78 percent from the beginning of 2022, totaling $6.341. In the mid-Atlantic, diesel is up 68 percent at $6.36. The spread between a gallon of diesel in the Gulf Coast and its New York harbor price is usually just a few cents. More recently, that difference was up to 66 cents. But that amount is still not enough to move oil to the Northeast — particularly when traders can make so much more selling diesel abroad without the risks described above.

Due to Russia’s invasion of Ukraine and the subsequent sanctions, Europe is looking to get diesel from other sources. In 2019, Europe consumed about 6.8 million barrels of diesel each day with Russia exporting about 600,000 barrels per day. Because Europe has only eliminated one-third of its Russian diesel, prices are expected to continue to increase. Latin America, too, has been importing U.S. diesel. Waterborne exports of diesel from the U.S. Gulf Coast hit record highs in April, according to oil analytics firm Vortexa. Also, due to the COVID lockdowns, refineries on the East Coast scaled back due to staffing shortages. It can take six months to a year to reignite refineries that were previously shuttered.

Northeast Home Heating Oil Reserve

Only once before has the government released diesel from the Northeast Home Heating Oil Reserve: in the aftermath of Superstorm Sandy in 2012. The reserve was established in 2000 to meet a supply crunch caused by a severe winter storm. In 2011, it was converted from home heating oil to ultra-low sulfur distillate, a cleaner-burning diesel used to power engines in trucks, tractors and other vehicles.

Diesel, like gasoline, is a vital fuel for the U.S. economy, powering farm and construction equipment and trucks, trains and boats that move goods across the country. Skyrocketing diesel prices will likely get passed along to families, contributing to what is already America’s worst inflation in four decades, which is why the White House is concerned and has asked for the reserve to be studied regarding its release. This response is a band-aid, rather than a long-term strategy. It would be preferable to stop the shuttering of refineries and change the regulatory environment for more to be built. The Trump administration tried to reopen the Philadelphia refinery that shuttered in 2019, to no avail.

Conclusion

Biden continues to Band-Aid, rather than deal with policies that will solve the problem. Now, he is considering using a 1-million barrel reserve to deal with high diesel prices on the east coast. He needs to realize that there is a supply shortage compared to demand, which is increasing, and introduce policies that will increase domestic oil production and increase refinery output. These actions needed to be instituted at the start of his administration because the COVID lockdowns decreased output from industries due to their closure. The oil and refining industries were no different. Getting back to pre-COVID levels has not happened and this administration is not helping matters, starting with the cancellation of the Keystone XL pipeline and the continuing moratoria on oil and gas leasing on public lands, owned by Americans, who would like reasonable gasoline and diesel prices. Even Senate Energy and Natural Resources Committee Chairman Joe Manchin indicated that the Biden administration’s oil and gas leasing policies have “put America’s energy security at risk.”


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


Biden Has Taken “Over 90 Actions” To Make Energy More Expensive: Tom Pyle on Varney & Co.

Friday, May 20th, AEA president Tom Pyle joined Stuart Varney on Fox Business to discuss Democrats’ energy policies. Watch the video below to see Tom explain how the litany of executive actions taken by the Biden administration has driven up energy prices in the United States. Read the full list of things Biden and Congressional Democrats have done to attack American energy producers here.

The Unregulated Podcast #85: The Future Is Built By Us

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the latest pronouncements from the World Economic Forum and other headlines from across the country.

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

Joe Biden and the leadership of the Democratic party 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 100 actions deliberately designed to make it harder to produce energy here in America.

32 of these anti-energy proclamations were enacted after the Russian invasion of Ukraine, which Biden regularly touts as an excuse for rising gas prices.

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.

The Democratic plan for lower gas prices is simple: blame everyone else, buy an electric vehicle, and don’t be poor. The Biden administration has made it clear they value the support of the radical environmental lobby more than lowering prices at the pump.

Below is a list of 100 explicitly anti-energy actions taken by the administration since Biden took office last January. 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. 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. 
  2. 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. 
  3. Biden is seeking $50 billion for programs to address climate change, 
  4. including $18 billion to build the U.S. government’s resilience to climate change, 
  5. $3.3 billion in funding for clean energy projects and at least $20 million for a new “Civilian Climate Corps.” 
  6. To help pay for the increased climate spending, Biden is asking Congress to eliminate tax provisions that aid domestic energy production, 
  7. 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.  

On April 28, 2022,

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

On 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.

On 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.

Gas Rationing To Return This Summer?

Petroleum product shortages may be ahead as motorists, truck drivers, farmers and airlines are grappling with increasing demand for gasoline, diesel and jet fuel. Despite refiners focusing on diesel in lieu of gasoline this spring, a global diesel shortage is looming. Refiners are planning to spend the summer increasing jet fuel and diesel production instead of gasoline because refining oil into diesel or jet fuel is currently more profitable than making gasoline despite those fuels historically being the least profitable parts of the barrel. Currently, the profit margin on distillates is nearly $60 a barrel, while the margin to make gasoline is $34. As a result, it is unclear what the availability or price of gasoline will be this summer as Americans increase gasoline demand by taking vacations as school lets out.

Diesel

number of reasons caused diesel prices to increase to record levels including refinery shutdowns and refinery conversions to biofuels that have reduced capacity, a surge in natural gas prices (used in the production of diesel), a reduction in the sulfur content of maritime fuels which has put pressure on refining capacity and, of course, high oil prices. Seven refineries, which processed 806,000 barrels of oil per day, have shut down or are being converted to biofuels, leaving the United States with 124 operating refineries, down more than 10 percent since 2016. Total U.S. operating refinery capacity fell 4.5 percent between the COVID years of 2020 and 2021 to 17.7 million barrels per day–—its lowest level since 2013. With less refinery capacity, the volume of fuel refiners can produce has been reduced. With the United States exporting more diesel to Europe, the continent’s primary motor fuel, due to Russia’s invasion of Ukraine, the volume of diesel normally available domestically has been reduced further. In the past several weeks, distillate exports have returned to mid-2019 levels.

Source: Reuters

The U.S. stockpile of diesel fuel has hit a nearly two-decade low. The nationwide stockpile of distillate fuel oil declined to about 104 million barrels, the lowest level since April 2008. East Coast inventories declined to 21.3 million barrels of diesel–— about two weeks supply–— the lowest level since data was first recorded in 1990. The average cost of diesel fuel surpassed $5.56 a gallon –— the highest level ever recorded. Diesel is vital for the construction, mining and agriculture sectors, and is central to our transportation and logistics systems. In 2020, the transportation industry alone consumed 122 million gallons of diesel per day.

Gulf Coast refineries, which account for about 45 percent of the nation’s refining capacity, are operating at 94 percent utilization, compared to 88 percent in the Midwest. In the Midwest, demand from local farmers has been weak due to unseasonably cold weather that has delayed planting season. Recently, planting was just 4 percent complete compared to the five-year average of 6 percent, according to the U.S. Department of Agriculture. Chicago ultra-low-sulfur diesel was trading 21.5 cents per gallon below diesel futures; at this time last year, it was 5 to 8 cents above that benchmark.

Jet Fuel

Refiners have also increased jet fuel production as air travel has rebounded from the COVID lockdowns. On the East Coast recently, jet fuel traded at more than $100 per barrel above Brent oil futures in early April as inventories touched 32-year lows. The East coast has some of the world’s busiest airports.

Source: Reuters

Conclusion

There is the possibility that there may be calls to ration diesel in parts of the country this summer, despite refiners currently prioritizing diesel instead of switching operations to gasoline ahead of the summer driving season. Refinery margins for diesel are at $60 per barrel—about twice that of gasoline. It will be interesting to see if the diesel situation spills over to jet fuel and gasoline, although the link is already apparent in jet fuel prices.

The major reason for escalating petroleum prices in this country is President Biden’s anti-oil and gas policies. His administration recently canceled three offshore lease sales, after canceling the Keystone XL pipeline and placing a moratoria on oil and gas drilling on federal lands. Despite his assurances that he is “working like the devil” on the oil and gas problem, oil companies will not invest in new wells and fields under the current Biden administration because all its actions are designed to lower long-term production and increase prices as a means to achieve its “net zero” aspirations. President Joe Biden promised this when he said, “no ability for the oil industry to continue to drill, period, ends.” Given that background and nothing but actions confirming that goal since taking office, the regulatory situation is too uncertain for positive action to be taken by oil companies. Americans are going to be hurt.


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

Biden Sends Tax Dollars Abroad While Shutting Down Mines At Home

President Biden and his administration do not want to mine American-owned minerals on public lands. Rather, Biden wants to use American taxpayer funds. The Department of Defense asked Congress to let it fund facilities in these countries that process strategic minerals used to make electric vehicles and weapons. Existing law does not allow Defense Production Act funds from being used to dig new mines, but they can be used for processing equipment, feasibility studies and “upgrades” to existing facilities. Currently, only facilities in the United States and Canada are eligible for that funding. If the Pentagon’s request is approved, the change would be included in the 2023 National Defense Authorization Act which the House Armed Services Committee is expected to review later in the year. Evidently, the Department of Defense is worried about where the United States will get the vast amounts of “clean energy transition” minerals and is taking steps to alleviate the looming problem.

The request was made to supposedly reduce America’s dependence on China for lithium, rare earths and other minerals used to make weapons, wind turbines and a range of technologies. Minerals, such as copper, cobalt, nickel, graphite and zinc, are essential for renewable technologies. But, the mining and processing are dominated by China and other hostile nations’ mineral supply chains. In 2021, the United States produced just 6 percent of the global copper supply, 0.4 percent of global cobalt supplies, 0.67 percent of the world’s nickel, 0 percent of global graphite supply and about 5.7 percent of the world’s zinc.

There are numerous cases of the Biden administration blocking critical mineral mine development in the United States and the Obama/Biden administration before that. The Biden administration has revoked federal leases; used regulatory action to delay or revoke mining, air pollution and water quality permits; and labelled a flowering plant endangered as ways to delay or cancel metal mines in the United States. To make Americans believe that he is doing something positive toward mining in the United States, President Biden invoked the Korean War Era Defense Production Act on March 31, 2022, to increase domestic production of minerals used in making electric vehicles, such as nickel, lithium and cobalt. But, Biden’s action did little to increase domestic mining because he did not waive, streamline or suspend existing environmental and labor standards, nor did he address a major hurdle to increased domestic extraction of these critical minerals: the years-long process needed to obtain the necessary federal permits for a new mine. In fact, on April 15 the Department of Interior released a new policy allowing “compensatory mitigation” for anyone using government lands, which basically allows bureaucrats to demand “payola” from those wishing to get a permit for, among other things, mining activities.

UK and Australia Minerals

The United Kingdom is home to many natural mineral deposits, from fossil fuels such as coal, metals such as tin and copper, industrial minerals like china clay, and precious metals such as gold and silver. The United Kingdom refines nickel and has several proposed processing facilities for lithium and rare earths, although energy has gotten so expensive recently in the UK and other parts of Europe as a result of the green energy transition that some facilities have been forced to close.

Australia is one of the world’s leading producers of bauxite (aluminum ore), iron ore, lithium, gold, lead, diamond, rare earth elements, uranium, and zinc, and rare earth elements, a group of 17 metals used to make magnets that turn electricity into motion as well as for other uses. Australia also has processing facilities for a range of minerals, including iron ore, lithium, copper and rare earths.

Department of Defense Grants

The Pentagon last year awarded a grant worth $30.4 million to Australia-based Lynas Rare Earths Ltd to build a processing facility in Texas with privately held Blue Line Corp. However, last month, Lynas Chief Executive Amanda Lacaze complained that those funds have yet to be dispersed, citing ongoing negotiations over protection of her company’s intellectual property. The Pentagon has also granted at least $45 million to MP Materials Corp, which controls the only U.S. rare earths mine but depends on China for processing, and, in fact, is part-owned by Chinese interests. MP recently started receiving the funds and the Pentagon will have “certain rights to technical data” because of the financial support. Both these awards were started under the Trump administration.

Conclusion

Instead of promoting critical mineral development in the United States, the Biden administration is placing roadblocks in the way of developers despite telling the American public that he is doing all he can to develop such an industry. There are numerous examples of mines that have not been able to move forward despite spending a decade trying to do so. Now, the Department of Defense wants Congress to allow American tax dollars to be used for processing facilities outside our borders. Keeping critical mineral mining and processing within the United States would create jobs, revive the mining industry and help to ensure the United States is independent of China and other hostile nations.


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