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Skyrocketing Nickel Prices Threaten Biden’s EV Agenda

March 23, 2022 by Leave a Comment

Nickel prices have skyrocketed with Russia’s invasion of Ukraine due to fears that Russian supplies may be cut off. The disruption is causing supply problems for carmakers and others that need the metal. Nickel prices surged in the middle of March after which trading was temporarily suspended for several days and new restrictions were applied that did not initially work. A plunge in price at the open of trading several times triggered the exchange’s daily limit, below which no further trades were allowed.  Because nickel is a key component in batteries for electric vehicles, volatile prices could slow the transition away from gasoline and diesel vehicles, which may mean that President Biden does not reach his electric vehicle goal of 50 percent of vehicle sales being electric by 2030.

Background

Earlier this month, nickel’s price more than doubled in a matter of minutes. A large producer, Tsingshan of China, bet that nickel’s price would drop–a wager that went awry when Russia’s invasion of Ukraine threatened to disrupt already tight supplies. The rapid rise in price threatened Tsingshan and others with huge margin calls, prompting the London Metal Exchange, which handles all nickel trading, to halt trading and cancel trades made at the highest prices during the frenzy. Since then, attempts to restart trading and allow the market to settle on a price for nickel have faltered. Analysts expect nickel prices to drop, eventually, but to remain significantly higher than they were a year ago.

Automakers Are Rethinking Suppliers

As a result of the high prices and the suspension of trading, automakers are rethinking where they get the parts and metals they use to make cars and many other products. Automakers and other companies that need nickel, as well as other battery raw materials like lithium or cobalt, are looking for alternatives to shield against future price shocks. For example, Volkswagen is looking to buy nickel directly from mining companies. Besides Russia, there are known nickel deposits in Canada, Greenland and the United States in Minnesota. However, Biden’s Department of the Interior revoked existing federal leases for Twin Metals Minnesota to mine copper, nickel, cobalt, and platinum-group elements in January. Instead of producing these metals domestically, President Biden wants to import them.

Establishing new mining operations here or elsewhere will take years, even decades, because of the time needed to obtain the infrastructure and to acquire permits and financing. Automakers and other big nickel buyers will need to look for alternative suppliers, use more recycled material or switch to battery designs that require less nickel. In the meantime, consumers will have to pay higher prices for goods that need nickel, which also includes goods made from stainless steel. The nickel price increases in March would more than double the cost of the 80 pounds of nickel that an average electric car battery needs to $1,750 a car.

While Russia’s nickel is mainly used for stainless steel, Russian company Norilsk Nickel, also known as Nornickel, is the world’s largest nickel producer, with vast operations in Siberia. Norilsk is among a limited number of companies authorized to sell a specialized form of nickel on the London Metal Exchange. To date, the United States and Europe have not tried to block nickel exports.

Price Expectations for Nickel

Analysts expect nickel prices to come down to around $25,000 a metric ton compared to the peak of $100,000 a metric ton, and remain much higher than a year ago. The price of nickel topped $20,000 a metric ton this year after hovering between $10,000 and $15,000 a metric ton for much of the past five years because of limited production due to the pandemic. After Russia invaded Ukraine in late February, the price rose above $30,000 in a little over a week. Then on March 8, Tsingshan Holding Group of China made a bet that the price of nickel would drop. When the price rose, Tsingshan owed billions of dollars. The price then shot up to a little over $100,000 a metric ton, threatening the existence of many other companies that had bet wrong and prompting the London Metal Exchange to halt trading.

Electric Vehicle Prices Increase

Because the prices of metals used in cars have soared, including aluminum that is used in the bodywork, palladium used in catalytic converters, and nickel and lithium that power electric vehicle batteries, automakers are raising their prices for vehicles. Tesla, for example, raised its prices in China and the United States for the second time in less than a week, after Elon Musk indicated that it was facing significant inflationary pressure in raw materials and logistics. Tesla raised prices for all its models in the United States by 5 to 10 percent, and in China, Tesla raised prices of some China-made Model 3 and Model Y products by about 5 percent.

According to Edmunds data, the average transaction price for a new electric vehicle rose to $60,054 in February, $1,820 more than their average MSRP of $58,234. That compares to the average transaction price for all new vehicles at $45,596 in February. The higher cost of an electric vehicle may make buying one uneconomic even compared to higher gasoline prices. For example, a person who drives 20,000 miles a year in a vehicle that gets 20 miles per gallon will pay $2,250 a year for gasoline at $2.25 a gallon. Doubling the cost means just under an extra $200 per month for fuel. It would take over 6 years of the extra cost for gasoline at $4.50 per gallon to pay the price premium between an electric vehicle and a gasoline vehicle. Electricity prices are also spiking, especially in states retiring baseload power plants and pressing for more market penetration of renewable energy sources, such as California.

Conclusion

Commodity prices soared on supply fears related to Russia’s invasion of Ukraine, with the ongoing war and Western sanctions raising fears of disruption. Russia is a key producer and exporter of metals and grains and is the world’s third-largest producer of nickel—a key ingredient in stainless steel and a major component in lithium-ion batteries. The increase in metal prices is affecting the price of electric vehicles as Tesla recently announced a second vehicle price increase. Automakers are trying to find alternative metal suppliers, but until they do consumers can expect to pay more for an electric vehicle. The increased cost could affect President Biden’s plans for an electric vehicle transition in the United States, particularly as the electric vehicle price premium would take years to pay back compared to the current increase in gasoline prices. But, American consumers need to be vigilant as environmentalists are calling for a national climate emergency that could have Biden evoking even more stringent actions against U.S. oil and gas companies, raising prices further.

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

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Which Is It, Joe?

March 22, 2022 by 7 Comments

Joe Biden ran for president promising to end domestic production of natural gas, oil, & coal. Joe Biden hired a team of bureaucrats who zealously attacked American energy producers from day one. Now that the predictable consequences of his extremist agenda are coming to fruition Biden and his cronies are changing their tune. You can’t have it both ways, Joe.

Send a message to the White House demanding Biden abandon his anti-energy agenda!

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American Gas Could Save The World, If Biden Would Get Out Of The Way

March 18, 2022 by 1 Comment

Toby Rice, who runs the U.S. largest natural gas producing company, Pittsburgh-based EQT, indicated that the United States could easily replace Russian natural gas supply in Europe. He estimated the United States has the potential to quadruple its gas output by 2030. What is needed to accomplish that is more natural gas pipelines and LNG export facilities because U.S. LNG terminals are shipping close to all the gas they can and there are not enough pipelines to get the needed gas to export terminals. Unfortunately President Joe Biden’s Federal Energy Regulatory Commission regulators—an independent agency—voted that they must consider climate change in their approval process for natural gas pipelines and LNG facilities. Political opposition to building pipelines and export facilities for hydrocarbons is primarily preventing the U.S. natural gas industry from helping Europe end its reliance on Russian gas. The Biden administration needs to streamline the process for getting pipeline and LNG projects approved, rather than following its current course of finding ways to undermine the approval process.

Status of LNG Facilities

The United States is the world’s largest producer of natural gas and largest exporter of liquefied natural gas, shipping 100 cargoes of LNG a month, mostly to Europe. There are currently eight LNG terminals operating in the United States, with 14 more projects approved for construction, some of which are waiting on the political climate to see whether pipelines to move the gas to terminals will be allowed to be built. LNG facilities are expensive and complex, and few are willing to risk billions of dollars if the government is targeting their product. After a large number of decisions in 2019 to build new terminals, developers have approved just one project in the past two years. U.S. LNG developers have abundant gas and operating skills but have been hamstrung by U.S. regulatory uncertainty in expanding operations. The United States has enough natural gas to produce at its 2020 rate for nearly 100 years, according to the latest government estimates, but tapping the nation’s ample supply is constrained by lack of pipelines and export terminals, and the time it takes to build this infrastructure. Great strides were made between 2017 and 2020, which made today’s LNG shipments to Europe possible.

In January, U.S. exports of liquefied natural gas (LNG) to Europe exceeded Russia’s pipeline deliveries for the first time. Of the five dozen or so U.S. LNG tankers on the water, more than two-thirds headed for Europe. U.S. producers increased the share of exported LNG to Europe from 37 percent of U.S. LNG volumes earlier in 2021 to nearly half in January 2022. Exports of LNG from the United States to EU-27 and the UK increased from 3.4 billion cubic feet per day in November 2021 to 6.5 billion cubic feet per day in January 2022. In February, about three-quarters of the tankers that departed U.S. ports were headed for European destinations with less than a quarter headed to Asia.

Russian exports, which normally account for about 30 percent of Europe’s natural gas use, dropped substantially because of Russian cutbacks and pricing. As a result, European natural gas prices are about four times as high as normal, inviting U.S. exports of LNG to fill the gap. European gas trades at around $26 per million British thermal units. The price of American gas is a little over $4, but the costs of liquefying, transporting and gasifying the LNG need to be added to the U.S. price. In February 24 trading, as Russia launched its invasion of Ukraine, gas prices surged to over $37 per million British thermal unit. In early March, LNG spot prices jumped to a record high near $60 per million British thermal units, but have since declined to around $51.

The U.S. Energy Information Administration projects U.S. LNG exports will reach 11.4 billion cubic feet per day in 2022, accounting for about 22 percent of expected world LNG demand of 53.3 billion cubic feet per day next year, outpacing both Australia and Qatar. Prices have risen so much in Europe that traders of LNG cargoes would rather pay millions of dollars in penalties for non-delivery to other countries for the opportunity to sell the cargoes at a premium to European buyers.

Source: Reuters

The 6.4 million metric tons of LNG exported from the United States in February (about 307 billion cubic feet of gas) would have been worth about $17.2 billion in Europe at $56 per million British thermal units or $13.5 billion in Asia at $44 per million British thermal units.

FERC to consider climate impacts for new projects

The Federal Energy Regulatory Commission, a federal agency that considers whether to approve or reject natural gas pipelines, will weigh a project’s contributions to climate change as part of its decisions. In determining whether a project is in the public interest, FERC voted to examine greenhouse gas emissions from the project’s construction and operations — as well as the emissions from when the gas is ultimately burned to make electricity. The new guidance will be applied immediately, though it was only issued on an interim basis. FERC is currently accepting public comments on it, and may make changes down the line based on the feedback. At issue is that the ruling hamstrings the objectives of the Natural Gas Act, which is to encourage the orderly development of natural gas infrastructure, because the guidance is vague. It does not add clarity to the certification process, but instead creates more questions, which ultimately give opponents of hydrocarbons opportunities for “lawfare,” the use of legal filings as part of the war on hydrocarbons.

Senator Joe Manchin, Chairman of the Senate Energy and Natural Resources committee, argued that FERC went “too far.” “The Commission went too far by prioritizing a political agenda over their main mission – ensuring our nation’s energy reliability and security. The only thing they accomplished today was constructing additional road blocks that further delay building out the energy infrastructure our country desperately needs.”

Under the interim policy approved by FERC, developers will be required to provide FERC detailed analysis of future emissions along with plans to offset those emissions, potentially by capturing carbon dioxide and storing it underground. Developers will face a tougher bar than they did in years past, potentially lengthening the timeline on what is already a long and costly process to get natural gas infrastructure projects approved and survive legal challenges from environmental groups. It also raises costs for U.S. projects, which may threaten the economics of their proposals. For developers, far more rigorous analysis will be required on climate impacts, considering not just a pipeline or LNG terminal’s emissions but any increase in natural gas consumption they might facilitate. For an LNG terminal that might ship out more than 15 million tons of LNG a year that would produce over 40 million metric tons of carbon dioxide, convincing FERC that such a project is in the public interest could be a tough sell.

Some states want to move LNG by rail, but President Biden’s proposed rule to the Pipeline and Hazardous Materials Safety Administration (PHMSA) would prohibit LNG from being transported by rail car in the United States. This Biden proposal will have devastating effects on the economy, American energy, and national security. The Biden administration’s attacks on the U.S. oil and gas industry leave no stone unturned.

Conclusion

The Biden administration needs to recognize the American oil and gas industry as a strategic asset in our arsenal. America is positioned to play this role because of its abundant natural gas and its lead in the technologies and innovations needed to develop and export it as LNG. Not long ago some experts thought America was running out of natural gas and facilities were built to import it. But the U.S. shale revolution and the development of modern hydraulic fracturing and horizontal drilling made America an energy powerhouse. Rather than import LNG, U.S. facilities were configured to export LNG instead. While LNG exports are a small portion of domestic natural-gas production, they are about 20 percent of the global LNG market. The United States is set to have the world’s largest LNG export capacity by the end of this year, which creates jobs and growth and affordable energy at home and provides U.S. allies a stable energy source.

The United States could do even more if the Biden administration did more to encourage LNG infrastructure and allow the free flow of LNG markets. The Biden administration should make clear that America is positioned to provide stability amid any disruption. The Department of Energy and Federal Energy Regulatory Commission must act on applications for LNG export facilities pending before them and also establish a clear timeline for approval. Germany is fast-tracking two LNG import facilities that would need LNG from the United States if Nord Stream 2 is to be contained in the wake of Russian aggression in Europe. President Biden needs to reassure our allies that the United States will be a reliable supplier of energy.

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Rep. Ro Khanna Flip Flops After Seeing Poll Numbers

March 18, 2022 by Leave a Comment

Rep. Ro Khanna, a Democrat from California, has been putting pressure on domestic oil companies to lower production for months. In October he was interrogating oil CEO’s about why they were increasing production as their ‘European Counterparts’ were lowering their own—seemingly a moral good in Rep. Khanna’s eyes.

Now that gas prices in his state are above the $6 mark, he is singing a different tune. We now hear him bemoaning the rising price ad nauseam. He’s responding to the tidal wave of public opinion that has shifted rapidly in the wake of the rising price of gasoline, and ignoring his own hypocrisy as he does so. 

There is no admission that his own policymaking contributed directly to the present problem, or acknowledgment of the full 180 he’s made on the issue. He’s simply begun calling for increased production as though that has been his position all along. I’ve put together a video highlighting the hypocrisy that Rep. Khanna has openly displayed on this issue.

Read more from the AEA team about what is causing higher prices at the pump.

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The Unregulated Podcast #75: Irish Marauders

March 18, 2022 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna recap events in Ukraine from this week, Raskin’s nomination, and the White House’s response to high oil prices.

Links:

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Biden Doubles Down On Anti-Energy Onslaught

March 17, 2022 by Leave a Comment

Biden’s campaign promise: “No more subsidies for the fossil fuel industry. No more drilling including offshore. No ability for the oil industry to continue to drill period. It ends.”

That President Biden is now asking the U.S. oil industry to produce more is ironic after taking steps to do just the opposite. Further, he has little understanding of the workings of the industry when he stated: “U.S. producers “have 9,000 permits to drill now — they can be drilling right now, yesterday last week, last year. They have 9,000 to drill onshore that are already approved. So let me be clear, let me be clear: they are not using them for production now.”

What Biden is probably referring to are leases, not permits. A mineral lease is the exclusive rights to the mineral resources under a tract of land or seafloor that are awarded to the high bidders in competitive lease sales. Federal leases generally have 5 to 10 year primary terms, in which the winning lease holder pays rents to hold the lease. Once the lease holder receives permission to perform the appropriate exploratory tests and sets up the required infrastructure for drilling, the leaseholder applies for further permits to drill wells. Permits are good for two years, with the possibility of a two-year extension. Once the wells are producing, the leaseholder must pay royalties on the product(s) produced.

In the fall of 2020, with Biden leading in the polls, oil and gas companies filed for permits and permit renewals, mostly in New Mexico and Wyoming, where much of the drilling on federal lands takes place, realizing that the nation will still need oil and gas for many years into the future and aided by speedier permitting approvals under the Trump Administration. They were responding to fears that Biden’s pledges to have no “drilling, period” might prove true. Processing times for completed applications to the Bureau of Land Management (BLM) dropped from almost 140 days on average in the last year of Obama’s administration to 44 days in fiscal year 2019 under Trump. Companies submitted more than 3,000 drilling permit applications in a three-month period that included the election. Department of Interior officials approved almost 1,400 drilling applications, which is the highest number of approvals for that amount of time during Trump’s four-year term.

Source: Associated Press

However, while the Biden Administration continued to approve drilling permits, the rate of approval declined most likely due to an agency pivot toward Biden’s climate agenda and a continuation of his Administration’s war on the oil and gas industry. The drop was especially dramatic in August, according to BLM data. BLM issued 171 drilling permit applications in August—a 75 percent drop since April, when it approved 671 permits. The approvals remained more than 50 percent less than the April approvals for the rest of the calendar year as the graph below shows.

Source: BLM

The slowdown in approvals shows the Biden administration began curtailing oil and gas permitting in the summer to focus mainly on renewable energy development as COP26 was just a few months away. The data suggest the administration wants to show that it is meeting its obligation to issue permits for existing leases while avoiding further legal challenges so that it can turn toward implementing its climate agenda.

The following chart from BLM shows the increasing time to approve a permit in FY 2021 from FY 2020, with the average increasing by 30 days—from 59 to 89. Also note that almost 4 months of FY 2021 was when the Trump administration was processing the voluminous number of permit applications that were filed in the fall of 2020 as noted above.

Source: BLM

A further delay in permit approvals for oil and gas drilling can be expected. More recently, the Interior Department indicated that permits to drill for oil and gas on U.S. public land will be delayed due to a federal judge ruling against the Biden administration’s estimates of the social costs of greenhouse gas emissions. A Biden executive order in 2021 directed federal agencies to weigh environmental permitting and regulatory decisions by considering a metric for estimating the societal costs from carbon dioxide associated with those moves. A Louisiana-based federal district judge in February blocked federal agencies from using that “social cost of carbon” plan, following a lawsuit by Louisiana and other states challenging the way it was imposed. The social cost of carbon is a government creation that seeks to assess the costs and benefits of a project based upon its potential impact on carbon dioxide. The higher the number, the more government can justify its decision to oppose a fossil fuel project or action.

Because the court ruling bars the federal government from adopting or relying on the metric, in the short term, the Biden administration argues it disrupts current work on federal drilling permits as well as new regulations. For instance, according to the Interior Department, the injunction is expected to lead to delays in permitting and leasing for federal oil and gas programs. The Justice Department told the court that at least 27 environmental reviews at the Interior Department are affected. “The injunction has halted work” on applications for permits to drill on “at least 18 wells on federal oil and gas leases in New Mexico.” Some have suggested this is a convenient excuse to justify further implementation of President Biden’s promises of “no drilling, period.” The Biden administration is currently sitting on over 4,000 unprocessed permit applications.

Conclusion

Department of Interior data show that the Biden administration is continuing its war against U.S. oil and gas companies by delaying permit approvals despite the rhetoric of Joe Biden and Jen Psaki that the administration has done nothing to affect lower U.S. oil output. BLM is clearly approving fewer permits to drill and taking longer to process a permit. And, according to the Interior Department, the industry can expect further delays as a judge tossed out the administration’s social cost of carbon metric.

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

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A Windfall of Bad Ideas

March 11, 2022 by Leave a Comment

With sky-high inflation reminding people of the economic malaise of the Carter years, it appears that some Members of Congress are actually looking back fondly on those times and are actively trying to relive those days. The latest bad idea that Congress is trying to revive is a new tax on oil profits modeled after the tax on oil profits President Carter signed in 1980. This was a bad idea in 1980 and it’s a bad idea today.

This new tax on oil appears to be predicated on two core beliefs: 

  1. U.S. oil producers have been producing too much oil and Congress should disincentivize future oil production. 
  2. The price of gasoline at the pump is too low.

Imposing A New Tax on the Domestic Production of Oil Will Lead to Lower Domestic Oil Production and Higher Prices at the Pump

While the Biden Administration is working to try to get more oil from other countries including Saudi Arabia, Iran, and Venezuela, they refuse to take meaningful steps to increase domestic oil production. This new oil tax bill will further harm domestic oil production.

The Congressional Research Service reports that President Carter’s crude oil profits tax reduced domestic oil production by up to 8 percent and increased dependence on foreign oil by up to 13 percent. This new bill is a bit different, but penalizing domestically-produced oil on the world market would lead to lower domestic oil production over time. 

There are a few problems with this approach.      

First, 77 percent of Americans would like to replace Russian oil imports with domestically-produced oil. By making domestically-produced oil more expensive, this would make it harder to replace Russian oil with additional domestic oil production.  

Second, the biggest reason that global oil prices moderated from 2010 through 2020 was because of new oil production in the United States.  The United States added far more to global oil production over the past decade than any other country.  In fact, 81 percent of the increase in global oil production from 2010 through 2019 came from the United States.

While this proposed oil tax would make gasoline prices higher in the short term, it will lead to lower domestic oil production in the long term.

The Bill’s Sponsors Apparently Think Gasoline Prices Are Too Low and Could Benefit from a 50-cent per Gallon Increase

Everyone knows that prices increase when the government increases taxes, even Senators Whitehouse and Warren (two sponsors of this bill). This new bill would impose a tax on oil produced in the United States and oil imported into the United States for larger producers and importers. The bill calculates the tax with a formula comparing oil prices over the past few years to current prices. Americans for Tax Reform used the Energy Information Administration’s estimates in the Short Term Energy Outlook to find that the tax could be about $22.50 per barrel of oil.  

This oil-price increase could lead to an increase of 50-cent per gallon at the pump. This is because, as the St. Louis Fed estimates, every “$10 rise in the price of a barrel of oil is correlated with an approximately 25-cent increase in the price of a gallon of gasoline…” 

At this point, it is not clear if this tax would lead to precisely a 50-cent per gallon increase in the price at the pump, but it’s a good starting point. The problem is that the price at the pump has already increased every month since President Biden took office. Not only that, but the price of oil increased by 87 percent from Inauguration day until Russia invaded Ukraine on February 24th.  

While President Biden is not to blame for the entirety of this price increase, he is to blame for being hostile to domestic oil production while encouraging despots and dictators to produce more oil. In fact, last year he and others in the White House tried to put pressure on OPEC + (in effect “OPEC +” is “OPEC + Russia”) to produce more oil. 

At a time when oil prices are at historic highs, this is not the time to further increase the price at the pump. Unless, of course, higher oil and gasoline prices are the end goal of your Green New Deal, which we all know is exactly the plan.

Conclusion

Taxing the profits of oil companies was a dim-witted idea when President Carter signed it in 1980. It is no less dim-witted today. This new oil tax could translate to a 50-cent per gallon “tax” on the price at the pump and it would penalize domestic oil producers when trying to sell oil on the global market.  

There is never a good time for higher energy taxes, but particularly not ones that exacerbate inflation and weaken our domestic energy security.

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The Unregulated Podcast #74: Biden’s Blame Game

March 11, 2022 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss Biden’s attempts at deflecting blame for run-away inflation and the future prospects of the so-called “energy-transition” movement.

Links:

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Jen Psaki Doubles Down On Lies Against American Energy Producers

March 10, 2022 by Leave a Comment

When asked by a news correspondent this month if President Biden intended to reverse course and reinstate pro-America energy policies, White House Press Secretary Jen Psaki responded that there are 9,000 approved oil leases that the oil companies are not tapping into currently. But, as American Petroleum Institute President and CEO Mike Sommers indicates, her statement amounts to factual distortion. “Just because you have a lease doesn’t mean there’s actually oil and gas in that lease, and there has to be a lot of development that occurs between the leasing and then ultimately permitting for that acreage to be productive,” Sommers said. In fact, the industry is using a higher percentage of federal onshore and offshore leases than at any time in the past, and it is continuing to increase production to meet surging demand.

The U.S. oil industry has both developed and undeveloped leases and it pays the government fees for renting them, regardless of whether oil and gas is eventually found and produced. It generally takes 7 to 10 years for oil companies to determine whether a lease will become productive and for them to invest in the infrastructure that is needed to produce the oil. With the Biden administration trying to push banks away from funding oil and gas projects and instead spend money on renewable energy, it is no wonder that the industry is hesitating to make the investment needed. Besides the need to obtain necessary capital to make the investment, the oil industry is faced with the uncertainty caused by Biden and his administration about imposing new taxes and regulations on the industry that were contained in the Build Back Better Bill. Further, the Department of Interior agreed with upping the royalty rates on the industry when they performed the review Biden requested when he placed the ban on new oil and drilling on public lands.

Because Biden touted his anti-oil and gas policies during his campaign for the Presidency, there was a flurry of lease purchases in 2020, despite record-breaking low – and even negative – oil prices resulting from the demand destruction due to the COVID lockdown. Those fears were justified as President Biden shut down leasing activities on his first day in office, and his leasing moratorium continues, despite a judge indicating that only Congress had the authority to approve not holding lease sales since Federal laws required the lease sales. Finally bowing to the law and conducting one lease sale in the Gulf of Mexico in the fall, another judge invalidated it on the grounds that the government had failed to take climate change into consideration. Biden’s administration has done nothing to contest that judgment, and in fact was appealing the original judge’s order the same week as the lease sale. To Biden and his administration, it is better to import oil from OPEC+ (the + is mainly Russia), Venezuela or Iran than to help the U.S. oil industry.

In the same press conference that Psaki misrepresented the 9000 leases, she falsely claimed Joe Biden was not funding the Russian war effort by continuing to import over 650,000 barrels of oil from Russia every day (about 8 percent of U.S. oil imports and 3 percent of oil consumption). At $120 a barrel that equates to $78 million a day from the United States to Russia alone. As the world’s third-largest oil producer providing more than 10 percent of global supply, Russia raked in $119 billion in resource revenues last year.

Due to pressure from Congress, Biden announced a ban on oil, liquefied natural gas and coal imports from Russia, signing an executive order to that effect on March 8. The day before, a bipartisan group of American lawmakers agreed to move ahead with legislation that would ban Russian energy imports in the United States and suspend normal trade relations with Russia and Belarus. Some European countries, which are highly dependent on Russian energy, have expressed a willingness to reduce their reliance on those imports, as well. Biden’s order blocks any new purchases of those energy products and winds down the deliveries of existing purchases that have already been contracted for. The White House said the action also bans new U.S. investment in Russia’s energy sector and prohibits Americans from participating in foreign investments that flow into that sector in Russia. China, which controls the minerals necessary for Biden’s “green energy transition,” immediately stepped into that space.

Gasoline prices have now surpassed their high in 2008, reaching an average of $4.17 a gallon. But, that is what Biden wants as his Secretary of Energy Granholm indicated—rising oil, natural gas and electricity prices benefit the transition to renewable fuels and Biden’s energy agenda.

Conclusion

The Biden administration and particularly Jen Psaki need to better understand the oil industry and energy markets so that they stop spouting misleading statements about oil leases and other industry-related subjects. The reason there are 9,000 undeveloped oil leases is because companies do not want to invest the massive amounts of money and manpower necessary to drill for oil when the Biden administration is constantly threatening to impose new or increasing taxes, fees and regulations on the industry, and “working like the devil” through all the financial institutions to cut off their funding and “bankrupt them.” With the ban on lease sales on federal lands, Biden has shown the U.S. oil industry through his actions that he does not want to do business with them. He would rather import oil from OPEC, Venezuela and Iran than to further develop the U.S. oil industry. His actions speak louder than his words.

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Tom Pyle to Congress: Rising Prices A Feature of “Green” Policies, Not A Bug

March 8, 2022 by 1 Comment

Tuesday, March 8, AEA president Tom Pyle provided testimony before a hearing by The Subcommittee on Energy of the Committee on Energy and Commerce titled: Charging Forward: Securing American Manufacturing and Our EV Future.

Tom’s full written testimony is available here. A video of the hearing can be viewed below.

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