During an interview with Brazil’s Agencia Estadio news service this week, I told the reporter that one of the reasons why I characterized the Biden energy policies as “confused” in a recent story is because we so often see the President saying one thing in public as his appointees in the federal bureaucracy are doing the opposite. We have seen this phenomenon take place repeatedly this year, as Mr. Biden has frequently called for the domestic industry to produce more oil and gas, refine more gasoline and ramp up exports of liquefied natural gas to Europe, while his agencies continue to hold up permitting, issue restrictive new regulations, and issue rulings that directly inhibit companies’ ability to get their business done.
It happened again this week, when the Environmental Protection Agency (EPA) announced it may soon issue a ruling declaring that vast parts of the Permian Basin are in “non-attainment” status under the agency’s ozone regulations. If such a declaration is made, it will constitute a direct governmental assault on what is by far America’s most active and productive oil-producing region and its second most-productive natural gas area. The Permian currently accounts for fully 43% of total U.S. daily oil production and is home to almost 40% of the nation’s active drilling rigs according to the Enverus daily rig count.
Thursday’s decision by the Supreme Court of the United States in the West Virginia v. EPA case is not expected to impact the agency’s ability to set standards on ozone levels and enforce them. If anything, it seems likely the agency, at least under a Biden presidency, will seek to become more aggressive in this realm as a backdoor means of continuing to force coal-fired power plants out of business and, as in this case, hamper the domestic oil and gas industry.
Placing the Permian Basin in non-attainment status would force a significant reduction in the region’s rig count, severely limiting the domestic industry’s efforts to increase U.S. oil production at a time when the global oil market is already severely under-supplied. Thus, while the President claims to want to “work like the devil” to lower gasoline prices and Energy Secretary Jennifer Granholm claims Mr. Biden is “using every tool” at his disposal to do so, the EPA is working to create the exact opposite impact.
Link to Forbes article.
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Meanwhile, over at the Interior Department, July 1 was also the day for issuance of a statutorily-mandated five-year off-shore oil and gas leasing plan. Nicholas Groom at Reuters has a summary here. The bottom line is, we’re going to completely shut down leasing off both the Atlantic and Pacific coasts, but maybe we’ll allow a little in the Gulf of Mexico or the Cook Inlet (Alaska). The number of auctions over the five-year period will be in the range of “zero to eleven,” and supposedly we’ll take public input as to which way to go. But Interior Secretary Deb Haaland in a statement left no doubt as to where she wants and expects this to come out:
"From Day One, President Biden and I have made clear our commitment to transition to a clean energy economy," Haaland said in a statement. "Today, we put forward an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing. The time for the public to weigh in on our future is now."
There is a 90 day period for public comment. You can be sure that environmental activist groups will flood the zone with thousands of comments to support the approach of the “zero” option of ceasing all further off-shore leases.
Blog article and discussion Here.
