American Oil and Gas Reporter - November 2021 - 25

Policies To Hurt Oil And Gas
Earning Media Attention
As Consequences Manifest
A growing number of major national media outlets are highlighting
the emerging U.S. energy crisis and the Biden administration's
anti-oil-and-natural-gas policies.
These policies-banning federal lands leasing, cancelling
pipelines, and pushing for a reconciliation package that includes
a proposed tax on natural gas and significant changes to the
federal oil and gas program-have created an uncertain environment
for responsible energy production throughout North America.
They are impacting consumers, local governments and businesses,
and helping contribute to a " sharp surge in energy prices that
threatens economic recovery, " as CNBC recently noted.
Now, the White House is asking the industry for help to
address this energy crisis, as Politico reports: " Oil industry
officials and experts said the White House team had experience
in renewable energy markets, but relatively few people with detailed
knowledge of oil markets-the problem of the moment. "
It is clear how the American oil and natural gas industry can
help if it is allowed to: by ramping up domestic production to
lower prices for consumers, reducing dependence on foreign
imports and continuing to operate at their world-class high
standards to lower emissions.
Here are a couple top national media highlights that note
this energy crisis:
Skyrocketing Energy Prices: CNN reports that " Gas prices
skyrocket as the global energy crisis worsens " as crude oil hit a
seven-year high of $80 in October and the price of gasoline has
nearly doubled since hitting a low of $1.77 in April 2020,
climbing 40% in 2021 alone: " All of this is leading to sticker
shock for many Americans filling up at the pump-at a time of
the year when gas prices typically cool off. "
As of mid-October, prices at the pump in 40 states average
more than $3 a gallon. In many parts of the country, prices are
nearing or surpassing $5 a gallon, Politico notes.
It's not only gasoline prices, but also a sharp increase in
home heating costs as the winter approaches. The U.S. Energy
Information Administration projects that households should
expect to pay 30% more for natural gas to heat their homes
compared with last year, as National Public Radio reports: " It
will cost $746 on average to heat homes with natural gas this
winter, while those who use electric heat can bank on spending
around $1,268 on their electricity bills this season. "
Reliance on Foreign Imports: The New York Times reports
that less domestic production merely increases foreign imports:
" But that doesn't mean the world will have less oil. That's because
state-owned oil companies in the Middle East, North Africa and
Latin America are taking advantage of the cutbacks by investorowned
oil companies by cranking up their production.
" This massive shift could reverse a decade-long trend of
rising domestic oil and gas production that turned the United
States into a net exporter of oil, gasoline, natural gas and other
petroleum products, and make America more dependent on the
Organization of the Petroleum Exporting Countries, authoritarian
leaders and politically unstable countries. "
" After more than a decade of domestic
production that promised reliable,
affordable energy, the United States faces a
completely different scenario this winter.
"
Now it appears the White House is fine accepting this new
reality as the Times notes:
" President Biden has effectively accepted the idea that the
United States will rely more on foreign oil, at least for the next
few years. His administration has been calling on OPEC and its
allies to boost production to help bring down rising oil and
gasoline prices, even as it seeks to limit the growth of oil and
gas production on federal lands and waters. "
The data backs this up: According to EIA, although the
United States exported more crude oil than it imported in 2020,
it will return to being a net energy importer in 2021 and 2022.
Because of cuts in domestic production, EIA also predicts
energy imports will increase 62% by 2022. And these imports
come from unfriendly nations. In May, American imports of oil
from Russia reached a historic high of more than 26 million
barrels, after averaging fewer than 20 million barrels for 2019.
Reducing supply does not also cut demand, a lesson the
Biden administration should have learned from California,
whose governor, Gavin Newsom, has admitted as much. " As
it relates to managing decline, we've got to address the issue
of demand, " he acknowledged. " California since 1985, has
declined its (oil) production by 60%, but only seen a modest
decrease in demand, 4.4%. And that means we're making up
for a lack of domestic production from Saudi Arabia, Ecuador
and Colombia, and that's hardly an environmental solution
when you look globally. "
The national media has connected the dots that sharply
curtailed domestic energy production means higher prices for
Americans and more foreign imports. After more than a
decade of domestic production that promised reliable, affordable
energy, the United States faces a completely different scenario
this winter.
❒
JEFF ESHELMAN is chief operating
officer of the Independent
Petroleum Association of America
and the founder/executive vice
president of Energy in Depth.
Along with more than two decades
at IPAA, he previously worked at
the Defense Logistics Agency, the
White House Office of National
Drug Control Policy and three
public affairs firms.
NOVEMBER 2021 25
American Oil and Gas Reporter - November 2021

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