American Oil and Gas Reporter - November 2022 - 12

IndustryDigest
Biden's SPR Release
Draws Sharp Criticism
WASHINGTON-In a move that has
drawn fire from policymakers and
industry representatives, the Biden
administration announced on Oct. 18
that the U.S. Department of Energy
would release another 15 million barrels
of oil from the country's strategic
petroleum reserve.
According to the Department of
Treasury, 2022 SPR releases and similar
actions from U.S. allies have trimmed
U.S. gasoline prices as much as $0.40 a
gallon and helped mitigate market
supply disruptions caused by Russia's
invasion of Ukraine. DOE says it plans
to release as much as 3 million barrels
of sour crude and up to 12 million
barrels of sweet crude, with deliveries
from Dec. 1 to December 31.
The administration promised to
replenish the SPR to previous levels
and reassure the industry by finalizing
a rule allowing fixed-price forward
purchases of crude oil to replenish the
SPR at lower prices than the barrels
sold. " Relative to conventional
purchase contracts that expose
producers to volatile crude prices, the
fixed-price contracts can give
producers the assurance to make
investments today, knowing that the
price they receive when they sell to the
SPR will be locked in place, providing
them with some protection against
downward movements in the market, "
DOE maintains.
Independent Petroleum Association of
America President and Chief Executive
Officer Jeff Eshelman advises against
using the SPR to manipulate crude oil or
product markets. " The SPR is America's
first line of defense against a major
disruption in domestic petroleum
supplies, " he relates. " Releasing more oil
from the SPR is a short-term fix for
prices at best. It not only reduces our
capacity to protect ourselves in case of a
true emergency in the future, but also
increases America's reliance on the
politically volatile countries that
currently provide most of our oil. "
The administration's decision came
shortly after the Organization of
Petroleum Exporting Countries
announced it would cut output by 2
million barrels day. Eshelman suggests
Biden's policies and rhetoric also
contribute to high energy prices, and if
12 THE AMERICAN OIL & GAS REPORTER
the administration is truly interested in
reducing U.S. dependence on foreign oil
and easing consumers' pain at the
pump, it will promote U.S. oil and
natural gas production.
It can do so " by streamlining the
permitting process and allowing
America's energy producers to continue
and expand work on federal lands, in
the Gulf, in Alaska and throughout the
nation-adding more oil to the
marketplace, increasing domestic
supplies and strengthening the nation's
energy security, " Eshelman says.
" Policymakers should oppose all
nonemergency sales of oil, regardless of
any political calculations that an
administration may want to make. "
Noting that the Biden
administration's announcement came
only weeks before the November midterm
elections, many GOP
policymakers described the move as an
effort to assuage voters' frustration
about high gasoline prices " The
Strategic Petroleum Reserve was built
for a national energy crisis-not for a
Democrat election crisis, " quips
Senator John Barrasso, R-Wy. " Joe
Biden is draining our emergency oil
supply to a 40-year low. His dismal
approval rating is not a justifiable
reason to continue to raid our nation's
oil reserves. The surest way to bring
down energy prices is to unleash
American energy production. " ❒
Appeals Court Tosses
States' Case Against
Social Cost Of GHGs
MINNEAPOLIS-The Biden
Administration's regulatory metric for
the social cost of greenhouse gases (SCGHG)
has withstood a legal challenge;
the U.S. Court of Appeals for the Eighth
Circuit issued a determination that the
states behind the lawsuit lacked
standing to sue.
" We conclude that the states are
requesting a federal court to grant
injunctive relief that directs 'the current
administration to comply with prior
administrations' policies on regulatory
analysis (without) a specific agency
action to review,' " writes Judge James B.
Loken in the Eighth Circuit's dismissal
of State of Missouri et al v. Biden et al.
Loken says such an injunction exceeds
federal courts' authority.
The dismissal notes that the policies
at issue affect how agencies engage in
quantified cost/benefit analysis before
adopting regulations or implementing
agency actions, and such analysis can
raise complex, controversial issues that
trigger intense disagreement. " But
absent a specific controversy that falls
within the judiciary's Article III power
to decide cases and controversies, these
policy disagreements are for the people
to decide through their elected
representatives in the legislative and
executive branches of government, "
Loken writes.
The states claim they will experience
revenue losses associated with the
economic fallout from regulations
informed by the metric. While such
economic injury can give a state
standing to sue, the dismissal notes, the
threatened injury must be certainly
impending and fairly traceable to the
conduct in question.
" The problem with this contention,
as the district court explained, is that the
alleged economic injuries are 'concrete'
only if we 'assume that at some point in
the future, one or more agencies will
'inevitably' issue one or more
regulations that rely in some way upon
the interim estimates; that such agency
will 'inevitably' disregard any
objections to the methodology by which
the interim SC-GHG estimates were
calculated; and that this yet-to-beidentified
regulation will then harm
plaintiffs in a concrete and
particularized way,' " Loken relates.
" This theory of injury in fact 'does not
satisfy the requirement that threatened
injury must be certainly impending
(because it) relies on a highly attenuated
chain of possibilities.' "
Along with Missouri, other states in
the lawsuit against the Biden
administration's SC-GHG metric were
Alaska, Arizona, Arkansas, Indiana,
Kansas, Nebraska, Ohio, Oklahoma,
South Carolina, Utah and Tennessee. ❒
Designation Removes
53,804 Colorado Acres
LEADVILLE, CO.-When President
Biden established the Camp HaleContinental
Divide National Monument
in Colorado on Oct. 12, the U.S.
Department of Agriculture characterized
the decision as an effort to preserve a
unique era of military history and a
American Oil and Gas Reporter - November 2022

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