Biden's Oil Policies Threaten the Next Energy Crisis, Trade Group Warns - Yahoo Finance

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(Bloomberg) -- US oil and gas production is booming, but policies being imposed now could jeopardize the country’s energy might, the industry’s top trade group is warning Washington.

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That sobering outlook came from the American Petroleum Institute Wednesday, as it holds an annual gathering in the nation’s capital to highlight top policy priorities, amid concerns about climate change and conflicts around the globe that have heightened tensions over fossil fuel supplies.

US oil production hit a record in 2023, and it’s on track to surge to new highs this year, according to a forecast from the government’s Energy Information Administration. That’s yielded real dividends for American consumers and the industry, but it’s an outgrowth of activity by previous administrations that could be undone, API President Mike Sommers told industry officials, congressional staff and others at the event a few blocks from the Capitol.

“Washington is on the cusp of spoiling the American energy advantage, undermining it with short-sighted policies and hostility toward US oil and natural gas,” Sommers said.

In a separate interview, Sommers warned that the administration is sending signals and pursuing policies in a way “that is sowing the seeds for the next energy crisis.”

According to an API analysis, the US has increased production by about 1.6 million barrels per day since President Joe Biden took office — a historically high number. However, 1 million of those barrels came from private lands and 500,000 came from leases offshore and onshore sold during previous administrations. In general, oil and gas leases granted under Biden’s watch could take years to yield results.

Biden is under increasing pressure from climate activists to block oil and gas projects seen out of step with a warming world and the urgent need to phase down the use of fossil fuels.

The API — which represents some of the nation’s largest oil, pipeline and supply companies — is pressing for swifter permitting of energy projects, including licenses to broadly export liquefied natural gas around the globe, and more opportunities to pursue production on federal lands. That includes across the Gulf of Mexico, where Congress forced the Biden administration to sell drilling rights last year. That’s set to be the last auction of its kind until at least 2025, when there may be tighter limits and less available territory.

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The industry is worried that three potential future Gulf lease sales — tentatively planned by the Interior Department because they are required to issue new offshore wind rights — may be significantly scaled back or canceled altogether. It’s a “huge concern,” Sommers said, noting the relatively better environmental footprint for oil and gas production in the Gulf of Mexico versus other regions.

The API is pushing Congress to mandate more sales, advance LNG export permitting amid possible changes that could chill development and “stop” an Environmental Protection Agency plan to limit car pollution seen aggressively pushing electric vehicle sales, Sommers said.

Geopolitical concerns — including escalating violence aimed at Red Sea shipping — enhance the need for vigilance, Sommers said.

“Our adversaries have shown time and time again their willingness to weaponize energy,” Sommers said. “Our energy leadership is our security advantage,” but “unrealistic timelines” and government mandates toward 100% renewables and electric vehicles forfeit that to other countries.

While the trade group would welcome changes to a methane fee and other provisions of the 2022 Inflation Reduction Act, oil and gas companies are warning lawmakers against wholesale rewrites that could jeopardize tax incentives supporting carbon capture, hydrogen production and other ventures.

(Updates with API head comments at event, from third paragraph.)