Oil: between ecology and energy, the US government walks a tightrope

Between ecology and energy, the United States government walks a tightrope: while pressuring the local oil industry to produce more after the embargo on Russian crude oil exports, it seeks to promote the transition to clean energy.

“You can walk and chew gum at the same time!”, US Energy Minister Jennifer Granholm launched on Tuesday before industrialists gathered at the annual CERAWeek conference in Houston (Texas), while calling for promoting exploration and production without neglecting environmental objectives.

The metaphor did not sit well with the oil lobby, which has been criticizing Biden’s energy and environmental policies for months, long before the Russian invasion of Ukraine, which caused a new spike in oil prices.

“The Biden administration continues to blame everyone but itself for rising gas prices”, protested Phil Flynn, oil market analyst at Price Futures Group.

“They blamed supply chain problems and now they gleefully blame Putin”, commented this expert.

“What they do not consider is the cancellation of the Keystone pipeline and the moratoriums on drilling on federal lands”, he emphasized.

However, according to the Center for Biological Diversity, the federal government approved 3,557 oil and gas exploitation permits on federal land in 2021, “far exceeding the number of permits agreed by the (Donald) Trump administration in his first year in office (2017), which was 2,658″ permissions.

Gasoline prices in the United States soared to levels not reached since the 2008 financial crisis, with the gallon (3.8 liters) well above $4 on average, a dollar more than before the Ukraine invasion and above of a psychological dimension that disturbs motorists in the country.

reviews skyrocket

Biden’s Secretary of Energy assured that this new need for fossil fuel supply, to try to lower prices at gas stations, does not question the government’s commitment to the energy transition.

“We are very serious about decarbonization” of the country’s economy, Granholm emphasized.

But criticism is fired at the government’s initiatives, both for the annulment of Keystone’s permit, one of Joe Biden’s first measures upon reaching the White House, and for the possibility of resorting to sanctioned producers such as Iran or Venezuela.

“The government wants to relaunch energy imports from Iran and Venezuela, that is, from the country that most sponsors terrorism and a criminal dictator in South America”, denounced the leader of the Republican minority in the Senate, Mitch McConnell, in a speech on Tuesday. “They prefer to buy from these people and not from Texas, Alaska or Pennsylvania”, he added.

multiple factors

But the government’s environmental priorities are not the only factor behind the US oil industry’s difficulty in increasing production.

The United States, the world’s largest producer of crude oil thanks to shale oil, did not return to its production level prior to the coronavirus pandemic, when the drop in activity sharply reduced demand. The return of this type of controversial extraction will take time, experts stress.

“It takes several months to create a new production in the United States”, indicated Andy Lipow, specialist of the oil market of Lipow Oil Associates.

“Drilling increases, the number of wells went from 397 a year ago to 638 today”, he exemplified. The oil industry faces supply difficulties and a shortage of qualified labor.

“We are in a very difficult situation”, explained the president of the company Occidental Petroleum Corporation, Vicki Hollub, at the CERAWeek conference.

“With the supply problems, any attempt to increase production today at a rapid rate is extremely difficult.”, he explained.

On their side, the environmental activists denounce the profits of the oil giants, which increase along with prices. “The leaders of these companies are profiting from the war”, said the NGO Friends of the Earth (Friends of the Earth) in a statement on Thursday.