Updated 2022-Dec-6
Much has been said about Joe Biden’s war on fossil energy. Those who are against him look at his actions and say these actions are directly responsible for a large part of the current, Dec/22, inflation rates. Like it or not, one of the major reasons for the US’s economic prosperity, in comparison with the rest of the world, has been it’s lower than average energy costs.
Biden Stealth War on Oil Post Navigation via topics
2020 Campaign Promises
During the 2020 Presidential Election Campaign, Joe Biden was asked multiple times for his policies on fossil fuels. In a number of cases he was very explicit on his views.
2019-Dec Oil Company Employees in Jail?
During early 2020, Dec 2019, campaigning Joe Biden held a town hall in New Hampshire.
There he suggested that one way to hold oil executives accountable was to put them in jail. Should the purchasers of these companies products, consumers, also be put in jail?
2021-Jan-20 Executive Order 13990
Executive Order 133990, enacted in Biden’s first day in office. Basically stopping the Keystone Pipeline in it’s track. Some of said it was not yet completed, and hence didn’t affect anything. It also directed the Sec of the Interior place a temporary moratorium on all activities relating to the implementation of the Coastal Plain Oil and Gas Leasing Program in the Arctic National Wildlife Refuge (“ANWR”).
2021-Jan-27 Executive Order 14008
EO-14008 directs the Secretary of the Interior to pause on granting new oil and natural gas leases on public lands or offshore waters and to launch a rigorous review of all existing leasing and permitting practices related to fossil fuel development on federal lands. Additionally this EO directs federal agencies to eliminate fossil fuel subsidies as consistent with applicable law by 2022 but does not detail what is a subsidy.
2021-May-20 Nord Stream 2 Pipeline, the only Pipeline Approved by Biden
Donald Trump had put sanctions on the Nord Stream 2 pipeline. On May 20, 2021 President Joe Biden removed those sanctions enabling work to accelerate on the controversial Russian pipeline to Germany.
2021-Jun-15 Federal Judge Orders Biden Administration To Halt Oil And Gas Leasing Ban
Parts of President Biden’s executive order EO-14008 were deemed outside of his authority to enact.
Specifically EO-14008 called for the ban of quarterly oil and gas lease sales.
Since Congress, created the Mineral Leasing Act of 1920, the interior secretary is required to hold lease sales, “at least quarterly”. Hence Judge Terry Doughty, of the U.S. District Court for the Western District of Louisiana granted a preliminary injunction order banning oil and gas leasing ban until the case is concluded.
2021-Nov-4 OPEC+ rejects Biden’s plea for bigger oil-supply increase
Biden had asked for a speedup of oil production from OPEC+, but the group decided to keep with their 400K barrel/day production hike scheduled for December. President Joe Biden wanted more than double that amount. Alarabiya reported that OPEC+ cartel could face a bare-knuckle fight with the White House amid talk of the US could tap the Strategic Petroleum Reserve. There was also worry that Iran, with the resumption of Nuclear talks, might be able to enter the world market creating an excess supply situation.
2021-Nov-23 Biden announces a release of 50 million barrels from the SPR to counter OPEC+
In what would be the first of many SPR releases, after being denied his requested production increases from OPEC+, Biden announced a 50 million barrel release from the SPR.
The goal of the move was to fight higher gas prices, help lower “transitory” inflation. Noteworthy on this release was the plan for other nations, China, India, South Korea, & the UK to also release from their reserves.
2022-Feb The Biden administration misses a 2nd deadline to hold onshore drilling leases
Nominally the Dept of Interior has quarterly onshore oil drilling lease sales. The Biden administration, defying a 2021-Jun-15 court ruling which ordered the administration to halt it’s ban on new oil and gas leases missed a second deadline for conducting the required quarterly sales.
2021-Mar-1 President Joe Biden authorizes 30 million barrels release from the SPR in response to the invasion of Ulraine
With the Ukraine conflict in full swing, and oil prices unpredictable President Biden, working with International Energy Agency (IEA) agrees to release 30 million barrels. The IEA agrees to also release 30 mb for a total of 60 million barrels.
Of all of Biden’s SPR releases, this one is the one most in alignment with the original intentions of the SPR.
2022-Mar-8 Biden states there are 9,000 unused permits to drill
In an attempt to shift the narrative, Biden during a Mar-8 speech stated that oil companies have 9,000 unused permits to drill on Federal land.
One of Biden’s handlers gave one of his speech writers this simple tidbit. But, nominally, once a company acquires a permit many other factors come into play before a company is willing to commit investment money to drill.
One, is there an adequate equipment and workers ready to schedule the drilling? Many workers disappeared in the pandemic. Additionally steel pipe and equipment are short supply on back-order for months. So drilling activity during this administration is more planned and scheduled. In the past Wildcatters would drill wells on speculation resulting in boom or bust cycles as the price of oil gyrated. Investors investing in oil are more about consistent returns in today’s economic environment. The Biden administration has made it clear that while he is president, energy production via fossil fuels is not a high priority.
Two, the cost to extract a barrel of oil is about $10-15 in Saudi Arabia. While in West Texas is can be as high as $70. If the Biden administration is flooding the market with oil from the SPR. What is the point in competing with the Federal government? Given an outlook of a sustained $80/barrel and above rate, more drilling might be occurring.
Three, only about 10% of the oil extracted within the US is from Federal lands, most of it is from private lands. There are many many existing low producing wells on private and federal lands, now not producting, but once the price of a barrel of crude rises, they become economically viable to be activated to increase the output.
Fourth, oil companies like to have an inventory of wells available with predicted reserves to show they are ready for the future. Financial analysts pay attention to each companies Reserve Components.
A lot has been said about during Biden’s first year in office, the US produced an average of 11mb/day. While Trump’s first year in office, only an average of 9mb/day were produced. But, the drilling for Biden’s number occurred during the Trump years, while the drilling for Trump’s numbers were during Obama’s years. Drilling takes time. Roads need to be built. Estimates for 2023 are at about 12.3 mb/day. As the economy grows, as it should, increases are expected. Ideally more of this would be green energy, but that takes time.
2022-Mar-31 Biden orders SPR releases of 1mb/day up to the Midterm Elections
President have used the Strategic Petroleum Reserves (SPR) as a way dampen the economic effect of hurricanes, terrorism, and global cutbacks. After the 1973 Arab Oil Embargo, congress determined there was a need for an emergency stockpile of crude oil and authorized the SPR to hold crude for emergency uses. Crude started flowing into the SPR in 1975. And since that time the United States has pursued a policy of Energy Independence. Presidents up until President Biden promoted the concept of Energy Independence.
2022-Apr-15 Increase in Lease Royalty Costs
The US Department of the Interior increased the royalty rate from 12.5% to 18.75%. Basically a 50% jump in costs. This was the first increase since the royalty rates were first imposed in the 1920’s, almost 100 years ago. Nominally these costs are just passed on the consumer. But this additional burden does have the effect of making more leases unproductive from a cost standpoint and undoubtedly factors into whether to drill or not, given a new wells production cannot be adequately ascertained.
2022-Jul-15 Saudi Arabia - Pariah, or Provider?
During the 2020 campaign Joe Biden strongly came out against Saudi Arabia primarily because of the Jamal Kashoggi killing. However, with the Strategic Petroleum Reserve extraction scheduled to begin winding down during the midterm elections time frame he needed to come up with additional oil for US needs.
In the following video, he appears to be strongly against the Saudi’s during a campaign debate.
Fast forward to 2022. America’s energy needs have grown. Biden has expended a large percentage of the Strategic Petroleum Reserve with the planned end date of the extractions to be during the midterm elections. The three options on the table are Saudi Arabia, Iran, and Venezuela. Initially Venezuela is off the table. And Iran appears to be pursuing their quest for a Nuclear Weapons suite. So Saudi Arabia, an old ally of the US, is where he goes first.
President Biden had a summer 2022 middle east trip. He visited many countries but the key one was Saudi Arabia, a country whose leader he has labeled a Pariah. There he meant with Saudi Leader MBS to request production increases.
2022-Sep-26 Nord Stream 2 Pipeline explodes
On Sept 26, 2022, the pipeline was damaged with what appeared to be a large explosion. At this time an investigation is ongoing to attempt to determine the cause. Looking back, as Russia was getting ready to invade Ukraine, on February 7, 2022, Biden made what could be historically as a rather bold statement.
In the video below Biden promises if Russia invades Ukraine, then there will be no more pipeline.
Russia did invade Ukraine, and the pipeline is now in-operable. A question for you is, after viewing the above video, did the President keep his word?
2022-Oct-13 Biden's Perfect Phone Call, Election Interference?
After the Saudi’s had turned down Biden’s request for them to pump more oil. And then in early October OPEC announced a production cut of 2 million barrels a day. This seemed to infuriate Biden and he publicly vowed to halt arms sales and allow price fixing lawsuits.
On October 13, 2022, dnyuz.com reported that -> The Saudi Foreign Ministry, in an unusual statement, said that the Biden administration had urged the kingdom to delay the production cuts for one month. Such a delay could have prevented price hikes at the gas pumps that might harm Democratic candidates in the U.S. midterm elections on Nov. 8. Fortune magazine also reported this story.
Was this behind the scene dealing Election Interference? If Donald Trump had made the same perfect phone call to the Saudi’s, pleading with them to post pone production cuts until after the mid-terms, what would America’s media companies have done with this information?
2022-Nov-17 Biden flip-flops and states Pariah MBS should be granted sovereign immunity in Khashoggi civil case
Biden, abandoning a campaign promise filed papers that Mohammed bin Salman should be granted immunity. This action will likely lead judge John Bates to dismiss a civil case brought against Prince Mohammed and his alleged accomplices.
Given his July trip to Saudi Arabia to request more oil production, it is believed this will put Biden on better footing if he wants to re-request more production increases.
Biden must no longer believe that MBS is a Pariah.
2022-Nov-26 - President Biden is forced to turn to Venezuela's Tareck El Aissami, on the ICE most wanted list
With the Saudi’s denying Biden output increases, and instead giving him production cuts, and Iran still not cooperating. And having the US increase production political a no-go for his handlers, Biden is forced to turn to Venezuela.
Venezuela in the late 90’s was producing 3 million barrels/day and exporting 1.8m barrels/day to the US alone. But then the introduction of Hugo Chavez as their leader and country reforming itself to a Bernie Sanders/Elizabeth Warren style socialist state caused oil production to plummet. Capitalist countries such as Chevron were force to leave the country.
So on 2022-Nov-26 Biden’s Treasury Dept. granted Chevron a license to resume limited production. When Chevron was forced to leave, it left assets and receivables worth about $4B. Before Venezuela gets any money from the sales, Chevron will get to be paid.
Making this deal with Venezuela gives the appearance of Joe Biden doing something about the price of oil. But it could be viewed as just another job transfer to another country. In addition it just off-shores our emissions, basically an accounting trick to make the US look greener from a statistical charting perspective. But given the oil fields haven’t been used for awhile, and nearly all of the skilled workers have left the company, output for years could be low.
Days after the U.S. authorized Chevron’s return, the company’s top executive there met with Venezuela’s oil minister, Tareck El Aissami, a man the U.S. has accused of drug smuggling.
Tareck El Aissami, for whom the U.S. ICE agency has offered a reward of up to $10 million for information leading to his capture, tweeted “TIME TO PRODUCE!!”
Even MBS doesn’t have a $10 million reward on him. But when your poll numbers are dropping, you do what you can.
Summary
From Campaign promises, to Executive Orders, releasing oil from the Strategic Petroleum Reserves, to ignoring court orders to hold quarterly lease sales per congressional law, to groveling to other countries leaders to increase their production while fighting domestic production Biden has crafted a marketing look that belies his verbal intentions.