From zerohedge America’s energy policies, specifically those centered around oil and gas, are “bat shit crazy” and the Biden administration is doing nothing but creating “turmoil” in the oil markets, according to geologist and fossil fuel expert Dr. Marc J. Defant. More on Dr. Defant’s credentials at the end. Excerpts in italics with my bolds and added images.
How did Biden’s policies impact the lower production of oil and gas?
By 2019, due primarily to fracking, the US became the number one producer of oil and gas in the world. In fact, we became a net exporter of oil and gas.
Prior to Biden entering office, oil production of oil shales reached over 12 million B/D. but fell more than 1 million B/D during 2021. During this time, Russia became the world’s largest exporter of oil which helped fund their war effort in the Ukraine.
Social Cost of Carbon
Under Obama, the government came up with a dollar value called the social cost of carbon. It is supposedly an estimate by the government as to the environmental damage from everything from rising sea level to wildfires and floods from the release of one ton of carbon dioxide via fossil fuel burning. But scientists are still completely uncertain about the direct impact the burning of fossils fuels may have on the environment. I hope this causes you to suspect the number may be related to magic.
But that never stopped the Obama administration from coming up with a solid amount of $57. Trump reduced the number to $7, but Biden revised the number to $51. The number is important because it gave the Biden administration the leverage to restrict oil and gas production based on supposed environmental and economic threats from greenhouse gasses (i.e., reduce permitting on federal lands).
As might be expected, gas-producing states fought back by challenging the social cost of carbon in court, and a judge issued an injunction preventing the administration from using the metric. But rather than submit to the judge’s ruling, the Biden administration simply decided to stop new permits on federal lands blaming the judge for the action – sigh. But Biden has been slow-walking permitting since he became President. He is the only President in 20 years not to have an onshore lease sale in a given year (2021).
Intentional Destruction of American Energy Production
We should not be surprised by Biden’s actions. During his campaign he promised to end drilling on federal lands to fight climate change. As much as 25% of oil and gas production comes from federal lands.
Finally in November of last year, the Department of the Interior, which is required by law to have quarterly lease sales, opened its first Gulf of Mexico oil lease auction which generated $190 million from oil companies. But alas, a green Obama-appointed judge vacated the auction after [environmentalists] Earthjustice out of San Francisco sued.
The ruling effectively ended new drilling in the Gulf, where some of the world’s environmentally friendly oil resides.
There are some state representatives that claim the Biden administration went ahead with the auction knowing full well it would be vacated. As you might imagine, the Department of the Interior will need a great deal of time to review the environmental impact of drilling in the Gulf (wink wink).
Bloomberg reported that an oil executive mused:
“Biden is signaling that his environmental goals trump energy security and consumer prices… that’s not lost on public companies or banks they rely on.”
Ultimately, investment in the oil industry increases when roadblocks to making a return on investment are removed. Biden’s actions have scared off many potential investors further reducing oil production. Press Secretary Jen Psaki’s oft repeated statement that 9.000 leases have been permitted is at the very least disingenuous considering the impediments to drilling the Biden administration has created.
Intentional Constriction of American Energy Supply
Psaki frequently claims that the Keystone XL Pipeline has no impact on oil prices because it will take two years to complete (only one year now if they had not shut it down). But Psaki is undermining (purposely in my opinion) the importance of the supply chain.
For example, the oil that would come through the pipeline has to be shipped by train. Recent train crashes demonstrate the danger of transporting oil via this method. And it obviously costs a lot more to ship via rail. But in a real head scratcher, Biden waved sanctions on the Nord Stream 2 pipeline from Russia to Germany. Why is this acceptable, but the XL is not? Russian oil is notoriously dirty (high sulfur content).
One would think Biden would be doing everything he could to send American oil and gas to Europe rather than making them more dependent on Russian oil.
Ultimately, the Biden administration has intentionally raised significant barriers in permitting supply of oil to the US. Infrastructure is extremely important to the supply of cheap and clean oil to the American economy.
The production of oil and gas in America is highly regulated – it’s the cleanest in the world both in lack of contaminants like sulfur which pollute and the way the industry protects against leaks.
The invasion of Ukraine by Russia created fears about the future of oil supplies which, in turn, pushed oil prices to record highs. And although the US buys less than 10 percent of its oil from Russia, Biden’s decision to stop buying oil from Russia, created more turmoil in the markets.
But perhaps the most irrational decision ever made by a President is Biden’s pursuit of [the] Iranian (and Venezuelan) nuclear deal to get access to Iran’s oil. They are the foremost sponsor of terrorism in the world and yet we are willing to sign a very one-sided treaty with them to gain oil which is extremely dirty (high sulfur).
We will pay them just as Obama did, with the helicopter carrying billions of dollars. And those payments will make it easier to develop delivery systems once they finally develop a nuclear bomb. On top of this, we are helping them build an nuclear power plant that will give them clean energy but not us.
Finally, I ask you to remember, gasoline prices were rising quickly way before the war in Ukraine broke out not only due to Biden’s interference in our oil production but also the inflation caused by his huge spending bills. Now we are going to buy oil from Iran instead of enabling our own industry to supply America’s needs. It is the very definition of “bat-shit crazy.”
Dr. Marc J. Defant is a professor of geology/geochemistry at the University of South Florida. He worked for Schlumberger Well Services and Shell Oil for three years, with two years at Shell working as an exploration geologist. He has also been Editor of Geology and an Associate Editor of the Journal of Geophysical Research. Dr. Defant was also invited by the Chinese Government to be a keynote speaker at a symposium on the continental crust and has given invited talks at Massachusetts Institute of Technology, Columbia University, Universitè de Bretagne (Brest, France), University of California at Los Angeles, University of Georgia and Tennessee, and Woods Hole Oceanographic Institution, as well as many others.