Domestic oil production is forecast to reach an all-time high by the end of the year, even as President Biden announces plans to blunt fossil fuel output and consumption as part of his climate change agenda.
Presidents largely lack control over short-term oil supply and costs at the pump, but industry analysts say Mr. Biden has caused long-term damage to production with mixed signals between his green energy policies and calls for more oil to blunt high gasoline prices.
“The administration is not totally to blame for a lot of this. There’s no doubt about it. But this administration has sent mixed signals from the beginning,” said Frank Maisano, a senior principal and energy expert at the law firm Bracewell. “The administration is caught between the consumers’ rock and the environmentalists’ hard place.”
Mr. Biden’s latest environmental regulation, announced earlier this month, canceled all Trump-era oil and natural gas drilling leases in the remote Arctic National Wildlife Refuge. Combined with the administration’s other protections and a proposal to block new drilling across 13 million acres in a separate area of Alaska, no new oil and gas leases will be permitted anywhere in the U.S. portion of the Arctic Ocean.
Republicans blame the administration’s energy policies for inflating gasoline prices, but the U.S. is expected to break pre-pandemic records by producing an average of 12.8 million barrels of oil per day this year and 13.1 million next year, according to the Energy Information Administration.
The U.S. has been the world’s largest oil-producing nation since it surpassed Russia and Saudi Arabia in 2018. Global demand for fossil fuels — oil, natural gas and coal — is projected to increase until it tops out around 2030, the International Energy Agency projects.
Mr. Biden has tried to appease competing interests. He has annoyed climate activists who say he has failed to stop oil and natural gas production on federal lands and in waters. Average Americans, meanwhile, are frustrated with stubbornly high prices at the pump.
Mr. Biden and his top officials have prodded Big Oil to increase production to lower prices while promoting restrictive policies.
“The regulatory inconsistencies this administration has caused will create long-term damage,” Mr. Maisano said. “Across the board — oil and gas and renewables — all want policy certainty. They need policy certainty. It’s essential for them to have a long-term plan.”
The national average gasoline price stood at $3.88 per gallon as of Sunday, according to AAA. That is 20 cents higher than a year ago. Oil markets ticked higher and sat around $90 per barrel, roughly the same price as one year ago. The EIA expects higher oil prices through the remainder of the year — an average of $93 per barrel for Brent crude, the global benchmark — as a result of declining global inventories.
Also elevating gasoline costs are higher crude oil prices, increased global demand, production cuts in the Middle East and heat waves limiting domestic refining capacity. Global oil demand in August was at 101.4 million barrels per day, slightly outpacing supply at 100.8 million barrels, according to the EIA.
Republicans have sought to draw a connection between the high prices and Mr. Biden’s latest policies against new drilling in Alaska, underscoring the political challenges for the incumbent Democrat seeking reelection next year.
“Washington Democrats opened a new front in their war on affordable and abundant American energy,” said Senate Minority Leader Mitch McConnell, Kentucky Republican. “The president calls this move a necessary step to meet the urgency of the climate crisis, but any serious observer would call it bad news for families trying to make ends meet.”
About 15% of U.S. crude oil production in 2021 was in federal waters of the Gulf of Mexico, according to the EIA. The American Petroleum Institute, the industry’s leading lobbying group, estimated that federal lands and waters provided roughly 24% of total U.S. oil production.
Republican presidential candidates say they would “unleash American energy” by allowing more drilling on federal lands and in waters and slashing environmental permitting regulations that can delay new energy projects for years.
Relief at the pump could be on the horizon.
The busy summer driving season is over, and stations started switching to a cheaper winter blend of gasoline this weekend.
GasBuddy, the fuel-monitoring app, estimates that decreased demand and the winter blend will push down prices by 10 to 30 cents per gallon by late November.
Still, a single major hurricane could knock refineries offline and send regional prices soaring.
Georgia Gov. Brian Kemp issued an executive order last week to halt the state’s 31-cents-per-gallon gas tax through Oct. 12. The move is reminiscent of gas tax breaks that Georgia and several other states implemented in the summer of 2022 when average prices reached a record $5 per gallon.
• Ramsey Touchberry can be reached at rtouchberry@washingtontimes.com.
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