In one week, President Joe Biden managed to anger both the left and right, whether it was the situation unraveling in Afghanistan or pleading with the Middle East to produce more crude oil to curb skyrocketing gasoline prices. Perhaps this is a case of a great portion of the electorate voting against someone instead of voting for a candidate, resulting in an administration not guided by a constant philosophy but rather adopting a mechanism of feeling which direction the wind is blowing. Either way, many Americans are handwringing for entirely different reasons over the president pleading for help from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+. But Biden might have shot himself in the foot after the 13-nation cartel denied his request for more oil.
OPEC Turns Down Biden Inquiry
The White House recently implored OPEC and Russia to produce more crude oil, which would help bring down the cost of skyrocketing energy prices. Officials claimed the group increasing output by 400,000 barrels per day (bpd) was “simply not enough” during the global economic recovery. It is unclear as to how much the Oval Office demanded. How did the entity respond to Biden’s desperation? No, thank you, sir!
Reuters reports that sources say OPEC leaders think global crude markets possess sufficient levels of oil. Speaking on the condition of anonymity, the individuals told the newswire OPEC and its allies do not believe extra crude is required in the market, adding that the latest data indicate there is no need for more supply. An official stance could be published on September 1, when the key producers are scheduled to host a policy review amid new figures.
This was almost an inevitability, considering the fact West Texas Intermediate (WTI) and Brent prices are plummeting, and demand fears are intensifying amid the growth of the Delta and Lambda COVID variants. Plus, the institution would not shift its newest agreement so soon. Indeed, global crude markets would not be prepared for even more of an injection of barrels.
Conservatives, libertarians, and the energy sector were not pleased with the news coming out of 1600 Pennsylvania Avenue, especially after the cancellation of the Keystone XL pipeline and the suspension of oil and gas leases on federal lands. Texas Governor Greg Abbott (R), for example, urged President Biden to “allow American workers – not OPEC – to produce the oil.” American Petroleum Institute (API) President Mike Sommers was stumped by the reports because “you’d think the first place you would go would be American producers.” Alberta Energy Minister Sonya Savage said in a statement that Biden’s approach “smack[s] of hypocrisy.”
But progressives also had a message for the commander in chief: You have some explaining to do.
Won’t Somebody Please Think About the Climate?
Many on the left have been befuddled by Biden’s move. Deirdre Shelly, an organizer for the Sunrise Movement, told Politico he could not be a climate change leader “if he’s lobbying oil states to produce more fossil fuels.” Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute, also stated in an interview with the publication that “increasing oil production guarantees that we will suffer far worse climate disasters than what we’re seeing right now.”
Others, however, are making excuses for the incumbent administration. The primary argument: Biden needs to take action now to help secure the House and Senate in 2022. Former Obama administration climate adviser Jason Bordoff labels criticisms as “misguided.” By doing so, the president can maintain his environmentalist agenda over time. A White House spokesperson recently published a statement, explaining:
“We can do two things at once. Achieve our climate goals while ensuring the energy transition is one that takes into account the interests of the middle class, who experience changes in energy prices very directly, and meet global energy needs as the economy recovers from the pandemic.”
Will America’s Energy Sector Bailout Biden?
While hitting the pause button on the oil and gas leasing might not impact today’s prices, kiboshing Keystone caused regulatory uncertainty in the domestic energy industry, especially regarding future investment. Why bother investing $2 billion on a massive pipeline or oil project if there is the likelihood of cancellation or fierce regulatory interventions? Ultimately, the Biden administration’s war on domestic energy could be backfiring, enabling oil and gas firms to concentrate on being more fiscally conservative and rewarding shareholders for supporting their companies. In the end, U.S. consumers will likely continue paying more at the pump, adding to escalating inflation pressures.