President Joe Biden promised the most ambitious green agenda ever, ending fossil fuels, pushing renewables, and forcing business to toe the line. As Earth Day 2022 arrives, Washington Examiner offers alternative coverage in light of record energy prices and widespread criticism of the administration’s incoherent policy approach
President Joe Biden has some progress to show this Earth Day, April 22, for the green agenda he campaigned on, but record energy prices at home and in Europe have sent his administration reluctantly encouraging the production of more of the fossil fuels he has sought swiftly to phase out.
The Biden administration has been asking domestic oil producers to increase output to help relieve record gasoline prices in particular. Meanwhile, with allies in the European Union warning that a shut-off of Russian gas to the continent could spell immense economic and humanitarian suffering, Biden has promised to help Europe by providing more U.S.-produced gas by ship.
Here’s a look at the shift:
Biden’s green agenda
Biden came out swinging after he was inaugurated and pulled the plug on the Keystone XL pipeline on his first day in office, having determined the pipeline “disserves the U.S. national interest” for contributing to climate change.
He ordered a pause on new oil and natural gas leases on public lands and waters that same week, along with a “comprehensive review and reconsideration” of federal leasing practices, and he later set national targets to reduce greenhouse gas emissions by at least 50% in 2030.
The administration went further at the United Nations’s COP26 climate change conference in November, committing the United States to an agreement pledging to stop funding overseas coal, oil, and gas projects and to prioritize clean energy financing.
In December, the State Department sent a directive to embassies around the world informing them that U.S. policy “will center on promoting clean energy” and instructing them to avoid financing fossil fuel projects.
Tracking the pivot
The Biden administration was slow to support more domestic oil production publicly and explicitly in response to rising crude oil prices, which analysts blamed generally on economic recovery coming out of the worst of the pandemic.
Oil rose steadily over the course of 2021 but really took off in late summer and in October — crude traded up into the $80s per barrel for the first time since 2018.
During a CNN town hall around that time, Biden named the Strategic Petroleum Reserve, Saudi Arabia, and OPEC as imperfect solutions, leaving additional domestic production off the list.
“It’s going to be hard,” he said. “It’s going to be hard. There’s a possibility to be able to bring it down, depends on — little bit on Saudi Arabia and a few other things that are in the offing.”
Days later, State Department energy adviser Amos Hochstein, who has been helping coordinate allied responses to the energy crisis in Europe, said the price “crisis” shows that “we need to accelerate the move off fossil fuels.”
Hochstein called for “well-supplied” energy markets, although he disputed the notion that lots of new oil and gas infrastructure are necessary to achieve that. Companies pursuing those projects risk being stuck with “stranded assets,” which “take us away from the goal” of mitigating climate change, he added.
When interviewed about a week after Hochstein made those comments, Energy Secretary Jennifer Granholm burst into laughter when asked about her plans to increase domestic oil production, downplaying its viability as a solution.
“Would that I had the magic wand on this,” Granholm said. “As you know, of course, oil is a global market. It is controlled by a cartel. That cartel is called OPEC.”
The administration weathered another month of pressure due to do something about prices, which fell sharply after Thanksgiving before recovering.
That pressure came from Republicans in Congress who blamed Biden’s energy policies — as well as from some Democrats who sought the imposition of a ban on fossil fuel exports.
Granholm eventually told oil executives during a meeting of the National Petroleum Council to “get your rig count up” and produce more oil.
“While I understand that you may disagree with some of our policies, it doesn’t mean that the Biden administration is standing in the way of your efforts to help meet current demand,” she said during the Dec. 14 meeting. “Please take advantage of the leases that you have. Hire workers. Get your rig count up.”
Brent crude, the global benchmark, closed just above $73 per barrel the day before.
Enter ‘war footing’
Russia’s invasion of Ukraine catapulted oil into new territory, and the administration with it.
Crude oil leaped above $100 per barrel and saw intraday trading reach above $130. On March 8, Brent crude closed 2 cents shy of $128 per barrel, and the administration began urging the oil industry to step up.
“It’s a time for oil and gas companies to work with Wall Street to unleash our productive capacity,” a senior administration official said on a March 8 call with reporters. “Price signals are giving every incentive that producers need to invest in America’s energy security, our energy reliability, our energy sustainability.”
Press secretary Jen Psaki also said at the time that it’s up to oil companies, “as well as Wall Street,” to determine “whether they’re going to reinvest these war profits from high prices back into the economy, raise production, and lower prices to American consumers.”
At the same time, the administration and Democrats have accused oil companies of gouging drivers by keeping prices unduly high while underutilizing federal leases and permits to produce more oil, both of which industry leaders have disputed.
“We are on a war footing, an emergency, and we have to responsibly increase short-term supply where we can right now to stabilize the market and to minimize harm to American families,” Granholm said in March at the CERAWeek energy conference.
Helping out Europe
Biden’s recent energy policy choices have been driven in large part by the dire outlook facing European allies.
Russia is Europe’s top external supplier of natural gas, used to heat homes and generate electricity, and oil. The war has EU members working day and night to secure alternatives in case a disruption or shut-off occurs.
Beyond that concern, EU members are resolved to exit Russian fossil fuels altogether — and on an accelerated schedule, in response to the war. To achieve that, they plan to make themselves greener by adding more renewable energy, as well as to build facilities quickly to receive liquefied natural gas from the U.S. and other friends.
Biden and European Commission President Ursula von der Leyen announced a joint task force in March that’s designed to help EU allies, who are working to get their gas storage levels up to at least 80% by winter, acquire more gas.
Biden set a goal of getting Europe an additional 15 billion cubic meters of LNG from the U.S. and elsewhere this year alone. The administration also wants to provide Europe with an additional 50 billion cubic meters of gas each year through at least 2030, acknowledging that new infrastructure would need to be approved and built in pursuit of those volumes despite complaints and warnings from environmental groups.
In another major development, the Interior Department announced on April 15 that in compliance with a court ruling that stopped Biden’s leasing pause, it will hold its first onshore lease sales of Biden’s tenure, although it’s making 80% less acreage available than had been previously nominated and will charge a higher royalty rate.
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All the while, the Biden team has maintained its longer-term green vision and argued renewable energy, electric vehicles, and the like alone can insulate consumers from the swings of commodity markets.
“We’re serious about decarbonizing while providing reliable energy that doesn’t depend on foreign adversaries. That means we’ll walk and chew gum at the same time,” Granholm said during the same CERAWeek remarks. “So yes, right now, we need oil and gas production to rise to meet current demand.”
