Humiliated By OPEC, Biden Crawls To Venezuela For Oil, But Still Won’t Unleash American Energy Production

‘U.S. Gasoline Prices Are Climbing Again And May Get Worse’

“U.S. gasoline prices are ticking up after a roughly 100-day decline, threatening to inflict new pain on consumers who have been grappling with widespread inflation for more than a year. Maintenance at fuel-making plants, more demand for gasoline and tight fuel supplies have contributed to a 14-day run of increasing gasoline prices. A gallon of regular averaged about $3.831 on Wednesday … prices are abnormally high for this time of the year, which is when refiners switch to producing winter-grade fuel blended with butane …” (“U.S. Gasoline Prices Are Climbing Again and May Get Worse,” The Wall Street Journal, 10/06/2022)

• “A decision by the Organization of the Petroleum Exporting Countries and its Russia-led allies Wednesday to cut oil production by 2 million barrels a day will further elevate prices, say analysts.” (“U.S. Gasoline Prices Are Climbing Again and May Get Worse,” The Wall Street Journal, 10/06/2022)

• “The price of oil, the primary input for gasoline, is also having an impact. Brent, the global benchmark, rose more than 2% to $93.90 on Wednesday. Exports of U.S. crude oil, OPEC+’s production cuts and limited capacity for additional releases from the Strategic Petroleum Reserve have essentially backstopped global oil prices from falling below $80 per barrel, putting a floor on domestic gasoline prices, said Frederick Lawrence, a director at research firm Capital Alpha Partners. ‘You don’t see these stresses fading away tomorrow,’ he said.” (“U.S. Gasoline Prices Are Climbing Again and May Get Worse,” The Wall Street Journal, 10/06/2022)

The Biden Administration Pleaded With OPEC And Other Oil-Producing Nations To Pump More Oil And Were Ignored

“The Biden administration launched a full-scale pressure campaign in a last-ditch effort to dissuade Middle Eastern allies from dramatically cutting oil production, according to multiple sources familiar with the matter. But that effort appears to have failed, following Wednesday’s crucial meeting of OPEC+, the international cartel of oil producers that, as expected, announced a significant cut to output in an effort to raise oil prices. That in turn will likely cause US gasoline prices to rise at a precarious time for the Biden administration, just five weeks before the midterm elections. On Wednesday morning, OPEC+ oil ministers meeting in Vienna agreed to an even larger production cut than the White House had feared — 2 million barrels per day, beginning in November, according to a readout of the meeting released on Wednesday.” (“Inside The White House’s Failed Effort To Dissuade OPEC From Cutting Oil Production To Avoid A ‘Total Disaster,’” CNN, 10/05/2022)

• “For the past several days, Biden’s senior-most energy, economic and foreign policy officials were enlisted to lobby their foreign counterparts in Middle Eastern allied countries including Kuwait, Saudi Arabia, and the United Arab Emirates to vote against cutting oil production. Wednesday’s production cut amounts to the largest cut since the beginning of the pandemic and could lead to a dramatic spike in oil prices.” (“Inside The White House’s Failed Effort To Dissuade OPEC From Cutting Oil Production To Avoid A ‘Total Disaster,’” CNN, 10/05/2022)

• “Wednesday’s production cut comes less than three months after President Joe Biden traveled to Saudi Arabia and met with Crown Prince Mohammed bin Salman on a trip that was driven in part by a desire to convince Saudi Arabia, the de facto leader of OPEC, to increase oil production which would help bring down the then-skyrocketing gasoline prices.” (“Inside The White House’s Failed Effort To Dissuade OPEC From Cutting Oil Production To Avoid A ‘Total Disaster,’” CNN, 10/05/2022)

‘As Diplomatic Humiliations Go, It’s Hard To Top Wednesday’s Decision By Saudi Arabia And Its OPEC+ Allies To Cut Oil Production’

THE WALL STREET JOURNAL EDITORIAL BOARD: “As diplomatic humiliations go, it’s hard to top Wednesday’s decision by Saudi Arabia and its OPEC+ allies to cut oil production by two million barrels a day despite U.S. entreaties and a looming global recession. News broke over the weekend that OPEC and its allies, including Russia, were contemplating cutting their production targets by one million barrels a day at their meeting this week. They want higher prices, and the prospect that this means rising gasoline prices before the November election sent the White House into overdrive…. A White House official told CNN ‘it’s important everyone is aware of just how high the stakes are.’ The stakes certainly are high for the Biden Administration, which has claimed credit for this summer’s decline in gasoline prices. The Saudis heard all this—and then raised their production cuts by an additional million barrels a day.” (Editorial, “The Saudis Snub Biden Again,” The Wall Street Journal, 10/05/2022)

So Now, Incredibly, The Biden Administration Is Talking About Easing Sanctions On Nicolas Maduro’s Brutal Regime In Order To Import More Oil From Venezuela

“The Biden administration is preparing to scale down sanctions on Venezuela’s authoritarian regime to allow Chevron Corp. to resume pumping oil there, paving the way for a potential reopening of U.S. and European markets to oil exports from Venezuela, according to people familiar with the proposal. In exchange for the significant sanctions relief, the government of Venezuelan President Nicolás Maduro would resume long-suspended talks with the country’s opposition to discuss conditions needed to hold free and fair presidential elections in 2024, the people said.” (“U.S. Looks to Ease Venezuela Sanctions, Enabling Chevron to Pump Oil,” The Wall Street Journal, 10/05/2022)

• “If the deal goes through and Chevron, along with U.S. oil-service companies, are allowed to work in Venezuela again, it would put only a limited amount of new oil on the world market in the short term. Venezuela was once a major oil producer, pumping more than 3.2 million barrels a day during the 1990s, but the state-run industry has collapsed over the past decade because of underinvestment, corruption and mismanagement. Sanctions leveled by the Trump administration further dented production and forced Western companies out of the country.” (“U.S. Looks to Ease Venezuela Sanctions, Enabling Chevron to Pump Oil,” The Wall Street Journal, 10/05/2022)

“The U.S.-Venezuela agreement, the terms of which are expected to be shored up later this month, is the latest sign that Washington is willing to wind down a pressure campaign against the Maduro government that it inherited from the Trump administration. There are potential pitfalls. The proposal is stoking fury among some of the regime’s most strident foes, who say the strategy would allow Mr. Maduro to maintain his authoritarian grip on the country with few concessions.” (“U.S. Looks to Ease Venezuela Sanctions, Enabling Chevron to Pump Oil,” The Wall Street Journal, 10/05/2022)

Joe Biden And His White House Are Desperate To Blame Anyone And Everyone Else For This Situation Except For Their Own Failed Energy Policies

“President Biden and the White House are taking on big oil companies, the Organization of the Petroleum Exporting Countries (OPEC), Russia and anyone else who might be to blame for high gas prices in the U.S. With the midterms fast approaching, rising gas prices pose a major threat to Democratic efforts to hold onto majorities in the House and Senate, and Biden and his team have repeatedly argued outside influences are to blame for the increases … Underlying it all has been a consistent effort to place the blame for high gas prices on Russian President Vladimir Putin …” (“Putin, OPEC, Big Oil: Biden’s Against Whoever’s Responsible For Gas Prices,” The Hill, 10/06/2022)

THE WALL STREET JOURNAL EDITORIAL BOARD: “The White House reacted in a statement on Wednesday—from national security adviser Jake Sullivan and economic adviser Brian Deese—by calling the production cuts ‘shortsighted.’ The statement also said the decision is ‘a reminder of why it is so critical that the United States reduce its reliance on fossil fuels.’ Do these people know how preposterous they sound? No American President has done more to make the U.S. more dependent on foreign energy than Mr. Biden has in less than two years. He came into office promising to slash U.S. oil and gas production, and his regulators and the Democratic Congress are doing everything they can to make drilling difficult and investment non-economic.” (Editorial, “The Saudis Snub Biden Again,” The Wall Street Journal, 10/05/2022)

FOX NEWS’ PETER DOOCY: “You’ve said the President was responsible for gas prices coming down.  Is the President responsible for gas prices going up?”
WHITE HOUSE PRESS SECRETARY KARINE JEAN-PIERRE: “So, it’s a lot more nuanced than that.” (White House Press Briefing, 10/04/2022)

• “It was just a few weeks ago when White House chief of staff Ron Klain and others were highlighting daily declines in prices at the pump as the cost dipped to close to $3 per gallon in mid-September in parts of the country.” (“Putin, OPEC, Big Oil: Biden’s Against Whoever’s Responsible For Gas Prices,” The Hill, 10/06/2022)

And The Administration’s Cavalier Use Of The Strategic Petroleum Reserve Has Left The Country With ‘Shrinking Options To Respond To Saudi-Russian Oil Output Cuts’

“The US has shrinking options to respond to Saudi-Russian oil output cuts via further releases from its Strategic Petroleum Reserve. … Due to those SPR releases, the reserve has shrunk significantly. As of last week, it contained 416 million barrels, the lowest amount since July 1984. By the time the White House completes the current round of releases, probably in early December, the reserve will have fallen to about 380 million barrels. …  Subtracting presold oil from the 380 million barrels the SPR would have by year’s end leaves just 144 million barrels for emergency releases.” (“US Options for Responding to OPEC+ Are Shrinking Fast,” Bloomberg, 10/05/2022)

“US President Joe Biden’s use of the Strategic Petroleum Reserve to blunt surging energy prices threatens to inflate OPEC’s sway over global oil markets, said Bank of America Corp.’s Francisco Blanch. In the wake of the OPEC+ alliance’s decision to slash production limits by 2 million barrels a day, the White House has few options remaining to head off higher prices and their impact on consumers, Blanch, the bank’s head of global commodities and derivatives research, told Bloomberg Television on Thursday. One of those options -- selling or loaning more crude from the strategic reserve -- may prove counterproductive for the US in the long run, he warned. ‘I don’t think it’s a great idea given the incredibly tense geopolitical world we live in today,’ Blanch said. By depleting the reserve, the US puts itself ‘more in the hands of OPEC+,’ and ‘eventually you’re just ceding more and more market control.’” (“US Tapping Strategic Oil Plays Into OPEC’s Hands, Blanch Warns,” Bloomberg, 10/06/2022)

Of Course, The One Thing The Biden Administration Refuses To Do Is Take Its Boot Off The Neck Of The American Oil And Gas Industry

THE WALL STREET JOURNAL EDITORIAL BOARD: “The Biden White House has tried every gimmick to lower gas prices other than the one that would really matter: Call off its political and regulatory campaign against American oil and gas production…. But the Administration won’t do it because it is too afraid of, or shares the beliefs of, the climate left that wants to ban fossil fuels. That’s the definition of ‘shortsighted,’ and it leads to humiliations like the one Wednesday and higher prices for American families.” (Editorial, “The Saudis Snub Biden Again,” The Wall Street Journal, 10/05/2022)

U.S. OIL & GAS ASSOCIATION: “OPEC says no, SPR options all but gone... The WH has one option left and it is the one option they should have never turned away from in the first place - the US based oil and gas industry.” (U.S. Oil & Gas Association, @US_OGA, Twitter, 10/05/2022)

President Biden Has Strangled Oil Production On Federal Lands And Is Now Considering Curtailing Offshore Drilling Altogether For Years

‘The Biden Administration Has Leased Fewer Acres For Oil-And-Gas Drilling Offshore And On Federal Land Than Any Other Administration In Its Early Stages Dating Back To The End Of World War II’

“The Biden administration has leased fewer acres for oil-and-gas drilling offshore and on federal land than any other administration in its early stages dating back to the end of World War II, according to a Wall Street Journal analysis. President Biden’s Interior Department leased 126,228 acres for drilling through Aug. 20, his first 19 months in office, the analysis found. No other president since Richard Nixon in 1969-70 leased out fewer than 4.4 million acres at this stage in his first term. Harry Truman was the last president to lease out fewer acres—65,658—in 1945-46, when offshore drilling was just beginning and the federal government didn’t yet control the deep-water leases that have made up the largest part of the federal oil-and-gas program in modern times…. The Journal’s analysis, based on Bureau of Land Management and Bureau of Ocean Energy Management data, quantifies the slowdown in onshore and offshore leasing under Mr. Biden…. Federal leases account for more than a quarter of all U.S. oil production.” (“Federal Oil Leases Slow to a Trickle Under Biden,” The Wall Street Journal, 9/04/2022)

“The Mineral Leasing Act of 1920 requires onshore oil and gas leasing ‘at least quarterly.’ While the Biden administration has been in office for six quarters, it has conducted auctions in just one of them. That happened in late June, after the administration came under increasing pressure to tame soaring gasoline prices at the pump in the wake of Russia’s invasion of Ukraine.” (“Federal Oil Leases Slow to a Trickle Under Biden,” The Wall Street Journal, 9/04/2022)

• “In all, the Interior Department has awarded 203 leases for oil and gas development during Mr. Biden’s first 19 months in office. Former presidents Trump and Obama each approved 10 times as many leases during the same period, the Journal’s analysis shows. Going back further, the 203 leases under Mr. Biden amount to 3.2% of what presidents from Dwight Eisenhower to Mr. Trump awarded on average in the same span.” (“Federal Oil Leases Slow to a Trickle Under Biden,” The Wall Street Journal, 9/04/2022)

‘For Offshore Drilling, The Biden Administration Has Yet To Complete A Sale’ And ‘Hasn't Ruled Out A Complete Block On New Leases’

“For offshore drilling, the Biden administration has yet to complete a sale. It did hold one, on Nov. 17, offering 80 million acres in the Gulf of Mexico in a sale originally proposed by the Trump administration that would have been the largest offshore sale in U.S. history. It sold 1.7 million acres, but a federal judge invalidated the sale in January, ruling that the administration failed to do a proper environmental analysis. The Biden administration declined to appeal the decision, letting the sale get canceled.” (“Federal Oil Leases Slow to a Trickle Under Biden,” The Wall Street Journal, 9/04/2022)

“The Biden administration is nearing a decision on the future of federal offshore fossil fuel drilling and hasn't ruled out a complete block on new leases. On Thursday, the 90-day comment period for the Department of the Interior's (DOI) proposed five-year offshore leasing plan ended, paving the way for the agency to issue a final decision. In July, the DOI unveiled the plan which gutted a Trump administration proposal, ruling out any leasing in the Atlantic or Pacific and opening the door to an unprecedented scenario where no lease sales would be held through 2028.” (“Biden Admin Weighs Complete Block On Offshore Oil Drilling As Gas Prices Keep Rising,” Fox Business, 10/06/2022)

• “Under the DOI's proposal, the federal government could choose to hold anywhere between 0-11 offshore lease sales, compared to the Trump administration's version which called for 47 such sales. Federal law mandates the interior secretary to issue offshore leasing plans every five years laying out prospective oil and gas lease sales. However, the administration dragged its feet on a replacement plan as it considered objections from environmental groups, which oppose all new fossil fuel leasing, and pressure from industry as gas prices surged. In her statement announcing the proposal on July 1, Interior Secretary Deb Haaland reaffirmed her and President Biden's ‘commitment to transition to a clean energy economy.’” (“Biden Admin Weighs Complete Block On Offshore Oil Drilling As Gas Prices Keep Rising,” Fox Business, 10/06/2022)

And The Partisan Legislation Biden Officials Keep Boasting About Slapped American Energy Producers With Tax Hikes That Will Undoubtedly Increase Prices For American Families

Democrats’ Reckless Taxing And Spending Spree Included Tax Hikes On Oil, Which Will Cost Americans More At The Pump

“The legislation … would reinstate and increase a long-lapsed tax on crude and imported petroleum products to 16.4 cents per barrel, according to a summary of the plan released Sunday by the Senate’s tax-writing committee. The fee would be paid by US refineries receiving crude oil and importers of petroleum products, according to the Congressional Research Service… The proposed levy on imports is a revival of the Superfund tax, which helped fund the clean-up of hazardous waste sites and previously stood at 9.7 cents per barrel until it lapsed at the end of 1995. In addition to reinstating and increasing the tax, the Senate proposal would index the fee to inflation.” (“Manchin Spending Deal Includes Billions in Oil Import Taxes,” Bloomberg, 7/31/2022)

AMERICANS FOR TAX REFORM: “Democrats’ reckless tax and spend spree endorsed by Sen. Joe Manchin (D-W.Va.) includes a $12 billion tax on crude oil that will be paid by consumers in the form of higher gas and energy costs…. As if it weren’t bad enough, Democrats have pegged their tax increase to inflation. As inflation increases, so will the level of tax…. This tax hike is a clear violation of President Biden’s pledge not to raise any form of tax on anyone making less than $400,000 per year.” (“Manchin-Schumer Bill Includes $12 Billion Crude Oil Tax,” Americans for Tax Reform Website, 8/01/2022)

 Democrats Also Included A New Tax On Natural Gas, ‘Creating A Burden That Will Fall Most Heavily On Lower-Income Americans’

 “The 725-page bill released last week would also impose other costs for the oil and gas industry. It places a new first-time fee on methane emissions rising to as much as $1,500 a ton and increases the royalty rate companies pay to the government for oil and gas produced on federal land.” (“Manchin Spending Deal Includes Billions in Taxes on Oil Sector,” Bloomberg, 7/31/2022)

• AMERICANS FOR TAX REFORM: “The legislation would impose a regressive tax on oil and gas development based upon emission levels of methane during production, leading to higher energy bills for consumers and higher costs of everyday products.” (“5 Tax Hikes in Dem Reconciliation Bill,” Americans for Tax Reform Website, 7/28/2022)

AMERICAN GAS ASSOCIATION: “On behalf of the companies and associations that make up the natural gas supply chain and the 180 million Americans and the 5.5 million businesses that rely on natural gas, we would like to express our concerns about including a methane emissions fee or tax in budget reconciliation legislation…. New fees or taxes on energy companies will raise costs for customers, creating a burden that will fall most heavily on lower-income Americans…. [B]ased on similar proposals introduced earlier this Congress, we estimate that the fee could amount to tens of billions of dollars annually. These major new costs most likely will result in higher bills for natural gas customers, including families, small businesses, and power generators…. Any increase in low-income households’ energy costs could prove devastating.” (American Gas Association and 27 Natural gas Supply Chain Associations, Letter to Sens. Schumer and McConnell, Speaker Pelosi, and Rep. McCarthy, 9/07/2021)

Democrats’ Legislation Also Charges Companies More To Produce Oil And Gas In The United States

“The bill would raise the minimum royalties for federal offshore oil and gas to 16.67% from the current 12.5%, and for 10 years would include a maximum of 18.75%, after which the cap would expire. The bill would revise the Mineral Leasing Act for onshore federal royalties to raise the minimum rate to 16.67% from its current 12.5%.” (“Democrats Reach Budget Bill Deal With Raft Of Oil, Gas Provisions,” Oil & Gas Journal, 7/28/2022)