Tag Archive for: gas prices

Biden Admin Hands Out $500 Million For Oil Drilling In Middle East

The Biden administration is providing financing for oil development in the Middle East after taking numerous steps to restrict domestic production, according to Bloomberg News.

The U.S. Export-Import Bank — a nominally independent government entity that aims to boost the American economy “by facilitating the export of U.S. goods and services” —  approved a $500 million loan guarantee for oil and gas development in Bahrain on Thursday, according to Bloomberg News. The funding follows the Biden administration’s decisions to release the most restrictive offshore oil and gas leasing schedule in American history and cancel seven previously-issued oil and gas leases in Alaska, among other actions intended to rein in domestic oil production.

The Export-Import Bank’s loan guarantee will “increase the production of oil and the availability of gas to meet the future energy demands” of Bahrain, the institution told Bloomberg News. The $500 million of financing was about five times larger than what some lawmakers were anticipating.

Six Democratic lawmakers, including Sens. Jeff Merkley of Oregon and Bernie Sanders of Vermont, wrote a Tuesday letter to the Export-Import Bank in which they implored the agency to not move forward with $100 million of financing because of potential negative ramifications for the climate. After the $500 million loan guarantee was announced, Merkley proceeded to describe the Export-Import Bank as a “rogue agency,” according to Bloomberg News.

While the Export-Import Bank is a nominally independent part of the executive branch, President Joe Biden appointed or successfully nominated Chair Reta Jo Lewis, Vice Chair Judith Pryor and board members Owen Herrnstadt and Spencer Bacchus.

In addition to the restrictive offshore leasing schedule and lease cancellations in Alaska, the Biden administration has moved to take millions of acres of federal lands off the table for oil and gas activity after unsuccessfully attempting to halt drilling on all federal lands in 2021. While U.S. oil production did reach record levels at the end of 2023, energy sector experts previously told the Daily Caller News Foundation that those production levels have been reached in spite of the Biden administration’s approach, rather than because of it.

The experts who spoke to the DCNF said this is because most of the growth in production has occurred on state and private lands, where Biden does not have the ability to directly shut down drilling. They added that the oil wells of today are the result of planning and financing decisions made several years in the past.

Neither the White House nor the Export-Import Bank responded immediately to requests for comment.

AUTHOR

NICK POPE

Contributor.

RELATED ARTICLE: EXCLUSIVE: Biden Admin Talks Tough On Big Oil, But Gave Them Regular Access To Discuss Key Regulatory Change

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Biden Admin To Continue Draining Oil From Strategic Reserves Through Election Day

The Biden administration announced Monday that it is auctioning 10 million barrels of oil from the Strategic Petroleum Reserve (SPR) which it will deliver throughout November, according to a Department of Energy (DOE) notice of sale.

The DOE announced that it will extend the period in which it aims to sell 180 million barrels of crude oil by auctioning 10 million barrels from Sept. 19 to Sept. 27 and delivering the oil from Nov. 1. to Nov. 30, according to the notice. The deliveries of the reserves, which aim to bring down gas prices, will take place during the same month as the midterm elections that take place on Nov. 8.

White House Press Secretary Karine Jean-Pierre said on Sept. 14 that gas prices had fallen for 90 straight days, touting Biden’s efforts to bring down prices at the pump after gas prices peaked at over $5 per gallon in June 2022. The White House is eager to continue lowering gas prices ahead of the midterm elections as it believes prices at the pump most directly affect voters’ everyday lives and their perception of the economy.

The average national gas price is $3.68 per gallon, which is 49 cents higher than it was in September 2021, according to AAA data. Biden’s Energy Secretary Jennifer Granholm said on Sept. 8 that the administration may continue to auction off oil barrels from the SPR past October to ward off increasing fuel prices in late 2022.

Biden has released 155 million barrels of oil so far, and the November sale will bring the total to 165 million barrels out of the 180 million barrels that he sought to sell from March to October. The emergency reserve fell to its lowest level since Nov. 1984 on Sept. 6 after consistent monthly releases of crude, according to DOE data.

SPR oil is sold to the highest bidder, and some of the businesses entitled to make bids are foreign companies. Biden announced in late March that he would approve SPR sales to bring down gas prices and increase the global supply of oil that is being disrupted by “Putin’s price hike,” according to a White House press release.

The DOE did not immediately respond to the Daily Caller News Foundation’s request for comment.

AUTHOR

JACK MCEVOY

Energy & Environmental Reporter.

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Biden Soaring Gas Prices Are Part Of Green Agenda—Gas Stations Adding Extra Digit Expecting $10 a Gallon for Gasoline

President Joe Biden suggested record gas prices were part of an incredible transition away from fossil fuels Monday in Japan.

At the press conference in Tokyo with Prime Minister Fumio Kishida, a reporter asked the president if a recession in the United States was inevitable.

“When it comes to the gas prices,” the president stammered for a moment. “We’re going through an incredible transition that is taking place that God willing when it’s over we’ll be stronger, and the world will be stronger and less reliant on fossil fuels when this is over.”

Biden then mentioned his decision to ease rising gas prices by releasing 180 million barrels of oil from emergency stockpiles in late March, though he noted it hasn’t been effective.

The Biden administration canceled the three remaining offshore oil and gas lease sales last week including the Cook Inlet in Alaska, and two in the Gulf of Mexico reportedly due to factors including conflicting court rulings.

Richard Spinrad, the head of the National Oceanic and Atmospheric Administration (NOAA) reportedly said the backlog in permitting was from a miscalculation a sub agency found, according to a late April letter obtained by The Daily Caller News Foundation.

The average pump price nationwide has surged to $4.59 per gallon of regular gasoline compared to $4.11 in April, according to AAA.

AUTHOR

CHRIS BERTMAN

Contributor. Follow Chris on Twitter.

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EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved.

How Biden Raised Gas Prices Without Anyone Noticing

  • U.S. pump prices have surged throughout President Joe Biden’s tenure in office, even as Democrats continue to blame the spike on Russia’s invasion of Ukraine and Big Oil companies.
  • The average price of gasoline nationwide increased a whopping 48.4% between Biden’s January 2021 inauguration and Feb. 21, three days before Russian President Vladimir Putin invaded Ukraine.
  • “We haven’t had a federal lease sale in North Dakota in over a year,” Republican North Dakota Rep. Kelly Armstrong, a member of the House Energy and Commerce Energy Subcommittee, told the Daily Caller News Foundation in an interview. “These are real things — that you are sending signals, not just to energy companies, but also to Wall Street.”

President Joe Biden and Democrats have blamed the continued gasoline price surge on Big Oil and Russia’s invasion, but pump prices have climbed throughout his tenure.

While Russia’s invasion of Ukraine has destabilized global energy markets, causing an historic supply crunch, high gasoline prices have been the norm throughout Biden’s first 14 months, federal data showed. Experts have blamed the high prices on the administration’s energy and climate policies disincentivizing domestic fossil fuel production.

Since Russia’s invasion, gasoline prices have increased more than 20%, from $3.53 per gallon to $4.24 per gallon, according to the Energy Information Administration. However, pump prices increased a whopping 48.4% between Biden’s January 2021 inauguration and Feb. 21, three days before Russian President Vladimir Putin ordered troops into Ukraine.

Democrats and the White House initially blamed Russia for the entirety of the price increases, calling it “Putin’s gas price hike,” before also accusing oil companies of profiteering off the crisis.

“While there is no denying that Putin’s war has led to instability on global energy markets, I remain concerned that the oil industry is not doing enough to protect American consumers from rising gas prices,” House Natural Resources Committee Chairman Raúl Grijalva wrote to Big Oil executives on March 18.

However, fossil fuel industry groups and Republicans have slammed the Biden administration for its long string of policies dating back to the president’s first day in office. They accused Biden of waging a war on fossil fuels, causing decreased capital flows to domestic projects.

“The United States has shown its global energy dominance over the past decade,” Independent Petroleum Association of America COO Jeff Eshelman told the Daily Caller News Foundation in February. “Unfortunately, this has been threatened by the current Administration’s policies against domestic natural gas and oil production.”

“Make no mistake, natural gas and oil production here at home benefits not only our nation, but also our worldwide allies,” he added. “For America, it means less reliance on oil imports from unfriendly countries.”

Among Biden’s first actions as president was to revoke the Keystone XL pipeline’s federal permit, which would have transported more crude oil into the U.S. from Canada. The administration also abandoned the Willow Project, a significant oil and gas project in Alaska approved by the Trump administration that would have produced 100,000 barrels of oil per day.

After a federal judge ordered the Biden administration to halt its attempted ban on new federal land drilling leases, the Department of the Interior has dragged its feet and defied multiple court-ordered deadlines to restart the program. The Interior Department also chose not to appeal a recent ruling that prohibited an offshore drilling lease in the Gulf of Mexico the agency facilitated in the fall.

Further, the administration hasn’t developed a new five-year federal leasing program — which is needed to plan future lease sales — to replace the current one which expires in late June 2022according to a Congressional Research Service report from December. The most recent offshore lease sale occurred in 2020 during the Trump administration.

Overall, there are just 601 oil and gas drilling rigs active in the U.S., the latest government data showed. The number of rigs peaked under the Trump administration in 2018 when there were 1,032 active.

The U.S. is also on track to again become a net importer of oil in 2022 after briefly reaching net exporter status in 2020. The U.S. became a net exporter of total energy in 2019, factoring in oil, coal and natural gas trade, for the first time in 75 years.

“We haven’t had a federal lease sale in North Dakota in over a year,” Republican North Dakota Rep. Kelly Armstrong, a member of the House Energy and Commerce Energy Subcommittee, told the DCNF in an interview. “These are real things — that you are sending signals, not just to energy companies, but also to Wall Street.”

“(Drilling projects) take several years to do and a ton of capital the raise,” he continued. “How are you going to do that when you have an administration basically signaling that they want nothing to do with oil and gas?”

North Dakota produced 1.1 million barrels of oil per day in 2021, the third-largest statewide output, according to federal data.

AUTHOR

THOMAS CATENACCI

Energy and environment reporter.

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EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved. Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.

Why do we have an Oil Glut?

The world is awash in oil and gas. Amazing.  Less than two decades ago in 1998, the predictions were by this time in 2016 oil production would be past its peak. In fact the gloom and doom experts were called Oil Peakists. Note this from Science magazine back in 1998:

From Science magazine’s “The Next Oil Crisis Looms Large—and Perhaps Close,” Aug. 21, 1998:

This spring . . . the Paris-based International Energy Agency (IEA) of the Organization for Economic Cooperation and Development (OECD) reported for the first time that the peak of world oil production is in sight. Even taking into account the best efforts of the explorationists and the discovery of new fields in frontier areas like the Caspian Sea . . . sometime between 2010 and 2020 the gush of oil from wells around the world will peak at 80 million barrels per day, then begin a steady, inevitable decline, the report says.

However, technology, especially here in the U.S., relegated that prediction to the proverbial dust bin of history. With the private developments of  revolutionary shale fracking and horizontal drilling technology, vast new energy resources were opened up in places like North Dakota, Ohio, Pennsylvania and even in the older Permian field in West Texas. The U.S. is now pumping 9 million barrels of oil a day, and trillions of cubic yards of gas. We are no longer dependent on importing Middle East oil. In fact much of the oil that we import comes from our neighbors Canada and Mexico.

In the wake of lifting sanctions against nuclear Iran, oil is beginning to flow again to the European Union from Tehran which says it could add another 500,000 barrels in production this year.  U.S. oil is also flowing to Europe now that the 43 year old ban on oil exports was lifted and signed in law late in 2015. The first shipment of sweet crude drawn from the Eagle Ford Shale field in South Texas left the port of Corpus Christi, Texas on New Year’s eve and landed at the port of Marseilles on Friday. Another shipment out of Houston made it to Rotterdam on Thursday. A third one out of Houston is on its way to Marseilles. The oil is the equivalent of the so-called Saudi light or sweet crude which doesn’t require as much refining producing profit margins for the refiners.

So, why do we have this glut? 

The world’s economies are not growing as fast or rather slowing down, especially in the big consumer of raw materials and energy, China.  China’s economy and trade is impacting on those exporters of commodities like oil, gas,  copper, aluminum  and  iron ore like Australia,  Brazil, Canada,  Russia, Venezuela  and African countries. Where China was growing at a purported 10 percent plus, annually, the evidence is it has fallen to less than a third of that towering inflated level. We have come to realize those growth estimates were based on questionable figures  prepared by the Chinese government.  Some economic experts suggest the annual growth in GDP may be less than three percent.  So with that news came the sudden plummeting in the world trading markets for commodities, especially oil.

There is  also the great geo-resource political game in the Middle East going on between Saudi Arabia and Iran, and let’s not forget Russia.  Saudi Arabia as the keystone in the OPEC oil Cartel is not listening to the complaints of the other members of the group at meetings in Vienna demanding that it reduce domestic production. It is pumping oil and still making money, because it costs less than $5 a barrel. This despite a yawning budget deficit of $98 billion. The Saudis have an estimated $600 billion in hard currency reserves, which provides a cushion to ride out the geo-political storm. They are using the oil weapon to beat back competitors including Iran across the Persian Gulf, Russia which  has military in Syria supporting the Assad regime, and  the newly resurgent producer, the US.   Russia, as Shoshana Bryen of the Washington, D.C.-based Jewish Policy Center pointed out in a recent interview, mispriced its budget at $119 a barrel of oil, then redid the numbers at $87 dollars only to see it plummet to less than $30 at one point.

So what is the impact here in the U.S.?

When was your last trip to fill up your car at the gas station?  Here on the Gulf Coast in the U.S., regular unleaded gas is currently selling for less than $1.80 a gallon.  That means savings to consumers who appear to be putting away the difference awaiting a return to a more confident economy.   Diesel that at one point was priced at nearly $1 dollar a gallon above gasoline has shrunk to less than ten cents a gallon differential. That means that the cost for moving shipments via long haul truckers has gotten cheaper. It means that jet fuel cost is less reflected in the huge profits being declared by the major airlines. Some of that may be due to the lagging airline ticket surcharges that remain in place.  However, the drop in oil production is also impacting the profit margins of rail carriers who minted money from train loads of combustible leaving the Bakken formation in North Dakota. The drop in oil prices occasioned by the glut also means that the cost of petro chemical feed stocks is enhancing profit margins for plastics,.

Remember, the discussion about lifting the 43 year old oil export ban?

One of the by-products of that was the convergent pricing of U.S. crude has converged with world pricing.  If you went onto the COMDEX oil trading floor in lower Manhattan, you would see traders vying for futures contracts in West Texas Intermediate (WTI) versus Brent-the so-called North Sea crude oil benchmark. The lifting of the oil export ban in the U.S. virtually eliminated the difference making Brent the world standard.  As of Friday, January 22, 2016 WTI was $32.19 per barrel for March 2016 deliveries, a 9.0 % jump, and Brent priced out of the London ICE was $32.18. Heavier grades like Canadian Tar sands or Venezuelan heavy sulfur crude require more refining to produce various products. These grades actually sell at discounts from those benchmarks by as much as five dollars.

Can we expect the oil glut to last? Hardly. The current excess supply will work itself off and oil futures will gradually begin to rise again. That will bring rigs on stream here in the U.S. to start producing again, it may cause Iran to produce more than the declared 500,000 barrels  annually and the Saudis would just be minting more billions to add to its hard currency reserves. However, by mid century those fabled Saudi sweet crude reserves may likely begin to tail off. Energy, whether oil or gas will reflect the cyclical demands of the world economies.  The U.S. stands in pretty good shape to weather the current volatility in trading markets; thanks to technology, entrepreneurial prowess and the lifting of the oil export embargo. Don’t panic and consider investing in contrarian values in the equity and debt markets. That is what the long term value investors do. They buy when values are relatively cheap compared to long term returns.

EDITORS NOTE: This column originally appeared in the New English Review. An earlier version was published in the Newsletter of the Lisa Benson Show National Security Task Force Newsletter, January 23, 2016.