Actions on Energy Security Should Match Reassuring Words on Ukraine Crisis
Posted February 24, 2022
Announcing sanctions Tuesday against Russia for its actions in Ukraine, President Joe Biden told Americans that he is executing a plan with major oil producers to “secure stability and global energy supplies.” To say the least, that is a welcome development as Russian military action escalates, raising the specter of additional geopolitical and economic disruption at a time of high inflation.
President Biden also said he is “using every tool at our disposal to protect American businesses and consumers from rising prices at the pump,” echoing prior comments that he would “work like the devil” to bring down gasoline prices. These words, too, are welcome. Policymakers of all stripes should embrace the fact that U.S. energy abundance has historically led to affordable energy for American consumers.
Yet despite this change in tone, the administration continues to block U.S. energy production. Policies that restrict U.S. natural gas and oil development are steps in the wrong direction. Indeed, few things are more critical right now than providing energy security to American consumers as well as our allies abroad.
Here are three things President Biden can do right now to ensure access to affordable, reliable U.S. energy – and to shore up the foundation for Europe’s energy security. The truth is, we can do both while addressing the risks of climate change. If we don’t, the benefits of U.S. energy leadership are at stake:
- Provide Clarity on Natural Gas and Oil Leasing: Last weekend, the Department of Interior (DOI), which was already behind on its obligation to lease on federal lands, chose to freeze some new drilling projects on federal lands.
- The department’s action to limit new oil and gas leases on federal property increases uncertainty about future energy development projects.
- It is a significant concern for American producers, given the far-reaching consequences of needlessly choking our own plentiful supply.
- At a time of geopolitical strife, America should deploy its ample energy abundance – not restrict it.
- Permit Energy Infrastructure: News last week that the Federal Energy Regulatory Commission (FERC) had voted to increase regulatory barriers for approving natural gas pipelines directly affects America’s response to the current Russia-Ukraine situation: Put simply, it could hinder our ability to develop and transport U.S. natural gas so that it can ultimately be shipped overseas.
- Even before tensions escalated over Ukraine, Europe had been facing a severe energy supply crunch – alleviated, in part, by the U.S. natural gas and oil industry, which has helped to obviate the need for our European and Asian allies to turn to nations like Russia for their needs.
- FERC’s decision brings more uncertainty into the approval process for pipelines and other critical energy infrastructure. It will only add delay to an already sclerotic approval process.
- President Biden, currently working to secure global energy supplies, should undertake efforts to ensure the permitting process for U.S. natural gas infrastructure is transparent, clear and consistent in its application. Additionally, the President should ask the Department of Energy (DOE) to accelerate authorization of more LNG exports to Europe.
- Finally, the administration should broaden exemptions to its own guidance blocking U.S. financial support for natural gas infrastructure projects overseas. Why hinder trade and commerce both sides want?
- Complete Work on a Long-Term Offshore Plan: Laws enacted by Congress mandate that long-range energy development projects are approved through an open and rigorous process run by DOI. Regular five-year plans for offshore projects receive input from federal, state, and local governments, as well as industry, Congress, environmental groups, and the public.
- The next five-year offshore leasing program, which should be in place by July 1, is dangerously behind schedule and highly unlikely to be finalized by the time the current one expires.
- No offshore lease sales can be held without the five-year program in place.
- DOI must move forward with a new five-year plan to prevent an unlawful and unnecessary disruption to American energy production.
Europe’s energy security is in the balance. Americans are fighting inflation. Right now, the most important move President Biden can make is to signal that America is positioned to provide stability and supply amid any disruption of international energy markets – and can do so without increasing costs at home.
About The Author
Mike Sommers is the 15th chief executive of API since its founding more than a century ago. Prior to coming to API, Mike led the American Investment Council, a trade association representing many of the nation’s leading private equity and growth capital firms and other business partners. He spent two decades in critical staff leadership positions in the U.S. House of Representatives and the White House, including chief of staff for then-House Speaker John Boehner. Mike is a native of Naperville, Illinois, and a graduate of the honors program at Miami University in Oxford, Ohio. Mike and Jill Sommers, a former commissioner at the Commodity Futures Trading Commission, have three children and live in Alexandria, Virginia.