Biden’s oil and gas policy makes about as much sense as his Afghan policy

Biden has done everything to obstruct US oil and gas producers in the name of fighting climate change – while imploring Saudi Arabia, Russia and others to increase oil production to keep pump prices down

Tilak K. Doshi

Published: 9:15pm, 29 Aug 2021

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Few would disagree with former US vice-president Mike Pence’s view that President Joe Biden’s botched withdrawal from Afghanistan “is a foreign-policy humiliation unlike anything our country has endured since the Iran hostage crisis”.

In his memoir, Robert Gates, who served as defence secretary for the Obama administration, famously wrote that Biden “has been wrong on nearly every major foreign policy and national security issue over the past four decades”.

It would seem that the disaster in Afghanistan is only the latest blunder in a foreign policy record filled with them.

Over the past few days, the world has watched news clips of chaos at Kabul airport with civilians clinging to US military aircraft in a desperate attempt to escape retribution by the victorious Taliban.

US diplomats, stunned by the speed of the Afghan military’s capitulation to Taliban fighters, were reduced to imploring the militant leadership with financial aid and other incentives not to storm the US embassy in Kabul – the embassy which had flown the rainbow LGBT flag to mark Pride Month in June and showcase American commitment to “inclusivity”.

The full extent of the US debacle was revealed when the State Department admitted that the Biden administration “cannot ensure safe passage” for thousands of trapped Americans to travel to Kabul airport.

02:19

Former British prime minister Tony Blair criticises US withdrawal from Afghanistan

But the Biden administration suffered yet another humiliation earlier this month when Opec, the oil-producers’ cartel, summarily rejected its request to release more oil to world markets.

Reuters quoted Opec sources as saying there was “no need to release extra oil more quickly”, and that there was “no concern that the planned schedule of increases would leave any demand unmet”.

US National Security Adviser Jake Sullivan had criticised big oil producers in Opec+, including Saudi Arabia and Russia, for what he said were “insufficient crude [oil] production levels”. “At a critical moment in the global recovery, this is simply not enough,” he said.

While this request was cast as a means of tempering oil prices to help global economic recovery, it is no secret that the Biden administration is deeply concerned with that distinctly American political barometer of presidential popularity – the price of fuel.

Senate approval of the US$3.5 trillion budget plan that would expand Medicare, tax credits and climate initiatives suggests that the US inflation outlook may not be “transitory”.

Bob McNally, one of Washington’s more acute observers of energy affairs, said: “The Biden administration is under enormous political pressure due to inflation, with galloping gasoline the most publicly visible and vexing.”

How can inflation be transitory if supply chain disruption is here to stay?

US fuel prices hit their highest levels since 2014 this summer. It is a “jarring contradiction”, according to a Bloomberg report, that Sullivan issued his request to Opec+ just two days after the UN Intergovernmental Panel on Climate Change (IPCC) published its sixth assessment report, warning of a point of no return in its climate crusade to quickly ban the use of fossil fuels worldwide.

The United States, along with the European Union, have been in lockstep with UN Secretary General António Guterres who said the IPCC report was nothing less than “a code red for humanity. The alarm bells are deafening, and the evidence is irrefutable.”

02:27

Global warming dangerously close to being out of control: US climate report

But the contradiction goes deeper: the Biden administration implores Saudi Arabia, Russia and other producers to increase oil production while doing its best to obstruct its home-grown oil and gas industry to meet the demands of the Democratic Party’s Green New Deal base.

The US remains the world’s largest oil and gas producer but Biden has done everything possible to obstruct domestic producers in the name of fighting climate change. On attaining office, he immediately unleashed a series of executive orders to reverse his predecessor’s strategy of “energy independence”.

At a stroke of his pen, he revoked permits for the Keystone XL pipeline to transport oil from Canada to Gulf coast refiners, suspended oil leasing in Alaska, halted oil and gas leases on federal land, and cynically invoked the Endangered Species Act to block energy resource development on private lands in the West.

Two weeks ago, the Biden administration challenged a federal judge’s decision in June to block the Interior Department’s pause on oil and gas leasing on public lands and waters. Oil and gas industry representatives question whether there is any intent by the government to fall in line with the court ruling since lease sales have not been scheduled despite the court order.

Amid climate pressure, Mideast and Russian oil producers stand to benefit

Benjamin Zycher, another keen analyst of the US energy scene, observed succinctly that “the Biden administration is fine with fossil-fuel production, as long as it happens overseas”.

While policy incoherence in Washington is nothing new, Zycher continues, “it’s still quite something to see the Biden administration simultaneously pursue new constraints on US production of fossil fuels as a central component of its ‘climate’ policies, while at the same time attempting to avoid the adverse price effects of that production stance”.

The Biden administration’s dysfunctional posture of imploring foreign producers to ramp up oil exports while doing its best to stymie America’s oil and gas industry is par for the course. The administration, it would seem, has been hoisted by its own petard.

Tilak K. Doshi is an energy consultant, and author of “Singapore in a Post-Kyoto World: Energy, Environment and the Economy”

David Dodwell is away