White House Issues Muted Call for Oil Companies to Ramp Up Production

By Tom Ozimek
Tom Ozimek
Tom Ozimek
Reporter
Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.'
March 2, 2022 Updated: March 2, 2022

A White House official said on March 1 that U.S. oil and gas companies can and should boost domestic production, while dismissing the idea that the Biden administration’s energy policies were preventing companies from doing so.

Bharat Ramamurti, who serves as deputy director of the National Economic Council, told Bloomberg that crude oil prices are high, and “if folks want to produce more, they can and they should.”

Ramamurti was responding to a question about U.S. energy production and criticism that President Joe Biden’s clean energy policies have squeezed domestic drilling and contributed to soaring gasoline prices.

“As of the beginning of this year, there were 9,000 permits for oil and gas drilling that were currently going unused. So the idea that the federal government is restricting the ability of oil and gas companies to produce more I think is incorrect,” Ramamurti said.

Shortly after taking office, Biden put a freeze on new oil and gas leases on federal land and waters, axed the Keystone XL Pipeline project, and has pushed to decarbonize the U.S. economy, citing the imperative to fight climate change.

Sen. Tom Cotton (R-Ark.), a frequent critic of Biden’s energy policies, has called for new drilling leases and resumption of the Keystone pipeline, recommendations that White House press secretary Jen Psaki recently dismissed as a “misdiagnosis of what needs to happen” to curb high oil prices.

The White House has largely focused on urging OPEC+ to ramp up production to cool prices, a strategy that has thus far borne little fruit. Another tactic has been coordinated releases of crude from strategic stockpiles.

All 31 member countries of the International Energy Agency on March 1 agreed to release 60 million barrels of oil from their strategic reserves. But the move failed to reassure markets, and prices rose after the announcement.

pump-jacks
Petroleum pump jacks in the Kern River oil field in Bakersfield, Calif., on Nov. 9, 2014. (Jonathan Alcorn/Reuters)

Surging energy prices, driven higher by fears that Russia’s invasion of Ukraine will lead to supply disruptions, are fueling calls to ramp up domestic oil and gas production, both to reinforce American energy independence and to support European allies.

Recent polling carried out on behalf of the American Petroleum Institute (API), an industry lobby, showed that 84 percent of U.S. voters believe that producing natural gas and oil in the United States would boost security in America and for its allies around the world.

“Due to America’s energy resurgence over the past fifteen years, the United States is well-positioned to alleviate the growing energy crisis in Europe,” Mike Sommers, president and CEO of API, wrote in a recent letter to Energy Secretary Jennifer Granholm (pdf).

Europe is highly dependent on Russian energy, with Russia supplying around 27 percent of the European Union’s crude oil, 41 percent of its natural gas, and 46.7 percent of its coal.

“Recent developments illustrate the importance of the government working collaboratively with industry to ensure U.S. energy and economic security, as well as that of our allies in Europe and around the world,” Sommers said, referring to the war in Ukraine.

He called on the Biden administration to urgently implement a series of policy recommendations, including “clearly” committing to the continued export of crude oil, natural gas, and refined petroleum products, “swiftly” approving all liquefied natural gas applications, and accelerating the issuance of lease sales.

Oil prices surged on March 2 as supply disruptions mounted following sanctions on Russian banks amid the intensifying Ukraine conflict.

Russian oil exports account for approximately 8 percent of global supply.

Tom Ozimek
Reporter
Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.'