The oil and gas sector and the Biden government are forced into a partnership of necessity. Currently, they seek divergent, long-term fuel goals, as a result of the European war and soaring energy prices.
It’s a War Zone Out There
The assault of Ukraine by Russia, as well as the punitive financial sanctions imposed by the US and Europe against Moscow, have wreaked havoc on global commodities markets.
Oil prices have swung back and forth this week, reaching $130 a barrel early in the week before dropping to $111 on Friday.
On Friday, gasoline prices hit a new high of $4.33 per gallon, a record high the Biden government has been combating for months. Fossil resource executives are cautious of the Biden government’s long-term goals.
In addition to short-term support for increased drilling, the industry stated it requires faster permit turnarounds and recognition that natural gas production should remain in the long run, while the renewable energy industry develops.
Global diesel shortage raises risk of oil price spike – column by @JKempEnergy https://t.co/wcVuE0r8Jq
— Reuters Commodities (@ReutersCommods) March 11, 2022
Officials from the Biden camp have stated their support for the sector, which is expected to add 900,000 barrels of oil per day to total output this year. It is on course to become the nation’s biggest LNG exporter.
However, these officials are adamant about their long-term commitment to pursuing renewable energy projects in order to better protect against potential price shocks, as well as climate change.
Can We Take the Heat?
“I see this as a kitchen fire,” said Vinai Thummalapally, interim president and chief operating officer of the US Trade and Development Organization.
This organization assists in the financing of energy projects around the world.
Oil price shock jolts global recovery as economic impact of Russia’s invasion spreads https://t.co/x8WS4Kpzzm
— Sameep Shastri 🇮🇳 (@sameepshastri) March 11, 2022
That notion was reiterated by Amos Hochstein, the White House special envoy and director for world energy matters.
The government recognizes additional oil and gas is required to stabilize markets, but it must guarantee “when we move to renewables, green, and pollution prevention, we do not establish a new dependency,” Hochstein said at the event.
Hochstein and authorities from the White House, State Department, Energy Department, and other organizations stretched out to encounter with a few of the 6,000 participants at the CERAWeek energy symposium in Houston.
They attempted to relieve anxiety about large swings in the oil prices and the government’s response to the global energy supply crunch.
Throughout the week, White House Climate Advisor John Kerry, Energy Secretary Jennifer Granholm, EPA Director Michael Regan, and a slew of other officials met with executives.
After speaking with White House officials, Jack Fusco, CEO of LNG exporter Cheniere Energy, said during an appearance the Biden administration was focused on sustainable energy, but also realized the need for further gas in the short term.
“The discussions were beneficial. They inquired about supply availability, how they might assist, and how much [gas] we can send to the EU.”