The chorus is growing from America’s oil executives for President Joe Biden to throw the federal government’s weight behind an industry he once deliberately shunned: U.S. shale.
The Biden administration, which has made climate one of its policy pillars, has more than once asked OPEC+ to raise crude production to tame energy prices -- while at the same time declining to do so at home. Now, oil and gas executives say they can help ease the energy crisis triggered by Russia’s invasion of Ukraine, but want help from the White House first.
“This shift away from Russia will not happen overnight, and we need to be clear about that, but for it to happen at all, we need clear and consistent energy policy here in the U.S.,” said Dustin Meyer, vice president of the American Petroleum Institute, on a conference call. “Unfortunately, that’s not really what we have right now.”
While critics complain the fossil-fuel industry is pressing its advantage at a time of war, further price rises triggered by Russia’s invasion of Ukraine may force President Biden to reckon with how the growing urgency of energy security lines up with his climate agenda.
“We expect a change in tone from Washington,” Pickering Energy Partners said in a note to clients. The mounting crisis in Europe combined with “economy-killing high gasoline prices” are likely spur the White House to explicitly call for more U.S. production, analysts wrote.
That’s something shale executives have been clamoring for.
“I’m a little mystified that there hasn’t been some dialogue,” Devon Energy Corp. Chief Executive Officer Rick Muncrief said earlier this week in an interview in New York.
U.S. shale has a litany of complaints with the Biden administration, from pipeline permitting to leasing, and is still producing less oil and gas than before Covid-19 struck two years ago, even though prices for both are much higher. Shareholder demands to harvest the elevated prices for dividends and buybacks is the main driver for their conservatism, but executives claim a long-term commitment from the U.S. government to back fossil fuels could unlock more capital investment in fresh production.
Liquefied natural gas is top of the agenda. Europe gets 40% of its natural gas from Russia and the urgency to move away from relying on Moscow to power its grid is growing by the day. The U.S., which recently became the world’s biggest LNG exporter, is already helping with nearly two-thirds of its cargoes currently at sea headed to Europe, but more could be done to displace Russia long-term, the industry says.
“Like in World War II and other crises, America has Europe’s back,” Mike Sommers, chief executive officer of the API, said in an op-ed published by Fortune Thursday. Biden could “move faster” on approving LNG export terminals and stop blocking financing to gas infrastructure overseas, he added.