The energy sector is one of the most important industrial sectors of the U.S. economy. When the government decides to intervene in such a sector, it becomes difficult for that sector to produce the goods & services that it produces at an affordable price.
Since in power, President Biden has implemented a number of regulations in the energy sector that make it complicated to produce oil & gas. For example, the Biden administration enforced an executive order that revoked the permit for the Keystone XL pipeline. This pipeline would have transported oil from Canada to the United States. Biden revoked the permit for the pipeline on his first day in office, citing environmental concerns. Another example is the Biden administration pausing new oil and gas leasing on federal lands and waters. This executive order, issued on Biden's first day in office, has been challenged in court and is currently blocked. However, it has still sent a signal to the industry that the Biden administration is not supportive of new oil and gas development on federal lands.
In addition to these specific actions, the Biden administration has also taken a more general approach to making it more difficult for the oil and gas industry to operate. This includes things like making it more difficult for companies to get permits and approvals for new projects and increasing enforcement of environmental regulations. These actions are hurting jobs and the economy.
Recently, the Biden administration proposed new regulations to further tighten the oil and gas market. Indeed, on August 4, 2023, the Biden administration proposed new regulations to make it more difficult to produce oil and gas in the National Petroleum Reserve-Alaska (NPR-A). The proposed regulations would increase the royalty rate for new and existing oil and gas leases from 12.5% to 18.75%; require oil and gas companies to reduce methane emissions from their operations; establish new environmental protections for wildlife and sensitive habitats; and increase public participation in the leasing and permitting process.
The Biden administration says that the proposed regulations are necessary to address the climate crisis and protect the environment of the NPR-A. The NPR-A is one of the largest and most important wildlife habitats in the United States, and it is also home to significant oil and gas resources.
The proposed regulations have been met with mixed reactions. Oil and gas companies have criticized the regulations, saying that they will make it too expensive to operate in the NPR-A. Environmental groups have praised the regulations, saying that they are necessary to protect the environment.
It would, however, be prudent for the Biden administration to cut regulations in the energy market. And doing so will help reduce energy costs; increase energy production; create more jobs; and boost economic growth. The reality is that the United States needs to produce more energy in order to reduce its reliance on foreign oil and to meet the growing demand for energy. Cutting regulations could make it easier for energy companies to produce more oil, gas, and other forms of energy.