President Biden traveled to Saudi Arabia on Friday to meet with officials from the desert kingdom, which holds the world's largest oil reserves, and is expected to meet with leaders from five other oil- producing Persian Gulf nations on Saturday.
The president had promised to restrict domestic fossil fuel development as part of his efforts to combat climate change.
When the Department of the Interior (DOI) released a five-year plan for offshore oil and gas drilling that could allow new lease sales in the Gulf of Mexico, Biden threatened to break a campaign pledge to stop selling offshore oil and gas production.
The administration approved a giant oil drilling project in Alaska that is opposed by climate change activists. A federal judge ruled that the project's environmental review did not adequately consider the effects on climate change. Opponents of the project were concerned that the administration was signaling support for the project after the new environmental impact analysis was issued.
According to the new analysis, giving the willow project a stamp of approval could be the kiss of death for any chance at meeting President Biden's climate commitments.
Experts say that none of these measures are likely to lower prices in the foreseeable future because of the long lag between the new fossil fuel lease and any effect on prices.
There aren't many options in the U.S. president's toolkit to lower fuel prices. Biden has used the ones he has, from the wise move of selling oil from the Strategic Petroleum Reserve to the more economically questionable proposal of a federal gas tax holiday.
Alan Zibel, research director for Public Citizen, told Yahoo News that the Biden administration's decision to sell off more public lands for drilling won't lower gasoline prices or make climate change worse. Today's gasoline prices won't be affected by any oil extracts from leases issued now.
It takes a long time to get permits and infrastructure in place to transport equipment and oil before the drilling can even start. Depending on factors such as water depth, drilling depth below the ocean floor, distance from shore and so on, it can take up to 10 years from a lease sale to oil production.
Zibel said that the outlook for the economy is a bigger driver of oil prices than the Biden administration is doing on supply.
Biden is not likely to increase oil production in Saudi Arabia. It may be related to the increase in oil production announced by the Organization of the Petroleum Exporting Countries.
Gross wrote in her post that Biden is unlikely to be successful if he asks for increased oil production. There are only two countries with spare capacity. They don't have a reason to increase production. Both countries are enjoying high oil prices because of a transition that will eventually erode demand.
Despite disappointing environmentalists, Biden's moves have angered the oil and gas industry. No new lease sales would be included in the offshore plan.
The DOI waited until the day after the previous five-year plan expired to propose a new one, which won't take effect until the fall at the earliest. They are worried that no areas will be opened when the final rule is issued.
Frank Macchia said, "Tonight's announcement leaves open the possibility of no new offshore lease sales, the continuation of a policy that has gone on for far too long." The U.S. is in an unprecedented position because of their failure to act.
Producing oil in the Middle East is not in the interests of the American people. On behalf of the men and women fueling America's economic recovery, I invite you to visit America's vast energy fields and infrastructure. Instead of asking foreign governments to increase energy production, look to reliable U.S. sources.
Oil companies have been blamed by the Biden administration for holding back on increasing supply. The White House released a plan for lowering gasoline prices that asked Congress to make companies pay fees on wells from their leases.
In the first quarter of this year, the nine largest US oil companies spent more on dividends and buying back shares than they did on new oil development. Biden sent a letter to the major oil refining companies asking for an increase in production.
At a time of war, historically high refinery profit margins are not acceptable. To address the crisis, your companies need to work with my administration.
According to U.S. Energy Information Administration data, the refinery utilization rate is currently at 94.2%, the highest rate since 2019. Capacity expansion is discouraged by the administration's reluctance to embrace additional federal fossil fuel leasing.
"Unfortunately, what we have seen since January 2021, are policies that send a message that the Administration aims to impose obstacles to our industry delivering energy resources the world needs."
If imploring Saudi Arabia isn't enough to bring down gasoline prices, what is? Climate change activists and consumer advocates want the federal government to pass on windfall profits to taxpayers.
According to the Center for American Progress, four fossil fuel multinational giants earned more than $75 billion in one year.
The Big Oil Windfall Profits Tax Act was introduced in March. Relief checks would be raised and sent to consumers for up to 40 billion dollars a year.
It is not as radical as it appears. In May, Britain's Conservative government unveiled a 25% tax on the profits of oil and gas firms that will pay for subsidies to low-income households.
Laws could be used to limit price increases. The House of Representatives passed a bill in May that would give the president the power to declare an energy emergency that would outlaw excessive increases in gasoline prices.
The White House did not respond to a request for comment on what it hopes to achieve on oil supply, but experts think the recent moves are an attempt to give the appearance of fighting high prices.
They are terrified that high prices at the pump will affect Biden's approval rating. If there was a president in this situation, they would do whatever they could to lower gasoline prices. He still has a political imperative to try to bring them down despite the fact that these prices are not his fault.
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