American energy policy softening

Regional and global situations have brought the subject of energy independence into sharp focus. Germany recently announced it was considering a U-turn in its power policy. And the Ukrainian situation may be leading to similar reflection in the U.S.

President Biden placed a ban on Russian oil, liquefied natural gas (LNG), and coal imports, as well as U.S. investment in Russia’s energy sector or Americans financing or enabling foreign companies investing in or producing energy in Russia.

“This crisis is a stark reminder,” said President Biden. “To protect our economy over the long term, we need to become energy independent.”

While the preference of the administration would be to achieve that independence via renewable sources, the president’s comment may signal a softening of approach to oil and gas policy.

At last week’s CERAweek gathering of energy and oil & gas leaders, Energy Secretary Jennifer Granholm asked energy executives to start "producing more right now." She urged homegrown producers to do all they can to increase output.

The U.S. imported a staggering 8.5 million barrels per day of petroleum from more than 70 countries in 2021 according to the U.S. Energy Information Administration. Canada dominated with about half. Russia provided 8% and Saudi Arabia 5%. North American energy independence would be possibly if Canadian resources were supported, and the U.S. industry encouraged to produce more. But major barriers must be overcome. Some say it takes longer to permit pipelines than it takes to build them.

Some speakers at CERAWeek voiced strong commitments to decarbonization. But at the same time, they saw an immediate and short-term need for fossil fuels while the long-term transition to alternative energies takes place. Other at the show complained about the administration trying to convince American financial institutions not to invest in American energy projects such as those in Alaska.

Heather Reams, president of Citizens for Responsible Energy Solutions, stressed the major role natural gas should be playing in the nation's electric grid. In her view, this is the only way to achieve energy independence while wind, solar, and battery resources are gradually added.