The Cavernous Hole In American Energy Policy

In an abundant year for American energy policy ideas that are the equivalent of shooting the economy in the foot, one stands out for its simplicity: the giant, empty caverns known as the Strategic Petroleum Reserve (SPR).

When gasoline prices surged in 2021, the Biden Administration first started tapping the SPR. It was just 11 months into a term that had seen the rapid rise in energy prices following the Administration’s open declaration of hostility toward the American oil and gas industry. The Russian invasion of Ukraine goosed prices higher, and the Administration again turned to the SPR in 2022 in an effort to show America that it was doing something to alleviate the pain at the pump. It drained the SPR to the lowest level in 40 years, while continued higher energy prices contributed to the highest inflation in 40 years.

The Administration bragged about the oil depletion as “record releases,” which is like gloating about emptying the household savings account to invest in a worthless boondoggle. That is exactly what happened; the SPR releases provided a few days of temporary relief before prices shot higher. As energy prices stayed high, inflation worsened.

Today, those giant storage caverns – created to aid the U.S. in a global energy crisis, not for political expediency – remain empty, with apparently no plan for them to be replenished. In fact, one report predicts it will take decades to restock the reserves from their current all-time low of a mere 20 days supply. Consumer Energy Alliance warned over a year ago that draining the SPR for political purposes without lifting restrictions on American oil and gas production would prove a costly mistake.

So here we are, watching gas prices streak past an eight-month high. At the same time, the Administration continues to send negative market signals by – for the first time in history – failing to produce a new federal offshore leasing plan, as required by Congress. Due over a year ago, it will not be ready until the end of this year, according to the Interior Department.

In late July, the National Marine Fisheries Service agreed to restrict oil drilling activity in more than 10 million acres right in the middle of the Congressionally mandated Lease Sale 261 in the Western Gulf of Mexico. The unprecedented terms of a legal settlement with a coalition of environmentalist groups also include restrictions on oil and gas vessels while other vessels traversing those waters are exempt. This action could severely curtail energy development opportunities in the Gulf.

In sum, we no longer have a meaningful SPR, nor a plan to refill it; we are taking overt steps to kill the offshore oil and gas industry despite the clear instructions of Congress to develop the Gulf.

Ironically, just as two executive branch agencies do everything to make offshore oil and gas drilling unviable, the Administration touts its support for conservation and National Parks under the Great American Outdoors Act. This law mandates that “50% of all energy development revenues from oil, gas, coal, or alternative or renewable energy development on Federal land and water, up to $1.9 billion per fiscal year” must be used for our nation’s parks and conservation. With more development in the Gulf, much of the funding will dry up.

The policies coming out of Washington mirror those that failed in Europe, California, and New York. Look at the cancellations or renegotiations of offshore wind contracts in the Northeast to account for higher financing and materials costs. This means that families relying on that electricity will be paying more. As for California, it is still a basket case railing against nuclear power and natural gas on one hand, while quietly extending the life of its sole nuclear plant and continuing to use natural gas to keep the lights on.

These are the practicalities dictated by realities that have smashed headlong into ideology. Our only hope is that the poorly thought-out policies will lose their luster when votes may be at risk. However, ideology is notable for its persistence in the face of failure. To wit, this just in from New York: Ratepayers in New York City will see their bills go up by roughly 20% to pay for the State of New York’s ill-conceived energy policy.

Briana Delvecchio, a resident of the suburb of White Plains, shared a too-familiar concern: “It’s upsetting. And I feel bad for my parents. They pay over $800 a month and my mom would like to retire but she can’t. It’s ridiculous, it’s not fair. How are we going to live?”

Our energy policy is so broken that it took a second Supreme Court decision, which follows an Act of Congress, to give final clearance for the Mountain Valley Pipeline to begin construction.

Everyone desires cleaner energy and an improving environment – and we are getting it. For the past two decades, the U.S. has had the largest emissions reductions on the planet, while China contributes 66% of the developed world’s emissions every year.

American families and businesses are paying far too much for energy policy gone mad without any clear indication that what they are paying so much for will have any meaningfully positive impact on our shared environment.

It’s simple. We can, we must, and we are… producing the energy we need while improving our environment. We are proving that thoughtful energy diversity that allows space for wind, solar, oil, natural gas, and nuclear will work for all Americans by delivering affordable, reliable, and environmentally responsible energy. The con of an ideologically driven energy policy that picks winners and sets arbitrary deadlines is clear. Energy and environmental improvement go hand in hand, and there is more than one road to success. Those who block the roads don’t have our interests at heart.

We only have ourselves to blame if we don’t stand up and tell our elected representatives to correct course rapidly and ignore those who offer false choices, pitting one energy resource against another.

If those forces are left unchecked, our wallets will be as empty as the Strategic Petroleum Reserve.

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This article was published by CFACT, Committee for A Constructive Tomorrow, and is reproduced with permission.