The American Petroleum Institute (API) has issued a report harshly criticizing the Biden administration for its decision to revoke oil and gas drilling permits previously issued for Alaska’s North Slope, cutting potential domestic fuel supplies and putting price pressure on energy consumers across the U.S. — including in New England.
“Canceling the leases issued on January 6, 2021, put the Department of Interior (DOI) out of compliance with the Tax Act’s mandate to complete at least one lease sale within four years,” according to API. “Furthermore, in doing so, DOI acted beyond its legal authority.”
As a result of the canceled permits, potentially as many as 1.45 million barrels of oil per day in future supply have been barred from the market, according to API’s estimates. That is around seven percent of the current total rate of daily oil consumption in the U.S. and a major drop in supply that inevitably will cause upward pressure on prices.
Americans currently pay an average of $3.40 a gallon for regular gasoline, $4.20 for heating oil, and $4.40 for diesel fuel, while facing price inflation for other basic needs, including food and housing.
“Even though states like Massachusetts are working to reduce petroleum use through energy efficiency and the use of renewable biofuels for on-road vehicles and home heating, our region is still heavily dependent on petroleum, and any additional supply will be a benefit to consumers in future years,” said Michael Ferrante, president of the Massachusetts Energy Marketers Association.
In New Hampshire, for example, with one of the highest rates of home heating oil use in the U.S., consumers are increasingly finding it difficult to pay for fuel, according to Richard Annaian, owner of 603 Oil Co. in Moultonborough, N.H.
Annaian said a growing segment of his customers today are ordering the absolute minimal quantity of heating oil required to make home deliveries because they can’t afford to buy more. That, in turn, means they must pay a higher price per gallon (an industry-standard business practice based on volume pricing).
“Customers with diesel vehicles are saying they can only fill up a few gallons at a time,” Annaian said. “They can’t afford to fill their tanks. More credit cards are being declined because they’re maxed out.”
Meanwhile, the Biden administration has sold off more than 40 percent of the nation’s Strategic Petroleum Reserve since last year, reducing it from 700 million to 350 million barrels in an attempt to mitigate rising fuel prices that have left the stockpile at its lowest levels in 50 years.
“There is now overwhelming evidence that the Biden energy policy is inflicting direct and material harm on American families. The administration has to see this, but yet they continue to pile on bad energy ideas after bad energy idea,” said David Holt, president of the Consumer Energy Alliance.
“This has directly led to record highs in gasoline, diesel, and electricity prices, and, because energy powers the nation, higher fuel prices mean the prices for everything – bread, milk, eggs, shampoo, clothes, building materials – has also increased in price. American families can now clearly see the direct cause and effect of these misguided energy policies.”
According to the new API report, “The United States is a net exporter of liquid petroleum fuels. To maintain this benefit to the American economy, including the competitive advantage it provides for American manufacturers and the budget relief it provides for American families, developing secure access to areas of great energy resource potential like the Coastal Plain [in Alaska] is vitally important.”
Despite the efforts of some environmental groups to severely limit or oppose drilling altogether in the region, the oil and natural gas industry “has a 50-year track record of safe and responsible energy development on the North Slope of Alaska while respecting and often supporting reasonable stipulations to protect the Alaskan environment and wildlife,” according to API.
“This administration is proving that ensuring we have access to all energy resources – including natural gas and oil – is the only sensible energy policy. If only they would follow the science and the facts.”