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Biden’s restrictive oil policy unlikely to continue

Oil&Gas Materials 25 January 2021 10:25
Biden’s restrictive oil policy unlikely to continue

BAKU, Azerbaijan, Jan.25

By Leman Zeynalova – Trend:

US President Joe Biden's oil policy is tied to his health policy, Dr. Gal Luft, co-director of the Institute for the Analysis of Global Security (IAGS) told Trend.

“His ability to lead the US out of the pandemic will determine oil consumption and prices more than any other driver. Beyond that, Biden will be under pressure from the progressive wing of his party to take decisive action against the hydrocarbon industry, including ban on fracking, revocation of permits and restoring of fuel efficiency mandates on cars.

The cancellation in his first day in office of the permit for the Keystone pipeline, causing the loss of thousands of jobs in both Canada and the US, is a first sign of Biden’s subservience to the progressive left. But those actions stand in sharp contrast with Biden’s more urgent commitment to revive the economy, and it is unlikely that he will be able to continue to carry out a restrictive oil policy in the face of a deepening economic crisis.

The good news for America’s oil is that Biden’s economic recovery program entail printing of trillions of dollars which will weaken the US currency while driving up prices of energy commodities. This will be a shot in the arm for the domestic oil industry which will be able to produce for higher breakeven prices,” said the expert.

Hours after taking office, President Joe Biden made good on a campaign promise to cancel the Keystone XL oil pipeline. Later that day his Interior Department mandated that only top agency leaders could approve new drilling permits over the next two months.

The actions sent oil producers’ stocks tumbling and raised blood pressure across the industry.

“In the first couple of days of the new administration, they are taking actions that will harm the economy and cost Americans their jobs,” said Frank Macchiarola, a senior vice president of policy for the American Petroleum Institute. “We’re concerned, and everyone in the country should be concerned.”

The Interior Department’s order, signed late Wednesday, changes procedures for 60 days while the agency’s new leadership gets into place. It requires top brass to sign off on oil leases and permits as well as decisions about hiring, mining operations and environmental reviews.

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Follow the author on Twitter: @Lyaman_Zeyn

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