Biden Administration Seeks New Restrictions on U.S. Oil and Gas Industry

The battle over the future of America’s petroleum industry continues to rage as “President Biden has used every weapon and every tool available to him to make producing American energy more difficult,” as one Texas Congressman said.

Rep. August Pfluger (R-Tx), who chairs the House Energy Action Team, pointed to two new regulations proposed by Washington bureaucrats creating more restrictions on exports of liquefied natural gas (LNG) from the U.S. and requires the industry to begin reporting greenhouse gas emissions.

Pfluger introduced a bill to amend the Natural Gas Act repealing restriction on the import and export of natural gas, and it passed by a vote of 224-200 in the House of Representatives.

Additionally, a group of nine Democrats from Texas have joined with the Texas Republicans in signing a letter to Biden asking him to stop implementing restrictions on LNG exports.

“Your continued prioritization of LNG exports ensures a future marked by affordable, accessible, and sustainable energy resources that foster global stability and propel the energy transition,” the members of Congress wrote in a letter. “We firmly believe that LNG exports hold significant benefits for the U.S. economy, energy security, and bolstering our alliances with U.S. partners across the world. As the United States continues to lead in global stability and energy resources, the export of U.S. LNG is a linchpin for fostering strong international partnerships, diversifying energy supplies, and reducing dependence on volatile regions. The Administration’s support for U.S. LNG is not only a boon for America but a beacon for the world’s pursuit of cleaner, more sustainable energy sources.”

The decision to ban exports creates uncertainty and discourages investments that would otherwise create jobs and expand the supply of natural gas, Pfluger said.

The Securities and Exchange Commission recently issued new greenhouse reporting requirement for the oil and gas industry, and several states and industry groups sued to stop the regulations.

The suit states Congress did not authorize the SEC to demand that companies report environmental or any other controversial issues completely unrelated to finance.

Meanwhile, the price of natural gas has dropped, closing in mid-week at $1.66 per million British thermal units (MMBtu) because of large oversupply, according to the Energy Information Administration (EIA).

“We expect the Henry Hub spot price to remain below $2 per MMBtu in 2Q24 (second quarter 2024) as the winter heating season ends with natural gas inventories 37% above the five-year average,” EIA stated. “The Henry Hub spot price averaged $1.72/MMBtu in February (30% lower than in our February report), a record low adjusted for inflation. Low prices were partially driven by reduced natural gas consumption in the residential and commercial sectors this winter (November—March).”

EIA said natural gas supply will average 104.37 billion cubic feet per day (bcfd) while demand will average 90.64 bcfd during 2024.

Alex Mills is the former President of the Texas Alliance of Energy Producers.