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What Exactly is Biden's Oil Policy for the United States?
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When it comes to environmental legislation, there’s a lot that the leaders of the countries around the world need to be mindful of – one of them being oil policy, and the most recent oil policies set by Biden has sent people for a loop in more ways than one.
👉 What is Biden’s Oil Policy, why could it hinder the efforts towards environmental progress being implemented by the Biden administration itself – all while still leaving a bad taste in oil companies mouths?
What is oil policy?
“ Oil policy is a set of strategies, regulations, and goals that are established by governments and organizations in an attempt to monitor and manage the production and distribution of oil – something becoming more pivotal as the world grows more cognizant of climate change. ”
Therefore, oil policy is often a compilation of multiple different decisions and thought processes in order to ensure both the economy and the environment are being benefited – and two ensure both Democrats and Republicans are satisfied with the final choice. However, this means that oil policies often vary depending on the primary goals of the government in question or the current party holding the house or senate.
Regardless, these are common key points to be considered in any oil policy:
- Exploration and Production: Oil policies delineate where exploration and drilling of oil can occur, and will provide licenses, agreements, and safety standards for these areas as well.
- Resource Ownership and Nationalization: An oil policy often goes hand-in-hand with ownership, as countries that drill oil will also have the ability to sell and export oil to benefit their own economy. This ownership requires allowing private companies to create agreements between the government and oil companies.
- Pricing and Taxes: Oil has to be taxed, and the price of that tax is subject to change in a world working towards greater sustainability – deeming this as one of the most pivotal points of oil policy today.
- Energy Security: Seeking places to extract oil isn’t always for economic purposes, but also to ensure a country has enough energy to suffice their own country’s power consumption – such as European countries which have struggled in the midst of Russia's invasion on Ukraine.
- Climate Precaution: Oil policies are becoming more necessary to align with other environmental regulations: meaning that oil policies usually provide insight in how to seek the use of renewable energy sources and reduce the overall environmental impact of oil exploration, production, and distribution.
- Regulating the Market: An oil policy usually has to include methods to ensure oil markets are monitored and measures – such as by implementing anti-trust laws and market surveillance to align with the Organization of the Petroleum Exporting Countries (OPEC).
- Energy Transition: Oil policies are adjusted to a world seeking sustainability and the use of clean energy, and therefore may opt to use more energy efficiency measures, clean energy technology, or invest in environmentally friendly projects to fund oil extraction and distribution.
Oil policy ultimately plays a vital part in developing the oil industry and its impact on a world growing more aware of the importance of sustainability and a clean energy economy. How government bodies choose to handle oil policy can reveal their economic, social, and environmental values.
In recent years, the Biden administration has been making a push to shift to the use of renewable energy and facilitate a clean energy economy – making it hard for many to understand why Biden approved of the ConocoPhillips' Willow Project.
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How has Biden’s Oil Policy impacted oil environmentalists?
It isn’t just the most recent, controversial ConocoPhillips' Willow Project that has sent environmentalists into a phase of concern, but the several approved oil projects that have been supported by Biden’s oil policy – some of which produce oil at a much larger scale than the Willow project itself.
Biden’s oily policy continuing to support these oil drilling projects have left environmentalists around the country confused, as these oil projects go against many of the other climate policies the Biden administration has made such a strong effort to implement in the past year – most notably the Inflation Reduction Act of 2022.
“ Environmentalists are mostly concerned about Biden’s oil policy as oil is known to drive climate change, but also because it drives the economy. The more that oil is extracted and offered on the market, countries will continue to seek purchasing it as no other alternatives are being presented in the same manner. ”
This is the antithesis of what Biden has presented in his climate bill last year, as he implemented tax incentives to encourage Americans to opt for installing renewable energy into their homes.
Another reason why environmentalists have been disappointed with Biden’s oil policy is because it continues to raise energy prices, which is something that Biden and other states in the U.S. have been actively working to avoid from happening in the first place.
👉 Biden’s oil policy ultimately demonstrates inconsistency in a president seeking to be purely climate forward. In fact, as of now – the Biden administration has approved of more oil drilling projects than the Trump presidency ever did. This has led environmentalists to question if Biden’s environmental motives are as honest as they seemed in previous campaigns.
On the flip side, Biden’s oil policy hasn’t satisfied those in favor of oil production and distribution either.
How has Biden’s Oil Policy impacted oil companies?
It’s easy to presume that oil companies are satisfied with Biden’s oil policy, as so many oil projects have been approved – but oil companies are just as unhappy with Biden’s oil policy as environmentalists are.
This is because oil companies can’t drill without a permit or leasing land from the government, but Biden and his oil policy have made it increasingly difficult for oil companies to do this with ease.
For instance, Biden paused the potential sales of new leases – trying to abide by his earlier promises in these environmentally spirited campaigns. While the federal government was able to Biden’s momentary pause and help get these oil companies and their projects moving – it creates a cause for concern: which side is Biden really on when it comes to oil policy?
“ In Biden’s oil policy, it is clear that the president is trying to satisfy both environmentalists and oil companies – which isn’t impossible, but isn’t the right way to go about helping both the planet and the economy. ”
Approving oil companies but depriving them of the right to lease the necessary resources and land costs time and money, both of which could be put forth towards other renewable energy projects or plans to instill the clean energy economy Biden has previously been vocal about in campaigns.
In addition to this, some have raised a cause for concern that Biden’s oil policy does not address energy security for the United States – as it is clear the U.S. is still dependent on oil for energy purposes, despite Biden’s current attempt to shift to the use of clean energy.
Currently, Biden’s oil policy isn’t doing either party any favors.
How would Biden’s oil policy impact the environmental goals of the United States if it were to continue as is?
The difficult part about Biden’s oil policy is that it’s going to be difficult to satisfy the needs and wants of both environmentalists and oil companies by following through with the various oil projects that Biden has already signed off on.
“ In addition to this, if Biden continues to approve of oil projects, it will deter the Biden Administration from many of their current environmental goals alongside much of the climate legislation that has been released by states trying to up their climate game as well. ”
For instance, take California’s climate legislation passed late last year – where the state has announced that the purchasing of gasoline powered vehicles will be banned starting in 2035. This shift in using electric vehicles is bound to take a hit on oil and fossil fuels, as usage will decrease given the subsequent shift in supply and demand to come.
In other words, if more people are going to be forced to drive electric cars or take public transportation – how will oil drilling projects such as the ConocoPhillips' Willow Project prove economically successful?
👉 Biden’s oil policy currently has one foot in and one foot out on each stance (environmentalists and oil companies respectively), which is never going to prove successful in reducing emissions and environmental impact or be financially lucrative for oil companies in a global market trying to go green.
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How could Biden’s oil policy be improved?
“ Biden’s current oil policy is clear: there is a way to satisfy both parties environmentally and economically. This is because Biden’s current oil policy is attempting to satisfy oil companies by approving their projects, but also abide by the wants of environmentalists by pausing potential land leases to become available for those oil companies. ”
However, thinking back to the same predicament with other controversial environmental debates such as with the Tongass National Forest in Alaska – there are solutions to solve both the concerns of environmentalists and oil companies alike.
Oil companies want to make money, and environmentalists are concerned about climate change. Therefore, there are a few ways that Biden’s oil policy could be altered to comply with the needs of both parties:
- Renewable Energy & CCS: Seeking to implement the use of renewable energy and carbon capture and storage technologies onsite to help reduce the environmental impact of oil drilling.
- Slow Transition: Biden’s oil policy can include a plan to slowly transition out of the need for oil drilling at all, or at least an outlined plan on how to reduce the need for oil drilling to tap-off energy reserves for the country.
- Improve Pipeline Infrastructure & Transportation: Following the Keystone XL pipeline, many environmentalists and critics alike have vouched for the need to improve the safety of oil transportation. This could be done if Biden’s oil policy included a plan on how to make use of renewable energy investments to implement this on a wider scale.
- Plan More Research: If Biden’s oil policy looked for new ways to implement the use of renewable energy technologies, it could help to reduce the concerns of environmentalists and allow oil companies to proceed at the same time..
- Increase Domestic Energy Production: You can’t fill someone else’s glass if yours is empty. The U.S., and Biden’s oil policy, should ensure first that the U.S. has a sufficient energy supply before getting too deep and looking for ways to make money off of exported oil. This is a wise move for both oil companies (in a financial sense) and to protect the environment.
Ultimately, Biden’s current oil policy is too vague to yield any economic or environmental success and satisfaction – but with a few efforts and adjustments, the U.S. could be raking it in while reducing emissions at the same time.
What about Greenly?
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It can be difficult to keep track of all the changes to come with climate change, such as oil policy, but don’t worry – Greenly is here to help! Keep up to date with all of the ways climate change is having an impact on society by checking our legislation checker or by booking a demo for personalized updates and expertise on how climate news will impact your company.
Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.