By Arjun Rondla, TAB Intern Europe is far too dependent on Russian energy imports. In an instant, the Kremlin can turn off the spigot and cripple European economies and leave the continent without enough heat or electricity. This reality has left President Biden and Europe with limited choices on how to handle efforts to restrain Putin's aggression.
In fact, Russia this winter declined to increase its supply of natural gas to meet Europe’s demand, causing natural gas prices to more than quadruple across the continent.
But Russia is not the only country with deep energy reserves.
North America is blessed with some of the largest natural gas reserves in the world. In 2019, the United States and Canada produced almost twice as much natural gas as Russia. We have the infrastructure to transport gas from across the country to export terminals on the Gulf Coast, primarily in Texas and Louisiana.
And we certainly have producers up for the challenge.
What do we lack? Sensible and balanced energy policy.
One of the first acts this Administration took was to revoke the Keystone XL pipeline’s permit. The Keystone XL pipeline would have added nearly 600,000 barrels of capacity per day to the Keystone Pipeline System running from Alberta to Texas.
The Biden Administration attempting to increase the “social cost of carbon” – a metric used in evaluating potential oil and gas leases – more than seven-fold from $7/ton to $51/ton. The administration is appealing a February 11 preliminary injunction directing the Department of the Interior to abandon its new metric. The Interior Department responded by stopping the issuance of all permits for new oil and gas leases on federal land in the meantime.
In December, President Biden directed the federal government to cease financing of most nonrenewable energy projects abroad.
Production being directly limited by the Administration is not the only concern, however, new regulation and limitation has fostered a reluctance amongst investors to invest in hydrocarbons. Investment in the exploration and production of oil and gas largely evaporated in 2021, despite rising energy prices.
Renewable energy – which Texas responsibly leads the way in – is an important component of our energy mix, but not the short-term solution to alleviating Americans’ prices at the pump or Europe’s reliance on Russian energy.
North American producers must be allowed to unleash their full potential. Our national security, closest allies’ security and economic recovery depend on it.
And Texas, the energy capital of the world, is up to the challenge.