WASHINGTON (TND) — Bipartisan calls for the U.S. to stop importing Russian oil and to curb current policies are continuing as war rages in Ukraine.
While many lawmakers in both parties agree that President Joe Biden should impose sanctions on Russia’s energy sector and that the U.S. needs to become energy independent, there are differing opinions on how the country should do that.
The Fact Check Team is taking a closer look at energy production in the U.S. and how it could impact the economy going forward.
Republicans argue that the U.S. needs to be producing more oil at home, while Democrats continue pushing President Joe Biden’s clean energy agenda.
The Keystone XL pipeline has been a big part of the conversation as gas prices soar. Supporters say it would have more than made up for what the U.S. gets from Russia but opponents disagree.
The pipeline project has a history dating back to 2008 but the controversy started with a proposed extension that would carry 830,000 barrels of crude oil from Albert, Canada to Texas every day.
Former President Donald Trump was a supporter of the Keystone pipeline, issuing a new presidential permit in 2019 and construction began in 2020 but on President Joe Biden’s first day in office, he revoked Keystone’s permit.
The total cost of the project was estimated to be $8 billion and for those advocates who say the pipeline would help the situation now, Reuters reports that’s not the case. Only 8% of the pipeline extension was built when Biden took office and reports show that it wasn’t supposed to be completed until 2023.
While U.S. oil production is cleaner than that of most other major energy producers, it may not be convincing enough to get some Democrats who prefer more green energy onboard.
Another hurdle domestic producers face is the type of oil they can produce.
The U.S. buys Russian oil in part because they produce a certain type of oil that is able to feed refineries in order to make fuel at top capacities.
The Biden administration also points to the 9,000 unused gas and oil leases as a major reason why the U.S. can’t increase energy production.
Members of the administration have been promoting the idea that companies are free to simply start using these leases if they’d like to. However, these statements can be misleading.
According to a Department of Interior report, the U.S. had more than 37,000 oil and gas leases just last year — so 9,000 is a small number comparatively — and just because an oil company has a lease doesn't mean they can just start drilling.
They must organize and safely manage their reservoir and satisfy several regulatory requirements, such as an onsite inspection, environmental review and permit approval. This process can actually take up to 10 years.
Experts say even if these companies start drilling more oil wells today, it could take anywhere from six months to years for that oil to start flowing.
Crude oil prices are as high as $115 per barrel and on average, Americans are paying $3.84 for a regular gallon of gas. This means profits for oil and gas producers.
Looking at ExxonMobil and Chevron’s stock numbers, both companies are doing well. Exxon’s stock comes in at $84 —up nearly $25 over the past year — and Chevron is at just under $159.
Despite these high prices, reports show that American oil suppliers aren’t eager to ramp up supply but there is a labor and equipment shortage which slows down production.
Companies are also cautious about investing too much too quickly because of the COVID-19 pandemic’s oil bust. When Americans were stuck inside, the oil market saw negative pricing and investors are hesitant to put more money in fossil fuel stocks, in some cases blaming the administration’s policies.
