The oil industry contends that it is maximizing current potential output and that it is common to buy leases and file permit applications for areas where it is not yet ready to drill. (David Paul Morris/Bloomberg via Getty Images)īiden seemingly referred to this phenomenon on Tuesday when he said, during an announcement of a ban on importation of Russian oil, “Russia’s aggression is costing us all, and it’s no time for profiteering or price gouging.” “So, as we look at 2022, what the companies have announced to their investors is that that capital discipline will continue, even though it’s becoming more and more obvious to them that oil prices have some substance underneath them and oil and gas prices are not going to simply fall very quickly.”ĭrivers are feeling the pinch of spiking gas prices, here at an Exxon station in Berkeley, Calif. “Oil companies have pulled back pretty hard in the last year and a half, even as they’ve climbed out of the pandemic drop in activity,” Brad Handler, a researcher at the Colorado School of Mines and a former Wall Street research analyst covering oil drilling, said during Wednesday’s presentation. Industry observers say oil companies are protecting profits for investors - which surge when prices rise - rather than expanding supply. Since the summer of 2020, however, crude oil prices have shot up to well above pre-pandemic levels, but the number of oil rigs remains below their 2019 level. oil rigs has tracked closely behind oil prices, as producers respond to market signals.

The oil industry hasn’t ramped up production enough to keep pace with surging demand and higher prices as the economy has rebounded from the pandemic-induced recession. “Over the last two weeks, the oil and gas industry has mounted a PR campaign in an attempt to loosen regulations and open more public lands for drilling, while sitting on a massive stockpile of approved but unused drilling permits that are ready to go right now, as well as thousands of idle leases for future drilling,” said Jennifer Rokala, executive director of the Center for Western Priorities, during Wednesday’s presentation. This would seem to contradict claims made by people such as American Petroleum Institute (API) president Mike Sommers, who wrote on the day Russia launched its invasion of Ukraine that “the administration continues to block U.S. President Biden meets with business leaders and governors on Wednesday. In terms of raw numbers, more drilling permits were approved during Biden’s first year in office than in any of Trump’s first three years. During fiscal year 2020, the last year of the Trump administration, the approval rate was 94 percent. So far this year, 96 percent of permit applications have been approved. In fiscal year 2021, 98 percent of drilling permit applications were approved.

“The Interior Department, the Bureau of Land Management, under both Biden and Trump, essentially operates as a rubber stamp,” said Jesse Prentice-Dunn, policy director for the Center for Western Priorities at a data presentation on Wednesday afternoon. Of that, slightly more than half - 13.9 million acres, equivalent to the size of West Virginia - are not being used.ĭespite Biden’s stated desire to combat climate change by reducing American dependence on fossil fuels that cause global warming, his administration has readily approved oil and gas drilling permit applications. More than 26 million acres of federal land - an area comparable to the size of Kentucky - are currently under lease for oil and gas drilling. The permits also expire after two years, with only one extension allowed. This is mystifying to some observers, who note that filing for those permits has already cost operators more than $10,000 each.

Right now, the industry is sitting on 9,173 approved but unused drilling permits on federal and tribal lands.

Us oil production by year