Biden’s Anti-Energy Policies and Increasing Natural Gas Prices

by | Mar 3, 2022 | Energy

Natural gas prices have escalated because of President Biden’s anti-oil and gas policies that are limiting pipeline infrastructure and increased production on federal lands, while the promise of pending regulatory actions add uncertainty to investments.

Natural gas prices have escalated because of President Biden’s anti-oil and gas policies that are limiting pipeline infrastructure and increased production on federal lands, while the promise of pending regulatory actions add uncertainty to investments. As soon as Biden got inaugurated, he started implementing his domestic anti-oil and gas policies by pausing lease sales on federal lands. Despite a federal judge overturning his pause, only one lease sale has been conducted offshore in the Gulf of Mexico and that lease sale was later overturned because Biden’s Department of Interior failed to consider climate change sufficiently in setting up the lease sale. Immediately prior to the sale, the administration appealed the judge’s decision ordering sales to be conducted.

Further, Biden’s appointees to the Federal Energy Commission now indicate that they will use climate change in their assessment of future natural gas pipeline projects. In a 3-2 vote divided along party lines, commission members changed the policy that lays out the process for reviewing and approving applications for new natural-gas pipeline projects to take into consideration a project’s environmental impact and the steps a developer has taken to limit that impact. In determining whether a project is in the public interest, FERC will examine greenhouse gas emissions from the project’s construction and operations — as well as the emissions from when the gas is ultimately burned to generate electricity. The new guidance will be applied immediately, despite it being issued only on an interim basis while the agency accepts public comments, and may make changes later based on the feedback. Subjecting project applications that have been pending for years to the new policies established today creates additional uncertainty for those pending projects and significant delays for much-needed infrastructure.

The new FERC guidance will make even more difficult to construct natural gas pipelines. Just from environmental opposition and court cases, six of the last seven planned interstate pipeline projects to transport natural gas throughout the east have been paused or canceled. Because of insufficient pipeline infrastructure, the Northeast must import natural gas from Russia rather than obtaining it from neighboring Pennsylvania, where natural gas prices are $3.50. The average natural gas price in Massachusetts during December was $8.38 per million British thermal units—up 96.7 percent from the December 2020 average Massachusetts natural gas price of $4.26 per million Btu. Russia’s war on Ukraine exacerbates these issues.

Democratic Senators have recently called on the Department of Energy to cut exports of liquefied natural gas (LNG) in an attempt to reduce prices. But, because natural gas prices are set regionally, most LNG exports would have no impact on the high natural gas prices in New England. Also, due to the Jones Act, LNG from the U.S. Gulf Coast cannot be shipped to New England in lieu of the Russian LNG because U.S. oil and natural gas must be shipped by U.S. tankers, which the United States does not own.

Further, President Biden has promised “freedom gas” to Europe as their energy prices have exploded. Natural gas in Europe is priced at the equivalent of $180 per barrel oil. According to the White House,

“The United States and the EU are working jointly towards continued, sufficient, and timely supply of natural gas to the EU from diverse sources across the globe to avoid supply shocks…. The United States is already the largest supplier of liquefied natural gas (LNG) to the EU.”

A flotilla of LNG carriers have steamed to Europe from the United States to help rescue the U.K. and other European nations who face shortages of natural gas due to Russian cutbacks and poor planning, from racing into intermittent wind and solar power while cutting back on coal and nuclear power. Last January, the United States sent about 20 percent of its LNG cargoes to Europe. This January, it has sent nearly 70 percent.

As Europe confronts the possibility of a serious supply disruption amid Russia’s attack on Ukraine, the United States is trying to help Europe secure emergency gas supplies. But, Europe has limited LNG facilities to import more as it wanted the cheaper natural gas piped from Russia, who supplies 40 percent of the continent’s natural gas. If Russian supplies are further cut off this spring, Europe would pay a heavy price since it remains dependent on Russian gas to heat homes and generate electricity despite the shipments of U.S. LNG. While some European countries, such as Poland, have built LNG terminals, Germany has not. Proposed LNG import facilities in Germany have been delayed as Russia built a new pipeline—Nord Stream 2—that would double Russian gas exported to Germany.


U.S. natural gas prices in the Northeast face more upward pressure amid Russia’s war on Ukraine because there is insufficient pipeline infrastructure for the Northeast to get its natural gas from neighboring Pennsylvania, forcing it to get LNG deliveries from Russia. While President Biden is supplying Europe with freedom gas and appealing to Qatar for more gas supplies to Europe, he has placed a pause on lease sales of oil and natural gas on federal lands in the United States and has appointed FERC commissioners who are making it even more difficult to construct natural gas pipelines in the United States. His restrictions have resulted in high heating prices this winter, particularly in the Northeast, and they are only bound to get worse as Biden continues to implement his anti-energy policies.

Made available by IER.

The Institute for Energy Research (IER) is a not-for-profit organization that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. IER maintains that freely-functioning energy markets provide the most efficient and effective solutions to today’s global energy and environmental challenges and, as such, are critical to the well-being of individuals and society.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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