Biden Opens New Fronts In His War On U.S. Oil And Gas

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Biden Opens New Fronts In His War On U.S. Oil And Gas

David Blackmon Senior Contributor Opinions expressed by Forbes Contributors are their own. Energy Share to Facebook Share to Twitter Share to Linkedin

WASHINGTON, DC - JANUARY 27: U.S. President Joe Biden speaks about climate change issues in the ... [+] State Dining Room of the White House on January 27, 2021 in Washington, DC. (Photo by Anna Moneymaker-Pool/Getty Images)

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The attacks on the domestic oil and gas business by the Biden/Harris administration are coming at such a rapid pace now that it’s hard to keep up with them all, which of course is a part of the overall strategy at play. What better way to cripple a major American industry, after all, than for the national government to overwhelm its ability to adequately respond?

Wednesday alone saw the opening of several new fronts in the war, as well as new efforts to justify and gloss over those that had come previously. Let’s just try to lay them out item-by-item:

John Kerry’s odd advice: Asked about what he would say to thousands of oil workers whose jobs have already been eliminated by President Biden’s Day-One executive orders during a White House press briefing, Kerry, who has been given the title of “Climate Envoy” in this administration, responded by saying, “What President Biden wants to do is make sure that those folks have better choices... That they can be the people to go to work to make the solar panels.”

Given that, according to Bloomberg , the vast majority of solar panels used in the United States today are manufactured and assembled in China, with most of the rest made in either Japan or Canada, this does not seem to be any more viable an option than was the Obama administration’s advice to out-of-work coal workers to “learn to code.” These oilfield workers are American workers who need American jobs to support their families and keep their homes.

Biden’s not going to ban fracking [at least not overtly]. - During a press conference of his own, President Biden appeared to back off of his campaign promise to ban hydraulic fracturing on federal lands, a statement that will no doubt enrage many who voted for him based on that promise.

Specifically, the President said, “Let me be clear, and I know this always comes up, we’re not going to ban fracking. We’ll protect jobs and grow jobs, including through stronger standards like controls for methane leaks and union workers willing to install the changes.”


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In reality, President Biden has already unilaterally eliminated many thousands of jobs in the oil and gas sector, including 10,000 from his cancellation of the cross-border permit for the Keystone XL Pipeline. That’s from a single executive order, and only accounts for the number of direct jobs the pipeline project would have created. That number doesn’t begin to account for the thousands of additional jobs that would have been created in other segments of the economy by the $8 billion capital investment the project represents.

The array of new regulations his Interior Department and Environmental Protection Agency will be developing in the coming months will no doubt eliminate thousands more jobs, including the methane regulations he refers to in his statement.

Regarding the promised fracking ban, it is becoming increasingly apparent that the Biden people have decided that a direct ban would become too politically costly in oil producing states like New Mexico, Pennsylvania and Colorado, and will likely instead attempt to accomplish the same net result via other administrative means. The moratorium on new leasing and permitting on federal lands and waters is one of those means, especially should the Biden Department of Interior (DOI) continue to extend it over the coming four years. As I pointed out in previous pieces , political appointees and career bureaucrats at the various bureaus within the DOI which control the leasing and permitting processes have all manner of means to slow or halt any company’s ability to get its business done on the leases it already owned before the moratorium took effect.

The point being that you don’t have to outright “ban” fracking in order to slow or stop it from happening.

Now, about those industry-specific tax treatments... - Another way to slow or halt drilling and fracking is to use the power of government to deplete the amount of industry capital available to fund the operations. In his very next breath following his remarks about the fracking ban, the President said this: “Unlike previous administrations, I don’t think the federal government should give handouts to ‘big oil’ to the tune of $40 billion in fossil fuels subsidies. I’m going to be going to the congress, asking them to eliminate those subsidies.”

Thus does President Biden trot out the tiresome Obama-era canard alleging that “big oil” gets $40 billion in subsidies from the federal government.

Several things to note about this:

The oil industry simply does not receive “subsidies” or “handouts” from the federal government. Those are specific words with specific meanings, and they do not apply to any industry-specific tax treatment in the IRS Code. The number Biden quotes is not an annual number, although it is often misconstrued to be so in the press and by activists. It is in fact the same 10-year composite value that the Obama administration attributed in 2009 to every industry-specific tax treatment currently in the tax code. Of that $4 billion per year, the vast majority comes from deductions for percentage depletion or intangible drilling costs, two deductions that have been a part of the tax code since 1913 The percentage depletion deduction applies almost entirely to royalty owners and very small producers. Big independents and major integrated companies like ExxonMobil XOM and Chevron CVX can’t even take advantage of that program. So much for “big oil” being the beneficiary. The deduction of intangible drilling costs - the costs to drill the well, basically - is no more a subsidy than deductions of the cost of goods sold by producers of products other than oil and gas. Like percentage depletion, it is important to note that the majors and large independents are also heavily-restricted from accessing this tax treatment. To deny this deduction effectively single out oil producers for discriminatory practices in the tax code, which is supposed to be somewhat unconstitutional, although that concept gradually seems to lose its meaning with every passing year. Apparently President Biden plans to do what President Barack Obama did during every year of his administration, and propose that congress eliminate every oil and gas-specific tax treatment currently on the books. It’s a tired tactic involving thoroughly debunked talking points - you can read about the rest of those treatments in a piece I wrote way back in 2013 - but apparently one that is de rigueur when your administration is conducting a new war on the oil and gas industry in America.

In an email, Tom Pyle, the President of the American Energy Alliance, said, “These actions are pointless. They will do nothing to affect climate change as competitors like China continue to ramp up the production and purchase of every form of energy they can, as fast as they can.”

All of this, and we are only 8 days into this presidency. Just 1,453 more to go.

Follow me on Twitter . David Blackmon

David Blackmon is an independent energy analyst/consultant based in Mansfield, TX. David has enjoyed a 39-year career in the oil and gas industry, the last 23 years of

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David Blackmon is an independent energy analyst/consultant based in Mansfield, TX. David has enjoyed a 39-year career in the oil and gas industry, the last 23 years of which were spent in the public policy arena, managing regulatory and legislative issues for various companies, including Burlington Resources, Shell, El Paso Corporation, FTI Consulting and LINN Energy. During this time, David has led numerous industry-wide efforts to address a variety of issues at the local, state and federal level, and from April 2010 through June 2012, he served as the Texas State Lead for America’s Natural Gas Alliance. In addition to client-related work, David also maintains a growing media communications practice. He is currently Associate Editor for Shale Magazine (, a contributor on energy-related matters at, and a feature writer for World Oil Magazine. He is the resident energy expert on the "In The Oil Patch" radio program, and executes frequent public speaking engagements around the state of Texas and at conferences. The text or links to all of David’s writings and podcasts can be found at He attended Texas A&I University and The University of Texas, earning B.A. in accounting in 1979.

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