Yes, we could.
First, Putin's oil is still getting to market, and the Western sanctions have only reduced those exports by a fraction. India and China remain great customers for Russian oil exports, and there are other customers as well.
Second, oil production from less efficient fields has always been part of the oil industry's changing operations. There are also typically other geographic areas to turn to as opportunities to ramp up production. But in the face of tightening supply, we cut off our nose to spite our face by
canceling auctions for potentially oil-rich areas in the Gulf of Mexico and off the Alaskan coast. This is significant because:
The decision to cancel lease sales for two regions in the Gulf of Mexico and one off the coast of Alaska leaves oil-and-gas companies facing a blackout period of unknown length for access to new drilling spots in valuable offshore acreage.
A five-year schedule for offshore lease sales expires at the end of next month, and the Interior Department has yet to propose a new one. Canceling the pending sales with no new schedule yet proposed could mean the industry now faces years between successful federal offshore auctions.
“The lack of new lease sales will lower future supplies, which will keep energy prices high and drive inflation for years to come,” Marty Durbin, president of the energy arm of the U.S. Chamber of Commerce, said in a statement.
We also have the
environmental lobby with its single-minded pursuit of crippling domestic oil production, who filed suit this week:
Three environmental law groups have sued the Biden administration in an attempt to block more than 3,500 permit applications from energy companies to drill for oil and gas on public lands.
The environmental groups filed the lawsuit in the District Court of Washington, DC, against the Bureau of Land Management, saying the permit approvals in Wyoming and New Mexico violated several federal laws, including the Endangered Species Act.
This comes after the Biden administration did signal it would resume leasing public lands for drilling, which really
cheesed-off his political left.
Prior to this week's suit from the Environmentalist, there was already a slow down on
approval for new drilling leases, because the administration was blocked from using the cost of climate change in federal rule-making.
The ruling has prompted delays and uncertainty across at least four federal agencies that were using higher cost estimates of greenhouse gas emissions in decisions, including plans to restrict methane emissions from natural gas drilling and a grant program for transit projects. It also continues a contentious legal battle that has hampered Biden’s plans to address climate change.
One of the most significant and unintended outcomes of the ruling is the government’s pause on new oil and gas leases and permits to drill on federal lands and waters. Lease sales in states across the U.S. West, including Montana and Wyoming, are now delayed.
No one is suggesting that the US can "dictate the world's oil prices". But we can't seem to get out of our own way when it comes to decreasing domestic supply. Needless to say, these actions, while they have an impact in the long term, have an impact on prices in the near term. If we were to take concerted action RIGHT NOW to increase domestic supply, we'd have a relatively immediate impact on near-term oil prices even though such efforts would not have an immediate payoff. Oil prices today are based on future supply prospects.