Biden urges G20 leaders to increase energy production as coal surges, oil crunch continues

President Biden will ask global leaders to increase energy output as the United States faces a coal shortage and rising energy prices.

A senior Biden administration official said during a press briefing Friday that Biden will ask foreign leaders to ramp up their energy production. 

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"It’s a delicate time in the global economy," the official said. "And what’s important is that global energy supplies keep up with global energy demand.  And global — global energy demand has returned almost back to pre-pandemic levels. Global energy supplies have not."

The official added, "And so, within the G20, there are, of course, major consumers of energy and there are major suppliers of energy.  We’d like to raise the issue and underscore the importance of finding more balance and stability, both in oil markets and gas markets."

Some Republicans have taken issue with Biden’s plea to the international community including Texas Rep. August Pfluger, who represents the oil-rich area of West Texas.

"Rather than flying across the world to virtue signal, President Biden and his team should be advocating for an all-the-above energy approach, including natural gas," Pfluger told Fox News. "Forcing unreliable energy on developing nations only sabotages their efforts to rise out of poverty."

The Biden administration’s move comes as the demand for electricity in the United States is surging which has driven natural gas prices to record highs and Bloomberg reports that coal miners are "sold out" for 2022 after power producers have signed multi-year contracts for every ton they can get. 

The coal crunch has many causes including the post-pandemic boom, supply-chain issues, and efforts to reduce carbon emissions. Experts believe the strain will last at least through the winter, exacerbating concerns in many countries of fuel shortfalls in the upcoming months. 

Ryan Sitton, founder and CEO of Texas-based reliability firm Pinnacle, told Fox News, "If you want to solve this problem you have to rewind the clock a year ago." Sitton, who is also a former regulator of the Texas energy industry, continued: "There’s no spigot you can just turn on and make more oil flow, there’s no crane you can just turn on and coal is going to be coming out tomorrow. These things take months and years to develop and we stopped funding all the way back during the coronavirus and the investment has not come back."

A large part of that cut in funding, Sitton explained, comes from governments and powerful interest groups that have lobbied pro-climate change investments and driven money and taxpayer dollars away from the oil and gas industry.

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Global production of coal, which generates around 40% of the world’s electricity, is about 5% below pre-pandemic levels, according to Wall Street Journal.

Oil prices have surged as well and IHS Markit Vice Chairman Daniel Yergin warned that a cold winter this year could cause oil prices to reach $100 per barrel.

The Biden administration has pleaded with OPEC, which sparked criticism from Republicans, to increase production faster, saying that higher gasoline costs risk harming the ongoing global recovery.

When the senior Biden official was asked if the administration would single out OPEC at the G20, the official downplayed that idea.

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"No, I don’t think — you know, that’s — I would characterize it the way I just did: There are major energy consumers and major energy suppliers," the official said. "We don’t have — we’re not a party to OPEC and we’re certainly not going to get involved with the specifics of what happens within the cartel, but we have a voice and we intend to use it on an issue that’s affecting the global economy as much as energy prices are."

Oil rose 11%  in October amid the natural gas shortage which has boosted demand for oil products which signals that global oil stockpiles could continue to fall in the next few months, Bloomberg reports.

The United States had become the world's largest energy producer and a net energy exporter in the years just before the pandemic. Biden canceled the Keystone XL pipeline, which would have carried natural gas from Canada through the United States to Texas, and "paused" oil and gas leases on federals lands via executive orders during his first days in office. Some argue those and other Biden policies have hindered American energy production, contributing to increases in gas prices.