Concerns mount on energy provisions within Democrat spending bill
Gas prices see seven-year high with no relief in sight
President Biden’s $1.7 trillion Build Back Better Act is expected to receive little to no GOP support in Congress, and Republicans have grown increasingly concerned about how the spending package could affect prices at the pump.
Gas prices have hit a seven-year high after shortages in the post-pandemic market have left demand up and inflation spiking.
The latest move to transition the U.S. away from oil reliance and reduce greenhouse gas emissions in the president’s social spending package has some concerned that prices will continue to inflate for consumers.
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"In their tax spend-and-spree plan, they want to penalize our oil and gas industry by tacking on harmful fees and handcuffing domestic production," Texas Republican Rep. Michael McCaul told Fox Business.
The Build Back Better plan would set aside $775 million for Environmental Protection Agency (EPA) grants, rebates, contracts and loans to help reduce emissions that stem from petroleum and natural gas systems.
Though the EPA would also be required to establish a plan that imposes fees for excessive waste emissions on petroleum and natural gas facilities, the congressman explained.
Starting in 2023 waste emissions that exceed an established threshold would be charged $900 per ton of methane, and by 2025 the fine would bump up to $1,500 per ton – costs lawmakers fear will be passed onto the American consumer.
"In a time when Americans are struggling to afford gas for their cars, Democrats are pushing for policies that will only drive prices further up," McCaul said. "These policies, combined with the administration’s reliance on OPEC+, will make us more reliant on foreign oil while gas prices for Americans soar."
Global oil demand tanked in April 2020 when economies shut down, cruise ships docked, planes remained landed and people stopped traveling into the office due to the deadly coronavirus pandemic.
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Led by Saudi Arabia, the Organization of the Petroleum Exporting Countries (OPEC) rolled back production to stave off the inevitable bust followed by a drop in demand.
But as economies worldwide have reopened oil and gas demands have renewed – causing a shortage in supplies and a surge in prices.
On Thursday, OPEC and its allies said it would not increase production to alleviate global shortages – opting instead to keep gas prices artificially inflated.
Russian Energy Minister Alexander Novak claimed this was an attempt to maintain balance in the market and stave off potential changes in demand.
The White House condemned the move, but the administration’s changes made to U.S. oil production, like pausing new federal oil leases and baring oil drilling leases in the Arctic National Wildlife Refuge, have prompted Republicans to cry foul.
When Energy Secretary Jennifer Granholm was asked Friday about what the administration plans to do to boost oil production, she laughed and said the U.S. doesn’t have a "magic wand" to make OPEC adhere to global concerns.
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"What is the American solution?" Bloomberg asked, pushing back on Granholm’s dismissal. "If they’re the bad guys, Russia and OPEC…what is the Biden plan to jumpstart energy production across America?"
"The Biden plan is to diversify, make sure we move in the direction of clean energy where we’re not reliant upon cartels and we’re not reliant upon geopolitical adversaries who may be creating choke points," she said, adding it is a "longer-term strategy."