On April 5, 2022, SAFE released “Overcoming America’s Energy Security Mirage” which contained recommendations to remedy petroleum supply shortfalls, provide needed assurance to global oil markets, and overcome America’s persistent and dangerous overreliance on oil for automobile transportation.
“For too long Americans have been sold a fallacy that ample domestic oil reserves would make our country immune from price hikes caused by foreign events, including actions by nations that do not share our interests or values,” said SAFE CEO Robbie Diamond. “Consequently, U.S. policymakers have been distracted from the important task of ending our economy’s oil dependence through fuel diversification. This ‘mirage’ also stalled progress towards addressing the growing threat China presents to our transportation sector and industrial base. Given recent events in Ukraine and their impact on oil prices, the time for half measures is over as we seek to starve the Russian war machine and protect the global economy.”
The report issued the following recommendations:
- Summon industry leaders and other experts to what would be an extraordinary in-person meeting of the National Petroleum Council, a chartered Department of Energy advisory committee, to discuss how the government can work more effectively with the private sector to eliminate impediments to achieving shared energy goals.
- The President’s announcement of a six-month long release of oil from the Strategic Petroleum Reserve (SPR) on March 30, 2022, was important but incomplete. To boost incremental oil supplies short term and reassure global markets, the President should:
- Refill the SPR from thousands of Drilled but Uncompleted Wells located in five primary shale basins using a combination of authorities to direct government oil purchases;
- Use the authorities in the Defense Production Act, which have been deployed throughout the pandemic, to facilitate manufacture and delivery of equipment that may be in short supply such as hydraulic fracturing wells, pipes, and rig equipment.
- Increase Natural Gas Exports and create a 21st Century “Arsenal of Energy.” The United States has about 100 million tons of LNG export capacity, with another 20 million tons under construction. A dozen other projects with 50 million tons of export capacity are approved but lack financing. Congress should pass legislation allowing the Department of Energy to provide loan guarantees for the construction of LNG export terminals to support this ramp up.
- Congress should pass the No Oil Producing and Exporting Cartels Act (NOPEC), which would enable the Department of Justice to take legal action against any foreign state (or state-run oil company) for price fixing and other anti-competitive activities.
- To accelerate the transition to more diversified, non-petroleum sources of energy, the U.S. should: (1) Fund investment and accelerate permitting in next-generation automobile manufacturing and supply chains; (2) Expand current federal incentives for electric vehicles of all classes; and (3) Ensure that the government’s planned investment in nationwide electric charging infrastructure is optimized to meet the needs of EV owners and fleet users.
- Maintain access to critical materials produced in Russia and Ukraine, including palladium, nickel, aluminum, and neon, through loan guarantees, direct financial assistance, tax credits, regulatory relief, and other policies to incentivize domestic manufacture.