The Keystone XL pipeline would have brought fossil fuels from Canada into the U.S. photo via Wikimedia Commons

A timeline of Biden and the oil industry

Biden’s campaign consisted of a new plan for the U.S. oil industry in order to combat climate change. His administration introduced the Biden Plan, which intended to “ensure the U.S. achieves a 100 percentclean energy economy and reaches a net-zero emissions no later than 2050.” Since his term began, he has revoked the Keystone XL oil pipeline as part of his action against climate change.

When the Keystone XL pipeline was proposed in 2008 by the energy infrastructure company TC Energy (formerly TransCanada), it was met with an uproar of protests by citizens. The pipeline was set to transport fossil fuels into the United States, raising concerns about threats to the climate, drinking water sources and public health. In this context, the Obama administration vetoed the pipeline’s construction in 2015; this was reversed in 2016 when former President Donald Trump signed an executive order to advance the Keystone XL pipeline, as well as others like the Dakota Access pipeline. Since his term began, President Biden has revoked the Keystone XL oil pipeline as part of his action against climate change.

Many people and companies, including the American Petroleum Institute, were unhappy about this action. On behalf of the American Petroleum Institute president and CEO Mike Sommers said that, while they support the Paris Agreement, “revoking the Keystone XL pipeline is a significant step backwards both for the environmental progress … Pipelines are the safest, most environmentally friendly way to transport energy, and … the Keystone XL pipeline has been through extensive environmental reviews”.

Not long after Biden took office and the pipeline was revoked, gas prices in the U.S. began to surge. However, the past two years have resulted in fluctuating oil prices due to many factors aside from Biden. According to the Wallstreet Journal, in March 2020, oil prices had gone below $0 per barrel, and many companies decided to limit oil production until the demand rose again. The Journal of Petroleum Engineering claims that “in January 2020, US crude oil was flowing at a peak rate of 12.8 million [barrels per day],” but “by May [of 2020] the output was down to 10 million [barrels per day].” The pandemic was not the only thing affecting the production.

After the February 2021 snowstorms and multiple tropical storms and hurricanes, North Dakota, Texas, Oklahoma and the US Gulf of Mexico saw anywhere from a 4 percent to 18 percent decrease in oil production due to freezing wells and power outages. New Mexico, however, managed a 17 percent rise because of their increased drilling to prepare for Biden’s plans for the oil industry.

Basic economics say that decreased supply results in increased prices. The cause of decreased oil production is more complicated than Biden’s actions, the pandemic has played the largest role in the price change, while recent poor weather and natural disasters have added additional complications. Companies are attempting to make up for profits lost last year and predictions of the future of oil prices vary significantly. Either way, the price of oil was destined to rise regardless of Biden’s decision to revoke the pipeline.

Post Author: Cheyenne Toon