A day after falling oil prices drove stock prices down on Wall Street, the global Energy Industries Council published a detailed report on Dec. 7 detailing U.S. energy policy in the wake of President Joe Biden’s Inflation Reduction Act of 2022.
The bipartisan law was designed to curb inflation and perhaps cut the national budget deficit by investing in domestic energy production and encouraging clean energy.
The London-based EIC’s 55-page report was titled “US Clean Energy Policy Remains Work in Progress Amid Lingering Attachments to Oil.”
Those attachments are understandable. Gasoline prices are a consistent political issue, and the United States is the world’s top producer of oil and natural gas. Political conservatives generally call for the president to keep up high production of fossil fuels, while liberals want him to stand by his policy of trying to cut greenhouse emissions in an era of very high worldwide temperatures.
The EIC, a global trade association for the energy supply chain with 900 member companies, basically found that theU.S. is trying to have it both ways. “The report provides a comprehensive overview of the U.S. energy landscape, highlighting key aspects and challenges,” EIC Communications Adviser Mahmoud Habboush told Arkansas Business.
Firdaus Azman, the report’s author, said the Inflation Reduction Act champions renewables and clean tech, but maintains America’s position as the leading oil-producing country, with 85% of production coming from onshore resources.
“We should beware of mixed messages,” Azman said. “America’s energy policy is still a work in progress.”
The report notes offshore developments in the Gulf of Mexico, including Murphy Oil Corp.’s King’s Quay Floating Production System. Murphy, of course, was based in El Dorado for decades and its spinoff, Murphy USA, remains one of the state’s largest publicly traded companies.
The EIC paper highlights the rise of renewable power, including domestic solar and wind energy. The IRA and a related infrastructure bill offered tax credits for increasing both, and solar power could provide more than 40% of U.S. electricity by 2035, the report said.
The paper “takes a deep dive into the burgeoning energy storage sector,” an EIC summary said, focusing on the Department of Energy’s Energy Storage Grand Challenge, which promotes next-generation battery and storage technologies. The nation is also chasing cost cuts by promoting clean hydrogen strategies and regional hydrogen hubs.
Azman said the U.S. energy sector is not for the faint of heart, “but for those willing to embrace the challenges and leverage the opportunities, it can be a rewarding journey.” The full report is available at the-eic.com/mediacentre/publications/reports.
On Dec. 6, benchmark U.S. crude oil prices fell roughly 4% as suspicions rose that there’s too much oil on the global market. Prices dropped below $70 a barrel, down $20 since September.
The average price for a gallon of regular gasoline in Arkansas on Dec. 8 was $2.76, down from nearly $3 just a month ago. In mid-June, 2022, gas was selling at its highest average price ever in the state, $4.54, the AAA said.
The falling prices came just a week before a previously announced voluntary oil production cut of 2 million barrels a day by OPEC+, but so far the markets haven’t reacted much.
“Historically, crude oil tends to drop nearly 30 percent from late September into early winter with gasoline prices trailing the play,” AAA spokesperson Andrew Gross said. “More than half of all U.S. fuel locations have gasoline below $3 per gallon. By the end of the year, the national average may dip that low as well.”
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