Prof. ST Hsieh
Director, US-China Energy Industry Forum
January 12, 2023
The following headlines featured “Chinese”, “Chinese Communists,” “threat to US national security,” but the bottom line is a deep policy divide between the Democratics and Republicans. In this case, the difference is about US energy policy with the underlying “believe it or not” global climate change.
Fundamentally, majority of Republicans are skeptical of climate change and are convinced that Biden wants to do away with fossil fuels and transition to an economy entirely reliant on renewable sources of energy like wind and solar. On the other hand, the administration blames the Republicans “are attempting to hike gas prices and neuter one of the best tools we have to deliver Americans relief from global oil spikes in the future, all to help Big Oil as they make record profits.”
While both parties are hyping and characterizing the other part as obstructionists and extremists, both parties are guilty of not “serious in governing!” There are some very specific concerns:
- Energy analysist “has expressed skepticism” about the legislation and called it “pretty silly.”
- Most energy experts point out that oil prices are set by the forces of global supply and demand, which are beyond Washington’s control.
- Neither McMorris Rodgers’s bill nor an Inflation Reduction Act repeal stands any chance of becoming law.
It is unfortunate that energy policy is not the only battle ground for US politicians. The show will go on for the next two years on almost any bill!
House passes bill aimed at restricting oil reserve sales to companies with Chinese influence
BY RACHEL FRAZIN – 01/12/23 11:07 AM ET
The legislation bars sales of oil from the Strategic Petroleum Reserve (SPR) to entities under the control, ownership or influence of the Chinese Communist Party, unless that oil will not be exported to China.
The bill’s prospects are uncertain in a Democrat-controlled Senate, but it still represents a significant window into Republican energy and foreign policy priorities for the new Congress.
Tom Kloza, the global head of energy analysis at the Oil Price Information Service, has expressed skepticism about the approach in the legislation that passed on Thursday, recently telling The Hill that it sounded “pretty silly.”
While some of the oil that was sold from the strategic reserve ended up in other countries, including China, Kloza said the impact on the U.S. economy would have been the same regardless of where those barrels had ended up.
“It is a world market and it’s like water seeking its own level and when you sold oil on the incremental market whether it moved to domestic sources or whether it moved overseas it did temper the enthusiasm for high-priced oil,” he said last week.
Republicans argued that the Biden administration’s move to sell off oil from the nation’s reserves last year was political — and said that if it benefitted China, it was harmful to the nation’s security.
“America’s SPR is meant for true energy supply disruptions, like those caused by hurricanes and natural disasters, not to help China,” said House Energy and Commerce Chair Cathy McMorris Rodgers, according to a copy of her floor remarks.
“Draining our strategic reserves for political purposes and selling portions of it to China is a significant threat to our national security,” she added.
Meanwhile, Rep. Frank Pallone (N.J.) the energy panel’s top Democrat, said he also opposes exporting U.S. oil to China, but said the GOP measure did not adequately address that issue.
“If Republicans were serious about addressing this issue, they would have brought forward a bill that banned all oil exports to China,” said a copy of his remarks.
“SPR barrels sold to Chinese firms represented only 2 percent of all the oil we sent to China last year. If we truly want to address China using American oil to build its reserves, let’s actually take a serious look at that, rather than skirt around the issue.
White House blasts ‘backwards’ Republican proposal on Strategic Petroleum Reserve
Alexander Nazaryan Thu, January 12, 2023 at 2:07 PM PST
WASHINGTON — The White House on Thursday sharply criticized what it called a “backwards” bill introduced by House Republicans that would limit presidential authority to tap the national Strategic Petroleum Reserve.
Known as the Strategic Production Response Act, the bill was introduced earlier this week by Rep. Cathy McMorris Rodgers, R-Wash., to prevent the president from releasing any oil from the reserve (except in case of a carefully defined “severe energy supply interruption”) unless the president at the same time opens up more federal lands to oil and gas drilling — something Republicans have sharply criticized Biden for resisting.
“It’s absolutely backwards for House Republicans to keep putting wealthy special interests ahead of middle-class families in this way,” White House spokesman Andrew Bates told Yahoo News. “They’re attempting to hike gas prices and neuter one of the best tools we have to deliver Americans relief from global oil spikes in the future, all to help Big Oil as they make record profits.”
Most energy experts point out that oil prices are set by the forces of global supply and demand, which are beyond Washington’s control. And even if the pace of leasing on federal land were accelerated, developing wells would take far too long to help consumers anytime soon.
Under a court order, the president did allow for new leases on federal lands last year. Still, Republicans remain convinced that he wants to do away with fossil fuels and transition to an economy entirely reliant on renewable sources of energy like wind and solar.
Although neither McMorris Rodgers’s bill nor an Inflation Reduction Act repeal stands any chance of becoming law, since the Senate remains in Democratic control, the proposals are a likely preview of dynamics in Washington for the next two years, with Republicans introducing legislation to undo or prevent Biden’s achievements, and the White House blasting those Republicans as obstructionists and extremists.
Thu, January 12, 2023 at 1:13 PM PST