NBC News: Soaring gas prices test Biden on climate change

April 21st, 2022

By Josh Lederman

WASHINGTON — President Joe Biden’s ambitions to finally put the U.S. on the path to confront climate change are crashing into an election-year scramble to lower gas prices and demonstrate tangible economic progress to voters.

As environmentalists celebrate Earth Day on Friday, the Biden administration is trying to thread the needle, arguing that the country can keep pursuing a climate-friendly future while keeping prices affordable.

Yet rarely have the trade-offs seemed so stark.

Ahead of midterm elections that could be brutal for Democrats, the White House is desperate to lower the cost of a gallon of fuel — the most visible economic indicator, broadcast on huge, neon signs at gas stations on almost every corner. But that means increasing global production of gasoline, just when Biden is trying to wean the U.S. off fossil fuels.

The administration is also racing to break ground on new roads, bridges and public works projects to show his $1.2 trillion infrastructure law is delivering. Yet this week, Biden reinstated rules requiring big infrastructure projects to undergo complex reviews for environmental and climate effects before they can get started, a step that could cause significant delays.

And as the White House tries to starve Moscow of the funds it needs to wage its war in Ukraine, Biden is pushing countries to stop buying Russian oil and gas. Yet the energy must come from somewhere. The White House recently greenlighted exporting more U.S. gas to Europe, a step that requires building costly new export terminals that are likely to stay in use for years — even if the current crisis ends.

Aiming to prevent its dueling priorities from colliding, the White House argues that sky-high gas prices and Russia’s war simply underscore the urgency for the U.S. to shift immediately to clean and renewable energy sources, eliminating the need to buy oil and gas from anyone.

“Ultimately, we and the whole world need to reduce our dependence on fossil fuels altogether,” Biden said last month as he announced new steps to lower gas prices.

Tiernan Sittenfeld, a senior vice president for the League of Conservation Voters, said Russia’s invasion had turned eliminating fossil fuels into an urgent matter of national security.

“It’ll ensure we’re no longer reliant on petrostate autocrats,” Sittenfeld said. “And it’s clear that we simply cannot drill our way to lower gas prices and energy independence.”

Yet some energy analysts have questioned that logic, arguing that building mammoth new solar and wind farms is not a viable solution to bring down energy costs immediately. Reducing demand for gas-guzzling vehicles, for example, requires selling millions more electric vehicles and installing tens of thousands of charging stations — steps unlikely to address the cost crunch for consumers right now.

“The Biden administration is walking a fine line,” said Frank Maisano, a consultant at Bracewell LLP, which represents energy companies. “The problem they have is the energy reality we face just doesn’t square with the quick transition that they would like to sell. The reality is it’s going to take longer.”

Biden’s newfound focus on lowering gas prices in the near term has opened up rare divisions between his administration and environmental groups, who largely cheered his efforts in his first year to recommit the U.S. on climate change. On Saturday, climate activists plan to protest outside the White House to ramp up pre-election pressure on the president.

The simmering tensions hit a boil last week when the administration, in a news release Friday evening before Easter weekend and the week before Earth Day, announced it would restart lease sales for energy companies to drill for oil and gas on federal lands.

The Sunrise Movement, a youth-focused advocacy group, blasted Biden for “this disastrous climate decision,” adding: “This is why young people are doubting the political process altogether.”

White House officials argued that Biden, who as a candidate vowed to end new drilling on federal lands, had been backed into a corner by a court injunction that forced the government to hold new lease sales. They pointed out that Interior Secretary Deb Haaland had used her discretion to significantly cut the amount of land being offered and raise the royalty rate companies must pay.

“President Biden remains absolutely committed to not moving forward with additional drilling on public lands,” Biden’s national climate adviser, Gina McCarthy, said this week on MSNBC. She said the administration “had no choice” but to comply with the court’s decision and had “found ways to reduce the size of that and its impact.”

Despite the blowback from environmentalists, it is unlikely that the new leases will lower gas prices any time soon, owing to the lengthy process of leasing, permitting, exploration and drilling before any new oil or gas would come to market. Capital Alpha Partners, an investment research firm, said in an analysis Thursday that “in the best case, we estimate that the planned lease sales would not result in new production for at least two years or longer.”

On his first Earth Day in office in April 2021, Biden was riding a wave of admiration and relief from climate advocates as he reversed many of former President Donald Trump’s moves on the issue, set aggressive new goals to cut U.S. emissions and teed up the most far-reaching climate investment in history as part of his Build Back Better domestic spending proposal.

But the spending proposal died, taking more than half a billion dollars in climate funding with it, denying Democrats what would have been their biggest legislative achievement to run on ahead of the midterms. The White House has pivoted to what steps it can take on its own authority to move its climate agenda forward while emphasizing the smaller climate-related investments in the $1.2 trillion bipartisan infrastructure law, which did pass.

Democrats have held out some hope that the larger climate provisions Biden had sought could still become law this year, either as a stand-alone measure or as part of a pared-down version of his initial Build Back Better proposal. But there have been no signs of serious, advanced negotiations — including with Sen. Joe Manchin, D-W.Va., a must-have vote — and time is quickly running out before the campaign season makes legislating in Congress nearly impossible.

On Friday, leading environmental advocacy groups sent a letter to the White House, reviewed by NBC News, imploring him to quickly push legislation with only Democratic votes that includes the more than $550 billion in climate funding, calling it a “legacy defining moment.”

“It’s time to close the deal and get this done,” wrote the Sierra Club, the League of Conservation Voters, the Natural Resources Defense Council and other groups. In the meantime, the gas price crisis has emerged as the White House’s top economic priority and an increasing political risk for the president and his party.

Last month, Biden announced he would release 1 million barrels of oil a day from the country’s strategic reserve, one of several steps to cut gas prices soon. He is also allowing E15 biofuel to be sold this summer, even though it is usually off-limits in the warmest months of the year because of smog concerns, and encouraging energy producers in the U.S. and overseas to temporarily drill for more oil and gas.

White House officials have touted the moves as concrete, visible steps the president is taking to lower prices ahead of an election that may depend in large part on whom voters blame for inflation and rising prices.

“I think that a lot of climate groups have been really understanding of the short-term decisions that need to be made to help working families at this dire moment,” said Jamal Raad, the executive director of the nonprofit group Evergreen Action. “That said, we can’t have any of the short-term decisions we’re making right now lock in carbon increases for decades to come.”


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