U.S. energy chief calls for more oil output amid ‘war footing’

Mark Chediak and Paul Takahashi 3/9/2022

(Bloomberg) — The top U.S. energy official openly called on oil and natural gas producers to boost supply amid an energy crisis sparked by Russia’s invasion of Ukraine.

Granholm
Granholm

“We are on a war footing,” Energy Secretary Jennifer Granholm told a packed ballroom at the CERAWeek by S&P Global energy conference in Houston on Wednesday. 

“We are in an emergency, and we have to responsibly increase short-term supply where we can right now to stabilize the market and to minimize harm to American families,” Granholm said. 

Granholm appeared to offer an olive branch to the industry that President Joe Biden once shunned, saying the country is “eternally grateful” to oil and gas companies for powering the nation for the past century -- and hopes they will continue doing so for the next 100 years with zero-carbon technology. She also highlighted the role liquefied natural gas exports is playing in easing supply constraints in Europe. 

Her comments come after oil executives at the biggest energy summit in the Americas spent the week criticizing the White House for asking OPEC countries to raise output, rather than domestic producers. The largest independent shale companies have said they won’t accelerate growth without long-term support from Biden, even as oil prices surge to the highest levels since 2014.

“Right now, we need oil and gas production to rise to meet current demand,” Granholm said, adding that boosting short-term oil supplies isn’t at odds with the administration’s commitment to clean energy. “We can walk and chew gum at the same time,” she said. 

Earlier, State Department Advisor Amos Hochstein characterized the industry’s reluctance to grow production as “appalling.” 

“We hope that we can have increased production this year,” he told Bloomberg Television.

Granholm’s remarks were more conciliatory. The Department of Energy and the Biden Administration are ready to work with oil and gas companies to diversify their energy portfolio and add clean fuels and technologies, she said. She also said the U.S. may need to release more oil from its strategic reserves.

“I hope that we’ll look back on 2022 as the year that the world took giant steps to improve energy security, and to tackle climate change,” she said. “To do that, to be on the right side of history, we have to work together.”

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