One of the continuing themes in my writing about President Joe Biden and his administration has to do with the consistent disconnect between the public statements of the president and his senior officials and the actions they take on energy. This lack of consistency is not only causing confusion for companies in the energy space, but has also led to a decrease in confidence in the US legal and regulatory system.

Unsurprisingly, this discrepancy between words and actions by Biden officials caused even more confusion in the energy space last week.

Here are some of the highlights:

New water heater standards – The Department of Energy (DOE) on Thursday proposed new water heater efficiency standards as part of its ongoing campaign to tighten regulations and raise prices for all types of home appliances. The new standards for water heaters follow similar proposals for air conditioners, gas ranges, portable gas generators and dishwashers.

Reuters reports that the DOE says the new standards will save consumers $11.4 billion in heating costs each year, but requiring electric heater manufacturers to incorporate heat pump technology into their units will undoubtedly lead to significantly higher prices for the units themselves.

“Consumers will pay the real price,” said Jill Nitoni, a spokeswoman for the Association of Home Appliance Manufacturers. “The Department of Energy has proposed very strict standards for home appliances that will require higher initial costs to purchase the product. Manufacturers want to be able to deliver high-performance, fully featured products at a cost that consumers of all incomes can afford. The DoE is making it very difficult with the standards they are proposing.’

New Federal Oil and Gas Leasing and Development Regulations – The Department of the Interior (DOI), led by longtime anti-oil and gas activist Deb Haaland, proposed new rules on Friday, which would a) raise royalty rates for onshore oil and gas leases, b) dramatically increase lease bonus and bond requirements, and c) increase restrictions on oil and gas drilling on federal lands.

Regardless of their respective merits, all of the proposed changes would impede future growth in oil and gas production on federal lands. The impact would be significant nationally, given that the federal government owns vast tracts of land in major oil and gas states in the West, such as New Mexico, Colorado, Wyoming, Montana and Utah.

Granholm calls on American companies to increase oil and gas production – Despite this suggestion from the DOI, Energy Secretary Jennifer Granholm called on US companies to produce more oil and gas during an interview with CNBC the very next day.

“There’s a lot of emotion in these markets, so we’re deeply concerned about the trajectory of where things are going,” Granholm said when asked about the state of the oil markets. When asked about high gas prices, Granholm added: “We want to see more supply… When prices are that high, it’s dangerous. I think the prudent course of action is to make sure transportation is available for people, and of course that means making sure the supply is stable.”

So here we see another example of the Biden administration’s actions contradicting the rhetoric coming from its senior officials. Clearly, increasing the costs and restrictions associated with oil and gas leasing and drilling on federal lands is not the way to encourage the higher production that Granholm says she would like to see. This move on DOI only strengthens Sec. Haaland’s continued refusal to hold regular lease sales as required by law not only onshore but also in federal offshore leasing areas.

In response to the discrepancy between Haaland’s proposed new regulations and Granholm’s statements, the American Oil & Gas Association tweeted the following:

No, you can’t really make this up and why would anyone want to try?

Bottom Line

The frequent conflicts between the actions of this presidential administration and the rhetoric emanating from its senior officials are not only confusing. The ever-changing environment is hurting companies’ ability to plan their business and leading to a loss of confidence in the US legal system.

This reality was reflected in the response of one company CEO when I asked if the Biden administration’s actions had led to a loss of predictability in American law and the regulatory structure: “I wish I could say it just ‘leads’ to: The fact is, it’s gone.”

The events of the past week once again show why this is so.

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