Over the past several weeks, the Biden administration has been calling U.S. oil and gas companies to increase production to tackle gasoline prices that have hit record highs.
This is only a part of the solution to lower pain at the pump, according to Clint Rancher, corporate partner at Baker Botts. To understand the complete solution, we need to understand “how we got to where we are,” Rancher told Hart Energy.
The four key factors Rancher lists driving higher pump prices include E&P companies exercising capital discipline, the war in Ukraine, limited refining capacity and the Biden administration’s push to decarbonization. During the interview, he also discusses Biden’s proposal of a federal tax holiday and his move to release emergency crude oil from the Strategic Petroleum Reserve (SPR).
Effective May, the U.S. began releasing 1 million bbl/d of crude oil for six months from the SPR in hopes of giving Americans relief as gasoline prices soar above $5 a gallon in many states. The flow is draining the SPR, which last month fell to the lowest since 1986.
Additionally, Biden has also proposed to suspend the federal gas tax for the next three months. The move, which received widespread skepticism, would suspend a tax of 18.4 cents per gallon of gas and 24.4 cents for diesel that drivers pay when they fill their tanks.
“While these tools are helpful, I don’t think these are the lion’s share of the problem,” Rancher said.
“In the longer term, the important thing will be making investments in energy infrastructure and easing some of the regulatory burden and burdens of capital formation that are disproportionately falling on energy companies,” he added.
Recommended Reading
BOEM to Offer 15,000 Blocks in Gulf Oil and Gas Lease Sale
2025-06-25 - BOEM is proposing a royalty rate of 16 ⅔ percent for both shallow and deepwater leases—the lowest rate for deepwater since 2007, the agency said.
E&P Highlights: June 30, 2025
2025-06-30 - Here’s a roundup of the latest E&P headlines, including an oil discovery by Equinor and an oil and gas lease sale in the Gulf of America.
Lower-Cost Horseshoe Wells Gaining Traction in Tight Leaseholds
2025-06-18 - Operators such as Matador Resources, Vital Energy and Comstock Resources have drilled more than 60 U-shaped laterals this year.
FlexEnergy Sells Canadian Operations to Enterprise Group
2025-05-01 - Enterprise Group will become the exclusive supplier of FlexEnergy’s turbines in Canada.
E&P Highlights: June 23, 2025
2025-06-23 - Here’s a roundup of the latest E&P headlines, including completion of a Gulf of America survey as an offshore leasing round nears this year.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.