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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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The White House Just Put The Oil Export Ban Rumor To Rest

  • A rumor has been circulating that the White House was considering an export ban on crude oil, but the administration has just shut it down.
  • The Biden Administration is now reportedly looking to work with Big Oil to find future-facing solutions for the country’s sky-high gasoline prices.
  • Secretary Granholm's remarks at the National Petroleum Council signal a complete U-turn, even as prices have remained lower, meaning the administration may not have had an immediate need to mend fences with oil and gas.
Oil Export Ban

When Democratic Congressman Ro Khanna told media the White House was considering an export ban on crude oil, West Texas Intermediate was trading above $80 per barrel, gas prices were sky-high, and that same White House was running out of options. Now, WTI is trading at below $70 per barrel, gas prices are down nationally, and the export ban on crude is off the table. The message was delivered by Energy Secretary Jennifer Granholm to the oil industry itself, with her also insisting that the Biden administration was "not a bogeyman."

"I do not want to fight with any of you," Granholm said at the National Petroleum Council, which included Big Oil majors such s Exxon and Shell, as quoted by Bloomberg. "I do think it's much more productive to work together on future-facing solutions."

"I heard you loud and clear and so has the White House," Granholm also said, referring to the export ban. "We wanted to put that rumor to rest."

Reports emerged last week that the White House was no longer considering an export ban. That happened after a bipartisan group of eight House Representatives countered Khanna's call for a ban on oil exports with a call on the White House to not resort to this. The group went on to detail why an export ban on oil was a bad idea—because it would ultimately lead to higher prices by cutting off the supply of U.S. crude to global markets.

"That proposal does absolutely nothing to alleviate higher prices or to make prices lower than in any sort of relative sense," petroleum economist Karr Ingham from the Texas Alliance of Energy Producers and creator of the Texas Petroleum Index said in November when the idea first floated into the spotlight.

That same group encouraged the administration to work with the oil industry instead of against it and have local companies boost production. This is the same message the industry has been sending the White House, but it has been a message that has largely remained ignored until now.

Now, Secretary Granholm's remarks at the National Petroleum Council signal a complete U-turn, even as prices have remained lower, meaning the administration may not have had an immediate need to mend fences with oil and gas.

"While I understand you may disagree with some of our policies, it doesn't mean the Biden administration is standing in the way of your efforts to help meet current demand," Granholm told the industry.

Granholm then went on to directly ask the industry to pump more oil, citing the woes of the average American driver.

"Consumers, as you know, are hurting at the pump," Granholm said, as quoted by Argus Media. "I hope you will hear me say that please, take advantage of the leases that you have, hire workers, get your rig count up."

Related: Oil Prices Under Pressure Despite An Optimistic Outlook

Ironically, as the administration hands an olive branch to the energy industry, it faces a backlash from its own voters. Liberal news outlet Grist earlier this week reported that the Biden administration had not in fact been obliged to hold the Gulf of Mexico lease sale that it held in November, and that was the largest ever such lease sale.

According to the administration, it was mandated to hold the lease sale because of a court ruling that suspended its moratorium on federal land oil and gas drilling. Yet, the Grist reports, a memo filed in August, months before the auction by the Department of Justice, or DOJ, contradicts the administration's public claims. While the court's order did lift Biden's complete pause on new drilling permits, it did not force the government to issue any new ones, the DOJ found, as first noted by the Daily Poster and reported by the Guardian.

That could put the White House in an uncomfortable situation, given its prioritization of energy policies aiming to reduce carbon emissions and reduce the U.S. economy's dependence on fossil fuels. 

The lease sale brought in close to $192 million for 308 blocks in the Gulf of Mexico, out of total bids worth $198 million. The money raised in the lease would go to the Department of Treasury as well as the states of Texas, Louisiana, Mississippi, and Alabama. Some of the money would go to the Land and Water Conservation Fund and to the Historic Preservation Fund.


It may be that the White House has realized a simple fact that is useful for all parties involved. Oil and gas companies pay for leases, and then they pay royalties to the federal and state governments for every barrel of oil and cubic foot of gas they produce. Oil and gas companies, in other words, bring quite a lot of money into the state coffers. It is certainly better to have these companies on your side than see them shrink their royalty-paying operations.

"I firmly believe those that embrace the change rather than fighting it will be rewarded on the other side," Granholm told the oil business as she invited it to join the administration in fighting the effects of climate change. Now, this may be interpreted both as an invitation to work together and as a warning not to antagonize the administration. It's certainly interesting how the industry would interpret it.

By Irina Slav for Oilprice.com

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