Approving the Keystone pipeline will not lower oil prices, NEC director Brian said

President Joe Biden’s top economic adviser suggested Friday that the White House was not reconsidering its decision to cancel the Keystone XL oil pipeline, which was disputed in response to increased crude and gas prices.

Brian Diz, director of the National Economic Council, told CNBC that the Biden administration is focusing on policies and strategies that could reduce fuel prices as soon as possible. He pointed to Biden’s decision on Thursday to start without 1 million barrels of oil per day from the Strategic Petroleum Reserve in the next six months.

“Any action on Keystone will not actually increase supply, and it will send years of oil into the future,” Diz said in a “squawk on the street” interview.

“What we’re focusing on right now is what we can do right now, and … there are wells that are closed and can be brought back online in the next few months. All we need now is to address the immediate supply disruption.” , ”He added.

The Russia-Ukraine war has pushed supply to the global oil market, which has already been strong due to the recovery in demand from the collapse of the Kovid-epidemic. As crude prices have recently reached record highs, so have petrol pump prices.

Russia, a major energy exporter, is facing a wave of sanctions after invading neighboring Ukraine. The United States has banned oil imports from Russia in an attempt to punish Moscow, and the United Kingdom is gradually withdrawing them.

Oil prices have slipped from their early March highs since they traded at their highest level since 2008, although they are still high enough for the year, adding to inflationary pressures on the economy. West Texas Intermediate Crude, the US oil benchmark, traded close to 100 100 a barrel on Friday, up 35% so far in 2022. Brent crude, the international benchmark, was close to 104 a barrel.

Keystone XL, a supply depot providing crude oil pipeline services, is lying idle on February 1, 2021 in Wayne, Alberta, Canada.

Todd Coral | Reuters

As oil prices have risen in recent weeks, some Republicans have called on Biden to go the other way and immediately give the necessary permission to build Keystone XL, a proposed 1,200-mile project that would supply oil from Canada to American refineries.

Biden revoked the necessary permits to build the pipeline on his first day in office last year. In June 2021, the company that owned it, TC Energy, officially shut down the $ 9 billion oil pipeline. It was first proposed in 2008, but suffered considerable delays due to legal challenges to the choice of environmentalists and Native Americans.

In addition to tapping into the country’s oil reserves, Diz said the Biden administration wants to produce more than about 9,000 drilling permits on already approved federal land. Deez said the motive behind Biden’s decision was to urge Congress to implement the fee, saying that companies were not using wells from their lease on government land.

“The wells that can come back are the ones that are bringing in millions of barrels a day in the short term, not long-term questions that we can debate,” Diz said. “But the long-term question of what the short-term priority is really cloud. We’re trying to keep our focus there.”

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