T he Biden administration boasts that U.S. oil production “is breaking the previous U.S. and global record.” This is the same administration that has adopted some 200 actions to limit oil and gas production as part of its climate-change agenda of a “great transition” intended to end all fossil-fuel production in the years ahead. Remember, one of Biden’s first actions as president was to kill the Keystone XL oil pipeline.
Yes, today’s production (about 13 million barrels daily) slightly exceeds previous levels. But it remains well behind the capabilities of an industry spurred by high world oil prices and a history of galloping past old milestones. I estimate that 2.4 billion barrels of oil, and a commensurate amount of natural gas, went untapped over the first 1,000 days of Biden’s presidency.
In each of the first three years of the Trump administration, domestic oil and gas production set records. In 2019, oil production was 39 percent above where it was in 2016. Gas production had increased 28 percent. A new report from the Committee to Unleash Prosperity shows how these gains were largely due to productivity growth driven by high rates of investment and innovation by extraction companies.
This progress was widely expected to continue. Shortly before Biden took office, the Department of Energy projected that domestic daily oil production would be between 13.8 and 16.5 million barrels, which would be well into record territory. In fact, the chart below shows production of less than 12 million.
The Department of Energy quietly admits that shifting sentiments about fossil fuels contribute to restricted supply. Production was becoming more expensive, DOE said, as it became “more dependent on internal sources of cash flow because outside funding sources are less available or require higher rates of return.” New federal energy regulations, on top of the prospect of corporate-tax-rate increases, are a recipe for a self-inflicted energy crisis.
During the Biden administration, domestic oil production has fallen 1–5 million daily barrels short of previous trends. From 2021 through the end of 2023, that is at least a cumulative 2.4 billion barrels missing from oil markets. Increased costs of oil and gas extraction are reducing annual GDP by about $100 billion.
Anti-energy policies in the United States enrich the major oil producers in Asia and the Middle East, some of whom use their wealth to fund terrorism. Venezuela was given a holiday from oil sanctions.
Indeed, foreign dictators are enriched twice by our policies. One benefit for them is that reduced production in the U.S. subtracts from world production, contributing to higher world oil prices. The second benefit is that undermining shale activity in the U.S. gives OPEC more pricing power, because we are no longer as able to respond to OPEC production cuts with production increases of our own.
Comically, Biden is trying to reduce prices at the gas pump by releasing 1 million barrels of gasoline from the Northeast Gasoline Supply Reserve. That’s less than 40 minutes of worldwide gasoline production, and it will have a minuscule effect on the average price of gasoline and may increase commensurately the prices of natural gas and other fossil fuels.
But if we were getting back to the Trump pro-drilling policies, the supply increase could be a thousand times greater than Biden’s reserve-release policy. Gas prices were less than $2.50 a gallon when Trump left office, and if it weren’t for the Biden war on oil and gas, we might be paying even less today.