Sometimes, events happen over time that are hard to explain and understand.
Take, for example, President Biden’s war against America’s oil and gas industry, yet last year, American producers set records for both crude oil and natural gas production, becoming the largest producing country in history.
How can that happen?
Well, Mr. Biden has tried, but his attempts have failed, so far.
Biden and his team of bureaucrats have proposed, proclaimed, stated, and issued some 200 actions that will have a negative impact on the oil and gas industry in the U.S., according to a report issued by the Institute for Energy Research.
On his first day in office, Jan. 20, 2021, he canceled the Keystone XL pipeline, issued a moratorium on all oil and natural gas leasing activities in the Arctic National Wildlife Refuge, and revoked Trump administration executive orders that decreased regulations in order to expand domestic production.
For the next three years, his administration has proposed $150 billion in additional taxes on the industry, strenuous environmental regulations, and even tried to manipulate the price of oil by releasing some 180 million barrels from the nation’s Strategic Petroleum Reserve.
U.S. Sen. John Barrasso, R-Wyo., led a coalition of 24 senators expressing “grave concern” about Biden’s “continued hostility towards American energy production.”
A few weeks ago the U.S. House of Representatives focused on a number of energy issues to increase access to America’s oil and natural gas resources and strengthen energy infrastructure. Rep. August Pfluger (R-TX) said: “One of the only promises that President Biden has followed through on is his campaign vow to ‘end fossil fuels.’”
But instead of driving the industry out of business, oil and gas production is at an all-time high. U.S. oil production has increased 19.8% since January 2020 from 11.1 million barrels per day to 13.3 million barrels per day in December 2023, and natural gas also set records, rising 14% since January 2020.
There are a number of reasons for the increase:
- Technology and efficiency development in exploration and production – The oil and gas industry in the U.S. has been a leader in technology development. Horizontal drilling and hydraulic fracturing techniques continue to improve to maximize efficiency in recovering hydrocarbon from very difficult reserves.
- Market conditions have changed – The oil and gas industry has become an international game with expanded exports of America’s resources to countries around the globe. International conflicts (Ukraine, Israel, and others) have influenced commodity prices.
- Price – Even though the daily price of crude oil and natural gas fluctuates, oil prices have remained above $60 per barrel. Natural gas prices, however, have declined to less than $2 per mcf in most locations, but in the Permian Basin of Texas and New Mexico, natural gas has dropped into negative territory where producers must pay to sell their gas.
- Demand has increased – Energy agencies across the globe project increased demand all the way to 2050.
Many, if not most, of the wells that are producing today, were leased, drilled, and began producing long before Biden became President. Certainly, the actions of governments can promote or deter activity, but in the end, business activity responds to key economic, supply-and-demand conditions.
Alex Mills is the former President of the Texas Alliance of Energy Producers.
Alex Mills is the former President of the Texas Alliance of Energy Producers. The Alliance is the largest state oil and gas associations in the nation with more than 3,000 members in 305 cities and 28 states.
