The Biden Administration is Enabling the U.S. to Produce more Oil Than at Any Time in History

 

Biden came into office after having promised to slash oil production on public land. Canceling the Keystone XL pipeline during his first week in office seemed to confirm the image of him as a president who would happily throttle the country’s oil industry while showering the renewable energy industry with government dollars. But things turned out a little differently.

The Biden Administration, often associated with its robust climate change agenda and commitment to renewable energy, has simultaneously overseen a significant increase in U.S. oil production. This juxtaposition of fostering green energy initiatives while enhancing fossil fuel production has sparked widespread discussions and analyses. Here, we explore the dynamics of this trend, the factors driving it, and its implications for the U.S. energy landscape.

President Biden has been happy to use government largess to stimulate the renewables industry, but he’s also done little to check the short-term growth of oil. After the Covid-led economic downturn and the Russian invasion of Ukraine caused a supply shock in the crude markets that drove U.S. gasoline prices up in 2022, the White House made an uneasy, but real, embrace of the oil industry to help bring down gasoline prices.

Under President Biden, U.S. oil production has reached unprecedented levels. According to the U.S. Energy Information Administration (EIA), domestic crude oil production averaged 11.9 million barrels per day (b/d) in 2022, surpassing previous records. This trend is expected to continue, with projections indicating an increase to 12.4 million b/d in 2023, breaking the record set in 2019.

U.S. oil production is at record levels and is expected to go even higher next year. U.S. production is humming along at more than 13 million barrels per day, and growing. That’s a gusher that has topped levels that then-President Trump and GOP backers used to boast about. Exports are also on the rise as domestic fuel consumption has slowly come off the highs experienced a decade ago, meaning that every new barrel of oil produced in the United States is more likely to head overseas. Gasoline is now below $3 a gallon in many parts of the country.

Demanding an “all of the above” policy that includes all forms of energy has become cliche among lawmakers. Under Biden, that may have become a reality few politicians will want to publicly discuss. Democrats don’t want to alienate their green backers on the left who’ve accused the administration of abandoning its climate focus, while Republicans are loath to admit that Biden’s oil boom is bigger than the previous administration’s.

Several factors contribute to this surge in oil production. Firstly, the global energy crisis spurred by geopolitical tensions, particularly the Russian invasion of Ukraine, has underscored the importance of energy security. In response, the Biden Administration has taken measures to bolster domestic energy production to reduce dependence on foreign oil and stabilize energy markets. This includes the approval of new drilling permits and the strategic release of oil from the Strategic Petroleum Reserve (SPR).

Biden came into office to counter China by rebuilding military alliances with Asian allies. In late 2022, a top Pentagon official promised to accelerate that effort, vowing that “2023 is likely to stand as the most transformative year in U.S. force posture in the [Pacific] region in a generation.”

The Biden administration inked new defense partnerships with the Philippines and Papua New Guinea and deepened ties with India and Australia. The Pentagon also announced it would forward-deploy a Marine littoral regiment, an upgraded unit equipped with anti-ship missiles and advanced intelligence and reconnaissance capabilities, in Okinawa, Japan. In addition, during his first year as president, Biden announced a new working group with Britain and Australia to support Canberra’s acquisition of nuclear-powered submarines and share other advanced technologies, a pact now known as AUKUS.

All of the moves are aimed at building up the United States’ military partnerships in the Pacific and countering China. The Pentagon said China is continuing to steadily expand its nuclear arsenal and could have 1,500 warheads by 2035, in addition to its growing fleet of warships and aircraft.

The jury is still out on whether the administration has transformed the country’s posture in Asia, but the DOD undeniably made some key moves that are sure to please partners in the region who worry about China’s mounting aggression.

While the increase in oil production has been welcomed by many in the industry, it has also raised concerns among environmental advocates. Critics argue that expanding fossil fuel production contradicts the Administration's climate goals and undermines efforts to combat climate change. In response, the Biden Administration has emphasized that these measures are temporary and necessary to address immediate energy needs while transitioning to a more sustainable energy future.

To mitigate the environmental impact, the Administration has simultaneously ramped up investments in renewable energy sources. The Inflation Reduction Act, passed in 2022, allocates substantial funds for clean energy projects, including wind, solar, and battery storage technologies . Additionally, stricter regulations on methane emissions and incentives for carbon capture and storage (CCS) technologies aim to reduce the environmental footprint of increased oil production.

Moreover, technological advancements and efficiency improvements in the oil extraction industry have played a crucial role. Enhanced oil recovery techniques, such as hydraulic fracturing and horizontal drilling, have made it economically viable to tap into previously inaccessible reserves. The Biden Administration's approach has been pragmatic, balancing the push for clean energy with the practical needs of the current energy market.

The increase in oil production has significant economic implications. It has contributed to job creation in the oil and gas sector, supporting thousands of jobs across various states. Furthermore, higher domestic production has helped stabilize fuel prices, providing relief to consumers and businesses facing inflationary pressures.

Increased oil production also enhances the U.S.'s position in the global energy market, giving it more leverage in geopolitical negotiations. By becoming a leading exporter of crude oil and refined petroleum products, the U.S. can exert greater influence over global energy prices and dynamics, which is particularly crucial in times of international conflict and supply disruptions.

The Biden Administration's tenure has seen a paradoxical but strategic increase in U.S. oil production, driven by a combination of market dynamics, technological advancements, and geopolitical considerations. While this has raised environmental concerns, it underscores the complexity of transitioning to a sustainable energy future. Balancing immediate energy needs with long-term climate goals remains a delicate task, and the Administration's efforts reflect this intricate balancing act.

As the U.S. continues to navigate these challenges, the ongoing dialogue between energy production, environmental sustainability, and economic stability will shape the future of the nation's energy policy. By fostering innovation in both fossil fuels and renewable energy, the Biden Administration aims to create a resilient and diversified energy landscape that can meet current demands while paving the way for a cleaner, greener future.

References

U.S. Energy Information Administration. (2023). Short-Term Energy Outlook. Retrieved from [EIA] https://www.eia.gov/outlooks/steo/report/

White House. (2021). President Biden Announces Release from the Strategic Petroleum Reserve As Part of Ongoing Efforts to Lower Prices and Address Lack of Supply Around the World Retrieved from [White House] https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/23/president-biden-announces-release-from-the-strategic-petroleum-reserve-as-part-of-ongoing-efforts-to-lower-prices-and-address-lack-of-supply-around-the-world/

U.S. Congress. (2022). The Inflation Reduction Act of 2022. Retrieved from [Congress] https://www.congress.gov/bill/117th-congress/house-bill/5376/text

Why the U.S. isn’t ready for a fight in the Indo-Pacific (2023). https://www.politico.com/news/2022/12/27/united-states-china-taiwan-pacific-00075555

30 Things Joe Biden Did as President You Might Have Missed. (2024). Retrieved June 3, 2024, https://www.politico.com/news/magazine/2024/02/02/joe-biden-30-policy-things-you-might-have-missed-00139046