The United States is producing so much oil that it has undermined the influence of OPEC, which failed when it tried to make production cuts recently to drive prices up globally. [washingtonpost]
U.S. oil production hit a record under Biden. He seldom mentions it.
The
politics of oil are particularly tricky for Democrats, whose chances
for victory in next year’s elections can hinge on whether young,
climate-focused voters come out in big numbers
You won’t hear President Biden
talking about it much, but a key record has been broken during his
watch: The United States is producing more oil than any country ever
has.
The
flow of huge amounts of crude from American producers is playing a big
role in keeping prices down at the pump, diminishing the geopolitical
power of OPEC and taming inflation. The average price of a gallon of
regular gasolinenationwide has dropped to close to $3, and
analysts project it could stay that way leading up to the presidential
election, potentially assuaging the economic anxieties of swing-state
voters who will be crucial to Biden’s hopes of a second term.
But
it is not something the president publicly boasts about. The politics
of oil are particularly tricky for Democrats, whose chances for victory
in the 2024 elections could hinge on whether young, climate-conscious
voters come out in big numbers. Many of those voters want to hear that
Biden is doing everything in his power to keep oil in the ground.
“If
you are not looking carefully at what the administration is actually
doing, it is easy to get the wrong impression,” said Kevin Book,
managing director at ClearView Energy Partners, a research firm. “There
are a lot of things going on at once. This is an administration which is
focused on the energy transition, but also taking a pragmatic approach
on fossil fuels.”
The United States is producing about 13.2 million barrels of crude oil
per day. That is millions of gallons more than is coming out of Saudi
Arabia or Russia. It is more oil than was being produced even at its
peak during the pro-fossil-fuels administration of former president Donald Trump, when production was 13 million barrels a day in November 2019.
Voters
who listen to Trump and Biden speak may come away with the impression
that the opposite is true. Trump recently told Fox News’s Sean Hannity
that he would act as a dictator only on the first day of his presidency
in 2025, in part because he wanted to “drill, drill, drill” for more
oil. The former president has constantly attacked Biden’s clean energy
agenda and accused him of squandering America’s prior “energy
independence” because of allegiance to “environmental lunatics.”
While Biden’s White House has publicly celebrated the decline in gas prices
and pledged to help consumers struggling with inflation, the president
has largely stayed mum about the oil industry’s record output. In
several speeches this year, he has blasted oil company executives for
amassing record profits.
“They
invested too little of that profit to increase domestic production and
keep gas prices down,” Biden said during his State of the Union address
in February. “Instead, they used those record profits to buy back their
own stock, rewarding their CEOs and shareholders.”
The
White House has also largely stayed mum on the oil production boom,
instead touting Biden’s legislative record as the most ambitious effort
to combat climate change in history and contrasting his stance with that
of Trump and other deniers.
“The
President is implementing the largest investment in climate ever,
putting the United States on a path to cut climate pollution in half by
2030,” White House spokesman Angelo Fernández Hernández said in a
statement. The statement praised Biden for protecting more than 21
million acres of public lands and waters and boosting clean-energy
manufacturing by invoking the Defense Production Act and facilitating
private-sector investments. “The President will continue to take bold
climate action and rally world leaders to raise their collective
ambition.”
The
soaring domestic oil output has already begun to reshape geopolitical
dynamics. The United States is producing so much oil that it has
undermined the influence of OPEC, which failed when it tried to make
production cuts recently to drive prices up globally. The amount cut was
quickly backfilled by the United States and other non-OPEC nations,
which gladly grabbed the market share OPEC forfeited.
The
diminishment of OPEC’s influence gives Democratic operatives one less
thing to worry about. It was only last year, during the midterm
election, that Saudi Arabia embarrassed the administration by
disregarding its requests not to cut production as prices at the pump
were soaring. As things stand now, Saudi Arabia is not in a position to
influence the U.S. election by pushing oil prices up as voting nears,
which typically sours consumers on the incumbent in the White House.
The
huge boost in U.S. oil production has defied analyst expectations and
driven energy prices down around the globe. White House policy is hardly
the key factor, but it has helped. Biden’s vows on the campaign trail
to restrict growth of fossil fuels gave way to a more moderate approach
after Russia invaded Ukraine and prices soared. The signal he sent to
the industry as voters struggled with high gas prices was clear: Pump
more.
“When
the head of the U.S. government tells industry to produce more, that is
significant,” Book said. “It reflected a sea change, and certainly the
end of a campaign of very restrictive rhetoric.”
The
shift, he said, gave oil companies and their investors the confidence
to redouble their efforts to pull oil from the ground. They were able to
ramp up production so high in large part because of efficiencies and
innovations in the way oil is pumped.
“These
companies have gotten more effective at drilling more rapidly,” said
Mark Finley, a fellow in energy and global oil at Rice University’s
Baker Institute. “They are drilling longer wells, and they are getting
more production from each well.” He said analysts had not anticipated
such strong growth because oil company investors were pressuring
companies to scale back their infrastructure spending amid projections
that the energy transition will shrink the market for fossil fuels.
But,
Finley said, the companies have managed to recalibrate their
infrastructure investments and increase output at the same time.
It is a mixed blessing for Biden. At the moment, the administration appearscontent
not to be taking too much credit. The continued attacks from
Republicans accusing the president of jeopardizing America’s energy
security with his focus on climate action are out of sync with the
reality on the ground, but they give Biden cover with his base. At the
same time, the relatively low gas prices help him with swing voters.
“While
the administration is pushing for an energy transition, they know
prices at the pump matter to the economy, consumer pocketbooks and also
their reelection prospects,” Finley said.
Some
liberals have also criticized Biden’s assertion in August that he had
“practically” declared a climate emergency with his environmental
policies, saying he should actually declare one, to combat extreme
weather and other threats. Biden has taken steps to reduce methane
emissions and also signed historic climate and infrastructure
legislation aimed at weaning the country off fossil fuels in the years
ahead.
But
the current rush of domestic oil production comes as the president’s
push to facilitate a transition to electric vehicles is falling short of expectations, providing an uncomfortable contrast for the White House.
As
U.S. oil production was soaring to record levels in December, Biden
administration officials were at the U.N. Climate Change Conference in
Dubai assuring world leaders that the United States would help lead the
global transition away from fossil fuels. That dichotomy stood out to
Amara Enyia, an activist and policy director for the Movement for Black
Lives, who attended the conference, known as COP28.
“There’s
this dissonance between the commitments that are being made versus what
the administration is actually doing,” she said. “We’re seeing this
sort of two-headed approach to climate — on the one hand, drilling
permits, and then on the other, talking about the need to move away from
fossil fuels.”
For
his part, Biden has said his top domestic priority is reducing prices
for Americans, and the relief at the pump carries potential benefits for
his 2024 prospects.
A
short-term boost in domestic oil production and a corresponding decline
in gas prices could have a long-term benefit for environmentalists —
helping prevent the return to power of Trump and other deniers of
climate change, said Josh Freed, the director of climate and energy at
the center-left think tank Third Way.
“The
fastest way to end all of American climate action is to see oil prices
dramatically rise and have Republicans get elected to office,” he said,
commending Biden’s handling of the issue.
Whether
Biden is successfully walking this tightrope is likely to remain a
matter of debate ahead of November’s election. Climate activists say
base voters are frustrated by the softening of the president’s stance
against fossil fuels, and mobilizing them will prove difficult despite
the historic investment the administration is making in green power and
accelerating the energy transition.
Climate-conscious
voters were particularly dismayed by the administration’s approval of
the Willow project, which will allow hundreds of miles of roads and
pipelines, airstrips, a gravel mine and a major new processing facility
in the middle of pristine Arctic tundra and wetland. For many, that
decision was one of several signifying how Biden’s bold campaign
promises to take on the fossil fuel companies yielded to dealmaking on
permits and a more conciliatory approach toward the industry overall.
“You
can’t solve the climate crisis without keeping fossil fuels in the
ground,” said Jamie Henn, founder of Fossil Free Media, a nonprofit
focused on ending oil and gas use. “Record oil production stands in the
way of the energy transition … An ‘all of the above approach’ leads to
flip-flopping on fossil fuels. It is bad policy, and also bad politics.”
Evan
Halper is a business reporter for The Washington Post, covering the
energy transition. His work focuses on the tensions between energy
demands and decarbonizing the economy. He came to The Post from the Los
Angeles Times, where he spent two decades, most recently covering
domestic policy and presidential politics from its Washington bureau.
Toluse
"Tolu" Olorunnipa is the White House Bureau Chief of The Washington
Post, and the co-author of "His Name is George Floyd," winner of the
2023 Pulitzer Prize for Nonfiction. He joined The Post in 2019 and has
covered the last three presidents. Previously, he worked at Bloomberg
News and the Miami Herald, reporting from Washington and Florida.
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