The news website Just the News, published a story written by Aaron Kleigman, which discusses the high costs imposed on the U.S. economy by policies imposed by President Joe Biden to limit the production, delivery, and use of fossil fuels. In an article titled “Biden’s energy policies costing U.S. economy $100 billion a year: study,” Kleigman discusses recent study by economists Stephen Moore and Casey Mulligan at the Committee to Unleash Prosperity which found that the Biden administration’s oil and gas policies have cost the U.S economy $100 billion a year. Kleigman and Just the News are to be applauded for bringing attention to this important research.
According to the study, the United States has produced far less oil and gas than it would have, given current market conditions, absent the Biden administration’s policies limiting oil and gas production and making such production more expensive. The economy is suffering as a result.
Discussing the study, Kleigman writes:
“The U.S. would be producing between 2 and 3 million more barrels of oil a day and between 20 and 25 more billion cubic feet of natural gas under the Trump policies,” states the report, which was published by the Committee to Unleash Prosperity. “This translates into an economic loss — or tax on the American economy — of roughly $100 billion a year.”
The figures are based on production numbers adjusted for the energy price spikes that have occurred since President Biden entered office in 2021.
“Both the domestic and international evidence show that when we adjust for the higher international price for oil and gas, the U.S. is drilling not record amounts of oil and gas, but far below what market conditions would dictate,” Moore and Mulligan argue. “It takes a higher oil price to motivate the same supply during the Biden administration.”
Kleigman notes that the Moore and Mulligan’s report came out even as “the Organization of the Petroleum Exporting Countries (OPEC) and its non-member allies, a coalition known as OPEC+ led by Russia and Saudi Arabia, announced Wednesday they’re going to slash oil production by 2 million barrels a day,” and just after President Biden announced he would continue to drain the U.S. Strategic Petroleum Reserve by 1 million barrels per day for the next six months to try to lower prices. The OPEC+’s move effectively more than cancels out Biden’s sales from the reserve. As a result of Biden’s failed diplomacy, oil prices are on the rise again.
Although Saudi Arabia has some of the lowest oil production costs in the world, the kingdom itself is very dependent on oil sales for funding the government. Estimates suggest that it requires $83 USD per barrel to stay balanced. As a result, Saudi Arabia, one of America’s greatest oil producing competitors, has a strong incentive to keep prices high.
Biden’s policies, as detailed by Climate Realism here, here, and here, for instance, have hindered American energy production, handing control of oil prices back to OPEC and OPEC+, after Trump made the United States energy independent.
Many of Biden’s actions hampering domestic energy production were reported in a report from The Heartland Institute:
- Canceling the Keystone XL pipeline
- Restricting drilling in parts of the Arctic Ocean, Bering Sea, and federal lands
- Placing a moratorium on new oil and gas leases on federal land
- Rescinding energy production leases in the Arctic National Wildlife Refuge
- Plans to close nearly half of the National Petroleum Reserve in Alaska
- Stringent new regulations on methane emissions from oil and gas production
- Classifying residual water from oil and gas drilling as toxic waste
- Considering hiking royalties paid to the federal government by fossil-fuel companies
The Biden administration’s restrictions on fossil fuel development have had a notable cooling effect on investment in oil and gas projects, as the recent report from the Committee to Unleash Prosperity shows. In sadly all too typical fashion, the corporate media has largely ignored this important story because it goes against the narrative they have spun for the past few decades that oil and gas companies are destroying the earth by bringing about climate change. Thanks, Just the News, for bringing attention to this important study which tells the truth about the continuing criticality of fossil fuels to modern civilization and economic progress.
Linnea Lueken is a Research Fellow with the Arthur B. Robinson Center on Climate and Environmental Policy. While she was an intern with The Heartland Institute in 2018, she co-authored a Heartland Institute Policy Brief “Debunking Four Persistent Myths About Hydraulic Fracturing.”
via Watts Up With That?
October 11, 2022