Dec 6, 2023 - Energy & Environment

Biden struggles to embrace America's quiet oil boom

Data: Energy Information Administration; FactSet; Chart: Axios Visuals
Data: Energy Information Administration; FactSet; Chart: Axios Visuals

Relative quiet from the White House and repeated GOP attacks on President Biden's energy record are hiding record levels of American oil production.

Why it matters: Don't expect public victory laps from Biden as he navigates the tricky politics around energy and climate change.

What's happening: U.S. oil production, the world's highest, is over 13.2 million barrels per day, nudging past levels seen just before COVID crushed demand and prices.

Zoom in: This petro-power — and how to talk about it — is a delicate balance for a White House that has made climate change an unprecedented policy priority.

  • Every president, Biden included, tries to avoid backlash over gas prices.
  • Yet young activists want stronger moves against fossil fuels, despite steps like limiting offshore leasing.
  • They've been dismayed at some decisions, such as approving a big ConocoPhillips drilling project in Alaska.

The big picture: Biden hasn't played up U.S. oil strength in his re-election pitch. But he does like promoting lower gas prices this supply increase helps enable.

  • A campaign official said that's woven into an economic message that includes efforts like addressing insulin prices. "It fits under that broader umbrella."
  • But Biden's campaign response team has cited U.S. output to parry GOP attacks on his energy record, the official said.

Between the lines: This adds up to a rather muted posture on oil output — a topic with political crosscurrents heading into 2024.

  • Some moderate Democrats want Biden to openly take credit for record production.
  • "Gas prices have been high — and the Biden Administration has done a huge amount to lower them, including upping drilling in the U.S.," said Josh Freed, who runs the climate and energy program at the centrist Democratic group Third Way.
  • "That's only half the battle. The President should take credit for this and he shouldn't be shy about it. It helps American families," Freed adds.

The intrigue: Biden's GOP and industry critics say the records come despite White House policies they call a drag on U.S. companies.

  • Biden's critics want less regulation and stronger support for drilling on federal lands.
  • Much of the oil and gas boom has unfolded on private or state lands, notably the prolific Permian Basin in Texas and New Mexico.

What they're saying: "Companies are producing [record amounts of oil] this month due to investment decisions, permitting and energy development innovations that were made several years ago — even as far back as the Bush and Obama administrations for offshore development," American Petroleum Institute spokesperson Megan Bloomgren said.

How it works: Forces pushing U.S. output upward include...

  • Attractive prices in recent years provide an incentive to drill more, although public firms are steering a lot of money into dividends and buybacks. Cost pressures have eased somewhat, too.
  • Producers at prolific U.S. shale basins are improving efficiency and drilling longer lateral wells.
  • Saudi Arabia and allied producers have held back some production as OPEC looks to prop up prices, leaving a market opening.

What we're watching: COP28, the big UN climate summit unfolding in Dubai.

  • In a chat with The Financial Times, U.S. climate envoy John Kerry rejected the suggestion that record U.S. oil and natural gas production "made the US position...more difficult in urging other countries to back an agreement for the phaseout of fossil fuels."

What they're saying: "President Biden has led and delivered on the most ambitious climate agenda in history, restoring America's climate leadership at home and abroad," White House spokesperson Angelo Fernández Hernández said in a statement.

  • "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."

The bottom line: The politics of oil and gas were dicey in 2020, and they remain so in 2023.

Editor's note: This article has been updated with a quote on oil production timelines.

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