Under Joe Biden, the US has become the world’s largest oil producer and is producing more oil than any country ever has. According to data from the Energy Information Administration (EIA), US oil production has even increased by 21% over the past five years, and it settled in December a new annual production record with 13,3 million barrels per day.
This means the US is pumping more oil than Saudi Arabia, with 9 million barrels daily, making it the largest producer in the OPEC+ oil cartel. EIA expects the US to do even better in 2024, producing 13,4 million barrels daily.
The news is by no means a boost for the Biden administration’s climate initiatives and grist to the mill of Republicans, who want to bet on more oil and gas production while rolling back subsidies for e-cars, taking the US out of global climate agreements, and canceling net zero promises.
Consequence of war
That higher oil production is mainly the result of the Russian invasion of Ukraine. That caused higher oil and gas prices, leading many shale producers to deploy more drilling rigs.
The top three states producing the most oil include Texas, New Mexico, and North Dakota, accounting for 42,6%, 14,1% and 8,9% of oil production respectively. Thanks to the highly productive oil fields in the Permian Basin, Texas has been the country’s leading oil producer for years. A hundred years ago, it was California, but oil production there has fallen sharply due to political policies and unfavorable geology.
In general, oil demand in the US and the world is expected to plateau and come down. But while so far it has mainly been the smaller producers that have been pushing up oil production, big players like Exxon Mobil and Chevron, the two largest US oil companies, are also starting to move into the market, betting that the predictions of declining oil demand due to surge of sales of EVs and the use of renewable energy are wrong.
Exxon, for example, plans to buy shale giant Pioneer Natural Resources for nearly 60 billion dollars, and Chevron plans to buy Hess for 52 billion dollars, mergers that would let them produce more oil and natural gas for decades to come.
At the recent COP28 climate summit, the international community called for the first time to turn away from fossil fuels because their greenhouse gas emissions have the worst effects on climate change. Yet you see that such big oil companies, on the contrary, want to increase production even more to squeeze more profit from their output while the United States is the most polluting country in the world after China.
The November election looming creates a tough split for President Joe Biden and the Democrats. On the one hand, Biden wants to get away from fossil fuels because they are dangerous for global warming; on the other, his policies also aim to keep prices low and supply the EU and the rest of the world with oil now that many countries have embargoed Russian crude.
This is succeeding also because OPEC+ has reduced production, and this is being amply compensated by other countries not in OPEC, such as the US, Brazil, Canada, and Guyana, the fastest-growing oil province in the world, which again curbs the power of the OPEC+ countries. In the US, for instance, you currently pay 3,3 dollars per gallon – a mere four liters – at the pump for petrol.
Given the elections
But whether his pragmatic approach can also convince environmentalists and young voters to vote Democratic is another question. However, Donald Trump has already hinted that he wants to “drill, drill, drill” for more oil should he be re-elected.
Analysts are convinced that Biden’s approach will play to his advantage with swing-state voters, who will be crucial to his hopes for a second term. Or as Josh Freed, the director of climate and energy at the center-left think tank Third Way, sums it up: “The fastest way to end all of the American climate action is to see oil prices rise dramatically and have Republicans get elected to office.”