President Joe Biden’s war on the oil and gas industry has cost the United States more than a quarter of a trillion dollars in lost economic activity, according to a new study.
The Committee to Unleash Prosperity released its study findings to The Daily Wire as U.S. oil production under Biden has failed to reach the same trend line relative to the rate of growth that was achieved under former President Donald Trump.
While the US is currently producing more oil than ever before, it is only slightly higher than the US was producing in 2019, before the coronavirus pandemic.
The study was conducted by Stephen Moore, Co-Founder of the Committee to Unleash Prosperity and Former Chief Economist of the White House Council of Economic Advisers Casey Mulligan, Ph.D., Professor of Economics at the University of Chicago and Senior Fellow in the Prosperity Liberation Committee.
“The Energy Information Agency had projected that the U.S. could produce as much as 15 million barrels of oil under current trends,” the study found. “According to the EIA, in the second half of 2023, daily US oil production averaged 13.2 million barrels, which is close to the peak reached under Trump.”
The study found that the average price of a barrel of oil has been significantly higher under Biden, $72 per barrel, than under Trump, $54 per barrel.
Productivity generated by each new well rose 23% under Trump, but “declined significantly” after Biden took office in January 2021 until the end of last year “both in absolute terms and relative to prior trends.”
The decline in production rates reflects “increasing extraction costs, which is one of the consequences of increased regulation, increased taxes and the reluctance of investors to finance oil companies,” the study said.
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“Although the EIA lowered its forecasts in early 2021 due to new challenges oil companies faced in securing capital, the agency still projected productivity growth to return,” the study said. “According to their modest forecast, US production should have already reached 14 MMb/d [million barrels per day] by 2022. But, in fact, production had not yet reached 13.0 MMb/d even by mid-2023. The surprisingly low production results are part of the reason why the EIA cut its 2022 production forecasts and, in particular, 2023.
If the production rate under Biden had remained the same as under Trump, the US would have produced at least an additional 2.4 billion barrels. The loss of oil and gas production and rising extraction costs have reduced “cumulative GDP by about $250 billion.”
“Anti-energy policies in the United States enrich major oil producers in Asia and the Middle East, some of whom use their wealth to finance terrorism,” the study said. “In fact, they are doubly enriched by our policies. One benefit they get is that the deductions from US production are the deductions from world production that contribute to higher world oil prices. The second benefit is that reducing U.S. shale activity gives OPEC more pricing power because we are no longer able to respond to OPEC’s production cuts with our own production increases. Indirectly, Biden’s policies regarding US production are also reducing OPEC production.”
Moore said the report made clear that Biden’s policies were harming US national security, the economy and global stability.
“This report makes clear that the radical left’s agenda, led by Biden’s policies, are self-inflicted wounds that are directly contributing to current economic challenges and rising energy costs harming millions of working Americans across the country. he said.
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