U.S. Energy Independence is Actually Expanding Under Biden
The latest lie is that Biden ended U.S. energy independence. Energy independence is achieved when U.S. companies produce (and export) more oil and energy resources than we import.
If you’re just here for the short fact, the U.S. is still energy independent as we are still producing more than we’re a net exporter.
How did we get here?
Former President Trump likes to take credit for this but the truth is, we achieved 90% independence under Former President Obama. We reached net exporting status during Trump’s term in 2019 but our net exports were the highest in American history in 2021.
That means we were more energy independent in 2021 than at any other time in history and the United States is still the world’s largest oil producer.
The WP talked to Ann-Louise Hittle, VP of oil research at Wood Mackenzie to find out why our big producer status isn’t translating to lower prices.
“The most straightforward answer is that U.S. demand still outstrips its own supply. We’re the world’s largest producer, but we’re also the world’s largest consumer,” she said. The U.S. produces 18.8 million barrels of oil per day but consumes slightly more — 20.5 million barrels per day. (The world as a whole consumes about 100 million barrels per day.) That difference means that no matter what, the U.S. has to purchase oil on the global market. So when supply in the market contracts slightly — as it will with the decision from OPEC Plus — that can affect prices in the U.S.
And even if U.S. production exactly matched U.S. demand, the country would still be importing and exporting oil constantly. Crude oil can be heavy or light, sweet or sour, and those qualities affect how much it needs to be refined and for what uses. U.S. oil companies constantly export crude oil and import refined oil, and vice versa.
Didn’t Biden end drilling so oil companies can’t keep up with demand?
No! In fact, the opposite is true. The Biden administration increased the number of permits issued by 34%! There are currently 9,000 unused permits to drill on public land. But that doesn’t really matter:
“In the United States, 90% of onshore oil production takes place on land that isn’t owned by the federal government. And of the remaining 10% that occurs on federal land, the oil and gas industry has millions of acres leased,” Biden said. “They have 9,000 permits to drill now. They could be drilling right now, yesterday, last week, last year. They have 9,000 to drill onshore that are already approved.”
But they’re not using them. In fact, publicly traded oil companies have a financial incentive to not use permits. Yacob Reyes and Amy Sherman of the Poynter Institute reported earlier this year:
Oil and gas companies can raise funds from investors by not drilling on leases with proven reserves, said Hugh Daigle, an associate professor at the University of Texas’ Hildebrand Department of Petroleum and Geosystems Engineering.
There is actually an incentive for the companies not to develop these resources because for publicly traded companies, these reserves get reported and influence market valuation, Daigle said.
OilPrice.com: The U.S. is still energy independent
U.S. Energy Information Administration: Energy facts explained
Updated on Oct 19, 2022
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