The Cost of Biden’s War on Oil and Gas: Nearly $100 Billion a Year in Lost Output
Under Trump Policies…
- The U.S. would be producing between 2 and 3 million more barrels of oil a day
- The U.S. would be producing between 20 and 25 more billion cubic feet of natural gas
- U.S. GDP would be increased by roughly $100 billion a year
The Biden administration has sent conflicting messages to the U.S. oil and gas industry. On one hand, Biden has promised to set the U.S. on a course of eliminating U.S. oil and gas over the next two decades. He has said that his long-term goal would be to “shut down” oil and gas production as part of his climate change strategy. He has also canceled pipelines, reduced drilling on public lands, and instituted tough new environmental standards that raise the cost of drilling. His new climate change legislation imposes new taxes on the oil and gas industry.
On the other hand, he has said multiple times he is “doing all I can” to reduce gas prices at the pump. He also claims that the U.S. is near “record levels” of oil and gas production in his first year-and-a-half in office.
This study examines what has happened with oil and gas production when we adjust for the large increase in the world price since Biden entered office. We find that Biden’s policies have shifted the energy supply curve such that we are producing less oil and gas at the range of current price levels that we would have with the Trump energy policies still in place.
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. This translates into an economic loss – or tax on the American economy – of roughly $100 billion a year.