PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

U.S. Energy Production Overcomes Unfriendly Policies…for Now

By at 30 January, 2024, 8:39 pm

by Raymond J. Keating –

I have long been amazed at the entrepreneurs, businesses, employees and investors who produce the energy upon which our economy is dependent. They not only push ahead with innovations, investments and production, but they have been doing so in a largely hostile policy climate for most of the past decade-and-a-half.

As reported by the U.S. Energy Information Administration, “U.S. dry natural gas production in the Lower 48 states reached an all-time monthly high of 105.5 billion cubic feet per day (Bcf/d) in December 2023, according to data from S&P Global Commodity Insights.”  The overall annual production average hit a record high of 102.2 Bcf/d in 2023.

On the crude oil front, a December 19, 2023, CNN report noted:

“The United States is set to produce a global record of 13.3 million barrels per day of crude and condensate during the fourth quarter of this year, according to a report published Tuesday by S&P Global Commodity Insights. Last month, weekly US oil production hit 13.2 million barrels per day, according to the US Energy Information Administration. That’s just above the Donald Trump-era record of 13.1 million set in early 2020 just before the Covid-19 crisis sent output and prices crashing.”

For good measure, the EIA reported in October that U.S. crude oil exports hit a record high in the first half of 2023, and Reuters noted, “U.S. liquefied natural gas exports hit monthly and annual record highs in December, tanker tracking data showed, with analysts saying it positioned the United States to leapfrog Qatar and Australia to become the largest exporter of LNG in 2023.” And as the EIA noted, total natural gas exports hit a record high in the first half of 2023.

How does the Biden administration react to this unabashedly good news?

It announced on January 26 that it would be delaying approval of any natural gas export terminals. Ironically, President Biden declared, “We will not cede to special interests.” Of course, the president’s announcement is fully driven by his pandering to special interests, while ignoring the economy and national security interests.

And make no mistake, when the Biden administration and some in Congress attack the U.S. energy sector, they are attacking small businesses. For example, according to the latest data from the U.S. Census Bureau (2021), 96 percent of employer firms in the oil and gas extraction sector have fewer than 100 employees, and in the support activities for oil and gas operations sector, 96 percent of employer firms have fewer than 100 workers.

Energy producers have made the U.S. the top energy producer on the planet, and with that comes additional economic, income and job growth. The Biden administration responded by trying to punish the small businesses and workers who innovate and work in the energy sector.

Questions remain, of course. Will the political attacks on U.S. energy production persist? While these anti-U.S.-energy regulatory costs and signals certainly have restrained investment, will it get worse? And will assorted elected officials continue to ignore sound economics in favor of pandering politics?

A better question: Why not support U.S. energy production to the benefit of individuals, families and small businesses across the economy?

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist and The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist.

 

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