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As the world grapples with the existential crisis of climate change, environmental activists President Joe Biden wants to phase out the oil industry, and Republicans say he has already done so. Meanwhile, the surprising truth is that the U. S. is pumping oil at breakneck speed and is on track to produce more oil than any other country in history.
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 U. S. oil production hit 13. 2 million barrels per day, according to the U. S. Energy Information Administration. That’s just above the era’s record of 13. 1 million. Donald Trump, established in early 2020, just before the Covid-19 crisis. to plummet.
That’s been helping to keep a lid on crude and gasoline prices.
U. S. production, led by shale oil drillers in Texas and New Mexico’s Permian Basin, is so strong that it is shipped overseas. The U. S. exports the same amount of crude oil, subtle products and herbal combustible liquids that Saudi Arabia or Russia produce, S said. .
“It’s a reminder that the U. S. has huge oil reserves. Our industry should never be underestimated,” said Bob McNally, president of Rapidan Energy Group.
Record U. S. production is helping to offset cuts from competitive sources aimed at outpacing OPEC prices, primarily Saudi Arabia and Russia. Other non-OPEC oil producers, such as Canada and Brazil, are also pumping more oil than ever before. (Brazil is expected to join OPEC next year. )
The strength of US production took experts by surprise. Analysts at Goldman Sachs on Sunday lowered their forecasts for oil costs next year. The bank said the “main reason” for the lowered forecasts is abundant U. S. supply.
Global demand for crude oil is expected to reach a record high in 2024; however, it will be “easily satisfied” by the growth of sources, according to S’s projections.
All of this has helped keep oil costs under control. After flirting with $100 a barrel earlier this year, crude has fallen back into the $70 to $75 range.
Energy costs rose this week after BP halted shipments to the Red Sea due to protection concerns. Still, U. S. oil is trading below $74 a barrel, well below the point reached when Hamas attacked Israel on Oct. 7.
Gas prices neared the psychologically important level of $4 a gallon in September. But prices at the pump have since fallen sharply, helping to ease inflationary pressure on the US economy.
The national average for a gallon of regular gas was $3. 08 per gallon on Tuesday, up from $3. 14 a year ago, according to AAA.
Despite record output, Biden has been criticized for his power politics.
“Unfortunately, this administration continues to pursue policies aimed at restricting access to new production, adding federal lands and waters. The world will continue to demand more energy, not less, and we urge policymakers to recognize the role that U. S. energy production can play. play as a stabilizing force for consumers here at home and around the world,” American Petroleum Institute senior vice president for policy and economics and Dustin Meyer, Regulatory Affairs, said Tuesday.
In September, the House Subcommittee on Energy and Mineral Resources held a meeting titled “Biden’s War on Domestic Energy Threatens All Americans. “
Republican Sen. Dan Sullivan of Alaska warned in a speech that the Biden administration’s war on power is a “gift to our adversaries. “
Earlier this month, in a Republican presidential debate, Florida Gov. Ron DeSantis pledged to “open all of our domestic power to production” to “lower fuel prices. “DeSantis made a similar comment at CNN’s mayor’s office last week.
The fact that the U. S. is poised to generate more oil than any previous country undermines the argument that Biden has waged a war on U. S. energy.
Of course, this doesn’t mean that it was Biden’s policies that paved the way for record U. S. oil production, nor that the White House would be quick to take credit for it.
McNally, a former leader under former President George W. Bush, said there is little presidents can do about U. S. oil production unless they take drastic emergency powers.
Unlike OPEC countries, U. S. oil production is largely decided through the flexible market.
“It’s not like President Biden or any president has a dial in the Oval Office to increase production,” McNally said.
Instead, the increase in U. S. production has been driven by smarter and more effective operations through oil corporations. Energy corporations have discovered tactics to extract more and more oil from the ground, without particularly expanding drilling.
The shale oil revolution spurred new drilling strategies that freed up new resources. But this strategy can be more complex and require gigantic amounts of water.
Still, McNally said the White House has been forced to change its tone on fossil fuels, moving from a climate-focused stance of 2020 and early 2021 to a more neutral one.
Last year, fuel costs soared above $5 per gallon following Russia’s invasion of Ukraine, which sparked panic in the oil market. Biden has suggested to U. S. oil corporations that they pump more oil, precisely the opposite of what weather scientists are calling for.
In March, the Biden administration even approved the Willow oil drilling project, a controversial ConocoPhillips drilling venture in Alaska that had been stalled for decades. That green light came in the face of deep criticism from climate groups worried about the environmental and health risks.
“President Biden has been moved away from his initial strategy of staying on the stock market toward a more pragmatic policy,” McNally said, noting that management “attacked the truth about high fuel costs and Russia’s invasion of Ukraine. “
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