What Biden’s oil record means for the industry’s future

By Heather Richards | 05/13/2024 06:48 AM EDT

U.S. oil production is at record highs despite the president’s pledge to end the federal oil program.

President Biden and oil barrels

AP, iStock

President Joe Biden entered the White House promising to end drilling on public lands. Instead, he presided over a record boom in U.S. oil production.

His Interior Department, which oversees the federal oil program, outpaced the Trump administration in approving new drilling permits. At the same time, Biden leased the smallest amount of public land for drilling in his first 18 months in office than any president since Harry Truman.

The conflicting record raises questions central to Biden’s efforts to address climate change: What is his oil legacy? How will it shape the industry — and emissions — in the long term?


The answers will depend partly on the fate of regulations issued by Biden on everything from industry methane emissions to drilling royalties, as well as the industry’s ongoing response to the president’s leasing policy. But the trajectory of the oil industry since 2020 also shows the limits of presidents to control drilling, even as they set policies that may influence production levels years later.

Biden’s mixed bag of policies will keep the nation’s oil program “treading water” in some ways, said Romany Webb, deputy director of the Sabin Center for Climate Change Law at Columbia University. Many policies will help curb greenhouse gas emissions and dampen demand for oil, but moves like approval of the massive ConocoPhillips’ Willow Project in the Arctic guarantee future drilling on public lands.

How Americans view the mixed oil record may be significant for Biden as he tries to woo environmental and young voters — without alienating undecided Republicans and independents — in a tight race against former President Donald Trump.

Climate-centric voters are demanding Biden do something in the coming months to shore up his record on oil policy, said Collin Rees, the U.S. program manager for Oil Change International.

“It’s a problem of his own making, by refusing to put forward more comprehensive plans to phase out fossil fuels,” he said. Biden erred in focusing mostly on reducing demand for oil and gas while letting industry continue to operate normally, he said.

“Every day that you are allowing [industry] to remain in the room, that you are indulging their fantasies about continued production, that you are allowing them to kind of peddle their false solutions and prolong their existence, you’re shooting yourself in the foot,” he said.

The White House did not provide comment in time for publication.

Trump has committed to reversing Biden’s policies and unleashing American fossil fuels, echoing Republican lawmakers who have painted the president’s action as destructive to energy security.

“The Biden administration’s policies have been devastating for our federal lands,” House Natural Resources Chair Bruce Westerman (R-Ark.) said in a statement. Whether it’s a new Bureau of Land Management rule “that fundamentally threatens the western way of life, or the decision to lock up enormous deposits of increasingly scarce minerals, it’s clear Biden and his bureaucrats have no interest in properly stewarding our federal lands.”

But that narrative conflicts with drilling data. Oil production has soared on public lands under Biden, growing by roughly 530,000 barrels a day since 2020. The country is currently producing more oil every year than any country in history, according to the U.S. Energy Information Administration.

Even Trump, while criticizing Biden on the campaign trail overall, has credited the president for both hindering the oil industry and unshackling it.

“We have more oil and gas than any country in the world … and we’re not allowed to use it. … They closed up the oil,” Trump said at a March campaign rally in Dayton, Ohio. “Now [Biden’s] drilling like crazy. He went back to my policy.”

The New Mexico factor

The current oil boom isn’t due to the administration’s policies — or any former president’s agenda, experts say. It’s the result of an oil boom in New Mexico.

New Mexico’s rise began before Trump took office in 2017. At the time, drillers had leased most of the good acreage in the Permian Basin of West Texas. Pushed out or priced out of Texas, companies bought federal leases in New Mexico, where a subbasin of the Permian — the Delaware — held promise. A nearly $1 billion federal lease sale in New Mexico in 2018 showed that the state’s oil rush had arrived in force.

“Growth in oil and gas production on federal lands in recent years has been dominated by production from New Mexico’s Permian Basin,” said Daniel Raimi, a fellow at Resources for the Future, an energy-focused nonpartisan group.

New Mexico production has been so strong that it’s offset a drop in other states. Gulf of Mexico oil drilling has also contributed to the rise in production, said Raimi.

Despite Biden’s promises to rein in oil development on public lands, there wasn’t much the president could do about the New Mexico boom, considering that drillers bought their rights before Biden entered office.

“There are fewer policy mechanisms the administration can use to reduce production on those lands,” Raimi said. “In Alaska or the Gulf of Mexico, where many leasing opportunities remain, the administration can take action to reduce future production by restricting leasing. But in the Permian, it’s a different story.”

Early in Biden’s tenure, Interior appeared poised to take a swipe at New Mexico oil and gas drilling activity with an order temporarily suspending new permitting, prompting a wave of criticism from industry and Republicans. But that order sunset. By the middle of Biden’s first year in office, new permitting on public lands had soared, cutting into a backlog of unapproved drilling permits left over from the Trump administration.

“Aside from restricting drilling in ANWR … I don’t otherwise get the feeling [Biden] has fundamentally done much to restrict oil extraction,” said Carey King, assistant director of the University of Texas, Austin’s Energy Institute.

Biden’s most significant action to shrink the federal oil program may be in reducing leasing. That began early in the administration with a leasing moratorium on public lands and waters. The pause was overturned by a federal court in 2021, but subsequent lease sales onshore have been markedly smaller and less frequent than the historical norm.

Interior inked a five-year offshore oil program in December with three lease sales between 2024 and 2029. Prior programs sometimes included dozens of auctions.

Fewer sales could stifle oil and gas production over the coming decade because companies would have fewer places to drill.

While Biden hasn’t come anywhere close to a full moratorium since taking office, observers say his reduced leasing also weakened investment in drilling projects.

“It is a pulling back on the reins of the oil and gas energy horse,” said Thomas Sansonetti, former Interior solicitor during the George H.W. Bush administration, of Biden’s leasing decisions.

How much they will pull back on the reins remains to be seen, however. Biden’s tenure coincided with a Republican-controlled House of Representatives, preventing the president from changing the oil program more permanently through the law, Sansonetti said.

A regulatory strategy

In the wake of the 2021 decision blocking Biden’s leasing moratorium, the administration pivoted to a different tool — regulations.

Interior finalized multiple rules in the past three years that affect the industry, including increasing royalties on federal leases, prioritizing lands with high oil potential for new lease sales, limiting venting and flaring of federal wells, increasing minimum bonds for onshore drilling, banning new leasing in the Arctic Ocean and requiring roughly $6.9 billion in new supplemental cleanup insurance from offshore drillers.

EPA has also released multiple regulations, including pollution protections from oil and gas infrastructure and a proposed fee on excess industry methane emissions.

While a future president could undo many of the rules, a reversal of all of them could take a long time, said Sansonetti.

Webb said the climate impact of Biden’s oil record goes far beyond the oil and gas leasing program.

“You’ve got to look at that program in the context of all the actions that are being taken across the administration,” she said. “It’s an interconnected system.”

A critical element of Biden’s oil legacy, she said, is the Inflation Reduction Act, which included new rules to make drilling on public lands more expensive alongside its $369 billion investment in energy and climate change programs.

Erik Schlenker-Goodrich, director of the Western Environmental Law Center, said the IRA offered “promise but also peril,” because it invests in “boondoggles” like untested carbon capture technology that will extend dependence on fossil fuels.

For their part, oil companies argue that Biden has hurt the industry’s ability to grow in the long term.

Holly Hopkins, vice president for upstream policy at the American Petroleum Institute, said the Biden administration has used “every tool at its disposal” to limit federal oil and gas development and the impacts will be felt in later years.

“Record high U.S. oil and natural gas production is supported by forward-looking decisions from previous administrations, and the misguided policy steps happening today will have consequences,” she said in a statement.

Biden’s regulatory actions have also prompted court battles that are continuing to shape the industry. One of the most recent examples is a lawsuit last month from North Dakota and other Republican states against Interior’s methane rule.

Industry groups also sued successfully to include an endangered whale’s potential habitat in a 2023 Gulf of Mexico oil sale after Biden tried to bar new leasing in the area.

Despite the industry criticism, some oil and gas representatives privately say the administration showed more tolerance for fossil fuels on public lands than expected.

In the run-up to the 2020 election, some oil companies predicted Biden would be a disaster, as he was promising to shut down fracking, end federal permitting and stop oil development in the Arctic National Wildlife Refuge.

Drillers aren’t panicking about a second Biden administration, said Andy McConn, director and head of commercial intelligence of the research firm Enverus.

“Not to say that this next [election] is unimportant, it’s just the stakes seem lower,” he said. “When the [Biden campaign] rhetoric was pretty hot, and there was uncertainty about drilling federal lands, the implications were bigger.”