US energy profits skyrockets as the country leads oil and gas production

Despite the Biden administration's ambitious climate goals, the oil and gas industry in the United States has seen unprecedented growth and profitability. The top 10 listed oil and gas producers in the US have reported a combined net income of $313 billion in the first three years of President Biden's term (Financial Times), this is three times the $112 billion generated during the same period under President Trump.

This surge in profitability can be attributed to several factors, including record-high production levels as well as significant cost reduction particularly in the oil rich Gulf of Mexico. In December 2023, US oil production reached 13.5 million barrels per day, surpassing all previous records. According to the US Energy Administration, by 2024 the US will reach the daily production of 14 million barrels per day. Additionally, natural gas production exceeded 105 billion cubic feet per day for the first time. These achievements have solidified the US as a global energy leader, with the country now ranking as the second-largest exporter of crude oil and the largest exporter of liquefied natural gas (LNG), overtaking Qatar. 

 In terms of production, while it is peaking in many countries, the US is expected to account for over half of worldwide expansion in the next five years, according to the International Energy Agency (IEA). Being outside the OPEC Cartel, the US has the freedom to expand its production without being bound by quotas or other limitations. Additionally, the US is a stable democracy where energy markets and investments are predictable and not affected by civil unrest, unlike in countries such as Iran, Venezuela, Iraq, Libya, and even Saudi Arabia, which has suffered drone attacks undermining its oil operations.

Biden is succeeding

The success of the US oil and gas industry under President Biden's administration has refuted criticisms from Republicans, who have accused the president of undermining US energy leadership with his climate-friendly  and ESG regulations. These criticisms, however, have been proven false by the US oil and gas companies' extraordinary performance, market share and profitability.

 President Biden's approach to the oil and gas industry has evolved since his presidential campaign four years ago, where he promised to lead a "transition from oil." While in office, President Biden has moderated his narrative, encouraging the industry to increase drilling to address high fuel prices and advocating for LNG exports to alleviate energy crises in Europe. However, he has done so, while overseeing the largest climate friendly investment package in US history through the $360 billion Inflation Reduction Act. 

Before I end, let me points out that this is real-politick at its best. On the one hand self-interest prevails, on the other the US maintains alive both the sustained energy security while advancing its global credibility and strength in terms of the transition to the green growth. I would also argue that but playing into the republican camp, Biden is able to contain criticism from Wall Street and from the oil special interest that have been attacking him for undermining the US energy leadership.  

In conclusion, the US oil and gas industry's recent success underscores the resilience of the sector and its ability to thrive even in the face of evolving political and environmental challenges. President Biden's administration has demonstrated a pragmatic approach to energy policy, balancing climate goals with economic realities, and ensuring that the US remains a dominant force in the global energy market. This balanced approach will probably serve President Biden well as he seeks to secure a second term as US President.