https://rogerpielkejr.substack.com/p/is-joe-biden-the-drill-baby-drill
Is Joe Biden the “Drill, Baby, Drill” President?
A Guest Post by Benjamin Zycher – This is a guest post by Benjamin Zycher, Senior Fellow (and colleague of mine) at the American Enterprise Institute. THB invites critique and contrasting perspectives. Today’s guest post offers a rejoinder to my recent post here at THB — Joe Biden is the “Drill, Baby, Drill” President.
Excerpt: My AEI colleague Roger Pielke Jr. argues in a recent post that “Joe Biden Is the ‘Drill, Baby, Drill’ President,” by virtue of the time trend for U.S. oil production on federal lands (onshore and offshore) for 2008-2023.1 In summary, Pielke reproduces the data on oil production from federal lands as reported by the U.S. Department of the Interior, showing that such oil production increased by about 129 percent during 2008-2023, over 46 percent during 2017-2023,1 and by 25 percent in 2023 relative to 2020. Table 1 presents those production data for calendar years 2016-2023 for crude oil (and associated liquids) and natural gas.
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Fossil energy production from federal lands is the end result of a lengthy process comprising complex preliminary analyses, leasing, exploration, permitting, and development, Pursuit of a lease on specific federal acreage is highly speculative, driven by some perceived potential for fossil production years in the future, under market conditions that are uncertain at best, and which may or may not yield an actual resource economically viable.
After a lease is obtained, geologic analyses — complex, time-consuming, and expensive — proceed, the central purpose of which is a determination of whether a drilling permit is worth pursuing. As a rough approximation, this process of geologic investigation consumes 2-4 years for onshore leases, and 7-8 years for offshore leases because of the enhanced attendant difficulties of engineering and logistical analyses.
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As discussed above, the number of new drilling permits issued in a given year is driven heavily by leases approved in prior years, followed by the geologic and other analyses needed to determine if a drilling permit is worth pursuing. Accordingly, it is leasing activity in prior years that is the central driver of fossil energy production on federal lands during the current year. Analogously, it is leasing activity in the current and/or most recent years that will prove the central determinants of such fossil energy production in future years.2
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Related:
Say what?! ‘U.S. oil & natural gas production & exports’ continue to expand into record territory even during Biden admin – Geologist explains – August 8, 2024
Geologist Gregory Wrightstone comments on oil and gas production continuing during Biden admin:
“Federal lands increase can be explained by the length of time needed to bring these properties into drilling and production from when the lease is issued to when the bit starts turning to the right. Most are offshore in the Gulf of Mexico, and many are in deep water. Most of the remainder are in Alaska. Both with long pre-drill times compared to wells on private lands.”
“The overwhelming majority of land-based drilling in America is for shale oil and gas reservoirs, and virtually all of that is on privately owned lands, so the Biden/Harris War on Oil is not able to slow them down. States issue the permits, and they have a strong incentive to be efficient in doing so.”
“Oil and Gas Production 3 – The Biden/Harris War on Oil Effect may not be seen for several years due to long lead times between acquisition and actual production.
The bottom line is that we are the dominant oil and gas producer, not BECAUSE of Biden/Harris, but IN SPITE of them. Just think what we could be doing with a pro-development president.”
To sum up, the increase in Federal production may be reflective of increasing leasing under Trump, which is just showing up now.”
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Raoul LeBlanc comments on Pielke’s blog:
Just a few things to add to the conversation:
1. The US government owns the mineral rights of about 1/3 of the Western US. But the amount of land that is prospective or actually producing is determined by geology. Producing areas are concentrated in SE and NW New Mexico, Wyoming, Western Colorado, and Central Utah. For the most part, the oil and gas industry already has access to the land that it wants in the L48. Individual companies are quite keen on selected new areas for exploration, but this is, frankly, not important.
2. In the context of the shale revolution, access to public lands is not really important. One of the nice things about shale is that about 91% of shale oil and gas wells are on private land. Individuals own the mineral rights, get the royalties, and provide access to the companies. Furthermore, the regulation of these activities is carried out by states. The federal government has been (mostly successfully) seeking a larger role, but remains mostly a bit player. In other words, federal policy and actions have actually had very little impact on the trajectory of the shale’s meteoric rise, no matter who was in the White House. Note that the federal government is the primary driver offshore and in Alaska, but that the time frames in which actions manifest themselves is much, much longer, so actions taken by any administration will not have impacts until 5-10 years afterward.
3. If you want to understand US oil and gas production growth (I do this for a living), stop looking so hard at policy. Policy matters somewhat, butt he key factors that explain US oil and gas are 1) oil and gas prices, which are set by supply/demand fundamentals, 2) corporate behavior of producers (especially the independents), 3) technology and oilfield service costs and equipment, and 4) geology and the physics of well production.
4) if you break out the DOI production expansion into the areas where it is occurring, you will find that more than 100% of the growth is in SE New Mexico. This part of the Permian Basin has probably the highest productivity shale wells in the country. They are excellent and should continue to power growth in the region for several years, as there is still room to run. But it is also important to note that these leases are all HBP (held by production). They were leased long ago for the most part, and any change in federal leasing policy has no impact. The Biden administration did make noises about withholding permits to drill, but companies had stockpiled permits during the latter days of the Trump administration and the Biden administration resumed issuance of permits at a normal rate. There is no realistic impediment to development beyond the usual bureaucratic burdens of logistics in a remote area and state and federal processes.
Given the above realities, the notion that production in the US — even on federal lands — will align with the attitudes and actions of a particular administration is unlikely to prove true.
