Despite facing a regulatory onslaught from the Biden administration, the oil and gas industry continues to be a key driver of economic growth in the United States. States rich in mining sectors, particularly oil and gas extraction, have experienced significant growth, bolstering overall GDP. The domestic harvesting of oil and gas has helped increase GDP, improving the economy’s perception on paper. However, President Biden’s efforts to curtail fossil fuel production in favor of alternative energy sources have hampered the industry’s growth. According to Peter Earle, an economist at the American Institute for Economic Research, the administration’s actions have had the opposite effect, disincentivizing fossil fuels while failing to revitalize manufacturing. Mining and drilling states, such as North Dakota, Texas, Wyoming, and Alaska, have contributed the most to US economic growth in 2023. The total dollar output for the mining sector has increased in 43 states, leading to growth in seven of them. Of these seven states, North Dakota, Texas, Wyoming, Alaska, and Oklahoma have seen the highest GDP increases. While the mining and logging sector, which includes oil and gas extraction, experienced job losses during the COVID-19 pandemic, it has since rebounded to pre-pandemic levels. However, jobs in the sector have remained largely stagnant, with no significant growth in recent months. Due to regulations and higher input costs, drillers have focused on reducing well heads and maximizing efficiency. This has led to increased production but has not translated into commensurate job growth. Mining has been the top contributor to the rising GDP among private goods-producing industries, while retail trade has been the largest for private services-producing industries. Mining accounted for 12.4% of total GDP growth in 2023, making up 0.31% of the total 2.5% GDP increase. Despite its significant contribution to GDP, mining accounts for less than 1% of the total national income. However, by providing affordable energy sources, mining has helped curb energy prices, positively impacting the economy. However, inflation has countered this effect, and the administration’s anti-fossil fuel policies have exacerbated the situation. Despite the hostile regulatory environment, the US has maintained its position as the world leader in crude oil production, surpassing Russia in 2018. Domestic production of crude oil has been on the rise since 2008 due to the adoption of hydraulic fracturing and horizontal drilling. The Biden administration has approved the $8 billion oil drilling Willow project in Alaska, despite opposition from environmentalists. However, the administration’s regulatory assault on the oil and gas industry has hindered the growth of refining capacity, which peaked in early 2020 and has not fully recovered. A strong domestic refining capacity would help insulate American consumers from global commodity market volatility, but the Biden administration’s policies have undermined this sector as well. The White House has not responded to a request for comment.
Oil Production Bolsters US Economy Despite Biden’s ‘Regulatory Assault’
