A US President’s ability to affect oil and natural gas markets is limited. The markets are global, and any president’s jurisdiction is limited to a single country; albeit in this case the one that’s currently both the largest producer and largest consumer of oil and gas in the world.
And even within US borders, power is limited. Durable policy changes require an act of Congress, which then—even once signed by the president—must survive increasingly activist judicial review to remain the law of the land. Anything enacted by executive order is ephemeral, requiring only a change of administration to be undone entirely.
In the spirit of ‘perception is reality,’ however, and given our proximity to the 2024 US Presidential Election, it’s worth at least trying to get a handle on any demonstrable differences between the candidates.
Finding the sweet spot for US hydrocarbons production is a balancing act. The unfettered pursuit of “drill baby, drill” would crater prices, which though beneficial to consumers, would not serve the industry well.
Both Trump and Biden left (or will leave) office with more oil being produced in the US than when they started their terms. Oil production even increased under Obama.
The Biden-Harris administration approved ConocoPhillips Co.’s 600-MMboe Willow project on Alaska’s North Slope. It increased other federal land available for leasing. But it also hiked royalty rates and promulgated regulations tightening methane emissions restrictions. The administration’s actions have prompted suit from both environmentalists and the oil and gas industry.
For his part, Trump increased the amount of land available for potential drilling in Alaska and Utah and reduced the industry’s regulatory burden. But he also banned coastal drilling in the eastern Gulf of Mexico and off the southeast Atlantic Coast.
Only about 10% of onshore oil production takes place on federal land and of leases already awarded by the US government to oil and gas operators, roughly half remain undeveloped. These small numbers further reduce any US president’s ability to shape the industry. But that doesn’t stop them from using the topic as a campaign talking point.
Here's what Vice-President Harris and former President Trump had to say on the topic of energy at their September 2024 debate.
Harris: “My position is that we have got to invest in diverse sources of energy, so we reduce our reliance on foreign oil. We have had the largest increase in domestic oil production in history because of an approach that recognizes that we cannot over rely on foreign oil…I am proud that as vice-president over the last 4 years, we have invested a trillion dollars in a clean energy economy while we have also increased domestic gas production to historic levels.”
Trump: “I got the oil business going like nobody has ever done before. They took, when they took over, they got rid of it, started getting rid of it, and the prices were going up the roof. They immediately let these guys go to where they were. I would have been five times, four times, five times higher because you're talking about 3 1/2 years ago. They got it up to where I was because they had no choice. Because the prices of energy were quadrupling and doubling. You saw what happened to gasoline. So, they said let's go back to Trump. But if she won the election, the day after that election, they'll go back to destroying our country and oil will be dead, fossil fuel will be dead. We'll go back to windmills, and we'll go back to solar.”
The ideal candidate would maintain and grow already record oil and gas output while providing the regulatory certainty and backing needed by industry to help it achieve its goals in other areas and continue to diversify its business footing for the future.
