Could Fossil Fuels Re-Elect Biden?

Oil and gas are doing more for the economy than his climate dreams

WSJ editorial. 

"Despite President Biden’s best efforts, U.S. fossil-fuel production continues to grow, and it’s supporting the economy he touts. That’s one notable finding from the Bureau of Economic Analysis’s recent report on state GDP growth in 2023 that is always instructive about regional and industrial economic trends. 

The U.S. economy last year expanded by 2.5%, and while the rest of the press missed it, fossil-fuel producing states led the way. These include North Dakota (5.9%), Texas (5.7%), Wyoming (5.4%), Oklahoma (5.3%), Alaska (5.3%), West Virginia (4.7%) and New Mexico (4.1%). Mining contributed about two to three percentage points to GDP growth in these states.

GDP growth in most other states was sluggish, especially those in the Northeast like New York (0.7%) and New Jersey (1.5%) and the Great Lakes region. Mr. Biden boasts about a Midwest manufacturing boom, but folks aren’t feeling it in Wisconsin (0.2%), Ohio (1.2%), Illinois (1.3%) Indiana (1.4%) and Michigan (1.5%).

Mining contributed 0.31 percentage points to U.S. GDP growth last year compared to 0.06 points for manufacturing and 0.04 points for construction. In most of the Midwest, reduced manufacturing output subtracted from growth. That’s not surprising since overall business investment last year was lackluster. One exception was oil and gas development.

U.S. oil production last year hit a record 13.3 million barrels a day while natural gas output surged to a record 45.6 trillion cubic feet. Most has occurred on state and private lands, which the federal government has little power to stop. This is why government revenue in Texas from oil and gas royalties and taxes last year soared to $26.3 billion.

Mr. Biden will never admit it, but privately financed fossil-fuel production is doing far more to boost the U.S. economy than his hundreds of billions of dollars in spending on electric vehicles and green energy. The latter may even detract from economic growth by causing a misallocation of capital to less productive uses.

Two exceptions to the fracking boom were Ohio and Pennsylvania, where natural gas production last year was roughly flat. A big culprit is a persistent shortage of pipeline capacity to transport gas, which owes to permitting obstacles by the feds and Northeast states. Mr. Biden’s pause on liquefied natural gas export projects has also added business uncertainty.

Even so, the U.S. gusher of fossil fuels has kept energy prices lower than they'd otherwise be. Natural gas prices reached an all-time low of $1.49 per million Btu last month, which along with a mild winter has reduced heating costs for tens of millions of Americans. Manufacturers have also benefited from lower natural gas prices. Global oil and U.S. gasoline prices have recently climbed amid geopolitical uncertainty, but they would be significantly higher if not for surging U.S. oil production.

Illinois Gov. J.B. Pritzker, a climate-change obsessive, nonetheless tweeted last month that “thanks to the Biden Administration’s vision and leadership, the US has achieved energy independence for the first time in 40 years!” He highlighted a chart showing that the U.S. recently became a net exporter of oil, natural gas and coal while China’s net fossil-fuel imports have grown. Cognitive political dissonance, thy name is Pritzker.

Mr. Biden deserves no credit for America’s fossil-fuel boom, but he’s surely benefiting from it, much as Barack Obama did in 2012. The President’s biggest economic success is something he has done everything in his power to thwart."