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With Obama-Era Handcuffs Removed, U.S. Finally Becomes Net Oil Exporter

January 3, 2019

For the first time since at least the 1940s, the United States is exporting more oil and petroleum than it imports, spurring economic growth.

For the first time since at least the 1940s, the United States is exporting more oil and petroleum than it imports, spurring economic growth. This accomplishment is due in large part to President Donald Trump’s decision to remove onerous Obama-era restrictions on oil production on federal lands, and it fulfills a long-stated public policy dream that only recently seemed achievable.

Just one decade ago, technological advancements in directional drilling and hydraulic fracturing—commonly called “fracking”—created a surge in U.S. oil production. Oil production from fiscal year 2009 through 2017 more than doubled on private and state-owned lands, thanks almost entirely to the fracking revolution. However, during the same period on federal lands, there was virtually no change in oil production. Although oil producers were able to better extract oil from leased federal lands, the Obama administration dramatically curtailed producers’ access to those lands. As a result, the percentage of oil produced on federal lands fell from 36 percent in 2009 to just 22 percent in 2017.

Something dramatic changed in 2017, though: President Trump started his first term in office and reversed Obama’s restrictive drilling policies. As a result, oil production on federal lands in 2017 increased dramatically. According to the federal Bureau of Land Management, revenue from oil and gas lease sales nearly doubled in the first year of the Trump administration compared to the final year of the Obama administration. The fracking revolution that significantly increased U.S. oil production and lowered oil and gasoline prices is now finally occurring on federally owned lands.

There are good reasons to believe the best has yet to come, too. In 2018, oil production on federal lands has increased compared to 2017, and it will almost certainly continue to grow as a result of the Trump administration’s encouragement and free-market reforms.

“[Fiscal Year] 2018 energy disbursements totaled $8.93 billion, which is an increase of nearly $2 billion since FY 2017 and an increase of $3 billion since President Obama’s last year in office. Production and revenues increased and the Department saw record-breaking sales,” the Department of the Interior noted in November.

Although some on the left might try to rewrite history, it is important to remember the overall oil production gains of the past 10 years occurreddespite the Obama administration’s best efforts to thwart them, not because of anything the Obama administration did. In addition to stifling oil production on federal lands, Obama routinely criticized oil as an energy source and even blocked U.S. energy producers from exporting oil to other countries. In 2015, Obama agreed not to veto congressional legislation allowing oil exports, but he only did so after Republicans agreed to authorize additional renewable power subsidies in return.

The Trump administration’s policies will have a tremendous positive impact on the U.S. economy for years to come. Saudi Arabia and other OPEC nations have been scheming for decades to create higher oil prices for Americans, even when it means higher gasoline prices for Saudi drivers. Why? Because higher oil prices bring overall net economic benefits to oil exporting nations. The best way to immunize the U.S. economy from the kind of oil price shocks that have previously sunk our nation into economic downturns and reduced American living standards is to ensure that the United States remains a net oil exporter. When OPEC nations restrict oil production and cause increases in global oil prices, higher prices at the pump will be offset by more foreign money flowing into the U.S. economy.

The next time you fill up your car at the pump, remember that the fracking revolution and increased domestic oil production are the primary reasons we no longer pay $4 per gallon for gasoline. Obama did his best to keep this progress from happening, but Trump is working to ensure the huge benefits associated with American energy dominance continue indefinitely.

[Originally Published at The Detroit News]

Article Tags
Environment
Author
Tim Huelskamp served as president of The Heartland Institute from 2017 to 2019.
Author
James Taylor is a senior fellow for environment and energy policy at The Heartland Institute.
jtaylor@heartland.org