It’s time to Break It Down!
If you follow my posts, you may know, occasionally, I concede that a particular story has made a point so well, there is nothing I feel compelled to add. Daniel Dale has done just that with his fact check of the myth of Trump’s so-called “energy independence.” In short, it didn’t happen, particularly in the way many GOP pols like to tell the story. Read it from Mr. Dale in his own words.
Washington (CNN)The United States never stopped importing energy from foreign countries under President Donald Trump.
Both before and after Russia’s invasion of Ukraine contributed to a spike in US gas prices, various Republicans bashed President Joe Biden for supposedly abandoning Trump-era “energy independence.” These Republicans have fostered the impression that the “energy independent” US did not need energy from Russia and elsewhere under Trump, but then, under Biden, has been forced to buy this foreign energy once more.
The truth is that the US was never close to genuine independence from foreign energy in the Trump era.
“Energy independence” is a political phrase, not a literal phrase. Despite how Trump and others have made it sound, it does not mean the US was ever going it alone.
“A ridiculous term,” said Jim Krane, an energy studies fellow at Rice University’s Baker Institute for Public Policy.
“A horrible term,” said Jeff Colgan, professor and director of the Climate Solutions Lab at Brown University and an expert on the geopolitics of oil.
“This stupid term,” said Amy Myers Jaffe, an energy expert and a research professor at The Fletcher School at Tufts University.
The term has various non-literal definitions. And the US did satisfy some of these definitions under Trump in 2020 — as it did again in the 11 months of 2021, mostly under Biden, for which we have complete data.
For example, in both periods, the US exported more crude oil and petroleum products than it imported. It also produced more primary energy than it consumed.
But none of that means that the Trump-era US did no energy importing at all. From the beginning of Trump’s term to the end, the US very much relied on oil and gas from abroad.
In 2020, Trump’s last full year in office, the US imported about 7.9 million barrels per day of crude oil and petroleum products. That was down from prior years — the US imported more than 10 million barrels per day in 2016, President Barack Obama’s last full year — but still a whole lot of foreign energy.
In fact, contrary to prominent Republicans’ suggestions over the last month that the US had just recently started consuming Russian energy under Biden, US energy imports from Russia spiked during the Trump presidency.
And that isn’t the only thing Republicans have gotten wrong.
Contrary to claims from Trump and other Republicans, Biden has not “shut down” American energy: US crude oil production in Biden’s first year was higher than in each of Trump’s first two years and just narrowly shy of production in Trump’s last year, though substantially lower than production in Trump’s record-setting third year. And experts say it is economic factors and cautionary pressures from Wall Street, not anything Biden has done, that has made US oil companies reluctant to dramatically ramp up production from current levels.
Multiple reasons for foreign imports
Amid the US boom in oil and gas production from hydraulic fracturing, better known as fracking, the quantity of US imports of crude oil and petroleum products has been trending downward since early in the second term of President George W. Bush. But there are numerous reasons why the US doesn’t just stop importing entirely.
One key reason is that there is a mismatch between many of the refineries in the US, which were designed to handle heavy crude oil, and the lighter crude that is produced in the US through fracking.
Another reason is that domestic energy production isn’t sufficient to fulfill the needs of all US refineries — for which it can be profitable to buy low-cost unfinished energy from abroad, turn it into higher-value petroleum products, and then export some of those products. Colgan noted in an email that even at moments when the US is a net exporter of oil, “it remains tightly integrated into the world market for oil, constantly exporting some grades of oil to foreign customers while importing other grades of oil into the United States. Same for oil products like gasoline and diesel.”
Geographic factors are also at play. For example, refineries in California have relied on imports, some from Russia, because importing has been cheaper than getting oil shipped from various parts of the US, such as the Permian Basin in the Southwest, to which California has no pipeline connection.
Unless the US shifts completely to renewable or nuclear energy, Krane said in an interview, “we are going to be tethered to supply lines that stretch halfway around the world whether we like it or not.”
Russian imports never ceased under Trump
Before Biden announced a ban on imports of Russian energy last Tuesday, some Republicans suggested that the US had suddenly started importing Russian oil under Biden.
For example, Florida Gov. Ron DeSantis said at an event in late February: “We were, before Biden took office, for the first time in any of our lifetimes, actually energy independent. Putin didn’t matter. Now, they’re importing millions of barrels of oil from Russia.”
Iowa Sen. Joni Ernst said on Fox News on March 6 that Biden’s choices when he first came into office “put us in this tenuous position with energy independence in the United States. Instead of being an exporter of energy, we became a consumer of Russian oil.”
The truth is that the US was importing a significant quantity of oil and petroleum products from Russia under Trump: over 137 million barrels in 2018, then 189.8 million barrels in 2019 and 197.7 million barrels in 2020.
Imports from Russia did increase again, to 245.2 million barrels, in 2021.
Analysts have attributed part of the spike in energy imports from Russia since 2018 to the sanctions Trump imposed on Venezuelan oil in 2019, which left US refiners looking for an alternative supplier. Regardless of the cause, it’s just not true that “Putin didn’t matter” to the US energy supply before Biden took office or that the US “became a consumer of Russian oil” under Biden.
What is true is that, under both Trump and Biden, imports from Russia made up a fraction of total US petroleum imports — about 8 percent in 2021, just about tied with Mexico for second place.
The US reliance on foreign energy is in large part a reliance on close ally Canada, which provided 51 percent of US imports in 2021.
Biden’s impact has been overstated
Republicans have portrayed Biden as an all-powerful enemy of the US oil and gas industry.
Trump claimed in a speech in late February that Biden “shut down American energy.” Florida Sen. Marco Rubio tweeted a Wednesday suggestion that Biden was stopping oil companies from increasing production, writing: “If Biden would let America get back to 2019 production we won’t need a single drop of oil from #Venezuela or #Iran or anyone else.”
There is no doubt that Biden’s attitude toward the US oil and gas industry is less friendly than Trump’s was. But the truth is that Biden isn’t stopping US energy companies from increasing production and certainly never “shut down” US energy production.
“President Biden hasn’t done anything yet — no offense — because he can’t get anything passed through the Congress,” Jaffe said in an interview.
Rather, US oil companies themselves have been reluctant to dramatically ramp up production. While the oil lobby has cast blame on Biden policies, experts cite various other reasons —including supply chain problems, challenges finding workers, and, critically, the current insistence from Wall Street that energy companies restrain spending and return cash to investors.
“Oil and gas companies do not want to drill more,” Pavel Molchanov, an analyst at Raymond James, told CNN Business for an article in early March, before Biden announced the Russia ban. “They are under pressure from the financial community to pay more dividends, to do more share buybacks instead of the proverbial ‘drill baby drill,’ which is the way they would have done things 10 years ago. Corporate strategy has fundamentally changed.”
Krane, the energy studies fellow from Rice University, concurred in an interview after Biden announced the ban.
“It’s not a lack of leasing that’s holding back US crude. It’s Wall Street,” he said. “The federal government is like a third-tier player in the US oil market. Market signals themselves are the main driver of energy production and decision-making in the US.”
Even still, US field production of crude oil in 2021, about 11.2 million barrels per day, was only slightly lower than US production under Trump in 2020, when it was about 11.3 million barrels per day — and 2021 production was higher than production in 2017 and 2018, Trump’s first two years in office, though well below the record 12.3 million barrels per day in 2019.
Numerous Republicans have castigated Biden’s decision to revoke the permit for the Keystone XL pipeline, which would have carried crude oil from Canada’s oil sands to the US. But the long-delayed pipeline would almost certainly not have been ready this year even if Biden had allowed construction to proceed.
The federal Energy Information Administration projected this month that US crude oil production will hit 12 million barrels per day again in 2022, then set a new record of 13 million barrels per day in 2023.
Moratorium put on hold
Biden has called for a shift away from fossil fuel production and toward renewable energy sources, and he has put forward policies toward that end. Those policies have included an attempted temporary moratorium on new leases for oil and gas drilling on public lands and offshore waters.
But the Biden moratorium wouldn’t have stopped drilling on existing leases. A judge put the Biden moratorium on hold in June. And the moratorium was intended to be in place only until the completion of a review by Biden’s interior department — which ended up recommending an increase to leasing fees but not a long-term halt to new leasing.
As CNN’s Ella Nilsen reported last week, the Biden administration approved more drilling permits in its first year than the Trump administration approved in 2017, 2018 and 2019, though fewer than it approved in 2020.
Since late February of this year, there has been a pause on the issuance of new leases and permits on federal territory. That pause, however, was prompted by a judge’s injunction in a lawsuit filed by Republican state attorneys general.
In addition, it’s important to note that more than three-quarters of US drilling occurs on non-federal territory.
“Facts: The Definition of Stubborn Things!” I’m done, holla back!
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