Thorny Crowns and Poison Pills

The Biden presidency ends with record U.S. hydrocarbon energy production. And parting "gifts."

“A determined soul will do more with a rusty monkey wrench than a loafer will accomplish with all the tools in a machine shop.” - Robert Hughes

In the United States, every Presidential election in the twenty-first century has been contentious. Recency bias makes the “climate” of the last seven seem particularly hot to those alive today, but history reminds us that this is not the case.

Consider, for example, the 1800 presidential election. President John Adams, leader of the Federalist Party, faced his Vice President Thomas Jefferson, representing the Democratic-Republicans. This was in the young Republic’s early years, long before the electoral system evolved to its present form, when such a matchup was still possible.

The campaign for the presidency in 1800 intensely partisan, with vitriolic attacks from both sides. Among other differences, Adam’s Federalists were advocates of strong centralized government, commercial expansion, and good relations with Britain. Jefferson’s Democratic-Republicans, championed states' rights, agrarian interests, and sympathy towards France.

The rhetoric from both sides was hostile. Federalists accused Jefferson of being a dangerous radical who would plunge the nation into chaos. Democratic-Republicans portrayed Adams as seeking to establish a monarchy. Discord was further fueled from within the Federalist Party by Alexander Hamilton's public condemnation of Adams.

Adams and the Federalists were defeated, but the election resulted in an electoral college deadlock. Both Jefferson and his running mate, Aaron Burr, received 73 electoral votes, throwing the outcome to the House of Representatives. After 36 ballots and the requisite political maneuvering, Jefferson was finally elected President and Burr, much to his discontent, became Vice President.

After a bitter defeat, it is also not uncommon for the outgoing administration to politically “salt the earth” a bit to spite the incoming opponent and preemptively monkey wrench its efforts. After losing a heated race, last minute consolation prizes of red meat to mollify a stunned and usually angry political base are poison pills directed at the victors.

In the aftermath of their 1800 Presidential election defeat, Adams and the Federalists, retaining control over the government during the lame duck session, undertook several measures to undermine the incoming Democratic-Republican administration. These actions were driven by a combination of spite and a genuine fear that the Democratic-Republicans would undo much of their work.

The Judiciary Act of 1801 was the most egregious example. Enacted during the lame duck session after the 1800 election, the Act reorganized the federal judiciary and expanded the number of circuit courts and judgeships. Adams and the Federalists packed the courts with judges in what became known as "midnight appointments," attempting to ensure that the judiciary remained a Federalist stronghold.

Today, Joe Biden’s presidency ends. He will not be missed by energy, environmental and economic pragmatists.

But during the lame duck session after losing the 2024 election, Biden made sure to politically salt the earth a bit for the incoming Trump administration in a variety of ways. Despite the rhetoric about a “smooth transition, in terms of energy and environmental policy, the modus operandi and the subject of his monkeywrenching were not much of a surprise.

What did Biden - or more realistically, his climate-obsessed handlers - impose by Executive Order targeting energy in his final days? What final rule did the Biden Department of Energy (DOE) issue as a parting gift under the auspices of “climate change”? And how much difference are any of these actions likely to make? On the final sunrise of lame duck season, let’s go hunting and find out.

We begin our story by noting the dichotomy between President Biden’s flowery climate rhetoric and what actually happened to U.S. hydrocarbon production during his term. Given the two charts below from the U.S. Energy Information Administration (EIA), we challenge Democrat climate voters to identify Biden’s resounding political success reducing U.S. crude oil and natural gas production during his term.

We have shown U.S. production as of January 2021, the month Biden was inaugurated, in both charts. The first shows U.S. onshore crude oil production since 1920.

In January 2021, when Biden took office, U.S. onshore crude oil production was 11.152 million barrels per day (bpd). In October 2024 (latest data shown) it reached a record 13.457 million bpd, an increase of over 2.3 million bpd - more than 20% - during Biden’s presidency.

The second chart shows monthly marketed natural gas production since 1975. Production as of Biden’s inauguration month is similarly noted.

In absolute numbers, the production increase during Biden’s presidency was over 407 billion cubic feet or more than 15%. The closest Biden and his environmental supports could get to reducing fossil fuel production was merely to slow the growth in domestic natural gas production by making pipelines harder to build. This is plainly evident by negative pricing at the West Texas Waha trading hub for weeks at a time, including as recently as last summer. But for that success by “environmentalists” in the U.S., the increase in natural gas production would been even higher.

It is also instructive to remember that Joe “climate change is the biggest crisis facing the world” Biden did not hesitate to drain the U.S. Strategic Petroleum Reserve of almost 1 million bpd (about 150 million barrels in total) in the six months prior to the 2022 mid-term election. Despite Biden and Democrat’s ironic rhetoric about “saving the planet,” the action was purely about saving his party’s chances in that election.

Imagine you were shipwrecked on a deserted island on November 1, 2020, and the first information you learned about America after recently being rescued was the chart below showing total U.S. petroleum production, consumption, and net imports vs. exports. You could be forgiven for assuming that Donald Trump had won the 2020 election.

To put a cap on the matter, after averaging net imports of over 12.5 million bpd in 2005, by 2021 the U.S. had become a net exporter of crude oil. In fact, setting aside how Covid-19(84) crushed economies and oil markets in 2020, under no president – Republican or Democrat - since 1950 has the U.S. ever been a net exporter of crude oil.

The U.S. has become such a global energy powerhouse that it has been a net exporter of crude oil in every year of Joe Biden’s term. In fact, the U.S. exported more than two million barrels per day in twelve of the thirty-five months between January 2022 and November 2024, and in two of those months (December 2023 and October 2024), U.S. exports exceeded three million bpd (an amount equal to nearly half of U.S. daily consumption in 1949). Twelve-month average exports have grown from 1.19 million bpd in 2022, to 1.71 million bpd in 2023, to 2.25 million bpd through 11 months of 2024.

You will not find a near doubling of U.S. crude oil exports over 35 months in the “climate leadership!” playbook. This is a thorny crown that Biden will never actually wear. That U.S. producers achieved these figures in spite of the Biden administration and Democrats in Congress is a testimony to their sustainability. (No quotation marks here - we use the term literally.)

Biden will get credit for signing the “biggest climate legislation in the history of the world” – the Inflation Reduction Act (IRA, which occurred only by the skin on Kamala Harris’ ass; she cast the tie-breaking vote). And it is true that legislation will waste spend $369 billion of taxpayer money overwhelmingly on “renewable” forms of energy, a figure which does not include another $500 billion to 2 trillion in likely production tax credits.

But as the charts above demonstrate, it is hard to discern any material impact Joe Biden had reducing domestic hydrocarbon production in order to save humanity and the planet from “the existential climate crisis.” Setting aside his use of the smear term “climate deniers” and given his absence of any form of energy, environmental and economic wisdom, we are personally grateful to Mr. Biden for the accomplishments shown in the graphs above.

An Executive Order Biden signed in his last month, and a final DOE rule under his administration on (yet) another use of natural gas in homes, both target hydrocarbon energy. Both are intended to serve as poison pills, attempting to spike the road ahead for the incoming Trump agenda to increase domestic energy production. They also serve as (mostly optical) consolation prizes to Biden’s Democrat “climate” supporters.

The usual Democrat Charlaticians™, EcoStatists and environmental non-profits cheered the EO and the DOE final rule. The Red Team screamed.

We just yawned.

The Executive Order has been well-publicized. It bans offshore oil and gas leasing in the eastern Gulf of Mexico, the entire Atlantic and Pacific coasts, and part of the northeastern Bering Sea off the coast of Alaska. Issued on January 6^th, exactly two weeks prior to the end of Biden’s term, the ban covers more than 625 million total acres.

Biden’s handlers used a provision from an arcane, 70-year-old law Congress intended to encourage offshore resource development to try to stop it. The tactic has only been used by a few other presidents in history, and U.S. District Court precedent ensures that it will not be as simple as Trump issuing a new EO overturning it (he already tried that).

The EO employs a rarely invoked provision in the 1953 Outer Continental Shelf Lands Act (OCSLA), Section 12(a), that gives the President broad discretion. Doomberg’s recent post The Bitter End summarizes the provision well:

The clear intent of Congress was to maximize the use of the country’s offshore resources, not to stunt their development. Most of the bill’s text is dedicated to the rules and regulations needed to achieve that goal. Out of respect for the office of the president, Congress included in Section 12(a) of the legislation some flexibility to limit drilling in areas the executive branch deemed inappropriate for development, and it is these 24 words that serve as the basis for Biden’s order:

“The President of the United States may, from time to time, withdraw from disposition any of the unleased lands of the outer Continental Shelf.”

Prior to the year 2000, the Section 12(a) provision was only invoked three or four times in nearly five decades. Since 2000, only one President has used the provision to attempt to permanently ban offshore oil and gas production. (We’ll give you three guesses which one, and the first two don’t count.)

• December 16, 2014. President Obama replaced his 2010 time-limited withdrawal with a withdrawal covering the North Aleutian Basin planning area “for a time period without specific expiration.”

• January 27, 2015. Obama Withdrew leasing deferral areas in the Chukchi and Beaufort Sea planning areas and in the Hanna Shoal “for a time period without specific expiration.”

• December 20, 2016. During the last month of his second term, Obama withdrew leasing deferral areas associated with 26 major canyons in the North and Mid-Atlantic Planning areas, from Virginia to Massachusetts, “for a time period without specific expiration.

Obama’s three bans totaled ~128 million offshore acres. At 625 million acres - effectively covering the entire Atlantic and Pacific coasts, a large area of the Bering Sea, and the entire eastern Gulf of Mexico - it’s clear Biden’s handlers (John Podesta?) decided to go big or go home. Or, more precisely, go big then go home.

Trump attempted to reverse Obama’s offshore oil and gas bans in his first term. His 2017 EO (attempting to overturn Obama’s bans in Alaska’s Chukchi Sea) was slapped down by an Alaska District Court Judge (appointed by Obama) in 2019. That now stands as a precedent in relation to Biden’s poison pill parting gift. Based on the clever choice of wording in Obama’s and Biden’s bans - “for a time period without specific expiration” - in the absence of Congressional action the question of whether the President has that authority will likely be settled by the U.S. Supreme Court.

The day after Christmas, Biden’s DOE issued a final rule on efficiency standards for what are commonly known as tankless water heaters. We won’t bore you with the details of the Energy Conservation Standards for Consumer Gas-fired Instantaneous Water Heaters rule, but this is one of those useless environmental and energy regulations which, as environmental industry professionals, we refer to as picking the fly shit out of the pepper.

Gas-fired water heaters are already the most efficient forms of making hot water for homes, with tankless versions more efficient than the old tank style we all knew as kids. The tankless versions that are subject to the rule are compact and highly efficient, a premium in smaller homes, apartments and condominiums.

Biden’s last-minute rule imposes new standards on gas-fired instant water heaters with effective storage volumes less than 2 gallons and input ratings greater than 50,000 BTUs per hour. For incremental benefit, it would effectively take about 40% of the existing tankless water heaters off the market by 2029, while increasing the cost of compliant designs for many small home and apartment applications.

The rule is really nothing more than another Democrat “climate change”-driven attempt to slow the proliferation of natural gas for any residential use. Like all of the Biden administration’s pushes to electrify your furnace, your water heater, and your stove, it uses mathematic gymnastics to justify chasing marginal risks.

It is another attempted use of government force in the “electrify everything” insanity, to shift more personal heating and transportation on to the electric grid as quickly as possible. Doing when the U.S. electric grid is not even close to prepared to handle the demand only makes the insanity worse.

How much of a difference to Trump’s objectives will Biden’s two last-minute efforts to salt the energy policy landscape make? As a practical matter, the answer is, practically none.

While Biden’s use of OCSLA’s section 12(a) authority likely requires Congressional action to overturn, the acreage taken out of play is off the coast of U.S. states that would have to approve offshore production and either won’t (California, Oregon, Washington, and New York to Virginia), aren’t likely to do so (Florida, Georgia, South Carolina), or where oil and gas development would likely only be profitable at prices well above current levels (the Bering Sea area off the Alaska coast). But at some prolonged pricing level indicating significant scarcity, some (>$200/barrel?), most (>$300/barrel?), or all (>500/barrel?) of those bets are surely off.

The central and western Gulf of Mexico is and will likely be the center of U.S. offshore production if and when it resumes full throttle. Known recoverable reserves in the eastern Gulf of Mexico pale in comparison to the portion west of the Alabama/Mississippi border. As depicted in the image below from the Bureau of Ocean Energy Management (BOEM), Biden’s Executive Order on offshore oil and gas development does not affect the western Gulf.

So, whether it is eventually overturned by the U.S. Supreme Court, or out of scarcity concerns by the actions of a panicked Congress, the offshore oil and gas leasing ban is largely symbolic. In the meantime, some states are not going to wait around to find out. Last Friday, five of them (Alabama, Louisiana, Georgia, Mississippi, and Alaska) filed suit in U.S. District Court for the Western District of Louisiana, naming President Biden and Interior Secretary Deb Haaland out of their own sense of symbolism. The suit seeks to stop the ban (injunctive relief), determine it illegal (declaratory relief) and to reverse it. That litigation in and of itself likely guarantees the issue will be settled by the U.S. Supreme Court.

We predict the Gas-fired Instantaneous Water Heaters rule will simply be withdrawn by the Trump administration. But to draw out our point about the mathematic gymnastics used to justify such nonsense, we close by noting just how ridiculously miniscule the rule’s proposed “energy savings” are in context.

According to the rule’s Synopsis (emphasis ours):

DOE’s analyses indicate that the adopted energy conservation standards for gas- fired instantaneous water heaters would save a significant amount of energy. Relative to the case without amended standards, the lifetime energy savings for gas-fired instantaneous water heaters purchased during the 30-year period that begins in the anticipated year of compliance with the amended standards (2030–2059), amount to 0.58 quadrillion British thermal units (“BTU”), or quads. This represents a savings of 1.9 percent relative to the energy use of these products in the case without amended standards (referred to as the “no-new-standards case”).

Sounds like impressive savings, until you put it into perspective. The U.S. uses approximately 94 quads of energy annually, with ~78 quads provided by hydrocarbons.

The reference period is thirty years. For simplicity, if we assume the U.S. used the same 78 quads of hydrocarbon energy for the next thirty-five years (it won’t), it will consume ~2,340 quads of hydrocarbon energy. Dividing the 0.58 quad lifetime energy savings over the 30-year period of DOE’s analysis results in a figure of 0.00025.

Jevon’s Paradox guarantees that such a trivial amount will be more than lost in America’s overall use of hydrocarbon energy over the next three plus decades. When you can’t even find the fly shit you’re trying to pick out of the pepper, it is better to stop trying.

One more for the road | Shutterstock

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