Study Claims To Find Lost GDP

The Biden administration's policies toward the oil and gas industry have had significant economic repercussions, according to a new study. The Committee to Unleash Prosperity released findings to The Daily Wire indicating that the U.S. has experienced over $250 billion in lost economic activity due to these policies.

The study, conducted by Stephen Moore, Co-Founder of the Committee to Unleash Prosperity, and Casey Mulligan, Ph.D., Former Chief Economist of the White House Council of Economic Advisers, highlights the impact of Biden's policies on U.S. oil production.

Despite producing more oil than ever before, the rate of growth has not matched the trends seen during former President Donald Trump's administration.

Under Biden, U.S. oil production has slightly exceeded pre-pandemic levels, but it has failed to reach the potential predicted by the Energy Information Agency (EIA). The EIA had forecasted U.S. oil production to hit 15 million barrels per day under current trends. However, by the second half of 2023, daily production averaged only 13.2 million barrels, close to the peak under Trump but not significantly higher.

A key point of concern in the study is the average price of a barrel of oil. Under Biden, the price has averaged $72 per barrel, compared to $54 per barrel under Trump. The study attributes this increase to a decline in productivity from new wells and rising extraction costs, both of which are seen as consequences of increased regulation, tax hikes, and investor reluctance to fund petroleum companies.

The decline in production rates is a significant factor. The productivity of each new well surged by 23% under Trump but fell considerably once Biden took office. This decline has resulted in increased extraction costs and reduced productivity, contributing to the overall economic impact.

The EIA's forecasts in early 2021 anticipated a return to productivity growth despite new challenges in securing capital. However, actual production figures fell short of expectations, leading the EIA to cut its production forecasts for 2022 and 2023. Had production continued at the same rate as under Trump, the U.S. would have produced an additional 2.4 billion barrels of oil, which translates to a reduction in cumulative GDP by about $250 billion.

The study also points out the geopolitical implications of these policies. Reduced U.S. production benefits major oil producers in Asia and the Middle East, who are not only enriched by higher oil prices but also gain more pricing power as U.S. shale activity diminishes. This shift indirectly reduces OPEC production, as the U.S. is less able to counteract OPEC production cuts with its increases.

Stephen Moore emphasized that the findings highlight how Biden's policies are harming U.S. national security, the economy, and global stability. He argues that the administration's agenda has directly contributed to the current economic challenges and rising energy costs affecting millions of Americans.

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