Despite the Biden administration's aggressive green energy push, the U.S. still leads the world in oil production, with the Energy Information Administration (EIA) naming America the top global producer for the sixth straight year in 2023.
However, Phil Flynn, an energy market analyst and FOX Business contributor, says a number of factors now threaten America's title.
Flynn told Fox News Digital that although the Biden administration has tried to take credit for record oil production, the investments and technology that allowed the U.S. energy industry to raise production occurred despite the fact that the administration has fought them every step of the way.
"But I see warning signs that because of what we've seen, as far as the regulatory front, it's going to be challenging to keep that production going," Flynn said in an interview.
CLEAN TECH, AI BOOM STRAINING US ENERGY SUPPLY
He pointed to a drop in rig count last week that he said could become a trend partly because natural gas prices are falling dramatically, but partly because of uncertainty surrounding the regulatory environment, and added, "It seems like we're kind of kicking the industry in the teeth at a time when they could really dominate."
According to the EIA, crude oil production in the U.S., including condensate, averaged 12.9 million barrels per day (b/d) in 2023 — a level which surpassed the American and global record of 12.3 million b/d that the U.S. set in 2019. Average monthly U.S. crude oil production also reached a record high in December 2023 at more than 13.3 million b/d.
Flynn said that while the EIA touted record U.S. production in its latest report, it also pointed to a slowdown in U.S. production growth, which he says indicates "the best days may be behind us if we stay on the path that we're on."
The analyst noted the Biden administration is looking to push through new methane regulations along with methane taxes which he said could put many smaller producers out of business.
Flynn said these regulations are sending signals to producers that they have to be wary, because new taxes and new regulations are going to slow them down. "So while production may creep up a little bit, it's going to start to decline."
He explained that when wells start to deplete, producers have to keep investing money to keep production going. However, because of the uncertain regulatory environment, it is going to make it more difficult for people to put money into U.S. oil and gas.
Flynn said a pull-back in oil rigs and a cut in U.S. investments will be felt in the summer months, but he expects oil to remain around the $80 a barrel mark for the short term. He added that the U.S. "dodged a bullet" and did not see a major price spike this winter due to milder weather and a natural gas glut.
However, down the road, he expects the regulatory environment will have a noticeable impact on supply.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
"While we are counting on record production because of investments made in the past, by the same token, we could start seeing production start to peak out because of the decisions that we made today," he said. "So in other words, we're living on borrowed time. If we don't change course, then this miracle that we've seen of U.S. oil production could be reversed."
FOX Business' Eric Revell contributed to this report.
