Oil & Energy
How Oil Industry Fared Under Last Nine US Presidents
With the 2020 Presidential Election looming, and with many claims and counterclaims about a president’s impact on the oil industry, I thought it might be of interest to review the history of U.S. oil production and consumption over the past 50 years. Here are the highlights from each president’s term in office.
Richard Nixon was inaugurated as the 37th president on January 20, 1969. When President Nixon took office, U.S. oil production was nearing a peak after over 100 years of increasing production. Imports made up 10% of U.S. consumption. In 1970, U.S. oil production reached 9.6 million barrels per day (BPD) and began a long, steady decline.
Richard Nixon began his second term on January 20, 1973. U.S. oil production had declined to 9.2 million BPD while consumption had increased by 3 million BPD from the first year of Nixon’s first term. As a result, oil imports would more than double during Nixon’s presidency, and American citizens would learn the danger of the dependence on imports with the OPEC oil embargo of 1973.
Gerald Ford was inaugurated as the 38th president on August 9, 1974 after Nixon resigned in disgrace. During President Ford’s term in office, domestic oil production continued to decline. U.S. oil consumption and imports continued to grow, and both were at all-time highs during Ford’s last year in office.
Jimmy Carter was inaugurated as the 39th president on January 20, 1977. Recent trends in consumption, production, and imports all reversed themselves during President Carter’s term. Consumption fell by 2%, U.S. production increased by 6%, and imports, after initially rising to record highs during his first year in office, were a fraction of a percentage lower at the end of his term than during Ford’s last year in office. Factors beyond Carter’s control, such as the Iranian Revolution and the Iran–Iraq War, heavily influenced the oil markets.
Ronald Reagan was inaugurated as the 40th president on January 20, 1981. Oil consumption continued to decline during most of President Reagan’s first term, and oil production crept back to levels that had not been seen in a decade. Oil imports fell by 35% during his first term.
Ronald Reagan began his second term on January 21, 1985. The trends from his first term all reversed themselves, as consumption rose 10%, domestic production fell by 8%, and oil imports increased by 49%.
George H. W. Bush was inaugurated as the 41st president on January 20, 1989. Consumption fell slightly during his term, but domestic production fell even more, down 12%. Imports increased by 19%, back above 6 million BPD for the first time since the 1970s.
Bill Clinton was inaugurated as the 42nd president on January 20, 1993. During his first term, consumption increased by another 7%, domestic production fell by 10%, and imports increased by another 23%, exceeding 7 million bpd for the first time in U.S. history.
Bill Clinton began his second term on January 20, 1997. His second term trends were almost identical to those of his first term. Consumption rose by another 8%, domestic production fell by another 10%, and imports increased by an additional 21%. Consumption and oil imports were at all-time highs, and production had fallen 40% from the 1970 production peak.
George W. Bush was inaugurated as the 43rd president on January 20, 2001. During his first term, consumption climbed above 20 million BPD for the first time in the nation’s history. Imports also reached new highs, above 10 million BPD. Domestic production continued to fall.
George W. Bush began his second term on January 20, 2005. During Bush’s second term, consumption began to decline as the nation entered a recession and oil prices reached record highs. Imports fell back to below 10 million BPD. The decline in domestic production continued, albeit at a slower rate of decline than during his first term. This marked the first trickle of oil production from hydraulic fracturing, which would make a major impact during the terms of the next two presidents. During Bush’s last year in office, the level of imports reached just over 50% of U.S. consumption.
Barack Obama was inaugurated as the 44th president on January 20, 2009. The economic sluggishness initially continued, but the impact of hydraulic fracturing began to be felt in President Obama’s first year in office. In a reversal of the long decline that began in 1970, crude oil production would rise all four years of Obama’s first term.
President Obama began his second term on January 21, 2013. The fracking boom caused oil production to accelerate until 2015. But then overproduction led OPEC to initiate a price war that ultimately crashed prices and production. Production began to decline in 2015, but 2016, the last year of Obama’s second term, was the first year of his presidency that annual oil production declined.
Between 2009 and 2015 oil production had increased by 4.4 million BPD. This was the fastest increase in oil production in U.S. history, and marked the largest increase in oil production during a single term of any president. If natural gas liquids (NGLs) are included, the gains during Obama’s first seven years were 6 million BPD. U.S. net imports of finished products like gasoline turned into net exports during Obama’s second term, and next imports of finished products plus crude oil fell by over 6 million BPD.
Donald Trump was inaugurated as the 45th president on January 20, 2017. Oil production had declined during President Obama’s last year in office as the average annual price of West Texas Intermediate (WTI) fell to $43.34/bbl. But in 2017 that rose to $50.79/bbl, and then to $65.20/bbl in 2018. Oil production followed prices higher. During the first three years of President Trump’s first term, annual U.S. oil production gained 3.4 million BPD. Net imports of crude oil and finished products turned into net exports in late 2019. U.S. oil production eclipsed the previous 1970 peak (although if you include NGLs, that peak was eclipsed in 2013).
But then the Covid-19 pandemic crushed oil demand. Now, less than a month before the election, U.S. oil production is at 10.5 million BPD, a significant decline from the 12.2 million BPD of 2019.
The net impact of the past 50 years of U.S. Presidents was a long, slow decline of oil production that was only reversed when the hydraulic fracturing revolution began.
U.S. oil production didn’t fall under Bush and rise under Obama based on the policies of these presidents. Production behaved according to policies that had been put in place years earlier, and in accordance with the behavior of oil prices in previous years. Jimmy Carter experienced a rise in oil production because the Alaska Pipeline, approved by Nixon, was completed while Carter was in office. Obama and Trump experienced a rise in oil production following years of climbing oil prices, which led to a fracking boom.
Presidents publicly fretted for decades about the loss of energy independence for the U.S. They tried many different approaches to solving this problem, from serious intervention in the energy markets to letting the free market solve the problem. Many billions of dollars were spent on programs with the intent of eliminating dependence on foreign oil.
Yet in 1969, Americans depended on oil imports for 10% of their consumption, and in 2008 that number had risen to over 50% of consumption. That trend was only reversed when fracking caused U.S. oil production to surge.
Thus, a president may have some impact on U.S. oil production, but it is mostly a factor of influences well beyond their control.
Culled from Oil Price International, London.
Nigeria’s losses due to crude oil theft has been said to be more significant than those of some other members of the Organisation of Petroleum Exporting Countries(OPEC).
The Chairman, Senate Ad- hoc Committee on Crude Oil Theft, Senator Ned Nwoko, made this known in an interview with newsmen in Abuja.
Nwoko noted with dismay the detrimental impact of the issue, which, he said include economic damage, environmental destruction, and its impact on host communities.
According to him, the theft was not only weakening the Naira, but also depriving the nation of vital revenue needed for infrastructure, healthcare, education and social development.
The Senator representing Delta North Senatorial District described the scale of the theft as staggering, with reports indicating losses of over 200,000 barrels per day.
Nwoko disclosed that the ad hoc committee on Crude Oil Theft, which he chairs, recently had a two-day public hearing on the rampant theft of crude oil through illegal bunkering, pipeline vandalism, and the systemic gaps in the regulation and surveillance of the nation’s petroleum resources.
According to him, the public hearing was a pivotal step in addressing one of the most pressing challenges facing the nation.
‘’Nigeria loses billions of dollars annually to crude oil theft. This is severely undermining our economy, weakening the Naira and depriving the nation of vital revenue needed for infrastructure, healthcare, education, and social development.
‘’The scale of this theft is staggering, with reports indicating losses of over 200,000 barrels per day more than some OPEC member nations produce.
‘’This criminal enterprise fuels corruption, funds illegal activities and devastates our environment through spills and pollution.
‘’The public hearing was not just another talk shop; it was a decisive platform to uncover the root causes of crude oil theft, bunkering and pipeline vandalism.
‘’It was a platform to evaluate the effectiveness of existing surveillance, monitoring, and enforcement mechanisms; Identify regulatory and legislative gaps that enable these crimes to thrive.
‘’It was also to engage stakeholders, security agencies, host communities, oil companies, regulators, and experts to proffer actionable solutions; and strengthen legal frameworks to ensure stricter penalties and more efficient prosecution of offenders”, he said.
Nwoko noted that Nigeria’s survival depended
Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) has called on Nigerian companies to position themselves strategically to take full advantage of the growing opportunities in upcoming offshore and shallow water oil and gas projects.
The Managing Director, SNEPCO, Ronald Adams, made the call at the 5th Nigerian Oil and Gas Opportunity Fair (NOGOF) Conference, held in Yenagoa, Bayelsa State, last Thursday.
Adams highlighted the major projects, including Bonga Southwest Aparo, Bonga North, and the Bonga Main Life Extension, as key areas where Nigerian businesses can grow their capacity and increase their involvement.
“Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) says Nigerian companies have a lot to benefit if they are prepared to take advantage of more opportunities in its offshore and shallow water oil and gas projects.
“Projects such as Bonga Southwest Aparo, Bonga North and Bonga Main Life Extension could grow Nigerian businesses and improve their expertise if they applied themselves seriously to executing higher value contracts”, Adams stated.
Adams noted that SNEPCo pioneered Nigeria’s deepwater oil exploration with the Bonga development and has since played a key role in growing local industry capacity.
He emphasized that Nigerian businesses could expand in key areas like logistics, drilling, and the construction of vital equipment such as subsea systems, mooring units, and gas processing facilities.
The SNEPCO boss explained that since production began at the Bonga field in 2005, SNEPCo has worked closely with Nigerian contractors to build systems and develop a skilled workforce capable of delivering projects safely, on time, and within budget both in Nigeria and across West Africa.
According to him, this long-term support has enabled local firms to take on key roles in managing the Bonga Floating, Production, Storage and Offloading (FPSO) vessel, which reached a major milestone by producing its one-billion barrel of oil on February 3, 2023.
The Emohua Local Government Area Administrator, Franklin Ajinwo, has pledged to improve electricity distribution in Oduoha Ogbakiri and its environs.
Ajinwo made the pledge recently while playing host in a courtesy visit to the Oduoha Ogbakiri Wezina Council of Chiefs, in his office in Rumuakunde.
He stated that arrangements are underway to enhance available power, reduce frequent outages, and promote steady electricity supply.
The move, he said, was aimed at boosting small and medium-scale businesses in the area.
“The essence of power is not just to have light at night. It’s for those who can use it to enhance their businesses”, he said.
The Administrator, who commended the peaceful nature of Ogbakiri people, urged the Chiefs to continue in promoting peace and stability, saying “meaningful development can only thrive in a peaceful environment”.
He also charged the Chiefs to protect existing infrastructure while promising to address the challenges faced by the community.
Earlier, the Oduoha Ogbakiri Wezina Council of Chiefs, led by HRH Eze Goodluck Mekwa Eleni Ekenta XV, expressed gratitude to the Administrator over his appointment and pledged their support to his administration.
The chiefs highlighted challenges facing the community to include incessant power outage, need for new transformers, and the completion of Community Secondary School, Oduoha.
The visit underscored the community’s expectations from the LGA administration.
With Ajinwo’s assurance of enhancing electricity distribution and promoting development, the people of Oduoha Ogbakiri said they look forward to a brighter future.
By: King Onunwor