The U.S. Energy Information Administration (EIA) recently noted that it expects “U.S. fossil fuel production to continue rising in both 2022 and 2023, surpassing production in 2019, to reach a new record in 2023.”
Source: U.S. Energy Information Administration
The EIA highlighted the following breakdown:
“Of the total U.S. fossil fuel production in 2021, dry natural gas accounted for 46%, the largest share. Crude oil accounted for 30%, coal for 15%, and natural gas plant liquids (NGPLs) for 9%. We expect those shares to remain similar through 2023.”
The U.S. is a global leader in fossil fuel energy production, ranking as the top oil producer, the top natural gas producer, and the third largest coal producer. The dramatic change in U.S. oil and natural gas production began in the period of 2006-08 when technological innovations – such as advancements in hydraulic fracturing and horizontal drilling – transformed the U.S. from seemingly being destined to rely more and more on foreign sources of energy to becoming the largest energy producer.
Keep in mind that these energy sectors are overwhelmingly populated by small businesses.
For example, in the drilling oil and gas wells sector, 93.3 percent of employer firms have fewer than 100 employees, according to the latest Census Bureau data (2018). And in the support activities for oil and gas operations sector, 95.2 percent have fewer than 100 employees, and in the support activities for coal mining industry, 85.2 percent have fewer than 100 workers.
Given the dynamism of the energy sector, the transformation of the U.S. into an energy-producing juggernaut, and the role that small businesses and their employees play, one has to wonder why the Biden administration and so many Members of Congress stand willing to attack and undermine the energy sector with misguided policies that harm consumers and our economy.
Perhaps rather than attacking certain sectors and doling out subsidies to others, the federal government should embrace U.S. leadership, and simply create the best policy climate whereby entrepreneurs and businesses in all energy sectors can work and compete to meet the needs and demands of consumers.
Related SBE Council content: Regulatory Signals Destabilize U.S. Energy and the Economy, November 2021.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.