A historical analogy of the recent oil production increase began during the Nixon Administration. In 1973 President Nixon pushed through the Trans-Alaska Pipeline Authorization Act, which cleared away legal challenges from environmentalists seeking to stop construction of the pipeline. But the pipeline didn’t start production until 1977, during President Carter’s first year in office. As a result, after a sharp decline in oil production under President Nixon, oil production rose for the first 2 years of President Carter’s term. But just like the production increase over the past four years, the production increase in Carter’s first two years was a result of events that took place during an earlier administration.
The lesson here is that in the short term, the energy policies that President Obama is pursuing today are unlikely to impact oil or natural gas production for several years. If he continues to adopt an antagonistic stance toward domestic oil and gas producers, the impact will be felt most strongly after an appropriate lag time.