If Democrats lose next week’s election, one reason will be soaring energy prices.
The lesson that an electoral defeat should drive home is that this is the result of their policies.
Consider President Biden’s outrage Friday over last week’s robust earnings reports for oil and gas companies. Six of the largest “made $70 billion in profit in one quarter,” he said at a fundraiser. [bold, links added]
These “excess profits are going back to their shareholders and their executives instead of going to lower prices at the pump.” The President who has done everything in his power to limit U.S. oil investment is now furious that he succeeded.
Mr. Biden doesn’t seem to believe oil companies should be allowed to make a profit or even cover marginal costs.
“We need to keep making progress by having energy companies bring down the cost of a gallon of gas to reflect what they pay for a barrel of oil,” he said. Anything more is “excess” profit.
Keep in mind that oil majors’ current profits follow steep losses in the pandemic. As oil prices plunged amid lockdowns, companies and OPEC nations pared investment and shut wells.
Demand for oil then bounced back much quicker than supply, which has driven up prices—and profits. That’s Econ 101.
Mr. Biden is miffed in particular that companies are returning cash to shareholders rather than increasing supply.
“You should be using these record-breaking profits to increase production and refining,” he said this month. But the progressive climate lobby and his Administration’s climate policies have been urging the opposite.
Exxon Mobil lost a board proxy fight in 2021 after large public pension funds and asset managers criticized it for investing too much in oil and generating too little profit.
Exxon and its board need to assess “the possibility that demand for fossil fuels may decline rapidly in the coming decades,” BlackRock said.
The International Energy Agency warned only last week that “no one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero [greenhouse-gas] emissions by 2050.”
It added that “any new projects would face major commercial risks” that may result in failing “to recover their upfront cost.”
No wonder oil companies are returning cash to shareholders rather than making investments in production, which takes decades to pay off. U.S. shale drilling can produce returns more quickly.
But rather than drilling more wells, many producers are shrinking their inventory of “drilled but uncompleted” wells.
The Energy Information Administration reported last week that the number of these wells fell to the lowest since December 2013, which means production will eventually taper off even in the prolific Permian Basin.
Permitting challenges impede new drilling, as does limited pipeline capacity to move natural gas produced alongside oil.
Large asset managers are also pressuring oil giants to maintain “capital discipline”—i.e., spend less on production.
Private U.S. oil companies added 47 drilling rigs in the third quarter while public firms added only one.
Climate lobbyists want companies to return profits to shareholders or invest in green energy.
Continental Resources founder Harold Hamm said this month he is taking his company private to have the “freedom to explore.”
“We have all felt the limits of being publicly held over the last few years, and in such a time as this, when the world desperately needs what we produce, I have never been more optimistic,” Mr. Hamm wrote to employees.
Mr. Biden and fellow Democrats simply refuse to understand the economic consequences of their assault on American fossil fuels. They have come to believe that climate is a crisis and that banishing oil and gas is urgent.
But that means higher prices, which they now blame on the very companies they want to go out of business. Economic logic won’t persuade them, but maybe a rout at the ballot box will.
Read more at WSJ
Watch Biden the clumsy Stumbles up the steps to Air Force One watch him trip down the stairs yelling like Goofy
If this wasn’t so serious, it would be laughable.
How stupid does Biden look given on one hand he says the oil co’s should produce more when on the other he is blocking them in a multitude of ways.
Then, to prove that he is the stupid one, just look at the price of gas and diesel. Why did the American people vote for this fool to be president?
By every conceivable measure, Americans are much worse off with this guy in the White House. November 9 can’t come soon enough so the republicans can put a stop to all the nonsense the Biden administration is serving up to the American people.
Colin, I’ll answer your question about the 2020 U.S presidential election. A large segment of Biden voters did not vote for Joe. They voted AGAINST Trump. That is why we need to “clear the decks” on the political landscape in 2024 and get some “fresh” candidates involved. We need to move past the 2020 election, regardless. Otherwise, we will just continue to spin our wheels…
So, the six largest domestic E & P outfits made a $70 Billion profit last quarter. What was the total revenues generated & consequent profit margin? Notice how that never seems to get mentioned. I’d imagine those profits are in the (historical) range of 6-10%. Anything above that would be “world class” performance. Wonder how those oil companies compare to the drug companies or big tech? I’ll bet those “favored” industries profit margins are WAY NORTH of anything “Big Oil” generated! Of course, that would require an honest financial analysis…
Well, Biden and the rest of his administration has zero knowledge of supply and demand as well as how to run a business. Also what his regulations and verbal assault on the oil and gas industry does to firms in making investment decisions. So these actions by the O&G industry is totally reasonable.
All of Bidens supporters should wear Kick Me signs so we can tell who they are