Who is really to blame

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Dec 9, 2013
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#41
(IMHO)

The Democratic party wants to encourage a more "green" energy program in the US and that is only practical when oil prices are high in order to minimize the "cost gap" of the more "green" energy programs. So the Dems have to drive oil prices higher in order to encourage adoption of their green energy alternatives.

(Source: Sen Ted Cruz)


View attachment 96018
I’m not going to pretend that policies from Ds are supportive of the o&g industry and to your point I do think they believe that higher energy prices will speed up the conversion to renewables.

But in order to get where we are you have to have a combination of many factors including demand outpacing supply. Domestically that means a robust economy driving demand and factors limiting supply.

We are at that intersection. Are we going to give credit to Biden for the economy driving sustained high demand? Are we going to fault Trump admin for a falling rig count that bottomed at a historical low of 250 rigs in 2020? The only way out of this in the near term is what happened in 2008 & 2009. We will not drill our way out of this short term. Rig counts are still below 750. It is impossible to get where we need at 750 rigs. It is likely more than double that number. And with rising costs of debt, a workforce that is reluctant to return to the patch and an international constrained supply chain it is doubtful (IMHO) we get there in the next 3 yrs. It also doesn’t help that the futures market doesn’t support drilling beyond the next 4-5 yrs.

That leaves the other side of the equation, demand destruction. That’s where we are. You have to see demand start to leave the market. There are signs that happened in May and my guess is that will pick up steam through the summer.

As others have stated it’s not as simple as pointing to one admin or another. This is a decades if not century long problem that we have squandered. It seems we end up here about every 15 yrs. Anyone wanting to blame one team and not take a look at past mistakes from both R and D isn’t really interested in solving the problem.
 
May 4, 2011
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#42
While I appreciate what you are getting at and recognize that we need a political discourse in this country that both encourages responsible domestic fossil fuel production and the continued push for alternative and cheaper over the long run renewables, I would be curious on an apples to apples comparison the details behind average gasoline costs.

For example, how much do taxes play a part in each countries price as well as knowing which countries are subsidizing. We do it in the US (not effectively and in various ways) and often to greater harm than short term good.

Oil and refined products are a global market and for the most part statistics and pricing and economic data are pretty readily available in the US.

Interesting the link you provided puts the US in the cheaper lower 1/2 of countries listed and it looks like only one other sizable free market democracy is really cheaper and not by much. If I’m reading the chart right.

A lot of the countries ahead of us are oil producing kingdoms who can manipulate gas prices to keep their domestic advantage.

You mention Ecuador but it looks like their govt has capped their prices so they aren’t a reflection of what is really happening.

We seem to go though this price shock about once every 15 years in the US. It’s astounding that our elected leaders can’t think and lead responsibly with a long term vision on energy policy and that we continue to put our heads in the sand until it hits our wallet.
You beat me to it, but price caps and other heavy handed approaches to keeping prices low are common throughout Latin America. Pemex is one example. Ecuador is a particularly intense example (see below).

https://www.newsweek.com/ecuadorians-fed-high-gas-prices-inflation-begin-demonstrations-1715480
 
Dec 9, 2013
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#43
You beat me to it, but price caps and other heavy handed approaches to keeping prices low are common throughout Latin America. Pemex is one example. Ecuador is a particularly intense example (see below).

https://www.newsweek.com/ecuadorians-fed-high-gas-prices-inflation-begin-demonstrations-1715480
Isn’t it long standing policy in ME oil producing monarchs to take in billions as a family and then fix/subsidize the country’s energy/fuel costs as a buffer to prevent social unrest thus increasing favor to remain in power?
 
May 4, 2011
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#44
Isn’t it long standing policy in ME oil producing monarchs to take in billions as a family and then fix/subsidize the country’s energy/fuel costs as a buffer to prevent social unrest thus increasing favor to remain in power?
That I wouldn't know. I've spent a fair amount of time in Latin America and working with Latin American immigrants, which is the only reason I know about that.
 

andylicious

Territorial Marshal
Nov 16, 2013
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#45
That's not 100% true, it's more a USA issue than it is for most of the others on this list. Over 100 countries have lower per gallon prices than the USA right now and the majority of them are producer nations which pay penny's on the gallon compared to us (under a dollar per gallon). There are 25 nations that pay less than $2 a gallon right now. In our hemisphere Ecuador is at $2.50. If we were to increase our production we would also have lower prices. Pretty simple supply and demand really. I don't have any problem with Biden demanding more production...its what we need in the short run to draw pricing down.
Gasoline prices around the world, 13-Jun-2022 | GlobalPetrolPrices.com
It is market issue. OPEC+ ramped up production at the start of the pandemic. This was an oil war over production quotas that resulted in negative WTI futures prices. It took OPEC+ 5 years to stop the shale production and rebalance the market.
 

Jonkr06

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Aug 18, 2007
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#46
Everyone is focused on upstream, but it's also a refining capacity issue. Several refineries have shutdown over the past few years or are being converted to renewable diesel. There's not much spare capacity left to just ramp up when prices spike.
 

Rack

Legendary Cowboy
Oct 13, 2004
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#47
Isn't it also a known thing that China and others what the USA dollar to no longer be used as a baseline for Oil pricing? Also I've attached this to show where we were...It's a huge contrast to that now, and I honestly don't know why any American wouldn't want this back...It makes us ALL stronger, richer, and safer to be the world producer of it's biggest commodity.
The U.S. Dollar And Oil Relationship Is Changing - BabyPips.com

So what did the pandemic do?

1. It forced the US to shut down for a time.
2. It forced the USG to pay the public to shut down...trillions of new dollars
3. It forced the public to stop flying and driving...loss of trillions of dollars
4. It forced oil companies to stop production of what they could not sell.
5. It's now driving high inflation across the board because it's the life blood of economies and we flooded the market with cash as well.
6. Meanwhile China...builds its military
7. AND Russia is at war with it's neighbor.
8. AND we pulled out of Afghanistan looking weak to the world.

This is where we are...I figure it either last until mid-terms in November. When we grow some centrist ideas and candidates...OR it last until 2024 for the new election. IF we can get along and stomach change to the middle on all sides. No doubt in my mind that the last 10 years haven't been kind to our nation...we have become more divided than in my lifetime...that is our biggest issue...not the price of oil, which is a huge issue, but our unity.

People who have been pent up are going to travel, they are going to spend the money that they had saved over the past several years on it...thus gas prices will remain a problem and inflation will continue.
 
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Dec 17, 2020
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#48
Don’t worry Biden sent a letter to the oil companies demanding they increase production. Is high gas because of Putin or oil company profits? It’s hard to keep up these days. This is all coming from a guy who promised on the campaign trail he would end all fossil fuel production. It’s funny how fossil fuels aren’t that bad now when you’re in deep political trouble.
Actually, he won't allow more drilling and is demanding they utilize more refining capacity that they just don't have.
 

Jostate

Identifies as a Cowboys fan
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#49

It's sad when the best defense of a President is to say "we'll nobody took that seriously anyway".
 

Rack

Legendary Cowboy
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#52
So, what's the fix...Mind you it's not the price for just gas at the pump that is being affected here.
it's the price on everything due to the prices of oil being high.

It's higher in Europe, but they have something we don't...very reliable mass transit which runs on mostly electricity and high-speed rail...if you haven't done this it's fantastic. I haven't done a study of how this has affected the price of high-speed rail, but I'm sure it's had an effect because of increased demand after the pandemic's effects on decreasing demand.

We don't have the structure in the USA to exist in terms of the way we drive due to increased prices because we really have few transportation alternatives except in the mega cities of the east coast.

One party is semi disincentivized politically because of environmental concerns as well as a positive desire to switch to other forms of mass transit...which I also agree with but that takes time more than negative pressure IMHO. However, the negative pressure may take such a political toll that they realize at some point they have to help work to lower prices and increase supply thus lowering inflation to more normal rates.

The monetary policy of both sides has also led to a high supply of dollars in the system. While this personally is a good thing for saving Americans, it's not a great thing for spending Americans who drive price up but also "help" the economy temporarily. This spend our way out of things seems to be headed for an end. Sadly.

Do I have a problem with politicians flip flopping on issues? Not really that much, I expect them to wavier. I understand that politicians' tell bases one thing and then HOPEFULLY do responsible things when the rubber meets the road. My hope is that POTUS Biden does change his stance on oil production (I think he has) as he sees this problem more clearly now and knowing the political damage its going to cause if he doesn't. That is a good thing.

So, how do we as Americans who wish to find solutions for both the price of oil and inflation go about helping our leadership make changes and limit their political damage that they fear in their minds? In other words, how do we build unity around a common problem?
 
Dec 9, 2013
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#53
So, what's the fix...Mind you it's not the price for just gas at the pump that is being affected here.
it's the price on everything due to the prices of oil being high.

It's higher in Europe, but they have something we don't...very reliable mass transit which runs on mostly electricity and high-speed rail...if you haven't done this it's fantastic. I haven't done a study of how this has affected the price of high-speed rail, but I'm sure it's had an effect because of increased demand after the pandemic's effects on decreasing demand.

We don't have the structure in the USA to exist in terms of the way we drive due to increased prices because we really have few transportation alternatives except in the mega cities of the east coast.

One party is semi disincentivized politically because of environmental concerns as well as a positive desire to switch to other forms of mass transit...which I also agree with but that takes time more than negative pressure IMHO. However, the negative pressure may take such a political toll that they realize at some point they have to help work to lower prices and increase supply thus lowering inflation to more normal rates.

The monetary policy of both sides has also led to a high supply of dollars in the system. While this personally is a good thing for saving Americans, it's not a great thing for spending Americans who drive price up but also "help" the economy temporarily. This spend our way out of things seems to be headed for an end. Sadly.

Do I have a problem with politicians flip flopping on issues? Not really that much, I expect them to wavier. I understand that politicians' tell bases one thing and then HOPEFULLY do responsible things when the rubber meets the road. My hope is that POTUS Biden does change his stance on oil production (I think he has) as he sees this problem more clearly now and knowing the political damage its going to cause if he doesn't. That is a good thing.

So, how do we as Americans who wish to find solutions for both the price of oil and inflation go about helping our leadership make changes and limit their political damage that they fear in their minds? In other words, how do we build unity around a common problem?
In my opinion we are at the point where the only short term solution is demand destruction. We can talk about gas tax holidays and gas cards and even releasing strategic reserves but that does nothing to solve the problems and IMO will make things worse.

Taking demand out of this economy is going to be painful, but you can’t snap your fingers and increase rig counts, Human Resources or add downstream capacity. It is not a simple process to get a well approved, drilled, completed and connected and producing. Think about the people, infrastructure and money it takes to find, produce and turn a dth/bbl into a KW or gallon of gas and then for you to consume it and then compare that to what it takes to do the same for a bottle of Aquafina water. Then do a cost analysis. It’s a freakin miracle we produce and consume energy for what we do. It’s what in part has made and sustained us as the global super power. We better figure it out as China and others are and will.

Long term it’s going to take negotiation and compromise on both sides. I’ve said it before and I will keep saying it, my belief is that the long term solution is a balanced approach to energy sources.

We’ve currently got leaders in one party foolishly saying they will end fossil fuel production and leaders in the other foolishly trying to convince others that renewables are evil.

I have long been a believer that Oklahoma is perfectly situated from a resource standpoint, it’s geographic location, it’s infrastructure and it’s people to be a domestic and global leader in both responsible oil and gas production and renewable/alternative energy. I am very glad that one of Gov Stitt’s objectives is to promote the oil and gas industry while at the same time seek out companies that invest in alternatives. It’s a win/win. Right now Oklahoma has a chance to really position itself and truly change our stars. This doesn’t happen very often.
 

oks10

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#56
I did at first. I was on the run.

Feel free to use the quote feature on any of my posts you are referring to.
I didn't mean from you specifically. Just that we had 4yrs of "well, what he really meant was..." from the Right defending the dumb stuff Trump said. Heck, I was guilty of it myself early on. Lol.
 

Jostate

Identifies as a Cowboys fan
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#57
I didn't mean from you specifically. Just that we had 4yrs of "well, what he really meant was..." from the Right defending the dumb stuff Trump said. Heck, I was guilty of it myself early on. Lol.
That's fair.
 
Feb 11, 2007
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#58
For Andrew Campbell, Executive Director of the Energy Institute at Berkeley Haas ( here ) “energy independence” is a “political slogan, not an economic or technical concept with a clear definition” often used by politicians to “imply that a country is insulated from global energy markets”.

“This is rarely the case,” he said.

“If a country produces all of the energy that it consumes, does not participate in international trade in energy, does not import energy-intensive products and does not send energy-related pollution to its neighbors or the atmosphere, then I would consider it energy independent. I don’t think any country meets that definition.”


Explain specifically measures that have shut down production?
This article states that production is increasing.
Indeed, oil production in the country is on the upswing. The Energy Information Administration has projected U.S. oil production will hit a record over 12.2 million barrels per day in 2023 as drillers ramp up output.

Finally, how many federal permits would do the trick? Obviously 1000 unused permits isn't enough.
WHERE IS THE CONSTRAINT?
The top five holders of unused leases on federal lands include EOG Resources (EOG.N), Devon Energy , Occidental Petroleum , ConocoPhillips (COP.N) and Matador Resources (MTDR.N), according to energy research firm Rystad.

Four of the companies – EOG, Occidental, ConocoPhillips and Devon - declined to comment on whether they will raise production by tapping those unused leases. Matador did not respond to requests for comment.

EOG, the largest holder of unused permits with more than 1,000, said it's "standard practice is to maintain a healthy inventory of the permits necessary to provide flexibility for current and future development plans."

Labor and supply constraints can also make it difficult for companies to boost production beyond what they had previously planned, Occidental Petroleum Chief Executive Vicki Hollub said at the CERAWeek conference.

Occidental has more than 500 unused federal permits.

She added that oil and gas companies have been limiting costs and spending to return more cash to shareholders. "Capital discipline today for oil companies is basically no (production) growth," Hollub said.

Her view was echoed by another executive at the conference.

"As an industry, we can't lose sight of the returns," said ConocoPhillips CEO Ryan Lance, and he also blamed the administration's "poor energy policy, poor regulatory policy" for creating the current squeeze. The company has nearly 400 unused federal permits.

https://www.reuters.com/world/us/big-oil-biden-administration-spar-over-blame-pain-pump-2022-03-10/


When it comes to big, complex issues, I laugh at how the same partisan people place blame without looking at any data at all. But, it appears as always, look at the money not the political spin.
This issue of energy independence is beyond "political spin". Without being able to produce enough energy we need we must import energy often from those who are not our friends. Then to get their energy we are we must make unpleasant concessions that weaken us as a nation.
 

Cimarron

It's not dying I'm talking about, it's living.
Jun 28, 2007
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#59
Does anyone see the irony of the government telling you to lower your AC usage on hot days to prevent overwhelming the existing electric grid while at the same time encouraging you to trade in your gas powered auto for an electric car.....
 
Dec 9, 2013
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#60
Does anyone see the irony of the government telling you to lower your AC usage on hot days to prevent overwhelming the existing electric grid while at the same time encouraging you to trade in your gas powered auto for an electric car.....
While I’m sure there is some consumption of electricity during peak hours, it looks like 80%ish of EV owners charge at home in the evening or overnight. But I guess that doesn’t fit your narrative.

Also I guess lowering your electric consumption during critically hot periods to avoid blackouts and avoiding putting at risk populations in danger isn’t high on your list. Or maybe it is and you just don’t like when someone makes a personal choice to lower their energy bill and buy an EV.

Hey kudos for no references to China Joe or no links to foxnews.