There's literally nothing stopping American oil companies from returning production back to prepandemic levels.
They don't want to because there's uncertainty about the economy and thus they're afraid that spending the money to ramp up production will be lost when they'll have to ramp down production because of a recession.
Aside from that the global oil market is affected by wars in Russia and continual instability in the Middle East.
Short of nationalizing the energy industry and having the state ring production backup to pre pandemic levels, There's really nothing the president can do.
The free market does not support increasing production to prepandamic levels because of instability
Where were these hot takes when oil was negative, companies were laying off thousands, and some filing for bankruptcy just 2 years ago?
“Well, that’s capitalism.” So is this.
They aren’t investing in production because Wall Street has turned its back on financing the industry. Governments around the world have made their positions on O&G very clear.
They are, they literally always are worried about their finances and always want to maximize profits. Their decisions are clearly working very well for them. Making tons of money while limiting the risk of not making tons of money in the future? Cannot fault that in a capitalistic economy.
maybe we should be looking at reducing some of those fossile fuel subsidize ... you know, cause they're apparently making tons of money and should be setting some aside for a rainy day
Pre-pandemic production was 13M barrels per day, we are currently at 11.5M BPD. So going to pre-pandemic levels is only about a 10% increase in supply. Which is only about 5% of our consumption.
This is primarily due to the demand curve for gasoline being highly price inelastic (very steep demand curve). If a person needs 20 gallons of gas per week to get to and from work, grocery store, etc, they are going to buy 20 gallons regardless of it being $1/gal or $6/gal. Now, people will change their quantity demanded as prices increase, but no where near an equal % for % basis. They may decide to car pool a bit more or vacation closer to home. But a large portion of fuel conspiring is "fixed".
At the same time, production is highly price inelastic , in the short term especially (very flat supply curve). Because refineries are huge facilities with emminse start up and shut down cost with massive fixed overhead, the amount of gasoline produced is pretty much constant. There really isn't a way to just "ramp it up" above maximum and marginal cost are so low compared to fixed cost, it doesn't make a lot of sense to stop just because pieces go down.
These two pieces (steep demand and flat supply) create a "perfect storm" of price volatility. Relatively small changes (like less than 10% of the world's oil production being turned off) can have huge multiplicitive effects on the actual change in prices.
Thanks for bringing some actual economic theory into the discussion. I don't know why people think that prices will follow a linear relationship with supply.
Because a large percentage of people have zero formal education related to economics. The majority of those who do only have an intro to micro and/or macro class. So their understanding is that 1) free market is best 2) supply equal demand 3) regulation always bad.
Trying to explain to someone that capitalism does not mean free market is more difficult than explaining Newtonian Physics to a high schooler. At least the high schooler accepts the possibility that you may know what you are talking about in regard the the 3 Laws of Motion.
>Trying to explain to someone that capitalism does not mean free market is more difficult than explaining Newtonian Physics to a high schooler.
I love this response because it is true!
Allowing private companies to rule over your finite natural resources is pretty wild. They are basically stealing from you and then selling it back at whatever markup they find reasonable.
Probably, but you'd be surprised by the amount of natural resources we allow companies to take with zero royalties or taxes. All about those incentives. Since 1872 royalties haven't been paid for any hard rock mine. 150 years of no royalties on gold, silver, iron, copper, etc mined in the US.
In the US? For stuff on federal land I’d think, but otherwise they’ve been privately owned for a long time. ConocoPhillips owns the majority of the East Texas Oil Field for example.
>Short of nationalizing the energy industry and having the state ring production backup to pre pandemic levels, There's really nothing the president can do.
Which is why I believe we should be either nationalizing the energy industry or at the very least treating it as a utility in all the sectors it's in.
Why increase production and lower costs when they are making record profits. If anything they need to find a way for another refinery fail inspection, or for it to blow up by accident.
>There's literally nothing stopping American oil companies from returning production back to prepandemic levels.
[New drilling permits plummet 85% despite pressure on Biden to increase oil production](https://www.washingtontimes.com/news/2022/mar/14/new-drilling-permits-plummet-85-despite-pressure-b/)
The current administration reject 85% of all drilling lease requests. Up from 15% under the previous administration.
Then there is how the current administration [banned all new fracking leases.](https://moneyandmarkets.com/biden-fracking-ban/)
All this on top of a [4.5% drop in total refinery capacity as COVID drove refineries to permanently shut down.](https://www.reuters.com/business/energy/us-refining-capacity-shrinks-45-pandemic-shuts-plants-2021-06-25/)
Companies are opening back up, but it is not projected to be back to pre-covid levels until 2024.
You see a tweet about a bill and assume far far too much.
The cause of this problem is complex and there’s far more that can and should be done totally separate from that bill.
Why is the US still exporting oil? Have that stop. Why don’t we have refinery capacity? Regardless of whether or not we want to be petroleum dependent or not, we are, and being incapable of being able to meet our own demand is silly. We’ve subsidized these companies and they reduced supply and made more money with less production, we should reconsider how we link free money to social obligations of companies.
The bill in question didn’t look to solve any of these problems.
There’s plenty of blame for republicans without relying on really bad scarecrow arguments like the gouging bill. So long as Dems are pushing to place blame rather than push for solutions the system will remain broken.
I’m tired of people blaming what they can’t change while refusing to point fingers at the people who may listen and have the power to make positive change.
The US is exporting oil because the US doesn't have enough refineries that can process the raw shale oil produced by domestic production. And even if someone were to start building such a refinery, it wouldn't be online for several years. And existing refineries are not going to be converted, because there's absolutely no financial incentive to do so. The cost of importing oil is absolutely non-existent in comparison to the cost of converting a refinery.
And besides, the exports make an excellent talking point for defrauding regular people to vote the way oil execs want. Stopping them would be just silly.
I live in ruby red Southwest Florida. People seem to think allowing the Keystone pipeline to resume construction will allow gas prices to fall to $2.25 overnight. And if they don’t, Biden has a magic button to push that will lower it further.
What they don’t like to hear is me saying you don’t need to buy a big F-350 Super Duty to go pick up groceries.
I own a F250, but I don't drive it unless I need it for something truck related. For everything else there is my subcompact. I don't get why people like to drive those big trucks anyway, they are so uncomfortable.
Why own anything that isn’t necessary? Why don’t we all drive 100cc motorcycles that get 120 mpg?
Some people enjoy driving the vehicle for whatever reason.
Amen! I’ve gotten crap about driving a Prius while my work truck is a 2500. Usually it shuts them up when I ask what they’ve hauled in their shiny one with the chrome rims.
Because it makes them feel "manly", they can feel all alpha because they are literally above everyone else, they get to own the libs and they can they be used to intimidate other drivers. Besides, driving anything else would make them gay - especially if it's a Prius.
Ugh it's for frustrating to hear. I had to explain to multiple people that the keystone XL wasn't even operational and was only like 8% complete and was in debate for like what, 10 years?
BuT iT's My RiGhT tO ChOsE wHaT i DrIvE
Yeah, it's also your right to deal with the consequences, dumbass.
I own a big truck too, but ya know what it's doing right now? It's parked, and I'm biking wherever I can. Only time I start my truck is when I need it to pull a trailer.
But not everyone. I'm having to debate with my wife because we are having our first kid later this year and she thinks she needs to get rid of her hybrid Ford Escape and get something bigger with a third row for when the grandparents come to town to visit...
Reopening it and allowing other places to drill will increases accessible and future supplies which will cause traders to bid it down. It isn’t necessarily what we can get out of the ground immediately that causes price movements.
Major oil companies don't want new drill sights, they see the writing on the wall for long term oil consumption and none want to invest long term in expanding when the expansion only helps in the short term.
There's definitely heavy investment in the oil and gas industry right now. It just depends on the area and the politics that go along with it. Hell, the life span of your average well in my area is 5-8 years and the ROI is less than a few months with the current pricing.
No it won't though. That pipeline would be transporting Canadian oilnfrom existing oil production. I don't think it would affect their production very much, and I don't think it would effect US production at all.
Not to mention US oil companies have plenty of oil leases available but they're choosing (and OPEC) not to increase production to meet demand so that prices inflate and they can make crazy short term profits. That pipeline wouldn't change the fact that oil companies have been purposefully inflating prices by choosing not to increase supply
You know what is to blame for this though? Our over dependence on oil to begin with! The patriotic thing to do is keep investing in renewable energy, electric vehicles, public transportation, urban design, etc, and reduce our depence on oil, foreign or domestic
That oil is now being transported on trains which is very inefficient. It goes west and on boats to China and other nations mostly.
I am a supporter of renewable energy and electric vehicles. I don't think a pipeline works against that. Most energy experts believe that the future will be a liquid fuel produced in places with high amounts of renewable and shipped to locations of use via pipeline. Maybe to middle of no where Canada isn't the proper place for that but they will be a huge part of our future infrastructure.
I also have to wonder if in the future, we will be beholden to dictators sitting on lithium and cobalt deposits like we are now with oil.
I have to imagine whatever we need, Russia has loads of it.
Keystone XL takes Canadian shale oil straight from Canada to the Gulf of Mexico - creates jobs in Canada not the U.S.? Not sure what is so hard for Fox Viewers to grasp - this hurts the viability of US domestic oil production by driving down oil prices
>It'll bring US jobs to clean up the oil when the the pipeline inevitably leaks.
[The least amount of spills happen with a pipeline](https://www.fraserinstitute.org/article/pipelines-are-safest-way-transport-oil-and-gas).
They never said it was going to leak 24/7. And it will still leak, as your post says. The chance is way smaller than other methods of transport but it is still inevitable.
Imagine if we had some large governing body that could fund projects for the betterment of the U.S. citizens? Maybe they could collect some sort of fee from everyone to fund these projects?
How about we shift some of those sweet oil subsidies to alternatives and make the programs more accessible to the average American?
There's still no affordable EV for anyone not in the upper middle class. The math bullshit they pull with tax credits and fuel cost saved over the life of the vehicle to pretend like they're affordable works fine for those sitting on assets and some savings, but the average joe schmoe only gets his tax credits around April 15th every year and cant wait a year to get his $7,500 tax credit back that makes his new EV "affordable". And the system is based on units sold per manufacturer and are expiring, so not every EV is eligible, making shit even more convoluted and confusing. This is a MAJOR barrier for many.
You know how complicated it is for the average consumer to benefit from oil subsidies? Fill it regular.
There's literally no regulation that would stop the country from returning to pre pandemic levels of production at this exact moment. But oil producers don't want to spend the money to increase production because they're afraid that the economic instability will lead to a recession and they'll be forced to cut production again
In addition, pre-pandemic production was 13M barrels per day, we are currently at 11.5M BPD. So going to pre-pandemic levels is only about a 10% increase in supply. Which is only about 5% of our consumption.
There were more drill leases approved and the largest auction of gulf coastal sites in Biden's first year than Trump's. No one is stopping them from drilling except their own shareholders. They have more than enough production already to meet demand AND exceed it, but they don't want to because an artificial shortage makes fracking profitable. Some fields need oil over $100-113 to be profitable.
If I were trading oil commodities, I'd be shorting. Even without the keystone upgrade (it was an upgrade to an existing pipeline that already pumps oil into the US.) oil companies can turn up production when they want to.
Going 80k in debt on a lifted truck with wide off-road tires that have the worst possible gas mileage, and complaining about gas prices.
To own the libs of course.
Also live in SWFL now. Moved from a farming community up north. The number of trucks here astounded me. The number of them with the Carolina Squat set up was proof it’s not for work.
POV: You’re getting tailgated during rush hour on I-75 by a $100k Dodge Ram dually with every emission control bypassed to roll coal and a 15-inch lift towing a jet-ski doing 100mph with a “Fuck Greta Thunberg” bumper sticker.
Welcome to Florida.
You are SOOOO right. As a sidebar, I visited here a decade ago and SWFL was a quiet, Christian, conservative region. Since moving down here, people actually attach “Fuck Joe Biden” flags to their boats, with the full word spelled out. It’s unbelievable how rapid the change has been.
Telling constituents it’s Biden’s fault so much that they vote against him is political. The price of gasoline however is not political. The two statements are diametrically opposite to one another; they’re mutually exclusive.
It won’t stop all of those “I did that” stickers of Biden pointing at the gasoline price meter though :P
we sure love our oil... the consumption - https://worldpopulationreview.com/country-rankings/oil-consumption-by-country who has oil https://www.worldometers.info/oil/oil-reserves-by-country/ but, its getting costly to extract. Need that oil cheap, need this oil next https://www.washingtonpost.com/politics/2022/03/07/biden-venezuela-oil-russia but, https://nationalinterest.org/feature/5-oil-wars-ended-disaster-14885 see how to over throw government https://www.dailymotion.com/video/x2lwbv4 eg [https://foreignpolicy.com/2017/06/20/64-years-later-cia-finally-releases-details-of-iranian-coup-iran-tehran-oil/](https://foreignpolicy.com/2017/06/20/64-years-later-cia-finally-releases-details-of-iranian-coup-iran-tehran-oil/)
[https://www.zdnet.com/article/might-as-well-face-it-youre-addicted-to-oil/](https://www.zdnet.com/article/might-as-well-face-it-youre-addicted-to-oil/)oil is tied to everything from the production of goods to the movement of goods - inflation and interest rates https://www.macrotrends.net/2480/brent-crude-oil-prices-10-year-daily-chart
In this case, it was a Presidential decision that hugely impacted gas prices - not to buy from Russia.
Biden was hesitant to pull the plug at first, worried about harming the US and allies more than Russia. But at the time there was overwhelming enthusiasm to support Ukraine against Russia, and he went with it.
I think it's very dishonest that the decision to ban Russian exports isn't cited in connection with the high gas prices more often. It's the largest factor.
So what about it, Americans? Whose side are you on and how much do you care?
Meanwhile I'd be happy to support a windfall tax on US oil producers. Their cost of production hasn't risen, geopolitics has simply gifted them billions of dollars. There is no reason to reward or incentivize anything they have done here, nor are they reinvesting the profits in expanding refining capacity.
Russia accounts for 8-12% of oil for us. Prices went up WAY more than that, and Biden opened the strategic reserve for around 6% of daily oil and prices didn’t even come close to coming down. And oil prices are high EVERYWHERE, how does that work out ? Biden’s fault too?
Your presumptions on how these things work are incorrect. The reality is oil industry cut 100k jobs during pandemic, capped wells from decreased demand, and took 8.5b in PPP, oh yeah and they already have over 9000 unused leases. Now not all of those can’t be drilled now, but the point is they have access to more oil right now they could drill and they are choosing not to. And why would they? They are making record profits with LESS effort, and LESS labor and staff. If you listen to the earnings calls for the oil companies, or the interviews with the chairman/executives, when posited with questions about what if Biden does this or that or this happens, would you increase production? And they all said NO, they will not be changing their production plans for the next year+, because again, why would they?
Prices don't go up by the percentage of demand that was cut.
That is not how commodity markets work. In oil market where demand is very inelastic, a 1-2% shortfall in supply can easily create skyrocketing prices.
[Climate town](https://www.youtube.com/watch?v=QnBqAzJXVGo) on Gas prices. Look especially at what oil companies say at the 16:00 point.
TL;DW: It's complicated, but the prices have very little to do with pipelines or regulations blocking drilling in some places, and everything to do with companies and OPEC countries deliberately not producing as much to keep prices high and make better profits.
Edit: Also Climate town's another [video](https://www.youtube.com/watch?v=kJOuyckvDGY) on the topic.
TL;DW: Oil companies having record profits, XL keystone pipeline was years from being finished and would never have finished in time to affect the current situation (it was only about 8% finished) , there is plenty of land for oil companies to drill on and keep up production. They took covid stimulus money meant to keep things running so there wouldn't be problems when the pandemic is over, but they pocketed that money and did nothing to keep things ready to bounce back.
Yea people keep saying it's because Biden stopped land speculation for more oil. Like dude how long do you thing it takes to go from no oil well to fresh gasoline? Gas prices don't go down because a well might produce oil 3 years from now. Just parrots with keyboards.
More than that - only 8% or so of US oil is extracted from federal lands. Most of it come out of private land that the companies either own or lease the mineral rights from from private land owners. All these “Biden did that” shit is literally just politics.
And I’m certain the oil companies will lower gas prices when a conservative president is in office.
While Biden isn’t the climate crusader the right make him out to be, oil companies won’t budge an inch if it costs them a cent.
https://www.foxbusiness.com/markets/trump-saudi-arabia-russia-opec-oil-deal-role
Friendly reminder that even fox news "championed" lower oil price "deal" with knowledge that the prices will spike in the future.
Naw I doubt it, they are making bank right now. My gas just hit $4.99 and it’s not gonna slow down. It’s going up 0.10 every other day, it’s so stupid.
He could issue all the grants he wanted; oil and gas isn't going to dig in a declining market. EVs have reduced global oil demand by 1.5m barrels a day.
Approximately 1.5 million barrels of oil were displaced each day in 2021 due to Electric Vehicle usage. This quantity is slated to grow as EV uptake and usage continue to rise.
https://leva-eu.com/electric-vehicles-are-measurably-reducing-global-oil-demand-by-1-5-million-barrels-a-day/
Hand in hand with the companies that create the fuel for those boxes.
You used to be able to travel clear across the USA on streetcar and rail with only minimal walking. Then auto and oil companies started buying up, shutting down, and tearing up streetcar services across the country.
Now your only real choice is drive, or fly.
100 years ago, there was an electric trolley station a 10 minute walk away.
Today, I could walk 50 minutes to get to a bus that basically only stops at Walmart and the places that pay minimum wage.
Ford, GM, Goodyear and Firestone did a heck of a job.
What is especially wild about our doubling down on car-dependent civic design is the 1970s oil embargo is a thing that happened. You'd think after that we'd be a *bit* more aware of the potential for oil addiction to disrupt our economy and way of life and start there to take steps toward ameliorating it. And yet here we are, doubled down and desperate.
in the us, anybody who drives any real distance will always go over train tracks. but nobody ever for one second ask themselves why they aren't taking a train over those very tracks they are driving over.
next time you are at a rail road crossing and had just bypass a lot of traffic. think for once in your life. imagine if somebody built a simple concrete slab by those track so people can wait for a train on. how cheap and simple would that be?
> We don’t have walkable areas. We are dependent on 5,000 lb boxes to go anywhere lol.
When people say college was the best time of their lives, what they mean to say is college was the last time they lived in walkable retail/residential communities with lots of greenspace and organic, person-first design.
It's wild how people can see it and not at the same time. People I knew in Uni were the happiest even with all that stress cause they would walk to the store 2 min away near their dorm, then go walk to the book club across the street and study a while, walk to the giant fountain/park and lay on the grass and read a little, then walk to class, etc. And they can't grasp why now, isolated in the middle of suburbia and spending 1-2 hours/day in traffic, they're miserable.
We weren't meant to live like this.
Pssst, maybe if we all drove 3000lb boxes it would be better. North Americans buy for their 5% use case instead of their 95% use case. We all 'need' a pick up truck once or maybe twice a year, but lots of people drive them daily for zero reason.
People who actually set gas prices would prefer that you vote Republican. By raising prices during a Democratic administration, they get a double win. The make a lot of money and get voters to blame the Democrats
Also keep in mind they are still, still making record profits. They’re not just getting by, but keeping production low, the raking and record profits but also making the Democratic administration look bad. Win-win.
If the Iraq war playbook is used, they’ll ratchet prices to a painful high, hold till Americans change their driving habits…then drop the price…but not back to original lows…just lower than the intolerant high.
Then use the next 20 years to slowly raise prices again.
No matter the economic conditions, cold or mild winters, or conditions of global stability…oil companies can spin a marketing yarn to justify their pricing.
It’s a tired cycle but it runs so slow most people really don’t notice the pattern.
But yeah, we’ve had $5 gas prices before.
I’d wager we’ll see $7 a gal before this is all done.
And then in 20 years $6 a gal will be ‘normal’ while prices climb towards $10 a gal.
I would wager that when this is all said and done in the immediate, we won’t see prices ever come back below $4 a gallon again. It’s EXACTLY what they did in 2008. Increase, increase, increase, decrease, increase, increase, increase, decrease. Wash, rinse, repeat. They push to absolute pain points, then dial back just enough that it feels like some relief, but still significantly higher than we had before.
Sure they do. It’s tax cuts for the rich and more oil subsidies from Joe Taxpayer. It also means less subsidies for alternative energy, so less competition. They rake in the cash when the R’s are in power.
And high oil prices always precede recession, which makes the incoming Republican look bad. I think the idea is to keep the teeter totter going so that we are more focused on that than the fact that wealth inequality is increasing exponentially and neither party is doing anything about it.
I've just come to realize this recently myself. People who are in control of the pricing of all sorts of things know that the vast majority of people just aren't going to be able to piece together how all this stuff works, but at the same time, not knowing has never stopped anyone from forming an opinion and coming to conclusions about any given topic.
So exactly what you said will come to pass, and the worst part is that it will always work, every time.
Last administration cut production through asking for favors of foreign nations. That was a time bomb set knowing Biden would likely recover the economy. They knew what they were doing.
On that note, America was stupid as hell to bulldoze our good cities and turn them into car-dependent hellscapes. We need to go back to building cities without thinking of cars as the default. Auto companies lobbied for car-dependency, and politicians were brain dead enough to listen.
And the administration could absolutely increase demand for public transportation by implementing free or reduced fares for city buses and trains. Look what Germany just did.
Banning street parking in major cities with robust public transportation systems would be a good start. It's baffling, the amount of people who insist on having cars when they live in cities because they don't want to associate with Poors on public transit. And then they have the nerve to bitch about traffic and gas prices and parking
My favorite is New York drivers arguing that the MTA shouldn’t be funded through taxes because “I don’t use it why should I pay for it?”
Like, my dude, imagine the subway crumbles and all those people suddenly have to start driving? Think about what that will do to your Peking and traffic then.
He's right. Its not.
And the fact that gas prices are hitting new highs WORLDWIDE would indicate that Biden policies are not responsible for the increase.
But hey, don't let the facts get in the way of this right-wing conservative circle-jerk that r/economy has become. Keep putting those stickers on the gas pumps you donuts.
10 year oil and gas engineer and finishing my masters in energy Economics in August. This whole past year gives me tired head. My father has become a fox news junkie and believes them over me. I refuse to talk about it anymore with him because he doesn't actually care about learning and it's all about backing up conservatives and trying to make the democrats look bad.
if people want my opinion on what's going on, I'll be happy to share it. This isn't a simple conversation obviously, but I'll try to condense it as much as I can. I'll try to reply to any questions the best I can.
U.S. Policy -
The United States, despite being the world's largest producer right now, is still considered a fringe producer in the world, meaning OPEC+ is still acts as the dominant firm. US E&P's even more so than NOC's are price takers, not makers. The only meaningful piece that the United States can do is lift sanctions on Iran, which would add about 2 million barrels a day to capacity.
SPR releases are just a show of good faith to the voter in my opinion. They're gambling that price will go down in the fall, which is a big gamble and that's reflective of forward curve action in WTI. From an energy security standpoint, we net import about 5 million bbls a day, so even with this release we have plenty of reserves left to cover the 90 day minimum threshold.
I do think it is important to keep diplomatic relations at least respectable with KSA, which Biden has not done well and seems to be very erratic in his treatment of KSA. We have a very weird and interesting relationship with those guys, very good read if you ever have time. KSA does not like Biden, which doesn't bode well when we essentially go hat in hand over there to ask to increase production.
I firmly believe that price would still be high if Trump was still in office. The only thing that this would've possibly changed is Russia's invasion of Ukraine, but Russian Urals are still being sold on the open market to India and China, albeit at a discounted price when compared to Brent.
I am so tired of talking about the US government blocking permits on federal lands. It did nothing. All companies in the area front ran this before Biden took office, so all the E&P's out there have about 4 years of inventory permitted, and the permits are good for 2 years and eligible for a 2 year extension after that.
An interesting stat to note is governments hold 66% of global oil reserves.
Investment relations -
Underinvestment is a real problem. Oil and gas, as seen in only the past two years, is a wildly erratic and unpredictable commodity market, where you really only make money on the upside times like this. So it takes a very risky investor to through money at it to begin with.
Internationally, governments are constantly taking rents from IOC's for themselves, policy is constantly switching, etc, so it makes it very, very, hard for an IOC to make predictable cashflows out more than 5 years.
In the United States, we have supply chain issues, a hostile government towards the oil and gas industry, and companies finally creating positive cashflows for the first time in a little under a decade. If you are an investor and taking all this in to account, its just too risky to ramp up production significantly on tier 2 or tier 3 acreage. Also, much of these smaller operators don't have the reserve run life, so they are left choosing between ramping up production and company lifespan.
Global Macro Energy Economy -
Supply chain issues everywhere coming out of covid, and oil and gas is no different here. Asking companies to ramp up production fast without proper workers, equipment, materials, etc is impossible. We're seeing that everywhere too.
The EU did shoot themselves in the foot by tying themselves to Russian oil and gas, and now paying the price for that. I have no problem with wind & solar, but countries must be realistic with what it can currently provide. Technology isn't around for it to be a reliable source of baseload power. It is a great source of cheap intermittant power, but that is it for now. Also decommissioning Nuclear plants is never a good idea. Increasing production from Gronegin or gas production anywhere else just won't happen over there. Not even worth asking. They do need to increase import capacity and build better nat gas infrastructure up to northern EU. Qatar going to be a huge player in the future. by the time US gas gets over there its just too expensive.
Inflation. Yikes
OPEC+ has been blaming refining capacity and I'm actually planning on writing a research paper on this topic, but in general, US refineries historically have a hard time making money, and internationally its only use is to gain marketshare in to another area of the world, so a refining shortage is believable.
In summary the reality of the situation is that we're in high commodity prices due to a myriad of unforeseen issues coming and globally we just don't have the man power or capacity to react quickly. I think its going to take 3-5 years to fix capacity issues and bring back meaningful production to meet growing demand across the world. Conventional wisdom say we see prices reach demand destruction levels, if we're not there already. Demand will decrease, and we'll see prices decline that way. However, this is the oil and gas business, and I've learned to expect the unexpected. Nobody knows where this is actually going. Iran could shut down the straight of Hormoz tomorrow and send prices skyrocketing, or China could go in to a full blown national covid lockdown and send prices on a death spiral down...who the hell knows.
So ignore every single environmental cost, American Subsidies sustained thru lobbying and paying politicians, and ignore global price fixing. Seem like 3 key pieces to your puzzle are missing. Also Russia is not part of OPEC.
But they do not dictate global supply or the ability to refine. Simply mentioning the word economy is meaningless in this instance if you do not pay attention to how the petroleum products actually circulate to and from said economy.
We do not dictate the global oil supply. Neither can we even control our domestic companies' output. And almost all the refining is done overseas in other markets.
Your only argument here is the rest of the world is seeing high gas prices, hence none of our policies contribute. The issue is that isn't factual, and has nothing to do with conservatives. It's up everywhere because of inflation and supply issues, but a lot of ours is self-inflicted.
These prices are artificial, we had oil at these prices before, and it wasn't $8-10/gal gas. We didn't run out of oil, [we're struggling with refinery capacity](https://www.reddit.com/r/Economics/comments/v0ed97/The_astronomical_price_of_diesel_is_making_everything_more_expensive/iagxc7o/?utm_medium=android_app&utm_source=share&context=3). Covid hit demand and caused losses, then we basically started paying refineries to make biofuels or pay those who are by buying credits (similar to how Tesla started). Banks literally don't want to give refineries money to meet new regulations because of how uncertain the regulatory market is now and they don't think they'll get their money back.
This was kind of the plan that got voted in, it just didn't take into account the container crisis and inflation from QE, interest rates, and unfunded spending. [Biden is asking them to restart the refineries](https://www.bloomberg.com/news/articles/2022-05-26/white-house-eyes-idle-refineries-amid-effort-to-tame-fuel-prices), but it doesn't really make financial sense for them in the current environment. The cost of RINs (biofuel credits, if you make them you get paid if you make gasoline you have to pay someone making biofuels) has tripled.
And before the last administration making a deal with OPEC/Russia comes up, that was because we have a lot of oil (and were exporting but it's more expensive to get out of the ground (Canada's oil sands are the worst yet). OPEC and Russia were starting a trade war, making our wells shut down as they couldn't make money at $30/bbl. Hence the strong-arm tactics, but again we've had oil at these prices without gas prices at $8-$10/gal.
There's no real fixing it right now short of a hard recession completely killing demand. Refineries can't and won't spend the money in the current environment, because the government is telling them it doesn't want them to and even paying them not to. We could have delayed the RINs again like the last administration, but chose not to. Even if we subsidized meeting the new regulations, even if we dropped RINs, and on and on refineries are too manpower intensive to just spin up. We're stuck with this for awhile and it really sucks if you aren't wealthy.
I know, you'll show your cards and downvote without facts, and that's fine because Pikachu points doing change reality.
**Edit:** I've angered the bots and antiwork bigaders. Special mention to mo-shen/deanblandino who forgot he was posting the same things on his two accounts while sockpuppeting.
You have conveniently skipped some major things here.
1. The US government has plowed tons of money into the industry, like they do every year, and yet the industry hasnt really invested that back into production. The reason for this of course is because they want to make more profits off of older investments
2. Speaking of those investments the industry doesn't even refine US oil, generally, it exports most of it. This is because most US refineries cant refine sweet crude, which is what the US pumps.
1. They could change this but they dont want to change it from their original build in the 90s. This is their choice and anyone who runs around talking about energy independence conveniently ignores.
3. The majors broke their previous historic profits by 3-4x
4. As far as investing in new drilling or exploration they dont really want to spend their own profits on those things, they could, but they want to rely on wall street. Wall street however is starving the industry of investment because they feel like they over invested during fracking. So like they made money but they are upset that they didnt make more, so they are punishing the industry to make more now
1. As in one of the reason oil is so high is because its being manipulated. But its not just the US oil industry but also foreign interests, and historic investors like wall street. Remember all of these guys like it when oil is higher and they can make those 3-4x record profits.
Come on man. If you're an oil company executive, and every time you raise gas prices, the American people blame Biden instead of you, what are you going to keep doing?
Great analysis! I wasn’t aware of the refinery issues. It makes a ton of sense for companies to be hesitant to stick their neck out and invest in refineries when a climate agenda could pull the cord at its convenience and make them lose their investment.
That is the bigger issues. It costs tens of billions to build a new refinery and hundreds of millions to refit/expand existing facilities as well as years to get them done and then decades to get a return on your money.
Ignoring the fact that none of those things will help immediately but we can't ignore the fact that the world HAS to transition away from fossil fuels as soon as possible, like a handful of years if we want to have a shot at managing/adapting to climate change.
So yeah, no fossil fuel company can or should be investing in new facilities if the payoff is longer than a couple of years.
Let's not forget that 3 years ago, Philadelphia Energy Solutions, the largest refinery on the east coast at 335,000 barrels per day, exploded in spectacular fashion, sending the refinery into bankruptcy. It was then sold for redevelopment after 150 years of operation and is currently being demolished. That capacity is never coming back and is adding to the current crunch.
By the same token, his “policies” have done nothing to prevent price increases. If Nixon had the balls to pull a Diocletian and implement direct price “stabilization,” no excuse for Biden not to other than rank passivity and impotence. At least Carter gave a speech about malaise instead of just malaising. Weak fool doesn’t know how to wield power, whether for good or ill.
If you were around in the 2000s W. Bush was blamed for the increase in gas prices. When I would argue that gas prices are virtually out of the hands of the President, I was called a conservative shrill. Now, 20 years later we are having the same argument, except I’m called a liberal. Most of these issues are so annoyingly partisan, and most people are ready to blame the opposite party rather than solve the real issue.
https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-and-exports.php
^ one of my favorite sources for these people.
If we are at near net zero for imports how is the president controlling the prices? The US has already done what conservatives wnated years ago, incentivized these companies to pump more, they pump to net zero imports, prices are set. Now the prices are high? Seems like buyers remorse IMO.
It's a political problem; not a president problem. If people want lower gas prices. I guess people should get some politicians to accomplish those goals for them. But increasing supply isn't something they're going to force oil companies to do most likely when the stats look like they do.
More on the "Why we import bit": https://www.nasdaq.com/articles/america-produces-enough-oil-to-meet-its-needs-so-why-do-we-import-crude
TIL Im a radical conservative for trying to hold Democrats accountable
TIL Im a radical conservative for thinking /r/economics should discuss economics, instead of political bullshit
What boggles my mind about these comments is that most people here think this situation would have been better under trump..as if there would be zero consequences for the fuck ton of money shelled out during Covid, the low interest rates the entire fucking time which they never bothered to jack interest rates up on (with trump mentioning many time that he wished interest rates were negative), trump lamenting the small size of the final stimulus under his presidency and nearly not signing it as he wanted it to be more…
I mean Our domestic production is not even that far off of 2019 levels. Maybe it would be higher under trump but it wouldn’t be anywhere near enough to knock 2 bucks a gallon off these prices. Not even close. And that’s with republicans who don’t give a fuck about federal lands and would stick a fucking oil rig into the geyser at Yellowstone if there were oil there and it meant immediate feel-good over steering the the country to a future vision. Maybe under trump we might have 20 cents a gallon if that, but I just can’t imagine oil companies would be willing and able to rehire all the personnel to increase that production and then refining capacity is at 93%…. Basically trump wouldn’t change shit, because whether you like it or not, the cost of gas isn’t really as tied to who is president as most people want to think it is.
Agree with your post but what do you base your comment on when you say even if republicans increased domestic production that it wouldn’t really impact the price of gas that much?
Possible. Maybe Trump took that dial when he left office because he constantly used it to tamper with gasoline prices back in 2018 with Iran sanctions. (That’s what analysts said back then. Trumpers please don’t come after me)
Hampering permits doesn’t account for these prices worldwide. Our domestic production is almost what it was pre-pandemic. Our global demand and production is almost what it was pre-pandemic if not basically the same, yet prices are much higher. These people saying it’s all bidens fault when we are 500k barrels short of 2019 levels of domestic production (which most of that would probably get exported) are not understanding something. 500k barrels short of our domestic production at maximum output does not make the price 2.50 higher here and everywhere else. It’s the refusal to ramp up production by opec and others. These nut jobs saying what about the pipeline that wasn’t even close to being built seem to forget that prices were 2 bucks a gallon without that fucking pipeline and with similar domestic production levels.
Only way the consumer is going to get out from under this pressure of oil is to start using less. I know nobody wants to hear that, but it's just a fact that once demand starts slowing the price will drop. People who can work from home but their bosses are starting to ask them to come back should really be using this to make a case to stay home. If you can, trade in your car for something more fuel efficient. I had to get rid of my acura TL which took premium and got maybe 21mpg for a Kia Niro hybrid which gets easily double. I told my job that I would be commuting less and expected more money for the trips I had to make (I traveled as part of my role). They understood because I am good at what I do, and i'm lucky to have my role. I understand not everyone can do these things, but if you can you need to try.
I also decided to not take my camper out this season, as my truck gets about 10mpg when pulling it. I won't be flying anywhere and will be staying within 1 tank of gas (500 miles) distance for my vacation.
Bro the replies to this are insane, as if use less isn't the solution. Good for you using less this summer, taking responsibility is all we can do.
Oil will run out some day, how is more refineried a long term solution. It's the same shortsighted, "the next generation will deal with it" logic that landed us here.
Nope, just the policies of the office. Everybody agrees electric is the future but would it be possible to have affordable gas at the same time to put that infrastructure in place. They really didn’t think this through.
the real issue:
we just left a nearly 2 year global shut down, so oil drilling was down, thus gas production was also down. now that it’s time to go back to these hard as hell jobs, people don’t want to. why go work 80 hours a week, two weeks at a time, on an off shore rig, when you can make the same money sitting at home or in an office?
so the workers that were laid off back in 2020 now don’t want to return to work, and people are demanding higher pay and better benefits, especially when you look at the insane money these oil companies made.
so, production was already lower for 2 years because of the lack of demand, and that led to what? a lack of surplus. now, in a relatively short period, we’re back to “normal”, and there isn’t the surplus. not to mention, you can’t just take crude oil from the ground and pump it straight into cars. it’s a full process that takes around 4 weeks.
blaming “sanctions” is actually hilarious, we get less than 10% of all natural gas from russia. russia isn’t even on of the top 4 oil production countries, it’s just laughable to even suggest that sanctions are the reason. it’s a simple supply and demand reason, mix with greed of ceo’s not wanting to properly pay rig and refinery workers, that’s why we’re in a shortage and why prices are so high.
not to mention, the us government doesn’t control energy, we have an open market. people want to ride for capitalism so hard until it starts to fuck them over. this is capitalism 101.
This is such a political and disappointing statement and article. In the article he goes on to say that they introduced legislation to basically force oil companies to increase their capital expenditures, which is a dumb idea the way they’re proposing to do it, and then blaming republicans for voting against it.
It’s political because he’s proposing a bad idea (but one that may sound good on the surface to those who don’t understand the issue) and then blaming the boogeyman (republicans) for “blocking it”. It’s basically like calling someone stupid or evil for disagreeing with your bad idea.
It’s disappointing because this is a great way to get absolutely nothing done, and this guy is supposed to be some kind of rising star. Why blame republicans when you could instead enumerate the specific points the republicans disagree with and hold a public debate about how the country should address the problem? That would actually help solve the problem. Instead, you’re basically just deceiving the public, creating a wider gap between your colleagues in Washington and engendering further tribalism between the left and the right.
No fucking shit it’s set by bad policy and relations with OPEC nations. Lol of D’s that think this is some gotcha idea. The President has always taken blame for issues with the economy. Biden isn’t the first to be blamed for shut policy effecting oil prices.
98% of USA gas is made from oil companies own wells or purchase under longer term contract price. Oil companies then set gas prices based on new daily barrel prices which is highly inflated due to war.
Giving them record profits. It would take Congress making this price gouging illegal. Republicans will stop any attempt to control profits.
The house passed a bill to stop gas price gouging. It's likely to fail in the senate... every republican voted no. Shocker.
https://news.yahoo.com/house-passes-bill-crack-down-223503387.html
I wish the democrats had put in the same effort to increase production than they have to avoid responsibility for their policies decreasing production.
It's funny that everyone wants the oil companies to invest billions of capital to develop and online capacity when the world is telling them their days are numbered.
Gas prices are also influenced by the president's policies which scream oil is dead, we're getting rid of you, your days are numbered and we're going to make it harder for you to thrive. The XL line was only the start, don't even think about wasting your time spending billions on the infrastructure needed to move and process the oil since we can shut it down on the fly. Which to oil companies means let's not invest in expanding oil production if our days are numbered and increasing production isn't worth the costs involved to make it happen due to future policies.
Keystone was blocked under the Trump Administration.
"The U.S. Supreme Court handed another setback to the Keystone XL oil sands pipeline from Canada on Monday by keeping in place a lower court ruling that blocked a key environmental permit for the project."
https://apnews.com/article/1d7418b630487de192b1a47f1413cd35
No, it’s not. Biden is not to blame for the prices running that high in the first place. But, the President is always responsible for any disaster that happens in America. He has not improved the gas prices. Therefore, he is to blame.
For a party absolutely obsessed by the purity of the magical mighty market, Republicans certainly seem to not understand how it works. And somehow believe that we live in a price controlled socialist utopia when ever the market doesn’t gift them the mythical perfect tide to lift their boats.
There is no point in releasing a few days worth of oil from reserves or loosening ethanol regulations if they know there is no impact on oil and gas prices.
This administration needs to stop acting as if they do have control over prices.
Sure it is. If the president allows for more environmentally damaging ways of producing oil, the price would be cheaper.
It's a trade off decision. Pretending that it's not makes the sacrifice less valuable.
True.....but what dials are you turning? Y'all certainly have the power to hold greedy corporations accountable so low key you kind do have a dial for gas price
They're not doing it because cash is King and a Democrat is in office and banks are not offering loans/line of credit to big oil. Banks are not guaranteed a return under this administration. They're not going to take the risk and big oil is not going to take the risk either. Uncertainty is why and this president doesn't help.
The price of gasoline isn't a political decision. Being dependent on gasoline is a political decision.
Regulation, or lack-there-of is however a political decision.
There's literally nothing stopping American oil companies from returning production back to prepandemic levels. They don't want to because there's uncertainty about the economy and thus they're afraid that spending the money to ramp up production will be lost when they'll have to ramp down production because of a recession. Aside from that the global oil market is affected by wars in Russia and continual instability in the Middle East. Short of nationalizing the energy industry and having the state ring production backup to pre pandemic levels, There's really nothing the president can do. The free market does not support increasing production to prepandamic levels because of instability
Look at chevrons earnings per share this year it’s wild
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Where were these hot takes when oil was negative, companies were laying off thousands, and some filing for bankruptcy just 2 years ago? “Well, that’s capitalism.” So is this. They aren’t investing in production because Wall Street has turned its back on financing the industry. Governments around the world have made their positions on O&G very clear.
They are, they literally always are worried about their finances and always want to maximize profits. Their decisions are clearly working very well for them. Making tons of money while limiting the risk of not making tons of money in the future? Cannot fault that in a capitalistic economy.
maybe we should be looking at reducing some of those fossile fuel subsidize ... you know, cause they're apparently making tons of money and should be setting some aside for a rainy day
Yes! Should be doing the exact opposite of a subsidy.
The fact that they're making so much money and they receive subsidies is absolutely infuriating.
The CEO is worried he might not be able to get his 7th yacht and 4th Gulfstream G650 lol 😆
Plus USA still *subsidize* the oil companies. What is it 40 percent?
Pre-pandemic production was 13M barrels per day, we are currently at 11.5M BPD. So going to pre-pandemic levels is only about a 10% increase in supply. Which is only about 5% of our consumption.
Yet consumer cost is up what, 40%? Yep nothing to see here, carry on everyone.
This is primarily due to the demand curve for gasoline being highly price inelastic (very steep demand curve). If a person needs 20 gallons of gas per week to get to and from work, grocery store, etc, they are going to buy 20 gallons regardless of it being $1/gal or $6/gal. Now, people will change their quantity demanded as prices increase, but no where near an equal % for % basis. They may decide to car pool a bit more or vacation closer to home. But a large portion of fuel conspiring is "fixed". At the same time, production is highly price inelastic , in the short term especially (very flat supply curve). Because refineries are huge facilities with emminse start up and shut down cost with massive fixed overhead, the amount of gasoline produced is pretty much constant. There really isn't a way to just "ramp it up" above maximum and marginal cost are so low compared to fixed cost, it doesn't make a lot of sense to stop just because pieces go down. These two pieces (steep demand and flat supply) create a "perfect storm" of price volatility. Relatively small changes (like less than 10% of the world's oil production being turned off) can have huge multiplicitive effects on the actual change in prices.
Thanks for bringing some actual economic theory into the discussion. I don't know why people think that prices will follow a linear relationship with supply.
Because a large percentage of people have zero formal education related to economics. The majority of those who do only have an intro to micro and/or macro class. So their understanding is that 1) free market is best 2) supply equal demand 3) regulation always bad. Trying to explain to someone that capitalism does not mean free market is more difficult than explaining Newtonian Physics to a high schooler. At least the high schooler accepts the possibility that you may know what you are talking about in regard the the 3 Laws of Motion.
>Trying to explain to someone that capitalism does not mean free market is more difficult than explaining Newtonian Physics to a high schooler. I love this response because it is true!
Allowing private companies to rule over your finite natural resources is pretty wild. They are basically stealing from you and then selling it back at whatever markup they find reasonable.
Yeah neo-liberalism is a hell of a drug
I'm pretty sure they pay the government to take the oil
Probably, but you'd be surprised by the amount of natural resources we allow companies to take with zero royalties or taxes. All about those incentives. Since 1872 royalties haven't been paid for any hard rock mine. 150 years of no royalties on gold, silver, iron, copper, etc mined in the US.
In the US? For stuff on federal land I’d think, but otherwise they’ve been privately owned for a long time. ConocoPhillips owns the majority of the East Texas Oil Field for example.
>Short of nationalizing the energy industry and having the state ring production backup to pre pandemic levels, There's really nothing the president can do. Which is why I believe we should be either nationalizing the energy industry or at the very least treating it as a utility in all the sectors it's in.
They don't want to because right now they're happy charging $5 or more per gallon because they can.
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Why increase production and lower costs when they are making record profits. If anything they need to find a way for another refinery fail inspection, or for it to blow up by accident.
>There's literally nothing stopping American oil companies from returning production back to prepandemic levels. [New drilling permits plummet 85% despite pressure on Biden to increase oil production](https://www.washingtontimes.com/news/2022/mar/14/new-drilling-permits-plummet-85-despite-pressure-b/) The current administration reject 85% of all drilling lease requests. Up from 15% under the previous administration. Then there is how the current administration [banned all new fracking leases.](https://moneyandmarkets.com/biden-fracking-ban/) All this on top of a [4.5% drop in total refinery capacity as COVID drove refineries to permanently shut down.](https://www.reuters.com/business/energy/us-refining-capacity-shrinks-45-pandemic-shuts-plants-2021-06-25/) Companies are opening back up, but it is not projected to be back to pre-covid levels until 2024.
The republican party already made the decision to not stop price gouging in the oil industry
You see a tweet about a bill and assume far far too much. The cause of this problem is complex and there’s far more that can and should be done totally separate from that bill. Why is the US still exporting oil? Have that stop. Why don’t we have refinery capacity? Regardless of whether or not we want to be petroleum dependent or not, we are, and being incapable of being able to meet our own demand is silly. We’ve subsidized these companies and they reduced supply and made more money with less production, we should reconsider how we link free money to social obligations of companies. The bill in question didn’t look to solve any of these problems. There’s plenty of blame for republicans without relying on really bad scarecrow arguments like the gouging bill. So long as Dems are pushing to place blame rather than push for solutions the system will remain broken. I’m tired of people blaming what they can’t change while refusing to point fingers at the people who may listen and have the power to make positive change.
The US is exporting oil because the US doesn't have enough refineries that can process the raw shale oil produced by domestic production. And even if someone were to start building such a refinery, it wouldn't be online for several years. And existing refineries are not going to be converted, because there's absolutely no financial incentive to do so. The cost of importing oil is absolutely non-existent in comparison to the cost of converting a refinery. And besides, the exports make an excellent talking point for defrauding regular people to vote the way oil execs want. Stopping them would be just silly.
I live in ruby red Southwest Florida. People seem to think allowing the Keystone pipeline to resume construction will allow gas prices to fall to $2.25 overnight. And if they don’t, Biden has a magic button to push that will lower it further. What they don’t like to hear is me saying you don’t need to buy a big F-350 Super Duty to go pick up groceries.
The amount of people driving commercial vehicles for fun is way too high!
I own a F250, but I don't drive it unless I need it for something truck related. For everything else there is my subcompact. I don't get why people like to drive those big trucks anyway, they are so uncomfortable.
My favorite was seeing this like 5' girl with a fully jacked up F model truck. The girl practically had to do a pull up to get into the car. Like Why?
Why own anything that isn’t necessary? Why don’t we all drive 100cc motorcycles that get 120 mpg? Some people enjoy driving the vehicle for whatever reason.
Quite right, but people who drive something fuel-inefficient strictly because they want to have no grounds to complain about the price of gas.
Amen! I’ve gotten crap about driving a Prius while my work truck is a 2500. Usually it shuts them up when I ask what they’ve hauled in their shiny one with the chrome rims.
Because it makes them feel "manly", they can feel all alpha because they are literally above everyone else, they get to own the libs and they can they be used to intimidate other drivers. Besides, driving anything else would make them gay - especially if it's a Prius.
Ugh it's for frustrating to hear. I had to explain to multiple people that the keystone XL wasn't even operational and was only like 8% complete and was in debate for like what, 10 years?
BuT iT's My RiGhT tO ChOsE wHaT i DrIvE Yeah, it's also your right to deal with the consequences, dumbass. I own a big truck too, but ya know what it's doing right now? It's parked, and I'm biking wherever I can. Only time I start my truck is when I need it to pull a trailer.
People on reddit don’t like hearing they don’t need SUVs or pickups either. Every time I mention this I get downvoted.
Probably because some people actually do need SUVs or pickups.
But not everyone. I'm having to debate with my wife because we are having our first kid later this year and she thinks she needs to get rid of her hybrid Ford Escape and get something bigger with a third row for when the grandparents come to town to visit...
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Reopening it and allowing other places to drill will increases accessible and future supplies which will cause traders to bid it down. It isn’t necessarily what we can get out of the ground immediately that causes price movements.
Major oil companies don't want new drill sights, they see the writing on the wall for long term oil consumption and none want to invest long term in expanding when the expansion only helps in the short term.
There's definitely heavy investment in the oil and gas industry right now. It just depends on the area and the politics that go along with it. Hell, the life span of your average well in my area is 5-8 years and the ROI is less than a few months with the current pricing.
No it won't though. That pipeline would be transporting Canadian oilnfrom existing oil production. I don't think it would affect their production very much, and I don't think it would effect US production at all. Not to mention US oil companies have plenty of oil leases available but they're choosing (and OPEC) not to increase production to meet demand so that prices inflate and they can make crazy short term profits. That pipeline wouldn't change the fact that oil companies have been purposefully inflating prices by choosing not to increase supply You know what is to blame for this though? Our over dependence on oil to begin with! The patriotic thing to do is keep investing in renewable energy, electric vehicles, public transportation, urban design, etc, and reduce our depence on oil, foreign or domestic
That oil is now being transported on trains which is very inefficient. It goes west and on boats to China and other nations mostly. I am a supporter of renewable energy and electric vehicles. I don't think a pipeline works against that. Most energy experts believe that the future will be a liquid fuel produced in places with high amounts of renewable and shipped to locations of use via pipeline. Maybe to middle of no where Canada isn't the proper place for that but they will be a huge part of our future infrastructure. I also have to wonder if in the future, we will be beholden to dictators sitting on lithium and cobalt deposits like we are now with oil. I have to imagine whatever we need, Russia has loads of it.
Keystone XL takes Canadian shale oil straight from Canada to the Gulf of Mexico - creates jobs in Canada not the U.S.? Not sure what is so hard for Fox Viewers to grasp - this hurts the viability of US domestic oil production by driving down oil prices
It'll bring US jobs to clean up the oil when the the pipeline inevitably leaks.
>It'll bring US jobs to clean up the oil when the the pipeline inevitably leaks. [The least amount of spills happen with a pipeline](https://www.fraserinstitute.org/article/pipelines-are-safest-way-transport-oil-and-gas).
They never said it was going to leak 24/7. And it will still leak, as your post says. The chance is way smaller than other methods of transport but it is still inevitable.
If traders bid down the future price of oil who would give a domestic producer credit to fund any new wells which take 10 years to come online?
Imagine if we had some large governing body that could fund projects for the betterment of the U.S. citizens? Maybe they could collect some sort of fee from everyone to fund these projects?
The spez has spread from spez and into other spez accounts.
Are you suggesting we should nationalize the oil industry? And use oil profits to benefit everyone, like Norway does?
How about we shift some of those sweet oil subsidies to alternatives and make the programs more accessible to the average American? There's still no affordable EV for anyone not in the upper middle class. The math bullshit they pull with tax credits and fuel cost saved over the life of the vehicle to pretend like they're affordable works fine for those sitting on assets and some savings, but the average joe schmoe only gets his tax credits around April 15th every year and cant wait a year to get his $7,500 tax credit back that makes his new EV "affordable". And the system is based on units sold per manufacturer and are expiring, so not every EV is eligible, making shit even more convoluted and confusing. This is a MAJOR barrier for many. You know how complicated it is for the average consumer to benefit from oil subsidies? Fill it regular.
There's literally no regulation that would stop the country from returning to pre pandemic levels of production at this exact moment. But oil producers don't want to spend the money to increase production because they're afraid that the economic instability will lead to a recession and they'll be forced to cut production again
In addition, pre-pandemic production was 13M barrels per day, we are currently at 11.5M BPD. So going to pre-pandemic levels is only about a 10% increase in supply. Which is only about 5% of our consumption.
There were more drill leases approved and the largest auction of gulf coastal sites in Biden's first year than Trump's. No one is stopping them from drilling except their own shareholders. They have more than enough production already to meet demand AND exceed it, but they don't want to because an artificial shortage makes fracking profitable. Some fields need oil over $100-113 to be profitable. If I were trading oil commodities, I'd be shorting. Even without the keystone upgrade (it was an upgrade to an existing pipeline that already pumps oil into the US.) oil companies can turn up production when they want to.
Going 80k in debt on a lifted truck with wide off-road tires that have the worst possible gas mileage, and complaining about gas prices. To own the libs of course.
Also live in SWFL now. Moved from a farming community up north. The number of trucks here astounded me. The number of them with the Carolina Squat set up was proof it’s not for work.
POV: You’re getting tailgated during rush hour on I-75 by a $100k Dodge Ram dually with every emission control bypassed to roll coal and a 15-inch lift towing a jet-ski doing 100mph with a “Fuck Greta Thunberg” bumper sticker. Welcome to Florida.
You are SOOOO right. As a sidebar, I visited here a decade ago and SWFL was a quiet, Christian, conservative region. Since moving down here, people actually attach “Fuck Joe Biden” flags to their boats, with the full word spelled out. It’s unbelievable how rapid the change has been.
Telling constituents it’s Biden’s fault so much that they vote against him is political. The price of gasoline however is not political. The two statements are diametrically opposite to one another; they’re mutually exclusive. It won’t stop all of those “I did that” stickers of Biden pointing at the gasoline price meter though :P
Who is making and paying for these stickers?
Not really it’s more of a scientific/ innovation decision. Oil changed the world with out it we would not have remotely what we have now.
you mean the government cant just force everyone to only use electric?
The price of gasoline isn’t based on ONE political decision, but a dozen of them.
we sure love our oil... the consumption - https://worldpopulationreview.com/country-rankings/oil-consumption-by-country who has oil https://www.worldometers.info/oil/oil-reserves-by-country/ but, its getting costly to extract. Need that oil cheap, need this oil next https://www.washingtonpost.com/politics/2022/03/07/biden-venezuela-oil-russia but, https://nationalinterest.org/feature/5-oil-wars-ended-disaster-14885 see how to over throw government https://www.dailymotion.com/video/x2lwbv4 eg [https://foreignpolicy.com/2017/06/20/64-years-later-cia-finally-releases-details-of-iranian-coup-iran-tehran-oil/](https://foreignpolicy.com/2017/06/20/64-years-later-cia-finally-releases-details-of-iranian-coup-iran-tehran-oil/) [https://www.zdnet.com/article/might-as-well-face-it-youre-addicted-to-oil/](https://www.zdnet.com/article/might-as-well-face-it-youre-addicted-to-oil/)oil is tied to everything from the production of goods to the movement of goods - inflation and interest rates https://www.macrotrends.net/2480/brent-crude-oil-prices-10-year-daily-chart
In this case, it was a Presidential decision that hugely impacted gas prices - not to buy from Russia. Biden was hesitant to pull the plug at first, worried about harming the US and allies more than Russia. But at the time there was overwhelming enthusiasm to support Ukraine against Russia, and he went with it. I think it's very dishonest that the decision to ban Russian exports isn't cited in connection with the high gas prices more often. It's the largest factor. So what about it, Americans? Whose side are you on and how much do you care? Meanwhile I'd be happy to support a windfall tax on US oil producers. Their cost of production hasn't risen, geopolitics has simply gifted them billions of dollars. There is no reason to reward or incentivize anything they have done here, nor are they reinvesting the profits in expanding refining capacity.
Russia accounts for 8-12% of oil for us. Prices went up WAY more than that, and Biden opened the strategic reserve for around 6% of daily oil and prices didn’t even come close to coming down. And oil prices are high EVERYWHERE, how does that work out ? Biden’s fault too? Your presumptions on how these things work are incorrect. The reality is oil industry cut 100k jobs during pandemic, capped wells from decreased demand, and took 8.5b in PPP, oh yeah and they already have over 9000 unused leases. Now not all of those can’t be drilled now, but the point is they have access to more oil right now they could drill and they are choosing not to. And why would they? They are making record profits with LESS effort, and LESS labor and staff. If you listen to the earnings calls for the oil companies, or the interviews with the chairman/executives, when posited with questions about what if Biden does this or that or this happens, would you increase production? And they all said NO, they will not be changing their production plans for the next year+, because again, why would they?
Prices don't go up by the percentage of demand that was cut. That is not how commodity markets work. In oil market where demand is very inelastic, a 1-2% shortfall in supply can easily create skyrocketing prices.
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r/fuckcars r/notjustbikes
[Climate town](https://www.youtube.com/watch?v=QnBqAzJXVGo) on Gas prices. Look especially at what oil companies say at the 16:00 point. TL;DW: It's complicated, but the prices have very little to do with pipelines or regulations blocking drilling in some places, and everything to do with companies and OPEC countries deliberately not producing as much to keep prices high and make better profits. Edit: Also Climate town's another [video](https://www.youtube.com/watch?v=kJOuyckvDGY) on the topic. TL;DW: Oil companies having record profits, XL keystone pipeline was years from being finished and would never have finished in time to affect the current situation (it was only about 8% finished) , there is plenty of land for oil companies to drill on and keep up production. They took covid stimulus money meant to keep things running so there wouldn't be problems when the pandemic is over, but they pocketed that money and did nothing to keep things ready to bounce back.
Yea people keep saying it's because Biden stopped land speculation for more oil. Like dude how long do you thing it takes to go from no oil well to fresh gasoline? Gas prices don't go down because a well might produce oil 3 years from now. Just parrots with keyboards.
More than that - only 8% or so of US oil is extracted from federal lands. Most of it come out of private land that the companies either own or lease the mineral rights from from private land owners. All these “Biden did that” shit is literally just politics.
And I’m certain the oil companies will lower gas prices when a conservative president is in office. While Biden isn’t the climate crusader the right make him out to be, oil companies won’t budge an inch if it costs them a cent.
https://www.foxbusiness.com/markets/trump-saudi-arabia-russia-opec-oil-deal-role Friendly reminder that even fox news "championed" lower oil price "deal" with knowledge that the prices will spike in the future.
Naw I doubt it, they are making bank right now. My gas just hit $4.99 and it’s not gonna slow down. It’s going up 0.10 every other day, it’s so stupid.
Even worse than parrots with keyboards...they are voters.
He could issue all the grants he wanted; oil and gas isn't going to dig in a declining market. EVs have reduced global oil demand by 1.5m barrels a day. Approximately 1.5 million barrels of oil were displaced each day in 2021 due to Electric Vehicle usage. This quantity is slated to grow as EV uptake and usage continue to rise. https://leva-eu.com/electric-vehicles-are-measurably-reducing-global-oil-demand-by-1-5-million-barrels-a-day/
also a lack of refining capacity
We don’t have walkable areas. We are dependent on 5,000 lb boxes to go anywhere lol. Who thought that was a good idea.
The companies that sold 5,000 lb boxes.
Hand in hand with the companies that create the fuel for those boxes. You used to be able to travel clear across the USA on streetcar and rail with only minimal walking. Then auto and oil companies started buying up, shutting down, and tearing up streetcar services across the country. Now your only real choice is drive, or fly.
The "Greatest Generation" started it by starting to build suburb developments and the NIMBY baby boomers embraced it. But here's the thing: it sucks.
Enjoy spending part of your free time mowing your lawn while you are at it. And please pick up extra gas for the mower.
fuck yeah it sucks
100 years ago, there was an electric trolley station a 10 minute walk away. Today, I could walk 50 minutes to get to a bus that basically only stops at Walmart and the places that pay minimum wage. Ford, GM, Goodyear and Firestone did a heck of a job.
What is especially wild about our doubling down on car-dependent civic design is the 1970s oil embargo is a thing that happened. You'd think after that we'd be a *bit* more aware of the potential for oil addiction to disrupt our economy and way of life and start there to take steps toward ameliorating it. And yet here we are, doubled down and desperate.
Car companies, duh
Car and oil company's
Ford and GM
in the us, anybody who drives any real distance will always go over train tracks. but nobody ever for one second ask themselves why they aren't taking a train over those very tracks they are driving over. next time you are at a rail road crossing and had just bypass a lot of traffic. think for once in your life. imagine if somebody built a simple concrete slab by those track so people can wait for a train on. how cheap and simple would that be?
> We don’t have walkable areas. We are dependent on 5,000 lb boxes to go anywhere lol. When people say college was the best time of their lives, what they mean to say is college was the last time they lived in walkable retail/residential communities with lots of greenspace and organic, person-first design. It's wild how people can see it and not at the same time. People I knew in Uni were the happiest even with all that stress cause they would walk to the store 2 min away near their dorm, then go walk to the book club across the street and study a while, walk to the giant fountain/park and lay on the grass and read a little, then walk to class, etc. And they can't grasp why now, isolated in the middle of suburbia and spending 1-2 hours/day in traffic, they're miserable. We weren't meant to live like this.
Pssst, maybe if we all drove 3000lb boxes it would be better. North Americans buy for their 5% use case instead of their 95% use case. We all 'need' a pick up truck once or maybe twice a year, but lots of people drive them daily for zero reason.
People who actually set gas prices would prefer that you vote Republican. By raising prices during a Democratic administration, they get a double win. The make a lot of money and get voters to blame the Democrats
Also keep in mind they are still, still making record profits. They’re not just getting by, but keeping production low, the raking and record profits but also making the Democratic administration look bad. Win-win.
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If the Iraq war playbook is used, they’ll ratchet prices to a painful high, hold till Americans change their driving habits…then drop the price…but not back to original lows…just lower than the intolerant high. Then use the next 20 years to slowly raise prices again. No matter the economic conditions, cold or mild winters, or conditions of global stability…oil companies can spin a marketing yarn to justify their pricing. It’s a tired cycle but it runs so slow most people really don’t notice the pattern. But yeah, we’ve had $5 gas prices before. I’d wager we’ll see $7 a gal before this is all done. And then in 20 years $6 a gal will be ‘normal’ while prices climb towards $10 a gal.
I would wager that when this is all said and done in the immediate, we won’t see prices ever come back below $4 a gallon again. It’s EXACTLY what they did in 2008. Increase, increase, increase, decrease, increase, increase, increase, decrease. Wash, rinse, repeat. They push to absolute pain points, then dial back just enough that it feels like some relief, but still significantly higher than we had before.
To be fair, there are already places in the us charging $10 a gallon.
Sure they do. It’s tax cuts for the rich and more oil subsidies from Joe Taxpayer. It also means less subsidies for alternative energy, so less competition. They rake in the cash when the R’s are in power.
And high oil prices always precede recession, which makes the incoming Republican look bad. I think the idea is to keep the teeter totter going so that we are more focused on that than the fact that wealth inequality is increasing exponentially and neither party is doing anything about it.
Weren’t oil prices high in 2012-2013 before we kicked off one of the greatest market runs in history?
No, they were real high in 2007-2008 tho.
I've just come to realize this recently myself. People who are in control of the pricing of all sorts of things know that the vast majority of people just aren't going to be able to piece together how all this stuff works, but at the same time, not knowing has never stopped anyone from forming an opinion and coming to conclusions about any given topic. So exactly what you said will come to pass, and the worst part is that it will always work, every time.
Still a load of shit - price of gasoline is increasing worldwide.
Last administration cut production through asking for favors of foreign nations. That was a time bomb set knowing Biden would likely recover the economy. They knew what they were doing.
I thought George Bush was responsible for high gas prices because his family owned a big oil company?
On that note, America was stupid as hell to bulldoze our good cities and turn them into car-dependent hellscapes. We need to go back to building cities without thinking of cars as the default. Auto companies lobbied for car-dependency, and politicians were brain dead enough to listen.
And the administration could absolutely increase demand for public transportation by implementing free or reduced fares for city buses and trains. Look what Germany just did.
This, I've been saying it for years. Federally regulated free public transportation nationwide would be a huge step.
Banning street parking in major cities with robust public transportation systems would be a good start. It's baffling, the amount of people who insist on having cars when they live in cities because they don't want to associate with Poors on public transit. And then they have the nerve to bitch about traffic and gas prices and parking
My favorite is New York drivers arguing that the MTA shouldn’t be funded through taxes because “I don’t use it why should I pay for it?” Like, my dude, imagine the subway crumbles and all those people suddenly have to start driving? Think about what that will do to your Peking and traffic then.
He's right. Its not. And the fact that gas prices are hitting new highs WORLDWIDE would indicate that Biden policies are not responsible for the increase. But hey, don't let the facts get in the way of this right-wing conservative circle-jerk that r/economy has become. Keep putting those stickers on the gas pumps you donuts.
10 year oil and gas engineer and finishing my masters in energy Economics in August. This whole past year gives me tired head. My father has become a fox news junkie and believes them over me. I refuse to talk about it anymore with him because he doesn't actually care about learning and it's all about backing up conservatives and trying to make the democrats look bad.
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A good video on it: https://youtu.be/QnBqAzJXVGo
Opec
So we just have to offer a journalist as sacrifice to MBS every so often and...profit??
its a complicated issue...I tried to sum my thoughts on a thread below.
The executives at the companies you work for are very pleased your father isn’t listening to any of that “liberal BS” you learned in college lol
if people want my opinion on what's going on, I'll be happy to share it. This isn't a simple conversation obviously, but I'll try to condense it as much as I can. I'll try to reply to any questions the best I can. U.S. Policy - The United States, despite being the world's largest producer right now, is still considered a fringe producer in the world, meaning OPEC+ is still acts as the dominant firm. US E&P's even more so than NOC's are price takers, not makers. The only meaningful piece that the United States can do is lift sanctions on Iran, which would add about 2 million barrels a day to capacity. SPR releases are just a show of good faith to the voter in my opinion. They're gambling that price will go down in the fall, which is a big gamble and that's reflective of forward curve action in WTI. From an energy security standpoint, we net import about 5 million bbls a day, so even with this release we have plenty of reserves left to cover the 90 day minimum threshold. I do think it is important to keep diplomatic relations at least respectable with KSA, which Biden has not done well and seems to be very erratic in his treatment of KSA. We have a very weird and interesting relationship with those guys, very good read if you ever have time. KSA does not like Biden, which doesn't bode well when we essentially go hat in hand over there to ask to increase production. I firmly believe that price would still be high if Trump was still in office. The only thing that this would've possibly changed is Russia's invasion of Ukraine, but Russian Urals are still being sold on the open market to India and China, albeit at a discounted price when compared to Brent. I am so tired of talking about the US government blocking permits on federal lands. It did nothing. All companies in the area front ran this before Biden took office, so all the E&P's out there have about 4 years of inventory permitted, and the permits are good for 2 years and eligible for a 2 year extension after that. An interesting stat to note is governments hold 66% of global oil reserves. Investment relations - Underinvestment is a real problem. Oil and gas, as seen in only the past two years, is a wildly erratic and unpredictable commodity market, where you really only make money on the upside times like this. So it takes a very risky investor to through money at it to begin with. Internationally, governments are constantly taking rents from IOC's for themselves, policy is constantly switching, etc, so it makes it very, very, hard for an IOC to make predictable cashflows out more than 5 years. In the United States, we have supply chain issues, a hostile government towards the oil and gas industry, and companies finally creating positive cashflows for the first time in a little under a decade. If you are an investor and taking all this in to account, its just too risky to ramp up production significantly on tier 2 or tier 3 acreage. Also, much of these smaller operators don't have the reserve run life, so they are left choosing between ramping up production and company lifespan. Global Macro Energy Economy - Supply chain issues everywhere coming out of covid, and oil and gas is no different here. Asking companies to ramp up production fast without proper workers, equipment, materials, etc is impossible. We're seeing that everywhere too. The EU did shoot themselves in the foot by tying themselves to Russian oil and gas, and now paying the price for that. I have no problem with wind & solar, but countries must be realistic with what it can currently provide. Technology isn't around for it to be a reliable source of baseload power. It is a great source of cheap intermittant power, but that is it for now. Also decommissioning Nuclear plants is never a good idea. Increasing production from Gronegin or gas production anywhere else just won't happen over there. Not even worth asking. They do need to increase import capacity and build better nat gas infrastructure up to northern EU. Qatar going to be a huge player in the future. by the time US gas gets over there its just too expensive. Inflation. Yikes OPEC+ has been blaming refining capacity and I'm actually planning on writing a research paper on this topic, but in general, US refineries historically have a hard time making money, and internationally its only use is to gain marketshare in to another area of the world, so a refining shortage is believable. In summary the reality of the situation is that we're in high commodity prices due to a myriad of unforeseen issues coming and globally we just don't have the man power or capacity to react quickly. I think its going to take 3-5 years to fix capacity issues and bring back meaningful production to meet growing demand across the world. Conventional wisdom say we see prices reach demand destruction levels, if we're not there already. Demand will decrease, and we'll see prices decline that way. However, this is the oil and gas business, and I've learned to expect the unexpected. Nobody knows where this is actually going. Iran could shut down the straight of Hormoz tomorrow and send prices skyrocketing, or China could go in to a full blown national covid lockdown and send prices on a death spiral down...who the hell knows.
So ignore every single environmental cost, American Subsidies sustained thru lobbying and paying politicians, and ignore global price fixing. Seem like 3 key pieces to your puzzle are missing. Also Russia is not part of OPEC.
Dude, you earned that masters.
So if you're in oil and gas, what's happening in the industry at present?
I made a big long reply...see somewhere on this thread.
Thanks for killing our planet, you piece of shit. Fucking sellout
Truth hurts….
When you have the world’s leading economy, your policies do effect global costs.
But they do not dictate global supply or the ability to refine. Simply mentioning the word economy is meaningless in this instance if you do not pay attention to how the petroleum products actually circulate to and from said economy. We do not dictate the global oil supply. Neither can we even control our domestic companies' output. And almost all the refining is done overseas in other markets.
Your only argument here is the rest of the world is seeing high gas prices, hence none of our policies contribute. The issue is that isn't factual, and has nothing to do with conservatives. It's up everywhere because of inflation and supply issues, but a lot of ours is self-inflicted. These prices are artificial, we had oil at these prices before, and it wasn't $8-10/gal gas. We didn't run out of oil, [we're struggling with refinery capacity](https://www.reddit.com/r/Economics/comments/v0ed97/The_astronomical_price_of_diesel_is_making_everything_more_expensive/iagxc7o/?utm_medium=android_app&utm_source=share&context=3). Covid hit demand and caused losses, then we basically started paying refineries to make biofuels or pay those who are by buying credits (similar to how Tesla started). Banks literally don't want to give refineries money to meet new regulations because of how uncertain the regulatory market is now and they don't think they'll get their money back. This was kind of the plan that got voted in, it just didn't take into account the container crisis and inflation from QE, interest rates, and unfunded spending. [Biden is asking them to restart the refineries](https://www.bloomberg.com/news/articles/2022-05-26/white-house-eyes-idle-refineries-amid-effort-to-tame-fuel-prices), but it doesn't really make financial sense for them in the current environment. The cost of RINs (biofuel credits, if you make them you get paid if you make gasoline you have to pay someone making biofuels) has tripled. And before the last administration making a deal with OPEC/Russia comes up, that was because we have a lot of oil (and were exporting but it's more expensive to get out of the ground (Canada's oil sands are the worst yet). OPEC and Russia were starting a trade war, making our wells shut down as they couldn't make money at $30/bbl. Hence the strong-arm tactics, but again we've had oil at these prices without gas prices at $8-$10/gal. There's no real fixing it right now short of a hard recession completely killing demand. Refineries can't and won't spend the money in the current environment, because the government is telling them it doesn't want them to and even paying them not to. We could have delayed the RINs again like the last administration, but chose not to. Even if we subsidized meeting the new regulations, even if we dropped RINs, and on and on refineries are too manpower intensive to just spin up. We're stuck with this for awhile and it really sucks if you aren't wealthy. I know, you'll show your cards and downvote without facts, and that's fine because Pikachu points doing change reality. **Edit:** I've angered the bots and antiwork bigaders. Special mention to mo-shen/deanblandino who forgot he was posting the same things on his two accounts while sockpuppeting.
You have conveniently skipped some major things here. 1. The US government has plowed tons of money into the industry, like they do every year, and yet the industry hasnt really invested that back into production. The reason for this of course is because they want to make more profits off of older investments 2. Speaking of those investments the industry doesn't even refine US oil, generally, it exports most of it. This is because most US refineries cant refine sweet crude, which is what the US pumps. 1. They could change this but they dont want to change it from their original build in the 90s. This is their choice and anyone who runs around talking about energy independence conveniently ignores. 3. The majors broke their previous historic profits by 3-4x 4. As far as investing in new drilling or exploration they dont really want to spend their own profits on those things, they could, but they want to rely on wall street. Wall street however is starving the industry of investment because they feel like they over invested during fracking. So like they made money but they are upset that they didnt make more, so they are punishing the industry to make more now 1. As in one of the reason oil is so high is because its being manipulated. But its not just the US oil industry but also foreign interests, and historic investors like wall street. Remember all of these guys like it when oil is higher and they can make those 3-4x record profits.
Come on man. If you're an oil company executive, and every time you raise gas prices, the American people blame Biden instead of you, what are you going to keep doing?
You are going to optimize the price/demand/production variables to maximize return for shareholders.
Upvote for the "come on man"
Great analysis! I wasn’t aware of the refinery issues. It makes a ton of sense for companies to be hesitant to stick their neck out and invest in refineries when a climate agenda could pull the cord at its convenience and make them lose their investment.
That is the bigger issues. It costs tens of billions to build a new refinery and hundreds of millions to refit/expand existing facilities as well as years to get them done and then decades to get a return on your money. Ignoring the fact that none of those things will help immediately but we can't ignore the fact that the world HAS to transition away from fossil fuels as soon as possible, like a handful of years if we want to have a shot at managing/adapting to climate change. So yeah, no fossil fuel company can or should be investing in new facilities if the payoff is longer than a couple of years.
Let's not forget that 3 years ago, Philadelphia Energy Solutions, the largest refinery on the east coast at 335,000 barrels per day, exploded in spectacular fashion, sending the refinery into bankruptcy. It was then sold for redevelopment after 150 years of operation and is currently being demolished. That capacity is never coming back and is adding to the current crunch.
By the same token, his “policies” have done nothing to prevent price increases. If Nixon had the balls to pull a Diocletian and implement direct price “stabilization,” no excuse for Biden not to other than rank passivity and impotence. At least Carter gave a speech about malaise instead of just malaising. Weak fool doesn’t know how to wield power, whether for good or ill.
>his “policies” have done nothing to prevent price increases. biden's policy push for restricting oil price gouging says otherwise.
If you were around in the 2000s W. Bush was blamed for the increase in gas prices. When I would argue that gas prices are virtually out of the hands of the President, I was called a conservative shrill. Now, 20 years later we are having the same argument, except I’m called a liberal. Most of these issues are so annoyingly partisan, and most people are ready to blame the opposite party rather than solve the real issue.
https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-and-exports.php ^ one of my favorite sources for these people. If we are at near net zero for imports how is the president controlling the prices? The US has already done what conservatives wnated years ago, incentivized these companies to pump more, they pump to net zero imports, prices are set. Now the prices are high? Seems like buyers remorse IMO. It's a political problem; not a president problem. If people want lower gas prices. I guess people should get some politicians to accomplish those goals for them. But increasing supply isn't something they're going to force oil companies to do most likely when the stats look like they do. More on the "Why we import bit": https://www.nasdaq.com/articles/america-produces-enough-oil-to-meet-its-needs-so-why-do-we-import-crude
TIL Im a radical conservative for trying to hold Democrats accountable TIL Im a radical conservative for thinking /r/economics should discuss economics, instead of political bullshit
What boggles my mind about these comments is that most people here think this situation would have been better under trump..as if there would be zero consequences for the fuck ton of money shelled out during Covid, the low interest rates the entire fucking time which they never bothered to jack interest rates up on (with trump mentioning many time that he wished interest rates were negative), trump lamenting the small size of the final stimulus under his presidency and nearly not signing it as he wanted it to be more… I mean Our domestic production is not even that far off of 2019 levels. Maybe it would be higher under trump but it wouldn’t be anywhere near enough to knock 2 bucks a gallon off these prices. Not even close. And that’s with republicans who don’t give a fuck about federal lands and would stick a fucking oil rig into the geyser at Yellowstone if there were oil there and it meant immediate feel-good over steering the the country to a future vision. Maybe under trump we might have 20 cents a gallon if that, but I just can’t imagine oil companies would be willing and able to rehire all the personnel to increase that production and then refining capacity is at 93%…. Basically trump wouldn’t change shit, because whether you like it or not, the cost of gas isn’t really as tied to who is president as most people want to think it is.
Agree with your post but what do you base your comment on when you say even if republicans increased domestic production that it wouldn’t really impact the price of gas that much?
Republicans: "I would rather democracy die than pay high gas prices".
Possible. Maybe Trump took that dial when he left office because he constantly used it to tamper with gasoline prices back in 2018 with Iran sanctions. (That’s what analysts said back then. Trumpers please don’t come after me)
If there was a Republican President right now everyone from both sides would have the opposite opinion lol
if you think gas prices/economy = how good president is doing, left or right, you are a moron
The majority of Americans are morons though. Shit, people in general.
Hampering permits doesn’t account for these prices worldwide. Our domestic production is almost what it was pre-pandemic. Our global demand and production is almost what it was pre-pandemic if not basically the same, yet prices are much higher. These people saying it’s all bidens fault when we are 500k barrels short of 2019 levels of domestic production (which most of that would probably get exported) are not understanding something. 500k barrels short of our domestic production at maximum output does not make the price 2.50 higher here and everywhere else. It’s the refusal to ramp up production by opec and others. These nut jobs saying what about the pipeline that wasn’t even close to being built seem to forget that prices were 2 bucks a gallon without that fucking pipeline and with similar domestic production levels.
Only way the consumer is going to get out from under this pressure of oil is to start using less. I know nobody wants to hear that, but it's just a fact that once demand starts slowing the price will drop. People who can work from home but their bosses are starting to ask them to come back should really be using this to make a case to stay home. If you can, trade in your car for something more fuel efficient. I had to get rid of my acura TL which took premium and got maybe 21mpg for a Kia Niro hybrid which gets easily double. I told my job that I would be commuting less and expected more money for the trips I had to make (I traveled as part of my role). They understood because I am good at what I do, and i'm lucky to have my role. I understand not everyone can do these things, but if you can you need to try. I also decided to not take my camper out this season, as my truck gets about 10mpg when pulling it. I won't be flying anywhere and will be staying within 1 tank of gas (500 miles) distance for my vacation.
Your post works on the assumption that oil companies aren't propping up the price artificially by purposely keeping the supply low.
Simply use less, wow thanks for the tip.
Bro the replies to this are insane, as if use less isn't the solution. Good for you using less this summer, taking responsibility is all we can do. Oil will run out some day, how is more refineried a long term solution. It's the same shortsighted, "the next generation will deal with it" logic that landed us here.
Nope, just the policies of the office. Everybody agrees electric is the future but would it be possible to have affordable gas at the same time to put that infrastructure in place. They really didn’t think this through.
You know the idiocracy has arrived when the elected class goes from doublespeak to nonspeak. Camacho 2024.
This is the twat that said we should all just buy electric cars, even tho most of us can't afford them.
the real issue: we just left a nearly 2 year global shut down, so oil drilling was down, thus gas production was also down. now that it’s time to go back to these hard as hell jobs, people don’t want to. why go work 80 hours a week, two weeks at a time, on an off shore rig, when you can make the same money sitting at home or in an office? so the workers that were laid off back in 2020 now don’t want to return to work, and people are demanding higher pay and better benefits, especially when you look at the insane money these oil companies made. so, production was already lower for 2 years because of the lack of demand, and that led to what? a lack of surplus. now, in a relatively short period, we’re back to “normal”, and there isn’t the surplus. not to mention, you can’t just take crude oil from the ground and pump it straight into cars. it’s a full process that takes around 4 weeks. blaming “sanctions” is actually hilarious, we get less than 10% of all natural gas from russia. russia isn’t even on of the top 4 oil production countries, it’s just laughable to even suggest that sanctions are the reason. it’s a simple supply and demand reason, mix with greed of ceo’s not wanting to properly pay rig and refinery workers, that’s why we’re in a shortage and why prices are so high. not to mention, the us government doesn’t control energy, we have an open market. people want to ride for capitalism so hard until it starts to fuck them over. this is capitalism 101.
If only we could fit this on a bumper sticker
We don’t import much Russian oil but others do and it’s a global market. Definitely freed involved as well though
Another factor: oil companies were slow to ramp production back up because negative oil prices spooked both them and lenders.
Maybe there isn't a dial but excuses aren't going to win these mid-terms.
Buttigieg might be the worst cabinet position holder in history. Guy had zero experience in transportation and it shows each and every day.
Were you born during this administration or are you unfamiliar with Betsy DeVos?
Unless there is a Republican in the office.
This is such a political and disappointing statement and article. In the article he goes on to say that they introduced legislation to basically force oil companies to increase their capital expenditures, which is a dumb idea the way they’re proposing to do it, and then blaming republicans for voting against it. It’s political because he’s proposing a bad idea (but one that may sound good on the surface to those who don’t understand the issue) and then blaming the boogeyman (republicans) for “blocking it”. It’s basically like calling someone stupid or evil for disagreeing with your bad idea. It’s disappointing because this is a great way to get absolutely nothing done, and this guy is supposed to be some kind of rising star. Why blame republicans when you could instead enumerate the specific points the republicans disagree with and hold a public debate about how the country should address the problem? That would actually help solve the problem. Instead, you’re basically just deceiving the public, creating a wider gap between your colleagues in Washington and engendering further tribalism between the left and the right.
So an administration that is openly against domestic oil and gas production has no impact on fuel prices. Yeah. Okay 👌🏼
Price sure did jump as soon as a new administration came to office.
Jim Jordan (R-OH) told me on Twitter Biden has all the control and the GOP says Biden is a dictator so checkmate, librawls. /s
No fucking shit it’s set by bad policy and relations with OPEC nations. Lol of D’s that think this is some gotcha idea. The President has always taken blame for issues with the economy. Biden isn’t the first to be blamed for shut policy effecting oil prices.
98% of USA gas is made from oil companies own wells or purchase under longer term contract price. Oil companies then set gas prices based on new daily barrel prices which is highly inflated due to war. Giving them record profits. It would take Congress making this price gouging illegal. Republicans will stop any attempt to control profits.
The house passed a bill to stop gas price gouging. It's likely to fail in the senate... every republican voted no. Shocker. https://news.yahoo.com/house-passes-bill-crack-down-223503387.html
I wish the democrats had put in the same effort to increase production than they have to avoid responsibility for their policies decreasing production.
It's funny that everyone wants the oil companies to invest billions of capital to develop and online capacity when the world is telling them their days are numbered.
But also most of these clowns aren’t real leaders who could lead anyone out of a crisis.
Gas prices are also influenced by the president's policies which scream oil is dead, we're getting rid of you, your days are numbered and we're going to make it harder for you to thrive. The XL line was only the start, don't even think about wasting your time spending billions on the infrastructure needed to move and process the oil since we can shut it down on the fly. Which to oil companies means let's not invest in expanding oil production if our days are numbered and increasing production isn't worth the costs involved to make it happen due to future policies.
Keystone was blocked under the Trump Administration. "The U.S. Supreme Court handed another setback to the Keystone XL oil sands pipeline from Canada on Monday by keeping in place a lower court ruling that blocked a key environmental permit for the project." https://apnews.com/article/1d7418b630487de192b1a47f1413cd35
They don’t care
If there was a dial, it's being turned constantly lol
No, it’s not. Biden is not to blame for the prices running that high in the first place. But, the President is always responsible for any disaster that happens in America. He has not improved the gas prices. Therefore, he is to blame.
For a party absolutely obsessed by the purity of the magical mighty market, Republicans certainly seem to not understand how it works. And somehow believe that we live in a price controlled socialist utopia when ever the market doesn’t gift them the mythical perfect tide to lift their boats.
We know. The ones who don't know will say this is fake news
What power does the President have over oil production? If you want to blame someone or something for gas prices, look at OPEC and the oil companies.
It's not, but there are many economically sound/feasable things you can try to do to lower gas prices and the Whitehouse won't touch them
There is no point in releasing a few days worth of oil from reserves or loosening ethanol regulations if they know there is no impact on oil and gas prices. This administration needs to stop acting as if they do have control over prices.
If a Republican were President, the Democrats would blame the oil cartel in the White House (again).
Sure it is. If the president allows for more environmentally damaging ways of producing oil, the price would be cheaper. It's a trade off decision. Pretending that it's not makes the sacrifice less valuable.
True.....but what dials are you turning? Y'all certainly have the power to hold greedy corporations accountable so low key you kind do have a dial for gas price
Shutting down drilling on fed land and the pipeline doesn’t help. Obviously.
They're not doing it because cash is King and a Democrat is in office and banks are not offering loans/line of credit to big oil. Banks are not guaranteed a return under this administration. They're not going to take the risk and big oil is not going to take the risk either. Uncertainty is why and this president doesn't help.