WHO IS RESPONSIBLE FOR THE OIL ISSUE?
I truly am proud to be a citizen of the USA but sometimes I am embarrassed by our political leaders. I don’t consider myself a super intellect but just an ordinary country girl who was fortunate enough to get a scholarship to college and enough grants and student loans to enable me to get a degree, but as I listen to what the President and his party members are saying and doing, I wonder if I missed something in college or if they are in a different universe. Some things just don’t make sense to me.
My college required Economics 101 which I really didn’t like or enjoy but learned enough to know if you have a great supply of something then the price falls. When you have a scarcity, the price goes up. Supply and demand! If you print more money than you have gold to back up, the money becomes less valuable. Inflation! If you spend more than you have, you go into debt, can’t pay your bills and have to beg, borrow or get a loan. (Actually, my family warned me about this.) Yet, I find the leaders of my country doing all these things.
My college required Economics 101 which I really didn’t like or enjoy but learned enough to know if you have a great supply of something then the price falls. When you have a scarcity, the price goes up. Supply and demand! If you print more money than you have gold to back up, the money becomes less valuable. Inflation! If you spend more than you have, you go into debt, can’t pay your bills and have to beg, borrow or get a loan. (Actually, my family warned me about this.) Yet, I find the leaders of my country doing all these things.
I watched as the administration shut down pipelines and dove into the “Green Policy Agenda” which seeks to decarbonize the nation’s economy by 2050, in part by transitioning off fossil fuels. It has sought to suspend issuing new federal oil and gas leases. This scared the petroleum stockholders who then pressured companies to hold back spending so that they could reap greater earnings.
So, let’s be clear, the slowdown of oil production began as soon as Pres. Biden instituted his “Green Policies” when he took office. Then Russia invades Ukraine and the US and Europe suddenly become aware of the danger of depending on Russia for oil and plans to stop Russia’s brutal attack against Ukraine by, sometime in the near future, cutting off the oil supply from them. All the while we are spending $74 million per day for Russian oil which would buy Putin 20 tanks per day.
A top Russian official has warned that a Western ban on Russian oil imports could result in oil prices more than doubling to about $300 per barrel and prompt the closure of the main gas pipeline from Russia to Germany and send US gas prices skyrocketing. Germany, who has been trying to turn “green” thanks to John Kerry’s influence, gets nearly 47% of their natural gas from Russia. They will really be hurting.
So now, the US has to go to Venezuela, OPEC, or Iran to get the oil we need. Guess what? They don’t like us! Surprise, surprise. We won’t recognize Venezuela’s president as legitimate, Iran sees us as Satan and wants to destroy us, and OPEC doesn’t like Biden’s “green policy” and wants to hold supply down until prices stop fluctuating. At least that’s what they say. We know that OPEC was established because they didn’t like the US, which was the largest producer of crude, running the oil show and setting prices. Perhaps an opportunity to take advantage of US weakness.
Everyone is crying “Pump, pump, pump!” but it is not that easy when you shut down the construction of a major pipeline on the first day of your administration and then by the end of January 2021, made a halt to new oil and natural gas leases on public lands and waters, and began a thorough review of existing permits for fossil fuel development. This essentially was a slap in the face to oil production. |
Consequently, oil workers have moved away from oil fields and found jobs elsewhere. Inflation has made equipment needs more expensive. Some equipment has been in storage for a year and would take time to get up and running.
“It’s hard to get pipe, sand, crews for drilling rigs, truck drivers,” said Mike Oestmann, CEO of Tall City Exploration, a company that drills oil wells in West Texas and has two active rigs that drill 32 wells per year combined. He said the scarcity of supplies, equipment and people “is unlike anything I’ve ever seen.”
What needs to be done is the reestablishment of trust in future petroleum needs, not a pressuring of the “Green Policy”. To significantly boost production, companies have to secure major financial backing. Historically, that backing has come from Wall Street, which has already started to see oil and gas as a riskier investment.
For example, the Rockefeller family — which became wealthy and famous in the late 1800s from founding the Standard Oil empire, whose successors include Chevron and ExxonMobil — sold off all its fossil fuel investments in 2015 because of concerns about climate change.
So, as long as we have the US Treasury Secretary, Janet Yellen, asking banks to defund fossil fuel projects and pushing banks to align themselves with the world’s climate goals, we will continue to beg our enemies to provide our needs. This great country will be at the mercy of its enemies and will sink to a minor role in the economics of this world, but more importantly force its citizens to suffer historic inflation and higher gas prices.
“It’s hard to get pipe, sand, crews for drilling rigs, truck drivers,” said Mike Oestmann, CEO of Tall City Exploration, a company that drills oil wells in West Texas and has two active rigs that drill 32 wells per year combined. He said the scarcity of supplies, equipment and people “is unlike anything I’ve ever seen.”
What needs to be done is the reestablishment of trust in future petroleum needs, not a pressuring of the “Green Policy”. To significantly boost production, companies have to secure major financial backing. Historically, that backing has come from Wall Street, which has already started to see oil and gas as a riskier investment.
For example, the Rockefeller family — which became wealthy and famous in the late 1800s from founding the Standard Oil empire, whose successors include Chevron and ExxonMobil — sold off all its fossil fuel investments in 2015 because of concerns about climate change.
So, as long as we have the US Treasury Secretary, Janet Yellen, asking banks to defund fossil fuel projects and pushing banks to align themselves with the world’s climate goals, we will continue to beg our enemies to provide our needs. This great country will be at the mercy of its enemies and will sink to a minor role in the economics of this world, but more importantly force its citizens to suffer historic inflation and higher gas prices.