Joe Biden, the 47th vice president of the United States, was the featured guest for the Tom Johnson Lectureship at the LBJ Presidential Library on Tuesday, Oct. 3, 2017. The conversation was moderated by Mark Updegrove, former director of the LBJ Library.
10/03/2017 LBJ Library photo by Jay Godwin
Why shouldn’t he be? Energy prices are going up.
The latest outrage at the Biden White House was last week’s robust earnings reports for oil and gas companies, informs the WSJ. According to President Biden (at a fundraiser), six of the largest companies “made $70 billion in profit in one quarter.”
The President who has done everything in his power to limit U.S. oil investment is now furious that he succeeded.
These “excess profits are going back to their shareholders and their executives instead of going to lower prices at the pump.”
Does Joe Biden think that oil companies shouldn’t make a profit or even cover marginal costs? It seems so, as Biden continued:
We need to keep making progress by having energy companies bring down the cost of a gallon of gas to reflect what they pay for a barrel of oil. Anything more is “excess” profit.
Econ 101
The President must have forgotten that oil majors’ current profits follow steep losses during the pandemic. Does he not remember that oil prices plunged amid lockdowns? Or that companies and OPEC nations trimmed investment and shut wells?
Demand for oil then bounced back much quicker than supply, which has driven up prices—and profits.
Joe Biden Reprimands Oil Companies
Rather than return cash to shareholders. Biden wants companies to increase supply. Despite the progressive climate lobby and Biden’s own administration’s climate policies that have been urging the opposite, he now rips into the energy companies:
You should be using these record-breaking profits to increase production and refining,
Failing to Recover Upfront Costs
Why would oil companies return cash to shareholders rather than make investments in production that may take years to pay off? Last week the International Energy Agency (IEA) warned that “no one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero [greenhouse-gas] emissions by 2050.” It then warned “any new projects would face major commercial risks” that may result in failing “to recover their upfront cost.”
IEA also warned that the number of “drilled but uncompleted” wells dropped off to the lowest since December 2013, “which means production will eventually taper off even in the prolific Permian Basin.”
Private U.S. oil companies added 47 drilling rigs in the third quarter while public firms added only one. Climate lobbyists want companies to return profits to shareholders or invest in green energy.
Using Continental Resources as an example, the WSJ reports that Harold Hamm is taking his company private to have the “freedom to explore.”
Mr. Hamm to employees:
“We have all felt the limits of being publicly held over the last few years, and in such a time as this, when the world desperately needs what we produce, I have never been more optimistic,”
Democrats Assault American Fossil Fuel
“Mr. Biden and fellow Democrats simply refuse to understand the economic consequences of their assault on American fossil fuels,” warns the WSJ.
They have come to believe that climate is a crisis and that banishing oil and gas is urgent. But that means higher prices, which they now blame on the very companies they want to go out of business. Economic logic won’t persuade them, but maybe a rout at the ballot box will.
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