Some days it’s hard to know what to say about what is taking place in the energy world.Today is one of those days.
U.S.President Joe Biden issued a request on Wednesday to OPEC+ leaders, urging them to …produce more oil? Really? Just one day after the U.S.Senate voted to approve a massive $1.2 trillion “infrastructure” bill loaded up with incentives, mandates, subsidies and slush funds designed to stimulate the buildout of electric vehicles (EVs) and renewable energy in the U.S., the President wants the rest of the world to pump more oil.
Here is the text of the President’s request, sent out under the name of his National Security Advisor Jake Sullivan:
It seems instructive at this point to note that neither Biden or Sullivan issued any similar request to America’s own producers of oil and gas, who could, if they wanted to, significantly ramp up oil production here in the United States.Of course, this administration has been working at ensuring these domestic producers find it as hard as possible to increase their own production over the last 8 months, and plans to continue that work for at least three more years, so asking for more production from them would have been even more ironic than asking other nations to damage their own economies for America’s benefit, which is exactly what the White House is asking the OPEC+ nations to do with this request.
It’s also key to note that U.S.
producers have received high praise from banks and private equity funders of their operations for exercising outstanding discipline in reining in their drilling programs in favor of focusing on improving free cash flow and maximizing investor returns this year.After listening to various company management teams talking about their success in this area, analysts for energy bank Tudor, Pickering & Holt recently said “Color us pleasantly surprised, companies largely avoided the allure of talking about growth in 2022.
Management teams continue to walk the walk on capital discipline.”
So, even if the White House wanted domestic producers to quickly raise production, they would likely be unwilling to do so.Which is why a tweet issued by Texas Governor Greg Abbott Wednesday night in response to Biden’s odd request of OPEC+ is essentially meaningless:
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But back to the irony in Biden’s request: What does it say about the validity of any energy-related reports coming out of the UN’s International Energy Agency (IEA) or Intergovernmental Panel on Climate Change (IPCC)?
We are, after all, barely 3 months removed from the IEA’s issuing an alarmist report on climate change that assured the world that it must immediately stop all new capital investments in any kind of fossil fuels in order to reach net-zero emissions goals by 2050.Last time anyone looked, crude oil produced by OPEC+ certainly qualified as a “fossil fuel.” So, was the IEA report just meaningless rhetoric to be used as a political tool to justify anti-fossil fuel policies when convenient and ignored by U.S.presidents whenever gas prices get too high for comfort?
Even more telling, Biden’s OPEC+ missive came just 2 days following the issuance of the latest alarmist IPCC report that was met by media stories accompanied by various photos of the world burning.Here is how the New York Times NYT began its August 9 story on this IPCC report:
Nations have delayed curbing their fossil-fuel emissions for so long that they can no longer stop global warming from intensifying over the next 30 years, though there is still a short window to prevent the most harrowing future, a major new United Nations scientific report has concluded.
Humans have already heated the planet by roughly 1.1 degrees Celsius, or 2 degrees Fahrenheit, since the 19th century, largely by burning coal, oil and gas for energy.And the consequences can be felt across the globe : This summer alone, blistering heat waves have killed hundreds of people in the United States and Canada , floods have devastated Germany and China , and wildfires have raged out of control in Siberia, Turkey and Greece .
It sure doesn’t seem as if the IPCC’s findings are consistent with calls for more oil production out of OPEC+.
But of course, what has most likely happened here is that the White House got some polling information this week showing that the issue of rising gas prices is having a negative impact on the President’s approval ratings.Indeed, a new poll from Fox News out this morning shows that 80% of those surveyed blame Biden for their rising gasoline bills.Thus, after 8 months of ignoring that issue and implementing policies that will make the problem worse, the administration now feels the need to “do something” to address it.
That “something” came to us in the form of the President’s entirely ironic request of OPEC+.It’s a request that those countries would be entirely justified in studiously ignoring.
David Blackmon
David Blackmon is an independent energy analyst/consultant based in Mansfield, TX.
He is the Editor of Shale Magazine and co-host of In The Oil Patch Radio , a
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David Blackmon is an independent energy analyst/consultant based in Mansfield, TX.He is the Editor of Shale Magazine and co-host of In The Oil Patch Radio , a nationally-syndicated weekly show.
David has enjoyed a 40-year career in the oil and gas industry, the last 23 years of which were spent in the public policy arena, managing regulatory and legislative issues for various companies, including Burlington Resources, Shell, El Paso Corporation, FTI Consulting and LINN Energy.
During this time, David has led numerous industry-wide efforts to address a variety of issues at the local, state and federal level, and from April 2010 through June 2012, he served as the Texas State Lead for America’s Natural Gas Alliance.In addition to client-related work, David also maintains a growing media communications practice.
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