Gas goes to $9.45/gallon in Mendecino, CA

[ajax18]

Doc, Canpakes, Honorentheos et al are so right. You don't read for comprehension of anything we write that casts legitimate doubt on what you are already determined to believe. Every time someone accuses you of not having read or understood something you don't like or that proves you wrong, you almost immediately come right back and inadvertently prove them right!

I actually would love for ajax to present any argument that would allow his statements to make sense. I’ll be happy to see it happen here. And this isn’t a ‘gotcha’ kind of thing; it’s a legit question posed to someone who wants everyone to believe that Joe Biden is making gasoline more expensive all over the world. Surely, there must be something to offer that backs that up.

What do you say, ajax? How did Biden make the cost of gasoline increase worldwide?

Politicians in eestern Europe and Austalia have embraced climate change and Covid policies that have resulted in similar consequences. In many ways they're even worse.

[Vēritās]

I actually would love for ajax to present any argument that would allow his statements to make sense. I’ll be happy to see it happen here. And this isn’t a ‘gotcha’ kind of thing; it’s a legit question posed to someone who wants everyone to believe that Joe Biden is making gasoline more expensive all over the world. Surely, there must be something to offer that backs that up.

What do you say, ajax? How did Biden make the cost of gasoline increase worldwide?

Politicians in eestern Europe and Austalia have embraced climate change and Covid policies that have resulted in similar consequences. In many ways they're even worse.

You don't seem to understand that oil is traded on a global scale and is priced accordingly.

[canpakes]

I actually would love for ajax to present any argument that would allow his statements to make sense. I’ll be happy to see it happen here. And this isn’t a ‘gotcha’ kind of thing; it’s a legit question posed to someone who wants everyone to believe that Joe Biden is making gasoline more expensive all over the world. Surely, there must be something to offer that backs that up.

What do you say, ajax? How did Biden make the cost of gasoline increase worldwide?

Politicians in eestern Europe and Austalia have embraced climate change and Covid policies that have resulted in similar consequences. In many ways they're even worse.

That doesn’t give any details on how Biden made the cost of gasoline increase dramatically worldwide, over the past few months.

But you’ve now introduced another interesting claim about what has made the cost of gasoline increase dramatically worldwide, over the past few months.

Can you explain the Biden thing, or these two new possible causes?

By the way, Australia ranks 31st in world oil production, so I’m eager to hear what’s up with their role.

[Vēritās]

Did you know there are some countries where the cost of gasoline is less than .25 cents per gallon?

Why can't we get that? Because our domestic oil production is controlled by private companies whose fiduciary responsibility is not to the American people, but rather their shareholders. Maybe we should rethink that and nationalize our domestic oil production.

The U.S. Government Doesn’t Control Domestic Oil Production. But It Should.

"This week, as President Biden banned the import of Russian oil and gas, fuel prices skyrocketed, and pundits and Substack bros across the land repeated the company line we all know by heart now: We need to drill more and increase production.

It’s a rallying cry that makes no sense. On top of the fact that there’s no such thing as an “immediate” increase in oil and gas production, if anything this crisis is one more reason to speed up the transition away from fossil fuels. And in the meantime, since the industry is going to blame the government for everything anyway, a little intervention would actually be helpful here, not to help the oil and gas companies but to rein them in and actually help the American public.

During the 1973 Arab-Israeli War, Arab members of the Organization of the Petroleum Exporting Countries imposed an embargo on exporting oil to the U.S. due to its support of Israel in the war. The result was rationing, miles-long lines at gas stations, a whole lot of headlines questioning our dependency on foreign oil, and ultimately a huge boom in energy efficiency and non-fossil energy in the U.S. The oil industry, of course, claimed that the shortages were all the government’s fault for refusing to let them drill more in the years preceding the embargo.

In 2012, when it was already clear that the fracking boom was headed for a bust, the fossil fuel lobby began pushing hard to lift the ban on exporting American oil and gas. The policy had been in place since that 1970s oil crisis in an effort to insulate Americans from the volatility of the global energy market. But suddenly, exporting was the industry’s last hope to maybe turn a profit on fracking, so the math changed. The story they told was one of national security and energy independence, a return to global superpower status. Their efforts paid off in 2015 when President Barack Obama lifted the ban.

When Donald Trump was elected in 2016, he became the most fossil fuel-backed president in U.S. history, an honor previously held by George W. Bush — and again the industry insisted it needed more land, fewer regulations, and more drilling. Under Trump the goal became not just “energy independence” but “energy dominance.” When Covid hit and the industry was suddenly sitting on mountains of oil barrels worth less than nothing, they seized on the opportunity to request further deregulation. Trump was only too happy to comply. In tracking the fossil fuel-requested subsidies, loopholes, and regulatory rollbacks during the Covid-19 pandemic, I counted well over 100, the vast majority of which remain in place. In fact, prior to leaving office, Trump tried to make as many of them as permanent as possible via executive order. Between those rollbacks and the lifting of the export ban, the oil and gas industry currently has more freedom to drill than it’s had since regulation began.

There are two important things to remember about how oil and gas production work: The government doesn’t place any production limits on oil and gas companies, and there’s no such thing as an immediate production increase. Oil and gas companies decide, all by themselves, whether or not to increase production, and new drilling now generally translates to oil and gas on the market in six to 12 months. A new fracking well takes six to eight months to produce oil, for example. Are there idle wells that could be productive again in less time? Sure. Are there some that were shut down during the pandemic that can be brought back online? Yep. But then we get to the real reasons oil companies aren’t drilling: It’s not government intervention, it’s a combination of money, labor, and materials (shocking, I know).

Like every other industry during the pandemic, the fossil fuel industry was hit by material and labor shortages. Except in the fossil fuel industry’s case, the labor shortage has been coming for a long time; recruitment and retention are hard when you’re in a dying industry. It was so bad last year that ExxonMobil CEO Darren Woods even floated the idea of pay raises, in a pandemic economy!

But even if labor were not a concern and the government threw all its resources into solving the industry’s material shortage problem, oil and gas executives don’t want to increase production because the high prices are working for them financially at the moment. They’ve said so explicitly, out loud and in public.

The big fracking companies — Devon, Pioneer, and Continental — burned by multiple boom and bust cycles over the years, pledged in February not to increase production until 2023. “Whether it’s $150 oil, $200 oil, or $100 oil, we’re not going to change our growth plans,” Pioneer CEO Scott Sheffield said during a Bloomberg Television interview. “If the president wants us to grow, I just don’t think the industry can grow anyway.”

In ExxonMobil’s February earnings call, Woods said the company’s focus remains on price per barrel over volume. “One of the primary objectives we’ve had in looking at the portfolio is less about volume and volume targets and more about the quality and profitability of the barrels that we’re producing.” he said. “That’s been the focus. And as we move forward, we’ll continue — you’ll continue to see the quality of the barrels or profitability of the barrels increase.”

According to Tom Sanzillo, director of financial analysis for the Institute for Energy Economics and Financial Analysis, what’s even more unusual than the industry’s hesitancy to drill, given the high prices per barrel, is the fact that they’re not buying up new land.

“Typically the price spike would occur and rather than pay dividends as robustly as they are paying now, they would buy up other assets and maybe increase production,” he said. “What’s happening now is not typical. They’re not buying up other assets, and they’re not drilling. What does that mean for the future? It’s hard to say. It’s possible they’re just biding their time, building confidence amongst investors and will increase production next year, but this is definitely not the typical response to a price spike.”

Instead, they’re banking that money, using it to make up for profits lost in the pandemic and mostly to conduct massive stock buybacks that keep their shareholders happy and might just bring investors back to fossil fuel for one more round.

Which brings us to the elephant in the room: the United States’s supposed energy independence. As a net exporter of oil and gas, that’s what the country was promised by industry. But you can’t have independence if you are ruled entirely by global commodity markets. The other big oil-exporting countries are able to use their production capabilities to protect themselves from sudden price changes because their fossil fuel industries are nationalized. Because the U.S. energy sector is entirely private, we have no such luck. For all the industry’s squawking about federal leases, only 10 percent of U.S. drilling happens on public land, the rest is on private land that the government has zero control over. And, again, there is no government entity overseeing production; it’s left entirely up to companies to produce as much or as little oil as they think will be profitable. The closest we have to a regulatory body on production is the Texas Railroad Commission, but even when oil prices went negative during the pandemic, the commission opted not to impose production limits.

Although Biden floated the idea of reinstating the export ban when he campaigned for president, his Energy Secretary Jennifer Granholm took that off the table almost immediately. It hasn’t reemerged in the Russia-Ukraine debates, and U.S. exports helped Europe absorb the sudden cutoff of Russian fuel supplies. But an export ban is not a terrible long-term plan. And since the industry is accusing the government of meddling with production anyway, why not call its bluff and start a real conversation about nationalizing the industry and marching it toward a transition to renewable energy? What we’re seeing now is an entirely unmanaged transition, unfolding in real time. It’s painful, and the future is completely unclear, but none of that has to be true."

[Doctor CamNC4Me]

So, Ajax. Do you want to nationalize oil production, ie getting the feds into the mix telling American corporations what to do, or do you want to leave it up to the free market and let the chips fall where they may?

- Doc

[Doctor CamNC4Me]

I just got back from errands IN MY CAR, and I noticed that, once again, all the gas pumps were packed with goer outers. Man. The free market is really something. I wonder if getting the federal government to nationalize the oil companies so we pay for cheaper fuel is socialism? Do Conservatives want to socialize the cost of fuel?

- Doc

[Jeff]

[canpakes]

.
“Save us, Papa Trump! Make gas prices go down by socializing the oil industry!”

- Trumpsters

[honorentheos]

"Gotham is being overran by agents of chaos! We need a hero to save us! But who?"

"How about the guy who set off the events that started the chaos in the first place but then was forced underground when their attempt to take over Gotham City was thwarted?"

"Hey, he can't bare any responsibility for.the chaos! It's not like global and national economics are complex systems with many variables and change like large ships that take time to turn or something...yeah, call that guy!"

[honorentheos]

Politicians in eestern Europe and Austalia have embraced climate change and Covid policies that have resulted in similar consequences. In many ways they're even worse.

Hi ajax,

Basic question for you: what would you do to incentivize investment in domestic extraction if you could snap your fingers and make a change?