It’s in the offing. This time, President Joe Biden is threatening to inflict his “emergency powers” on American oil producing companies if they don’t produce more oil.
President Biden may resort to using emergency powers if American oil companies don’t increase output at their refineries, the president told oil CEOs in a series of letters Wednesday.
Biden’s statement blames oil companies for running “historically high profit margins” even as Americans experience surging gas prices.
Never mind that they cannot just turn on the faucet and more oil comes out of the tap. It takes lots of money and quite a bit of time to reopen capped wells, and it takes even more money and lots of time to drill a new, producing well.
But Biden’s administration stands in the way of all of that, even as he threatens his diktat. His administration has already canceled large leases in Alaska. His administration has closed most Federal lands to further exploration, much less drilling. His administration is slow-walking new lease applications. His administration is slow-walking the permits needed actually to explore, and then the permits needed actually to drill, once a lease is approved.
His administration has closed major pipelines and is slow-walking construction of other pipelines so that even were a new well drilled or an existing one uncapped, the producers would have no way to deliver output to a refiner.
Given all of that, and with existing refiners already operating at near capacity, there’s no reason to open/build new refineries—they’d have no additional oil to refine.
Beyond that, there’s the matter of trust. Beyond the time and money it takes to (re)open a well, it takes more time—years—for those costs to be recouped and profit begun to be received from the proceeds of that well. Biden’s administration, though, cannot be trusted not to pull the rug out from under those oil companies and demand wells’ or pipelines’ closure once the current—Biden-created—gas price abates.
And this: oil companies’ “historically high profit margins” exist in part (not entirely) because they’re limited in where they can commit their revenues. They can’t spend them on exploration, drilling, producing, transporting, after all because of those Biden administration policies above.
Biden isn’t alone in this incoherence, though—this is typical of his Progressive-Democrat Cabinet and of the Progressive-Democratic Party politicians who dominate both houses of Congress. Nor is the incoherence limited to oil: there’s the environment and Party’s separate global warming mantra. See, too, our southern border, Party’s immigration “policy,” Biden’s foreign policy, defense attitude, and on and on.
1. Exxon Mobil has issued a corporate reply to Biden, pointing out from their own behavior over the past few years how many ways he’s wrong.
2. WSJ today has a house editorial re $6/gallon gas coming which points out how federal diktats are driving refinery problems.
3. The producers & refiners lost massive amounts of money during the lockdowns – their massive profits (so-called) are more catching up in a highly volatile environment than anything nefarious.