Blame Big Oil
26 months ago, almost to the day, the financial pages were awash with news of Exxon's departure from the Dow after 92 years.
"Oh, how the mighty have fallen," I wrote, on August 24, 2020.
As it turns out, reports of Exxon's demise were greatly exaggerated. Like an oil-soaked phoenix from the ashes, the "pride" of American fossil fuels rose again. Two years on from an existential crisis, business is booming. On Friday, the company reported the largest quarterly profit in its 152-year history.
I’ve recently done some work for a large American oil driller (that I will not name). The experience surprised me, though I was probably naive. But the people I worked with who administered the business tended to have their heads where the sun doesn’t shine.
Maybe the cause is attributable to the hot Texas climate. I just don’t know. But they didn’t seem to engage with my team or give a damn about my work in trying to help them. All they seemed to care about was the money coming in and their vacations. My work, and how it helped the company to drill or frac or whatever, was an afterthought. They’re a different kind of critter than I’m familiar with.
In my lifetime I look forward to seeing a preponderance of alternative energy sources and dramatically reduced usage of fossil fuels. The invasion of Ukraine by Russia and the anti-western market actions of certain middle eastern countries have raised energy costs for the US and the western countries generally. With any luck, the war will somehow be resolved in the coming year. But it may have changed the prevailing thought about urgency to change energy policy.
Biden seems to be using the strategic oil reserve to check oil prices and cause them to drop, which is very good in the circumstances. At the same time, Biden is helping Europe by encouraging US producers to drill and sell oil products in Europe.
Biden and his administration are not at all good at messaging and rhetoric. He passively sits and takes it when republican campaigns around the country sling mud at him. I have to agree with Bernie that democrats totally throw in the towel and let the republicans win the messaging game. Bernie is absolutely correct. The democrat’s messaging incompetence is giving the House (and maybe the Senate) to the republicans.
We agree on many things, not everything, but we agree on this: $4 for a gallon of gas is not a national emergency.
H-Man, once upon a time, not too long ago, you paid someone to take your oil production. Times have changed.
I have to roll my eyes when I hear people complaining about gas prices. The same people who insist that they need to drive big pickup trunks and SUVs gas guzzlers are suddenly worried about the price of gas? I’ve driven fuel efficient cars for decades precisely because I know how volatile gas prices can be. Whenever I mention this to someone who is looking at some Sherman Tank for the road they claim that they can afford it. As far as I am concerned, if $6/gallon will get more people to switch to more fuel efficient cars then we should have hiked the gas tax to $2/gallon a long time ago.
I consider myself a moderately progressive independent but I have to say that anyone who thinks that any politician has the slightest understanding of how real business works must also believe that economists have magic powers. Only with the blessing of inside information can any of our so-called “leaders” make a nickel in the market. Most people (who vote) think the government controls prices, business strategies, etc. On the other hand when it suits them these same people will tell you they think government should stop interfering with companies. I hate to say this but Biden has got to stop wasting our strategic reserves for what he imagines is political gain. Where I live (KC) gas is $3.49. In Europe, when available, petrol can easily sell for $9+/gal. It is sold by the quart! That’s an emergency. Today, stupid reigns supreme. Wait a couple weeks and see. We are going to be in for a rough two-year ride.