by Tyler Durden at ZeroHedge
Following President Biden’s letter to many ‘Big Oil’ executives, threatening them with forced production quotas, windfall taxes, and/or price-caps (because all those things have proved so successful in past crises… not), Exxon Mobil issued a reasoned response to The White House accusations and scapegoating: (emphasis ours):
We have been in regular contact with the administration to update the President and his staff on how ExxonMobil has been investing more than any other company to develop U.S. oil and gas supplies. This includes investments in the U.S. of more than $50 billion over the past five years, resulting in an almost 50% increase in our U.S. production of oil during this period.
Globally, we’ve invested double what we’ve earned over the past five years — $118 billion on new oil and gas supplies compared to net income of $55 billion. This is a reflection of the company’s long-term growth strategy, and our commitment to continuously invest to meet society’s demand for our products.
Specific to refining capacity in the U.S., we’ve been investing through the downturn to increase refining capacity to process U.S. light crude by about 250,000 barrels per day – the equivalent of adding a new medium-sized refinery. We kept investing even during the pandemic, when we lost more than $20 billion and had to borrow more than $30 billion to maintain investment to increase capacity to be ready for post-pandemic demand.
In the short term, the U.S. government could enact measures often used in emergencies following hurricanes or other supply disruptions — such as waivers of Jones Act provisions and some fuel specifications to increase supplies.
Longer term, government can promote investment through clear and consistent policy that supports U.S. resource development, such as regular and predictable lease sales, as well as streamlined regulatory approval and support for infrastructure such as pipelines.
Additionally, buidling on Exxon’s suggestions, the American Petroleum Institute – which represents ‘Big Oil’ – sent a letter to the president offering some advice.
The letter begins by acknowledging President Biden’s efforts to address Russia’s actions and then focuses on how we got here:
“Unfortunately, Russia’s actions and the instability it created has contributed to an already forming global energy crisis. Several factors have led to a significant and sustained supply and demand imbalance in global oil markets. Demand for energy, specifically crude oil, has surged as global economies have rebounded from the early part of the COVID-19 pandemic. In part, supplies have not kept pace due to global underinvestment in recent years driven by geopolitical and market forces, public policies, and investor sentiment.
This combination of factors and events leaves us in the situation we face today. Namely, the most consequential energy crisis since the 1970s.”
Then, The API lays out ten steps that President Biden can take to ease the bottlenecks and lower gas prices for the ‘average joe’…
Continue Reading1. Lift Development Restrictions on Federal Lands and Waters…