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Gas Prices Too High….Here’s My Take On !t…..
Gas prices in the US & around the world aren’t going down any time soon. The pandemic caused the demand for gas to drop. Oil producers stopped drilling & workers got laid off. Gas companies made huge profits receiving billions of dollars in government subsidies plus two bailouts to make sure they didn’t go under. Fast forward with the pandemic subsiding & people starting to drive & travel these companies that were in fact saved aren’t ramping up production. Less production means high prices which make up for lost profits. Companies are actually making more profit then before the pandemic.
There are currently leases on 23 million acres of public land that aren’t being used. That’s about 10,000 permits to drill. The oil companies are raising prices not increasing supply & spending these profits on shareholder buy backs. Let’s consider OPEC who controls oil & won’t sell more oil because by restricting the amount of product that goes into the market keeps prices high then OPEC can recover profits they lost through the pandemic.
As I see it the problem isn’t Biden or Putin, but corporate greed! Let’s remember that these companies are the same that hid research that said, climate change over the last 40 years was in fact caused by fossil fuel use. These companies are not run by good people they are run by good businessmen. How much control does President Biden actually have over the oil industry. He did sign an Executive Order for the Department of Energy to release 50 million barrels of oil from the Strategic Reserve to help cover the cost of gas for Americans. He also, coordinated this effort with other nations & called out OPEC for holding back supply asking the FTC to check that the oil & gas industry wasn’t engaging in potential illegal & anti-competitive behavior making prices higher for the American consumer. After his request crude oil prices started to come down.
In an article from mid March Occidental Petroleum’s CEO said, our supply issues are due to worker shortages & supply chain issues. Exxon Mobil’s CEO said, their primary objectives were less & less about volume & volume targets & more about the profitability of barrels produced. This translates into $$$ for these companies while blaming the Biden Administration by misleading facts one of which is when it comes to using permits to drill on private land it’s very time consuming. This is just another stale tactic allowing these companies to continue to make enormous profits. Leases according to Bloomberg Business are mostly owned by EOG Resources & Devon Energy & neither of these companies plans to grow production beyond 5%.
You may or may not agree. You may say it’s more complicated. You might still want to blame President Biden or Putin, but at least consider that oil & gas companies are making BIG profits at the expense of working people around the world. And they will continue to do so.
Patti Kasanow: Author.