Energy Report: Oil Policy Madness

Oil prices are waking up to the reality that underinvestment and Biden’s fixation on so-called leadership on climate change, will leave the globe under-supplied with oil and gas. The market is starting to price in the coming energy crisis and the future impact that it will have on people's lives and economic growth. Joe Biden held the first bilateral meeting of his presidency Tuesday with Canadian Prime Minister Justin Trudeau and said the US would lead on climate change to set an example. Yet we know that a so-called example will come at the expense of American workers and will favor China who continues to expand massively its use of fossil fuels as the U.S. goes into retreat.

Fuel, Pump, Energy, Gas Pump, Gas Station, Diesel Fuel

Image Source: Pixabay

Biden will also keep the pressure on the U.S. shale industry already under pressure from a year of weak prices, lack of capital investment as well as the fear of frivolous lawsuits from governments and municipalities surrounding climate change. The Hill reported for example that city officials in Annapolis, Md., filed a lawsuit Monday accusing 26 companies, including Exxon, Shell, and the American Petroleum Institute, of failing to warn state officials about the dangers posed by man-made climate change. The lawsuit, filed in Anne Arundel County Circuit Court, alleges that the named companies knew "for decades that climate change impacts could be catastrophic, and that only a narrow window existed to take action before the consequences would be irreversible," yet failed to warn relevant state officials.

Also, the Texas energy crisis may permanently take off US shale production for the foreseeable future. Oil trader Trafigura says that they believe that 5 to 10% of our oil production that was shut down due to the crisis may not come back online ever. They also predict a permanent loss of 2.0 million to 2.5 million barrels of US refining capacity. That means average Americans and businesses will be facing sharply higher gasoline and energy prices.

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Bill Johnson 1 month ago Member's comment

I bought USO at $18 and looking forward to higher Oil prices! I guess I’ll have to start riding the motorcycle to save on my fuel expenses!