President Biden is not engaging the oil and gas industry, forcing them to go to court to save their jobs. The killing of the Keystone XL pipeline and now there’s talk that the Biden administration could cost the energy industry hundreds of thousands of lost jobs.

Union workers that had voted for Donald Trump, were wooed back by Joe Biden with his promise to “build back better” plan. So far build back better means that if you are a union oil or gas worker, you are at high risk of being unemployed. Union workers are angry, and I am hearing from many of them directly. They feel that union leadership backed the wrong horse when they backed Biden. The Biden administration policies mean that the U.S. will lose our hard-fought-for and finally won energy independence. In fact yesterday, the Energy Information Administration reported that the United States will return to being a net petroleum importer in 2021.

On Fox News “America Newsroom” Texas Land Commissioner George P. Bush said Wednesday that, "President Joe Biden's immediate moves against the oil and gas industry produced a "chilling effect" against energy workers around the country. He pointed out that defending oil and gas jobs was not a Republican pet issue, noting four Democrats in the Texas U.S. House delegation oppose the environmental lobby. Union leaders like AFL-CIO President Richard Trumka, a Biden supporter, also criticized the White House over the quick Keystone cancellation, and Sen. Joe Manchin, D-W. Va., a key swing vote in the Senate, asked Biden to reverse his decision.

In Texas, they could lose 120,000 jobs through 2022 with the administration's suspension of new oil and gas leases, and Bush said the state would pursue legal avenues as it had in the past against fracking bans and what he called specious listings of animals on the endangered species list. That is just in Texas.

Image Source: Unsplash

Biden's policies of rejoining the Paris climate accord and killing the Keystone Pipeline is going to kill hundreds of thousands of jobs. Lost jobs have a trickle effect across many other businesses and the higher costs for energy around the country will slow the economic recovery. So far, the Biden administration has had no plan for replacing these union jobs. There have been vague promises of so-called green energy jobs but to develop all these jobs it may take years and many of those jobs will not pay nearly what the lost jobs paid. Union workers have been had. They know it.

Oil prices are pulling back again. Maybe it is the three-day holiday curse as oil often takes profits ahead of a holiday, especially in bull markets. OPEC and the oil storage locations across the Americas, are emptying as the remarkable rally in crude prices undermines the need to buy and stockpile barrels. Tank owners were one of the few benefactors from last year’s collapse that spurred traders to buy crude cheap, store it, and then sell into a rally. Now that the market and shifted into backwardation, where oil for prompt delivery is priced higher than later-dated contracts, it is making storage unprofitable. Gulf Coast terminal operators are offering to lease tanks at less than half the rate at the height of the storage boom in 2020.”

That can only happen as global oil inventories drain and that is another reason why, if oil demand surprises to the upside, we might be undersupplied. I have been warning users and producers about complacency. Hedges hopefully were put in place, the oil cycle has shifted and with the U.S. backing away for oil independence, the upside risks increase. Short term we could consolidate but prepare for what could be an era of higher, long-term prices.

Natural gas got a shock from a smaller than expected withdrawal from the supply. Despite bone-chilling cold and production freeze offs, the EIA reported that working gas in storage was 2,518 Bcf as of Friday. This represents a net decrease of 171 Bcf from the previous week. Stocks were 9 Bcf less than last year at this time and 152 Bcf above the five-year average of 2,366 Bcf. At 2,518 Bcf, total working gas is within the five-year historical range.