Big oil has hit a gusher. Even before Putin’s war, oil prices had begun to rise due to the recovery in global demand and tight inventories.far bigger bonanza.
Last year, when Americans were already struggling to pay their heating bills and fill up their gas tanks, the biggest oil companies (Shell, Chevron, BP, and Exxon) posted profits totaling $75bn. This year, courtesy of Putin, big oil is on the way to a
How are the oil companies using this windfall? I can assure you they’re not investing in renewables. They’re not even increasing oil production.---------------------
As Chevron’s top executive, Mike Wirth, said in September, “We could afford to invest more” but “the equity market is not sending a signal that says they think we ought to be doing that.”
https://www.theguardian.com/commentisfree/2022/mar/20/big-oil-gas-prices-windfall-tax-russia-ukraine
ltlee1 wrote:a far bigger bonanza.
Big oil has hit a gusher. Even before Putin’s war, oil prices had begun to rise due to the recovery in global demand and tight inventories.
Last year, when Americans were already struggling to pay their heating bills and fill up their gas tanks, the biggest oil companies (Shell, Chevron, BP, and Exxon) posted profits totaling $75bn. This year, courtesy of Putin, big oil is on the way to
Of course solving people's problems high gas price is not big oil's responsibility. And according to the WSJ article, they could not.How are the oil companies using this windfall? I can assure you they’re not investing in renewables. They’re not even increasing oil production.
As Chevron’s top executive, Mike Wirth, said in September, “We could afford to invest more” but “the equity market is not sending a signal that says they think we ought to be doing that.”---------------------
https://www.theguardian.com/commentisfree/2022/mar/20/big-oil-gas-prices-windfall-tax-russia-ukraine
Why U.S. Oil and Gas Producers Aren’t Solving the Energy Crisis
By Paul H. Tice, March 15, 2022, WSJ
First and foremost, U.S. shale got a wake-up call about its
business model in 2020. That’s when the combination of an
OPEC+ oil-market-share battle and pandemic lockdowns briefly
turned crude oil prices negative and decimated the energy
sector, driving more than 100 North American oil and gas
companies into bankruptcy by year end.
The main risk to the industry over the next decade is not
the potential for oil and gas demand to go down because of
the global energy transition away from fossil fuels. It is
the high likelihood of more energy supply-chain bottlenecks
created by government officials. A supply-constrained scenario
would be bullish for oil prices, giving producers even more
incentive to keep hydrocarbon reserves in the ground now to
produce them at higher realized prices down the road. As seen
by the four legally paralyzed years of the Trump administration,
even if Republicans regain the White House in 2024, not much
would change with regard to the inexorable march toward 2030,
the year of the climate rapture set by the United Nations.
U.S. energy companies have begun to wise up to the threat
that the theory of man-made climate change poses to the
industry. Since the Paris Agreement’s signing in 2015, the
global goal of decreasing carbon emissions has provided moral
justification for an all-out regulatory assault.
The latest front is the sustainable-investment movement
sweeping Wall Street, which has climate action as its top
environmental, social and governance objective. U.S. and
European financial regulators are pushing through mandatory
reporting standards on sustainability. This is the first step
toward screening and excluding politically incorrect industries
such as oil and gas from investment portfolios. As the intertwined climate-change and sustainability movements gain momentum between
now and 2030, the lending and capital markets are likely to become
more hostile toward traditional energy.
U.S. shale companies will need to ensure their ability to self-
fund from operations and run with less balance-sheet debt to
reduce their dependence on financing from the banking system
and institutional investors. Consequently, corporate sustaina-
bility doctrine provides another strong argument for U.S. energy
companies to maintain the status quo of slow to no production
growth and to continue living within cash flow over the long term.
Ironically, all the defensive measures now being taken by the
U.S. shale industry make it more attractive—and sustainable—from
an investment perspective. On top of production and spending
discipline and stronger energy commodity prices, some shale
players are merging to build critical mass, both in operating
scale and financial-market capitalization.
So why aren’t American oil and gas companies producing more
barrels to help tamp down oil and gasoline prices during a
global market shock when domestic inflation is rampant? The
answer, as with everything that revolves around climate change,
is complicated.
Mr. Tice works in investment management and is an adjunct
professor of finance at New York University’s Stern School of Business.
https://www.wsj.com/articles/why-american-producers-arent-solving-energy-crisis-price-hike-rise-oil-gas-wells-fracking-shale-lng-climate-change-green-russia-11647354744
--
On Wednesday, March 23, 2022 at 5:13:14 AM UTC, David P. wrote:to a far bigger bonanza.
ltlee1 wrote:
Big oil has hit a gusher. Even before Putin’s war, oil prices had begun to rise due to the recovery in global demand and tight inventories.
Last year, when Americans were already struggling to pay their heating bills and fill up their gas tanks, the biggest oil companies (Shell, Chevron, BP, and Exxon) posted profits totaling $75bn. This year, courtesy of Putin, big oil is on the way
How are the oil companies using this windfall? I can assure you they’re not investing in renewables. They’re not even increasing oil production.
As Chevron’s top executive, Mike Wirth, said in September, “We could afford to invest more” but “the equity market is not sending a signal that says they think we ought to be doing that.”---------------------
https://www.theguardian.com/commentisfree/2022/mar/20/big-oil-gas-prices-windfall-tax-russia-ukraine
Why U.S. Oil and Gas Producers Aren’t Solving the Energy Crisis
By Paul H. Tice, March 15, 2022, WSJ
First and foremost, U.S. shale got a wake-up call about its
business model in 2020. That’s when the combination of an
OPEC+ oil-market-share battle and pandemic lockdowns briefly
turned crude oil prices negative and decimated the energy
sector, driving more than 100 North American oil and gas
companies into bankruptcy by year end.
The main risk to the industry over the next decade is not
the potential for oil and gas demand to go down because of
the global energy transition away from fossil fuels. It is
the high likelihood of more energy supply-chain bottlenecks
created by government officials. A supply-constrained scenario
would be bullish for oil prices, giving producers even more
incentive to keep hydrocarbon reserves in the ground now to
produce them at higher realized prices down the road. As seen
by the four legally paralyzed years of the Trump administration,
even if Republicans regain the White House in 2024, not much
would change with regard to the inexorable march toward 2030,
the year of the climate rapture set by the United Nations.
U.S. energy companies have begun to wise up to the threat
that the theory of man-made climate change poses to the
industry. Since the Paris Agreement’s signing in 2015, the
global goal of decreasing carbon emissions has provided moral justification for an all-out regulatory assault.
The latest front is the sustainable-investment movement
sweeping Wall Street, which has climate action as its top
environmental, social and governance objective. U.S. and
European financial regulators are pushing through mandatory
reporting standards on sustainability. This is the first step
toward screening and excluding politically incorrect industries
such as oil and gas from investment portfolios. As the intertwined climate-change and sustainability movements gain momentum between
now and 2030, the lending and capital markets are likely to become
more hostile toward traditional energy.
U.S. shale companies will need to ensure their ability to self-
fund from operations and run with less balance-sheet debt to
reduce their dependence on financing from the banking system
and institutional investors. Consequently, corporate sustaina-
bility doctrine provides another strong argument for U.S. energy
companies to maintain the status quo of slow to no production
growth and to continue living within cash flow over the long term.
Ironically, all the defensive measures now being taken by the
U.S. shale industry make it more attractive—and sustainable—from
an investment perspective. On top of production and spending
discipline and stronger energy commodity prices, some shale
players are merging to build critical mass, both in operating
scale and financial-market capitalization.
So why aren’t American oil and gas companies producing more
barrels to help tamp down oil and gasoline prices during a
global market shock when domestic inflation is rampant? The
answer, as with everything that revolves around climate change,
is complicated.
Mr. Tice works in investment management and is an adjunct
professor of finance at New York University’s Stern School of Business.
https://www.wsj.com/articles/why-american-producers-arent-solving-energy-crisis-price-hike-rise-oil-gas-wells-fracking-shale-lng-climate-change-green-russia-11647354744Of course solving people's problems high gas price is not big oil's responsibility. And according to the WSJ article, they could not.
--
Still, the issue at hand is whether the US government should step in. If the US government chooses to step in, windfall tax is the
obvious approach.
Sysop: | Keyop |
---|---|
Location: | Huddersfield, West Yorkshire, UK |
Users: | 297 |
Nodes: | 16 (2 / 14) |
Uptime: | 108:15:13 |
Calls: | 6,662 |
Calls today: | 4 |
Files: | 12,209 |
Messages: | 5,335,598 |