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The Biden energy crisis is self-made. Oil and gas executives are well aware of how we got here and they are beginning to push back on Biden’s finger-pointing. Biden has called a meeting for Thursday for top oil and gas executives at the White House.
We can gauge the seriousness of Biden’s intent to do what he can to bring down the price of gas at the pump and encourage more oil production by the fact that he isn’t even going to meet with the oil and gas executives. He’s sending Energy Secretary Jennifer Granholm and other administration members instead of taking the meeting himself. Imagine being called to the White House on the premise that the president wants you to do more to help with the situation he has gotten us into but he can’t be bothered to talk to the executives himself.
Chevron chief executive Mike Wirth is the latest to respond to Biden’s continued vilification of the oil and gas industry. Wirth sent a letter to Biden addressing Biden’s demands that gas prices be lowered, fuel supplies be increased, and more oil be refined. Wirth said there is little that the industry can do to lower prices immediately. The meeting at the White House will not provide relief for drivers. “There are no easy fixes nor any short-term answers to the global supply and demand imbalances aggravated by Russia’s invasion of Ukraine.” Wirth gave a nod to Biden’s favorite excuse for all of his administration’s failures on energy policy and inflation now – it’s Putin’s fault.
There are no quick fixes or easy answers. Biden refuses to utilize an all-of-the-above approach to energy production, the only approach that produces successful American energy independence, as we experienced during the previous administration. Biden has taken the opposite approach, shutting down drilling, canceling lease sales, and increasing regulations and red tape to slow the process. Then, when the market reflects the results of Biden’s poor energy policies, all he can do is complain that oil and gas companies are making too much money and point a finger at everyone but himself.
Wirth told Biden that an new approach is needed, including incorporating his “whole of government” philosophy in addressing major issues to the energy crisis. He defended his employees and the company. He also mentioned that it is not helpful that “your Administration has largely sought to criticize, and at times vilify, our industry. These actions are not beneficial to meeting the challenges we face and are not what the American people deserve.” And, whether Biden wants to acknowledge it or not, Chevron, like other companies, is using and developing green energy techniques and solutions.
In 2021, Chevron produced the highest volume of oil and gas in our 143-year history. In the first quarter of 2022, our U.S. production was 1.2 million barrels per day, up 109,000 barrels per day from the same quarter a year earlier. In the Permian Basin alone, we expect production to approach 750,000 barrels per day by the end of the year, an increase of more than 15 percent from 2021. And Chevron’s U.S. refinery input grew to 915,000 barrels per day on average in the first quarter of this year from 881,000 in the same quarter last year.
In addition to increasing American oil and gas production, Chevron is also investing $10 billion to reduce greenhouse gas emissions and scale new advanced energy technologies, like carbon capture and hydrogen, along with growing our renewable liquid fuels production capacity to 100,000 barrels/day by 2030. America will lead in these critical new industries, creating jobs at home and exporting them to the world to meet energy and climate objectives.
American oil and gas supplies are among the most efficient, responsibly produced, and lowest carbon intensity supplies in the world. At roughly 15 kg of CO2-equivalent per barrel, Chevron’s Permian Basin carbon intensity is some two-thirds lower than the global industry average. U.S. Gulf of Mexico production has carbon intensity just a fraction of the global industry average. Increasing American production will offset barrels produced in other parts of the world that may not support America’s energy security, economic competitiveness, or environmental goals.
I want to be clear that Chevron shares your concerns over the higher prices that Americans are experiencing. And I assure you that Chevron is doing its part to help address these challenges by increasing capital expenditures to $18 billion in 2022, more than 50% higher than last year.
We need clarity and consistency on policy matters ranging from leases and permits on federal lands, to the ability to permit and build critical infrastructure, to the proper role of regulation that considers both costs and benefits. Many of these elements are described in our industry’s recently released 10-point plan. Most importantly, we need an honest dialogue on how to best balance energy, economic, and environmental objectives – one that recognizes our industry is a vital sector of the U.S. economy and is essential to our national security.
We can only meet these challenges by working together. Chevron will engage in this week’s meeting with Secretary Granholm. I encourage you to also send your senior advisors to this meeting, so they too can engage in a robust conversation. Your “whole of government” philosophy in addressing major issues should apply here too, as a comprehensive approach is best to address the energy needs of our nation and of our allies.
Chevron is increasing capital expenditures, producing oil and gas at the company’s highest level, and using techniques like carbon capture in the field. What more can they do? Well, Joe Biden decided to ridicule Wirth yesterday instead of noting that Chevron is willing to be a partner in good faith with this White House. He referred to Wirth as “sensitive” and said he had no idea his feelings would be hurt. Really?
Asked about the letter during a White House event, Biden called Wirth “mildly sensitive”, saying he “didn’t know they would get their feelings hurt so quickly”. He called on the industry to increase fuel supply.
Wirth’s feelings aren’t hurt. Oil and gas executives are finally pushing back on being scapegoated by this incompetent boob in the White House. They are angry, as they should be. Last week, Exxon Mobil CEO Darren Woods responded.
While at an event last week, Biden took aim specifically at Exxon Mobil, accusing it of hoarding cash while making “more than God last year,” referring to the $23 billion in profits the oil supermajor posted last year.
“The reason they’re not drilling is they’re buying back their own stock, which should be taxed quite frankly, buying back their own stock and making no new investments,” Biden said. “So I always thought Republicans are for investment. Exxon: start investing and start paying your taxes, thanks.”
In Exxon Mobil’s response the company said it’s invested more than $50 billion and increased U.S. oil production nearly 50 percent over the past five years. The company also pointed to its efforts to boost refining capacity.
“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,” the letter said. “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.”
It is painfully clear that Biden is clueless on how the private sector works, especially the oil and gas industry. Is it a surprise that investors don’t want to put their money into things like new refineries while the far left and their rubes like Biden shut them down or deny permits to build new ones? Both CEOs ask for consistency. The Biden administration asks for more energy production and more refining now but also insists that they will work to shut it all down in the coming years. Who wants to gamble capital on that kind of logic?
Biden is being led around by the nose by the far left who only want to talk about green energy. He appointed Jennifer Granholm of all people to be energy secretary. Biden began his term in office by shutting down the Keystone XL Pipeline on his very first day in office. It’s been downhill since then. Oil and gas executives deserve credit for even traveling to D.C. and taking the meeting at the White House. They know they’ll be stabbed in the back as soon as they leave.