Oil companies are coming under scrutiny amid scorching summer gas prices.
“At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable,” President Joe Biden wrote in a letter this week, directing his blistering criticism at U.S. oil and gas companies.
“There is no question that Vladimir Putin is principally responsible for the intense financial pain the American people and their families are bearing,” the President continued. “But amid a war that has raised gasoline prices more than $1.70 per gallon, historically high refinery profit margins are worsening that pain.”
While the Biden Administration maintains strongly its commitment to diversifying the U.S. energy use portfolio, the immediate, real-world pain consumers are feeling at the pump is beginning to tell.
Insulate journalists compare the brutal gas price hikes to tax increases the government imposed on tobacco products- i.e. a good thing which will encourage people to stop using petroleum. They keep forgetting, perhaps, that our entire economy- not to mention a 10,000 mile supply line built in a glut of globalization- wasn’t built upon tobacco products
It was built upon petroleum (and other fossil fuels) and it continues to run, or not run, on same.
The Biden Administration is perhaps right to pass this particular buck to U.S. oil and gas companies, but there is no question that public pressure is mounting on legislators to do something.
“We have been in regular contact with the administration to update the President and his staff on how ExxonMobil has been investing more than any other company to develop U.S. oil and gas supplies,” said ExxonMobil in response to the President’s letter. “This includes investments in the U.S. of more than $50 billion over the past five years, resulting in an almost 50% increase in our U.S. production of oil during this period.”
“Globally, we’ve invested double what we’ve earned over the past five years — $118 billion on new oil and gas supplies compared to net income of $55 billion,” continued the ExxonMobil statement. “This is a reflection of the company’s long-term growth strategy, and our commitment to continuously invest to meet society’s demand for our products.”
“In the short term, the U.S. government could enact measures often used in emergencies following hurricanes or other supply disruptions — such as waivers of Jones Act provisions and some fuel specifications to increase supplies,” suggested ExxonMobil. “Longer term, government can promote investment through clear and consistent policy that supports U.S. resource development, such as regular and predictable lease sales, as well as streamlined regulatory approval and support for infrastructure such as pipelines.”
ExxonMobil may have a point: There is a practical argument against regulating fossil fuels out of existence.
Without a global authority with the unilateral power to reach across borders and enforce worldwide environmental regulations- which we will never ever have- “fixing” the world’s dependence on fossil fuels is like plugging holes in a breaking dam.
Every time you patch one, ten more spring out.
Environmentalists fighting deforestation and loss of animal habitat run into this problem all the time. They successfully work with one nation’s government to stop clear-cut logging a valuable natural resource, but the “protected” area extends into another nation’s borders.
The mining or logging company just goes right over the border to a place with fewer regulations and continues despoiling a resource future generations of that nation’s people won’t get to enjoy.
As useful as environmental regulations, sanctions and penalties might be, they only work as far as a sovereign nation’s willingness to adhere to those standards.
If environmentalists think the Chinese Communist Party, Parliament, or even the two major U.S. political parties, are going to willingly give up their power and self-determination to cleave to a higher, international environmental body, they don’t understand power, or people, at all.
If we are to get out the mess of petroleum dependence, there is only one sure way to do it. Luckily, the U.S. is uniquely qualified with exactly the type of limitless, renewable resource we need to solve this problem: Innovation.
To those who say the United States has no culture, we say drive your car, use your computer, talk on your cell phone, enjoy air travel and listen to jazz music. Innovation is our culture. Ingenuity.
People come to the U.S from all over the world to build a business, invent a new product, invest in a start-up. Immigrants with big ideas have transformed this nation into the powerhouse it is today.
It’s time to transform it again.
If we are to solve the crisis of petroleum dependence, in the short and long term, we are going to have to innovate our way out of it.
U.S. oil and gas companies should be anxious to work with the Biden Administration to bring down the price of fuel. Both should also be investing heavily in innovation and product development.
Simply invoking the phrase “go electric” won’t do: Currently, only about 20% of the electricity we use comes from renewable sources; 60% comes from burning coal and 20% comes from nuclear power plants.
Once the U.S. can offer emerging nations, and everyone else, a real, viable choice of plentiful, clean, renewable energy, they will jump at the chance. As soon as that source of clean, renewable energy is cheaper to produce and use than fossil fuels, the shift will happen naturally.
And there will be no more pain at the pump for anyone.
(contributing writer, Brooke Bell)