Energy Tomorrow Blog
Posted August 16, 2021
Some observations follow on the Biden administration’s continued call for OPEC to increase its crude oil production – even as it curbs or discourages U.S. production – plus the president’s recent announcement that he wants the Federal Trade Commission (FTC) to investigate summer gasoline prices.
We’ll take the FTC first. Chair Lina Khan has been asked to look into any potential illegal conduct or anti-competitive practices that may have occurred during the summer driving season.
The U.S. Energy Information Administration (EIA) reported the national average for gasoline reached $3.172 per gallon Aug. 9, the highest point since October 2014. “[T]here have been divergences between oil prices and the cost of gasoline at the pump,” wrote National Economic Council Director Brian Deese. “While many factors can affect gas prices, the president wants to ensure that consumers are not paying more for gas because of anti-competitive or other illegal practices.”
Numerous federal and state agencies have investigated the causes of price spikes for decades and consistently have found that the markets and other factors are responsible for price fluctuations. If the White House truly believes “anti-competitive or other illegal practices” have elevated gasoline prices, it’s strange that it would look to a cartel of oil-exporting countries to help solve the problem. In fact, the administration is floating a false premise on what’s happened this summer with gasoline prices.
Posted August 11, 2021
The White House has big problems with its continued calls for more crude oil production from OPEC – even as it is discouraging U.S. production.
Rising domestic gasoline prices are a political problem for President Biden. … The administration’s political dilemma is that since April 2020, when EIA reported the per-gallon cost of gasoline was $1.938, prices rose to $3.231 last month. The safe assumption is that most Americans have noticed the 66.7% increase at the pump.
The White House response last month was to plead with OPEC to produce more crude oil – and that’s because the cost of crude oil is the No. 1 factor in the retail cost of gasoline. More supply means more downward pressure on crude costs and retail prices.
On Wednesday, President Biden doubled down on the approach, saying the administration wants OPEC to reverse production cuts made during the pandemic to lower prices for consumers. … Therein lies a big energy policy problem.
Posted July 8, 2021
The Biden administration says it is keeping a close eye on the OPEC+ talks on crude oil production because, as White House Press Secretary Jen Psaki said, it wants “Americans to have access to affordable and reliable energy at the pump.”
Unfortunately, the U.S. is mostly a spectator as OPEC+ debates crude oil supply, which continues to be outpaced by demand, putting upward pressure on crude costs. Because the cost of crude is the biggest factor in gasoline prices, U.S. pump prices have reflected this mismatch between demand and supply.
Posted April 6, 2020
OPEC+ members continue to discuss a meeting, reportedly Thursday, to address the price war between leading members Russia and Saudi Arabia, whose production increases amid a significant decrease in demand are deepening the crisis for the global oil industry.
There’s speculation the United States will be asked to participate in a deal with additional production cuts beyond what U.S. producers have already implemented in response to the marketplace, which we addressed in this post. In a new interview with CNN, API President and CEO Mike Sommers reiterated that markets should dictate production decisions, not government interventions, and that Russia and Saudi Arabia should change their production policies.
Posted March 25, 2020
There seems to be no shortage of flawed ideas in response to ongoing crude oil market instability.
Last week, a U.S. senator asked the Commerce Department to impose tariffs on imported crude oil, and a Texas state energy regulator called for statewide oil production quotas – isolating measures that don’t serve the interests of American consumers and don’t help our industry do its job of supplying the country with needed energy.
Posted March 12, 2020
Global oil markets have shifted dramatically in recent days and weeks, and the stakes are high for the United States energy revolution, retirement savings and the broader economy.
Let’s start with crude oil prices. Per Bloomberg, the per-barrel price of West Texas Intermediate (WTI) on March 9 was about half of what it was on Dec. 31, falling to $31.13 from $61.06.
Posted June 11, 2015
NPR – There's a serious problem in the American economy: Big corporations are doing well, but real household income for average Americans has been falling over the past decade — down 9 percent, according to census data.
"That's not good for America," says Harvard economist Michael Porter. "That's not good for America's standard of living. That's not good for our ultimate vitality as a nation."
That's why Porter's excited about the deep reserves of natural gas and oil that have been made accessible by hydraulic fracturing technology, or fracking — a boon he examines in detail in a new report.
"It is a game changer," Porter says. "We have estimated that already, this is generating a substantial part of our GDP in America. It's at least as big as the state of Ohio. We've added a whole new major state, top-10 state, to our economy."
Posted March 18, 2015
The Hill: Business groups are waging war on the Obama administration’s proposal to reduce ozone pollution, arguing the regulations would cripple the U.S. economy.
In order to comply with the proposed rule, many areas of the country would have to all but shut down land development and oil and natural gas drilling, industry groups charged on the final day for comments.
The Environmental Protection Agency (EPA) is being spurred on by greens and health groups, who argue that lower ozone emissions would benefit public health. The agency, they contend, is obligated to adopt the stricter standards.
But the rules would translate to higher electric bills for American families, the American Coalition for Clean Coal Electricity is said in comments it filed Tuesday.
Jane Van Ryan
Posted December 7, 2010
Jane Van Ryan
Posted July 16, 2009