Nothing they can do quickly. Any additional drilling would take several months to do anything. There are no short term solutions to this.
Not to mention these companies were punished for over drilling in the past by investors. The market pushed them to this point and they aren’t changing for something that could be short term. Some of these companies almost went out of business a couple of years ago.
They are doing what’s best for them and their shareholders at this point and taking a long term view. Not like everyone in America has cared about them the last couple of years anyway. Some left them for dead until recently and will do so again on the other side of this.
American producers can’t just “open the spigot” like the Saudis can, and there really aren’t any “easy” barrels out there that aren’t already flowing. Increasing production by any meaningful amount takes huge capital investment, time, manpower, and materials, and none of those are in ready supply.
The investment community used to reward these expenditures as a growth indicator, with the idea that money spent today would pay out in a couple of years (longer for offshore projects). Now, the expectation is that companies make a profit every quarter, which prevents any major capital outlay for drilling projects. Until the market changes that approach, no public companies are going to throw money at these projects.
Even if they did want to go big, there are real constraints on the industry all throughout the supply chain, as well as from a staffing standpoint. Even before the big oil crash in 2020, prices had been depressed for years, leading to nonstop layoffs - people have left the industry and will be slow to return with pay in other industries growing. The supply chain issues always hit when prices increase, and they’re not much different from what’s been faced in the past.
Oil, especially offshore, has been underinvested for many years, due to low prices and market demands. This is a huge wedge of production that’s lost and nowhere close to being returned.
Companies are happy to blame the government for lower production, but they know that’s not the real issue, and they also know that even if every pipeline and federal permit had been approved, we would still be having the same conversation right now.
If people want American companies to increase production, they’re going to have to incentivize them with more corporate welfare, and that’s just not feasible.
Everyone feels the pain of rising prices, even those who work in oil and gas. But a lot of people were gleeful at the destruction of oil and gas companies when prices crashed hard in 2020. Those are probably the people complaining the most now.
Nobody gave a flip when they were losing billions and the price was $30 not too long ago. Bought bigger trucks and enjoyed the great economy cheap oil brought you.
Wall Street is now populated by kids who were taught from the climate change bible and think investing in O&G is a sin of the highest proportions. Wall Street wants nothing to do with O&G. Now the oils are saying “f em”
Now, oil companies will not over leverage. They will stay within their budgets, enjoy the profits and distribute profits to the hardy shareholders who stuck with them with increased dividends and share buybacks.
Instead of crying about the obscene profits, go build yourself a homemade windmill to charge up your 'lectric car.
Saudis don’t have that much to increase. A good percentage of the Iranian oil is out there already on the black market. Allowing them to sell just increases their profit since black market oil is discounted heavily.
Most of the increases that were available have been destroyed by our government’s actions. Sanctions on Venezuela, regime change in Libya are two good examples. Not to mention USA fighting the pipeline from the Leviathan gas field in Israel to Europe.
I, for one, am very happy. I put a lot of extra money down in 2020 on the oil/commodity comeback.
They are limited, but between production and storage capacity, they can have an impact. That’s what happened in early 2020 (in collaboration with Russia).
Anyway, the overall point is that there isn’t an immediate solution unless global demand craters, which would be a bad thing.
Our current administration is not issuing and is withholding permits. Restarting the Keystone pipeline will take time. So what? Again I ask so what? The point is to increase our own production and be energy self sufficient. Every attempt to be self sufficient is a matter of National Security. In the meantime we can also buy more crude oil from other oil producing nations like Canada, Norway, Mexico etc…Surely not from the islamic state of Iran like our dear supreme leader wants us too.
New drilling leases aren’t required, and not all sold at the last auction. It isn’t a matter of oil in the ground, it is a matter of companies wanting to risk the expense of drilling to have prices collapse. The new pipeline won’t make up the shortfall (though I’m mostly for completing it). One of the answers is to use less oil. When gas was cheap, lots of people bought larger SUVs and trucks. Free market. I own a truck.
We’ve cleared this up before, but Iranian oil is sold on the black market, and is discounted as a result. The US doesn’t buy any, but Iranian oil affects prices because it adds to supply. FWIW, it helps us out right this minute. Nothing more to be done. UAE and Saudi increased output 400k barrels per day, but would rather take the profits. Coach V got into some oil equities early, he said, so he nailed that, and he can buy me a beer next time we run into each other.
There is no way to immediately increase supply. 70% of Russian oil is already off the market, not many buyers. We will just have to pay higher prices or roll back the sanctions on Russia.
“The new pipeline won’t make up the shortfall”
How did you come up with this conclusion?
What is the capacity of the Keystone pipeline?
The pipeline has a capacity to deliver 830,000bpd of crude oil and is expected to reduce greenhouse gas emissions by 19 million metric tonnes.
How many barrels do we import from Russia?
How many barrels a day does the US import from Russia?
The U.S. imports 670,000 barrels of crude oil and petroleum products each day from Russia, according to the U.S. Energy Information Administration, which only accounts for 5% of its crude imports.
The above was from two days ago
It’s not easy to pick and choose which country you import oil from. First, each refinery is set up for a certain type of crude. Every country’s crude doesn’t fit what is needed.
Also, logistics are important and not every country needs to export here or reasonably can.
Biden is right…you keep importing, and depleting, resources from a competior unitil you can NOT.
If we were to enter a crisis period , like World War III, then we do not import resources from our enemy…we then, if needed, tap into our pipeline and protect OUR resources from competitors.
I view the pipeline as an emergency fund to PROTECT Americans. You do NOT use it unless you absolutely need to.
Right now we are NOT at war with Russia…so the suburban cry babies will have to continue to throw their tantrums over the price of oil. Nobody FORCED them to live in the outer reaches of sprawling cities and live a life dependent on oil…that is a personsl decision.
Based on the most recent data available from the U.S. Energy and Information Administration, the United States imports about 7.236 million barrels of crude oil per day to make up the difference between how much the nation produces and consumes. This is based on numbers from April 2020.
So, the pipeline helps, but still a huge shortfall.
And yeah, use less gas. Many people will do that without any prompting. Even those who can easily afford gasoline at any price will cut back because it is a visible and immediate expense you see while you are filling the tank. I remember the oil shortages during the Iranian embargo. All of a sudden, people had an appetite for smaller, more fuel efficient vehicles. In many ways it accelerated the importation of Japanese cars because they got better mileage.
Who knows what long-term changes will come, but even the unlikely total capitulation of Russia won’t solve this within the next few years. Gonna have to do something different. People with money to invest will figure that out.
We do import 7M’s + per day. What I would like us to do is eliminate importing crude oil from Russia.
That equates to 670,000 barrels of crude oil and petroleum products each day.
The pipeline has a capacity to deliver 830,000bpd of crude oil and is expected to reduce greenhouse gas emissions by 19 million metric tones.
The most basic logic is to finish the Keystone pipeline ASAP
Get more crude oil from friendly nations that “fit” our refineries
I am sorry I still do not follow your logic.
By not buying their oil you lessen them funding their army. Most of their “hard core” economy is based around crude oil or/and crude oil by products.
Yeah, well for one thing it will take years to build the Keystone XL. And don’t forget
tar sands are about the dirtiest crude you can find, recover, and process.