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"Very little to do with it" I think its probably fair to say a good economy is outside of a presidents control. But presidents have plenty of tools to make an

"Very little to do with it" I think its probably fair to say a good economy is outside of a presidents control. But presidents have plenty of tools to make an economy worse at their disposal. For example shutting down domestic energy production, thus causing energy prices to increase, which will cause other prices to increase. This inarguably happened. We can discuss whether its good in the long run for environmental reasons. But no one in good faith can argue this administration didnt deliberately choose to shut off oil production to help push green policies and encourage people to get electric cars. Funny thing though is the price of gas is baked into almost every product in the country.....

jonnycomputer 4y ago
"shutting down domestic energy production" which "inarguably happened" If oil companies slowed down their drilling, easily accounted for by decreased demand caused by a massive recession. The President had nothing to do with it. https://rigcount.bakerhughes.com/ https://rigcount.bakerhughes.com/ https://tradingeconomics.com/united-states/crude-oil-rigs https://tradingeconomics.com/united-states/crude-oil-rigs
- leereeves 4y ago
  > The President had nothing to do with it. You're just going to ignore all the ways the President has opposed the oil industry? The President's actions have repeatedly signaled that investing in oil right now is betting against the US government: Jan 2021: Keystone XL pipeline halted as Biden revokes permit https://abcnews.go.com/International/wireStory/work-keystone-xl-pipeline-suspended-ahead-biden-action-75371464 https://abcnews.go.com/International/wireStory/work-keystone... Jan 2021: Biden suspends oil and gas leasing in slew of executive actions on climate change https://www.cnbc.com/2021/01/27/biden-suspends-oil-and-gas-drilling-in-series-of.html https://www.cnbc.com/2021/01/27/biden-suspends-oil-and-gas-d... Mar 2021: The Biden EPA Withdraws a Key Permit for an Oil Refinery on St. Croix https://insideclimatenews.org/news/25032021/biden-epa-limetree-oil-refinery-virgin-islands-permit/ https://insideclimatenews.org/news/25032021/biden-epa-limetr... Aug 2021: Biden signs order aiming for half of new vehicles to be electric by 2030 [reducing future demand for oil] https://www.nbcnews.com/politics/politics-news/biden-sign-order-aiming-half-new-vehicles-be-electric-2030-n1275995 https://www.nbcnews.com/politics/politics-news/biden-sign-or... Oct 2021: Drillers Would Face First-Time Methane Fee Under Biden Deal https://www.bloomberg.com/news/articles/2021-10-28/biden-deal-includes-first-time-fees-on-super-pollutant-methane https://www.bloomberg.com/news/articles/2021-10-28/biden-dea... Oct 2021: Biden bill targets fossil fuel firms in hopes of raising more than $100 billion in taxes https://www.washingtonpost.com/climate-environment/2021/10/29/biden-fossil-fuels/ https://www.washingtonpost.com/climate-environment/2021/10/2... Nov 2021: Biden asks FTC to investigate oil and gas companies https://www.politico.com/news/2021/11/17/biden-ftc-investigate-oil-gas-companies-522804 https://www.politico.com/news/2021/11/17/biden-ftc-investiga... Feb 2022: Biden administration freezes new oil and gas drilling leases [again] https://www.cnn.com/2022/02/21/us/biden-climate-social-cost-of-carbon-court/index.html https://www.cnn.com/2022/02/21/us/biden-climate-social-cost-... Jun 2022: Biden Administration Considers A Windfall Tax On Oil And Gas Profits https://finance.yahoo.com/news/biden-administration-considers-windfall-tax-190000268.html https://finance.yahoo.com/news/biden-administration-consider...
  - pron 4y ago
    A new lease on undeveloped land takes several years to reach production, so decisions made on leasing new lands now will have an effect only a few years from now.
    - leereeves 4y ago
      Beyond the impact of any specific policy, these decisions lead to the very obvious conclusion that oil faces significant political headwinds during the Biden administration and is therefore a bad investment right now. It's fair to argue that this is right decision for the future of humanity, but not to claim that these policies have no effect on short term energy prices. Long term, I think the country (and the world) are still divided (though HN clearly leans hard against oil). The future for oil could go either way, depending on the results of future elections.
      - deleted 4y ago
        [deleted]
      - jonnycomputer 4y ago
        I think people already knew that oil faces political headwinds because of global warming--which fewer and fewer people deny is happening, because they can see it for themselves.. Besides, from what I've read, Biden's executive action pause on new leases was overturned in court by June 2021. Figure 1 of this page (https://www.citizen.org/article/bidens-oil-letdown/ https://www.citizen.org/article/bidens-oil-letdown/) doesn't seem to indicate any real slow down in new oil leases [if someone has a more neutral source, I'd be happy to see it]. In any case, only about a quarter of US oil production is on federal land.
    - _-david-_ 4y ago
      How many years is a few? It has been a year and a half since his first action so I want to know when Biden is to blame.
      - pron 4y ago
- jonnycomputer 4y ago
  And if you zoom out further, you'll see that crude oil rig count dipped precipitously starting around 2015. In fact the trend is very similar between when Trump started his Presidency, and when Biden his, and yet the narrative that gets told about why this happened has everything to do with politics and political stereotypes, and very little with reality.
  - leereeves 4y ago
    > In fact the trend is very similar between when Trump started his Presidency, and when Biden his Oil production under Trump grew much faster than under Biden. Apart from recovering from a one month crater immediately after Biden took office (Feb 2021), oil production has barely increased at all under Biden. Whereas it increased by over 10% per year during Trump's first two years. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus2&f=m https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=m...
- gruez 4y ago
  And why did oil companies slow down oil drilling? Did they have an epiphany that drilling for oil is bad and they should stop? If they had drilled for oil they'd be making bank right now.
  - jonnycomputer 4y ago
    Because there was a massive recession?
  - Loughla 4y ago
    >And why did oil companies slow down oil drilling? Because there was a global, unprecedented reduction in demand? >If they had drilled for oil they'd be making bank right now. Yeah, and if I could see the future, I'd win the lottery also. What purpose does this sentence serve to you, genuinely curious.
  - runako 4y ago
    An active oil well produces oil every day, whether you want it or not. When demand abruptly dropped, crude started piling up at storage facilities, leading the price of oil to drop below $0[1]. Cutting production is a rational market response when wholesale prices are negative. 1 - https://www.reuters.com/article/us-global-oil-crash-explainer/explainer-what-is-a-negative-crude-future-and-does-it-mean-anything-for-consumers-idUSKBN22301M https://www.reuters.com/article/us-global-oil-crash-explaine...
- namelessoracle 4y ago
  So one of the very first acts of Biden admin wasn't shutting down an oil pipeline and alienating the oil industry? If Trump gets elected in 2024 and shuts down say AWS, and someone says he's "Shutting down the tech industry", Im sure you will pedantically argue that too right?
balderdash 4y ago
Let’s be fair, yes the current administration has done all it can to discourage, obstruct, and tax the energy industry (that’s factor 1). Factor two is ESG initiatives starving the sector of financing/investors. Factor three is other shareholders demanding cash returns after seeing tons of capex get burned the last go around. Factor 4 is the industry turned off during Covid (didn’t get a bailout like airlines) and now has to ramp back up. Don’t ask me to weight these but like the argument around what caused inflation it’s not one thing, but several working in concert.
awinder 4y ago
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus2&f=m https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=m... Biden announced policies related to new drilling starts but none of that impacts pricing or output to the degree you’re suggesting it does. There was no “shutting off” of production for sure so consider this a serious argumentative point?
- jonnycomputer 4y ago
  Typical of how things work, but it was challenged in court, Biden lost and resumed new leases, but they are challenging decision... https://www.eenews.net/articles/how-the-courts-have-shaped-bidens-leasing-strategy/ https://www.eenews.net/articles/how-the-courts-have-shaped-b... Only about a quarter of US oil production is on federal land anyway...
  - UncleEntity 4y ago
    Apparently they can’t even get people out to wells which were shut down to turn them on again due to a shortage of people who do that sort of thing. Can’t even imagine what the wait time is on a brand new well.
    - jonnycomputer 4y ago
      Labor shortages have been crazy everywhere.
      - UncleEntity 4y ago
        Plus this is one of those industries where you know there’s no future so why even bother entering it.
        jonnycomputer 4y ago
        I've always been of the view that oil and coal were too valuable, too energy-dense a finite resource, to waste, but should be kept in reserve for if/when we really need that kind of energy density. On a local scale: I'd rather use solar on my rooftop, but don't mind having a diesel generator when the power goes out. Other uses for oil and coal besides. Coking coal for steel production, oil for plastics, etc.
matthewdgreen 4y ago
The President can also darkly threaten to take away the independence of the the Federal Reserve if they don't keep rates low to assist in their re-election. Such things normally don't happen, but there's no physical barrier to prevent it. [1] [1] https://www.reuters.com/article/us-usa-fed-trump-tweets/trumps-tweets-threaten-feds-independence-push-rate-expectations-lower-study-idUSKBN1W82II https://www.reuters.com/article/us-usa-fed-trump-tweets/trum...
- UncleEntity 4y ago
  Congress, maybe, by repealing the federal reserve act. The president doesn’t have the power to just make things up as they go and I’m 99.8% sure the Fed isn’t under the control of the executive branch.
  - matthewdgreen 4y ago
    The President nominates the Federal Reserve Board with the consent of the Senate. But apparently the law on whether governors can be demoted by the President is unclear and may have to be resolved in Court. Apparently our last President asked his advisors for opinions on doing exactly this (surprise) [1], and like many things in our political system the answer turned out to be something more like "this would be a violation of norms" rather than "it is clearly illegal". So a sufficiently motivated President could do quite a bit to make an uncooperative Fed's life difficult, particularly if they enjoyed a sympathetic Congress and Supreme Court. The potential chaos alone makes threats much more credible. [1] https://archive.ph/y1uEv/again?url=https://www.bloomberg.com/news/articles/2019-06-18/white-house-explored-legality-of-demoting-fed-chairman-powell https://archive.ph/y1uEv/again?url=https://www.bloomberg.com...
taylodl 4y ago
U.S. refining capacity is running at 100%. You can add as much oil to the supply as you want - we can't refine it. Several refining facilities have been retired over the past 10 years as they've hit and-of-life. No one is interested in building new refineries because it's capital-intensive and requires a 50-60 year lifetime to achieve desired income. Many European countries have banned the sale of ICE vehicles by 2035, so why would you invest in more refining capacity in 2022? Not only that, but if you make the capital investment to increase refining capacity the result will be lowering the price of your product. That new refinery will never pay for itself, let alone be profitable. Why the dramatic rise in gas prices? Two-fold - refineries were end-of-lifed during the pandemic, which reduces supply, and then the lockdowns were lifted when the Covid vaccines became widely distributed, which had the result of increasing demand. Reduced supply + increased demand = higher prices. Throw in the Ukrainian War which has introduced uncertainties in the global oil market and so you have raw material costs increasing as well.
- WillPostForFood 4y ago
  No one is interested in building new refineries But they are interested in expanding existing refineries and have been blocked by the White House. https://www.reuters.com/article/us-usa-refinery-pollution/biden-white-house-blocks-virgin-islands-refinery-expansion-permit-over-pollution-concerns-idUSKBN2BH2OP https://www.reuters.com/article/us-usa-refinery-pollution/bi...
  - taylodl 4y ago
    That seems pretty disingenuous to me, TBH. Article to your linked article it's not an issue of the refinery's owner wanted to increase capacity and the White House said no. It's an issue of a refinery already experiencing environmental issues wanted to expand and weren't addressing the existing outstanding issues. Also, I find it curious the refinery in question is located in the U.S. Virgin Islands. I could be completely wrong but I would guess that refinery is producing refined products for export and not serving the U.S. domestic market. In another vein, it's interesting too that U.S. gasoline exports to Mexico and Latin America have risen to record levels. It's almost as if we're not a Socialist country and we can't tell those companies to supply that gas to the domestic market to help drive prices down.
wbsss4412 4y ago
> This inarguably happened. Hubris. This is not what happened in the slightest. Oil is traded on a global market, the little impact domestic production has on the price of oil is due to its contribution to global supplies. The only domestic industry that has an impact on local capacity is refining. Here is what happened: the fracking boom that began in the early/mid 2010s led to an oil glut as OPEC kept production high in order to drive out domestic US producers from the market (the shale producers had a higher cost structure and needed +$60 oil to break even). This strategy worked even before Covid, and once Covid hit, oil traded negative for a short period. During 2021 oil inventories slowly drew down. Yet, given the experience of the latter half of the previous decade, US producers have been understandably hesitant to invest. Obviously the Biden administration did not disabuse them of this notion, but the effect of their actions is consistently overstated. Shale companies had been failing since before Biden even declared his run for president. The war in Ukraine was then a precipitation even for oil prices to spike, but the biggest impact on gas prices has less to do with oil production challenges (though that was impacted) and more to do with refining. Crack spreads (the difference in profit between refining a barrel of oil into gasoline vs other distillates) hit record highs this year. The value of refining diesel and jet fuel was higher than refining gasoline, when it is usually the reverse. This can be pretty clearly traced to, on the one had, a rapid rebound in air travel, and on the other, shifted supply chains from Europe where diesel is the primary fuel for passenger vehicles (though I’ll admit that the latter is more speculative on my part).
Spooky23 4y ago
I think this admin is incompetent at communication and created the narrative you just expressed. The lockdown and implosion in demand created massive swings in demand and inventory. Crude oil production is a secondary driver, the primary driver of gas prices is end product (ie gasoline and diesel) inventory. There isn’t a ton a competitive pressure to invest billions in capital to activate refineries when your margins are so high and competitive forces are weak.

jonnycomputer 4y ago

"shutting down domestic energy production" which "inarguably happened" If oil companies slowed down their drilling, easily accounted for by decreased demand caused by a massive recession. The President had nothing to do with it. https://rigcount.bakerhughes.com/ https://rigcount.bakerhughes.com/ https://tradingeconomics.com/united-states/crude-oil-rigs https://tradingeconomics.com/united-states/crude-oil-rigs

leereeves 4y ago
> The President had nothing to do with it. You're just going to ignore all the ways the President has opposed the oil industry? The President's actions have repeatedly signaled that investing in oil right now is betting against the US government: Jan 2021: Keystone XL pipeline halted as Biden revokes permit https://abcnews.go.com/International/wireStory/work-keystone-xl-pipeline-suspended-ahead-biden-action-75371464 https://abcnews.go.com/International/wireStory/work-keystone... Jan 2021: Biden suspends oil and gas leasing in slew of executive actions on climate change https://www.cnbc.com/2021/01/27/biden-suspends-oil-and-gas-drilling-in-series-of.html https://www.cnbc.com/2021/01/27/biden-suspends-oil-and-gas-d... Mar 2021: The Biden EPA Withdraws a Key Permit for an Oil Refinery on St. Croix https://insideclimatenews.org/news/25032021/biden-epa-limetree-oil-refinery-virgin-islands-permit/ https://insideclimatenews.org/news/25032021/biden-epa-limetr... Aug 2021: Biden signs order aiming for half of new vehicles to be electric by 2030 [reducing future demand for oil] https://www.nbcnews.com/politics/politics-news/biden-sign-order-aiming-half-new-vehicles-be-electric-2030-n1275995 https://www.nbcnews.com/politics/politics-news/biden-sign-or... Oct 2021: Drillers Would Face First-Time Methane Fee Under Biden Deal https://www.bloomberg.com/news/articles/2021-10-28/biden-deal-includes-first-time-fees-on-super-pollutant-methane https://www.bloomberg.com/news/articles/2021-10-28/biden-dea... Oct 2021: Biden bill targets fossil fuel firms in hopes of raising more than $100 billion in taxes https://www.washingtonpost.com/climate-environment/2021/10/29/biden-fossil-fuels/ https://www.washingtonpost.com/climate-environment/2021/10/2... Nov 2021: Biden asks FTC to investigate oil and gas companies https://www.politico.com/news/2021/11/17/biden-ftc-investigate-oil-gas-companies-522804 https://www.politico.com/news/2021/11/17/biden-ftc-investiga... Feb 2022: Biden administration freezes new oil and gas drilling leases [again] https://www.cnn.com/2022/02/21/us/biden-climate-social-cost-of-carbon-court/index.html https://www.cnn.com/2022/02/21/us/biden-climate-social-cost-... Jun 2022: Biden Administration Considers A Windfall Tax On Oil And Gas Profits https://finance.yahoo.com/news/biden-administration-considers-windfall-tax-190000268.html https://finance.yahoo.com/news/biden-administration-consider...
- pron 4y ago
  A new lease on undeveloped land takes several years to reach production, so decisions made on leasing new lands now will have an effect only a few years from now.
  - leereeves 4y ago
    Beyond the impact of any specific policy, these decisions lead to the very obvious conclusion that oil faces significant political headwinds during the Biden administration and is therefore a bad investment right now. It's fair to argue that this is right decision for the future of humanity, but not to claim that these policies have no effect on short term energy prices. Long term, I think the country (and the world) are still divided (though HN clearly leans hard against oil). The future for oil could go either way, depending on the results of future elections.
    - deleted 4y ago
      [deleted]
    - jonnycomputer 4y ago
      I think people already knew that oil faces political headwinds because of global warming--which fewer and fewer people deny is happening, because they can see it for themselves.. Besides, from what I've read, Biden's executive action pause on new leases was overturned in court by June 2021. Figure 1 of this page (https://www.citizen.org/article/bidens-oil-letdown/ https://www.citizen.org/article/bidens-oil-letdown/) doesn't seem to indicate any real slow down in new oil leases [if someone has a more neutral source, I'd be happy to see it]. In any case, only about a quarter of US oil production is on federal land.
  - _-david-_ 4y ago
    How many years is a few? It has been a year and a half since his first action so I want to know when Biden is to blame.
    - pron 4y ago
jonnycomputer 4y ago
And if you zoom out further, you'll see that crude oil rig count dipped precipitously starting around 2015. In fact the trend is very similar between when Trump started his Presidency, and when Biden his, and yet the narrative that gets told about why this happened has everything to do with politics and political stereotypes, and very little with reality.
- leereeves 4y ago
  > In fact the trend is very similar between when Trump started his Presidency, and when Biden his Oil production under Trump grew much faster than under Biden. Apart from recovering from a one month crater immediately after Biden took office (Feb 2021), oil production has barely increased at all under Biden. Whereas it increased by over 10% per year during Trump's first two years. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus2&f=m https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=m...
gruez 4y ago
And why did oil companies slow down oil drilling? Did they have an epiphany that drilling for oil is bad and they should stop? If they had drilled for oil they'd be making bank right now.
- jonnycomputer 4y ago
  Because there was a massive recession?
- Loughla 4y ago
  >And why did oil companies slow down oil drilling? Because there was a global, unprecedented reduction in demand? >If they had drilled for oil they'd be making bank right now. Yeah, and if I could see the future, I'd win the lottery also. What purpose does this sentence serve to you, genuinely curious.
- runako 4y ago
  An active oil well produces oil every day, whether you want it or not. When demand abruptly dropped, crude started piling up at storage facilities, leading the price of oil to drop below $0[1]. Cutting production is a rational market response when wholesale prices are negative. 1 - https://www.reuters.com/article/us-global-oil-crash-explainer/explainer-what-is-a-negative-crude-future-and-does-it-mean-anything-for-consumers-idUSKBN22301M https://www.reuters.com/article/us-global-oil-crash-explaine...
namelessoracle 4y ago
So one of the very first acts of Biden admin wasn't shutting down an oil pipeline and alienating the oil industry? If Trump gets elected in 2024 and shuts down say AWS, and someone says he's "Shutting down the tech industry", Im sure you will pedantically argue that too right?

balderdash 4y ago

Let’s be fair, yes the current administration has done all it can to discourage, obstruct, and tax the energy industry (that’s factor 1). Factor two is ESG initiatives starving the sector of financing/investors. Factor three is other shareholders demanding cash returns after seeing tons of capex get burned the last go around. Factor 4 is the industry turned off during Covid (didn’t get a bailout like airlines) and now has to ramp back up. Don’t ask me to weight these but like the argument around what caused inflation it’s not one thing, but several working in concert.

awinder 4y ago

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus2&f=m https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=m... Biden announced policies related to new drilling starts but none of that impacts pricing or output to the degree you’re suggesting it does. There was no “shutting off” of production for sure so consider this a serious argumentative point?

jonnycomputer 4y ago
Typical of how things work, but it was challenged in court, Biden lost and resumed new leases, but they are challenging decision... https://www.eenews.net/articles/how-the-courts-have-shaped-bidens-leasing-strategy/ https://www.eenews.net/articles/how-the-courts-have-shaped-b... Only about a quarter of US oil production is on federal land anyway...
- UncleEntity 4y ago
  Apparently they can’t even get people out to wells which were shut down to turn them on again due to a shortage of people who do that sort of thing. Can’t even imagine what the wait time is on a brand new well.
  - jonnycomputer 4y ago
    Labor shortages have been crazy everywhere.
    - UncleEntity 4y ago
      Plus this is one of those industries where you know there’s no future so why even bother entering it.
      - jonnycomputer 4y ago
        I've always been of the view that oil and coal were too valuable, too energy-dense a finite resource, to waste, but should be kept in reserve for if/when we really need that kind of energy density. On a local scale: I'd rather use solar on my rooftop, but don't mind having a diesel generator when the power goes out. Other uses for oil and coal besides. Coking coal for steel production, oil for plastics, etc.

matthewdgreen 4y ago

The President can also darkly threaten to take away the independence of the the Federal Reserve if they don't keep rates low to assist in their re-election. Such things normally don't happen, but there's no physical barrier to prevent it. [1] [1] https://www.reuters.com/article/us-usa-fed-trump-tweets/trumps-tweets-threaten-feds-independence-push-rate-expectations-lower-study-idUSKBN1W82II https://www.reuters.com/article/us-usa-fed-trump-tweets/trum...

UncleEntity 4y ago
Congress, maybe, by repealing the federal reserve act. The president doesn’t have the power to just make things up as they go and I’m 99.8% sure the Fed isn’t under the control of the executive branch.
- matthewdgreen 4y ago
  The President nominates the Federal Reserve Board with the consent of the Senate. But apparently the law on whether governors can be demoted by the President is unclear and may have to be resolved in Court. Apparently our last President asked his advisors for opinions on doing exactly this (surprise) [1], and like many things in our political system the answer turned out to be something more like "this would be a violation of norms" rather than "it is clearly illegal". So a sufficiently motivated President could do quite a bit to make an uncooperative Fed's life difficult, particularly if they enjoyed a sympathetic Congress and Supreme Court. The potential chaos alone makes threats much more credible. [1] https://archive.ph/y1uEv/again?url=https://www.bloomberg.com/news/articles/2019-06-18/white-house-explored-legality-of-demoting-fed-chairman-powell https://archive.ph/y1uEv/again?url=https://www.bloomberg.com...

taylodl 4y ago

U.S. refining capacity is running at 100%. You can add as much oil to the supply as you want - we can't refine it. Several refining facilities have been retired over the past 10 years as they've hit and-of-life. No one is interested in building new refineries because it's capital-intensive and requires a 50-60 year lifetime to achieve desired income. Many European countries have banned the sale of ICE vehicles by 2035, so why would you invest in more refining capacity in 2022? Not only that, but if you make the capital investment to increase refining capacity the result will be lowering the price of your product. That new refinery will never pay for itself, let alone be profitable. Why the dramatic rise in gas prices? Two-fold - refineries were end-of-lifed during the pandemic, which reduces supply, and then the lockdowns were lifted when the Covid vaccines became widely distributed, which had the result of increasing demand. Reduced supply + increased demand = higher prices. Throw in the Ukrainian War which has introduced uncertainties in the global oil market and so you have raw material costs increasing as well.

WillPostForFood 4y ago
No one is interested in building new refineries But they are interested in expanding existing refineries and have been blocked by the White House. https://www.reuters.com/article/us-usa-refinery-pollution/biden-white-house-blocks-virgin-islands-refinery-expansion-permit-over-pollution-concerns-idUSKBN2BH2OP https://www.reuters.com/article/us-usa-refinery-pollution/bi...
- taylodl 4y ago
  That seems pretty disingenuous to me, TBH. Article to your linked article it's not an issue of the refinery's owner wanted to increase capacity and the White House said no. It's an issue of a refinery already experiencing environmental issues wanted to expand and weren't addressing the existing outstanding issues. Also, I find it curious the refinery in question is located in the U.S. Virgin Islands. I could be completely wrong but I would guess that refinery is producing refined products for export and not serving the U.S. domestic market. In another vein, it's interesting too that U.S. gasoline exports to Mexico and Latin America have risen to record levels. It's almost as if we're not a Socialist country and we can't tell those companies to supply that gas to the domestic market to help drive prices down.

wbsss4412 4y ago

> This inarguably happened. Hubris. This is not what happened in the slightest. Oil is traded on a global market, the little impact domestic production has on the price of oil is due to its contribution to global supplies. The only domestic industry that has an impact on local capacity is refining. Here is what happened: the fracking boom that began in the early/mid 2010s led to an oil glut as OPEC kept production high in order to drive out domestic US producers from the market (the shale producers had a higher cost structure and needed +$60 oil to break even). This strategy worked even before Covid, and once Covid hit, oil traded negative for a short period. During 2021 oil inventories slowly drew down. Yet, given the experience of the latter half of the previous decade, US producers have been understandably hesitant to invest. Obviously the Biden administration did not disabuse them of this notion, but the effect of their actions is consistently overstated. Shale companies had been failing since before Biden even declared his run for president. The war in Ukraine was then a precipitation even for oil prices to spike, but the biggest impact on gas prices has less to do with oil production challenges (though that was impacted) and more to do with refining. Crack spreads (the difference in profit between refining a barrel of oil into gasoline vs other distillates) hit record highs this year. The value of refining diesel and jet fuel was higher than refining gasoline, when it is usually the reverse. This can be pretty clearly traced to, on the one had, a rapid rebound in air travel, and on the other, shifted supply chains from Europe where diesel is the primary fuel for passenger vehicles (though I’ll admit that the latter is more speculative on my part).

Spooky23 4y ago

I think this admin is incompetent at communication and created the narrative you just expressed. The lockdown and implosion in demand created massive swings in demand and inventory. Crude oil production is a secondary driver, the primary driver of gas prices is end product (ie gasoline and diesel) inventory. There isn’t a ton a competitive pressure to invest billions in capital to activate refineries when your margins are so high and competitive forces are weak.