Biden adviser calls Wall Street opposition to shale drilling 'un-American'

Biden adviser calls Wall Street opposition to shale drilling ‘un-American’

White House chief energy adviser slams US shale investors’ refusal to ramp up drilling as ‘un-American’, even as Moscow’s invasion of Ukraine wreaks havoc on markets world oil and gas.

US oil companies have come under pressure from Wall Street to return record profits to investors this year, despite repeated pleas from President Joe Biden to pump out more oil to help tame runaway inflation.

“I think the idea that financiers would tell companies in the United States not to increase production and to buy back shares and increase dividends when profits are at record highs is outrageous,” said Amos Hochstein. , President Biden’s international energy envoy. “It’s not just un-American, it’s so unfair to the American public.

“You want to pay dividends, pay dividends. You want to pay shareholders, pay shareholders. You want to get bonuses, do it too. You could do all of that and invest even more. We ask you to increase production and seize the moment.

Hochstein’s comments came just days after the twin launch of an EU embargo on Russian oil imports by sea and a G7 price cap on the country’s oil in a bid by Western powers to hamper Kremlin revenues while keeping its crude flowing to the world market.

Moscow has repeatedly promised not to sell oil to countries respecting the cap. On Friday, President Vladimir Putin said Russia would “even think. . . on a possible reduction in production.

Hochstein said the Kremlin remained a threat to a “highly volatile” oil market and noted that Russia has repeatedly weaponized energy, including shutting off gas supplies to Germany this year.

“I think about it all the time,” he said, referring to the Russian threat to stop oil exports. “But that risk exists with or without the price cap.”

Oil prices have swung wildly this year, hitting nearly $140 a barrel after the Russian invasion in March, prompting the White House to release crude stored in emergency stocks in a bid to calm inflation.

Prices have fallen in recent days on fears of a global recession, with the international benchmark Brent index set at a year-to-date low of $76.10 a barrel on Friday.

But further turbulence in global energy is likely, particularly in the European gas market, as the standoff between Putin and the West deepens, Hochstein said.

While an “unprecedented” effort by the United States and other liquefied natural gas exporters had left Europe well supplied with fuel for this winter, the loss of Russian pipeline imports would mean repeating the “winter by winter,” warned Hochstein.

Additional global LNG supply would not arrive until plants being built in the United States and Qatar come online later this decade, meaning “the mountain to climb”. [to build] gas stocks for next year are much higher”.

“We are really preparing and living from an energy perspective, in Europe and beyond, in a hand-to-mouth, step-by-step [way]said Hochstein.

The longer-term solution was not to invest in more natural gas supply, but to reduce fossil fuel consumption themselves, argued Hochstein, a former LNG executive.

“We have to meet the demand [for hydrocarbons] then scale it down from there,” Hochstein said.

Advisor Biden’s comments will spark a backlash in the U.S. shale sector, which has complained about mixed signals from a White House that has called for more fossil fuel production while talking about reducing demand and accelerating development. abandonment of oil and gas.

But Hochstein denied any contradiction, saying the United States could “do two things at the same time, making sure we have enough [oil] supplying a strong global economy, while accelerating the energy transition”.

Oil would remain useful to the economy for several years, he said, adding that the Biden administration itself would become a major buyer of crude to replenish a federal stockpile when U.S. oil prices fall to around $70. the barrel.

Hochstein also criticized ExxonMobil’s $50 billion share buyback program, announced last week – a chief executive Darren Woods recently described as returning money “directly to the American people”.

“The only thing worse than announcing a stock buyback is saying that’s how you give profits back to the American people,” Hochstein said. “If you want to give back to the American people, invest in America, its workers. . . increase production, [make] the United States less dependent on other countries.

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