Article by Eric Worrell
h/t MyUsername – According to Huffington Post reporter SV Dáte, the United States needs to keep gas prices high to prevent economic collapse.
Trump promises cheap natural gas. Too bad, getting it could lead to financial ruin.
Oil industry experts agree he can't deliver $1.70-a-gallon gas without destroying the domestic oil industry and triggering a deep recession.
Press SV date
August 22, 2024, 08:00 am ET…
The problem, industry experts explain, is that energy is bought and sold on global markets, and the only way gasoline prices can fall from $3.40 a gallon to $1.70 a gallon is if crude oil prices fall from $75 a barrel to $75 a barrel. dollars and $30. At such low prices, U.S. oil producers will not be able to break even.
“This will bankrupt American industry. Before that, the entire American industry will shut down. “This is classic Trump. He talks exaggeratedly without any common sense.
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Matt Randolph, another oil industry executive with more than three decades of industry experience, frequently posts videos on social media mocking the energy claims of Democratic and Republican politicians.
in a video After Trump's previous half-price pledge, Randolph posted a post last week mocking Trump's promise and raising the prospect of a recession triggered by layoffs in the oil industry. “This is probably one of the dumbest statements Donald Trump has ever made,” he concluded.
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With no market mechanism to slash prices, Trump can only take government action. “The only other way is to provide massive subsidies to American consumers,” Randolph said. “That can't fly.”
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Learn more: https://www.huffpost.com/entry/donald-trump-half-price-gas-promise-recession_n_66c68217e4b01c59f9de051f
The most disturbing part of the HuffPost article is that it appears to be an extremely lazy journalism article.
Why does “SV Dáte” accuse Trump of planning government subsidies? There is no evidence in the article that Deit sought an explanation from Trump; he was simply caught up in a wild fantasy about Trump's push for destructive government-backed subsidies.
Dart's other points seem equally weak. Matt Randolph, quoted in Dart News, seems to think there is no point in producing more oil in the United States.
… Randolph: We currently produce 13.3 million barrels of oil per day. In 2023, our average is 12.9. It was a record year. So we will set another record in 2024. If they just keep oil prices high, it's hard to say what good it will do for us to continue to increase oil production. …
Learn more: https://www.tpr.org/news/2024-04-28/matt-randolph-aka-mr-global-sets-the-record-straight-on-the-us-oil-and- gas-industry?
Even if Randolph is right about prices (which I doubt), Randolph's argument completely ignores the benefits of American businesses and workers getting rich from oil profits, rather than the money ending up in the hands of Middle Eastern oil sheikhs. Even if gasoline prices don't fall immediately, improving the trade balance by reducing U.S. cash outflows will increase the purchasing power of the dollar and reduce upward pressure on inflation and interest rates. Furthermore, if U.S. production grows fast enough, OPEC's unity could break down and producers break ranks to try to squeeze as much profit as possible from a declining market. There is evidence that OPEC's control over oil prices and member countries' production levels is much weaker than they think.
I'm not accusing Randolph of ulterior motives, but there's a very obvious reason why some big oil companies may prefer Biden/Harris policies to Trump's. Biden/Harris passed laws creating a significant competitive advantage for big oil companies over smaller rivals.
Only large corporations with large legal and accounting departments can comfortably shoulder the costs of environmental compliance under Biden/Harris.
Texas oil and gas commissioner slams Biden administration's job-killing oil and gas rules
December 5, 2023
AUSTIN – Railroad Commissioner Wayne Christian issued the following statement regarding the new strict methane rules proposed by the Biden Administration's Environmental Protection Agency (EPA).
“While hard-working Americans have seen costs rise by nearly $11,000 this year for everything from gas stations to grocery stores, President Biden's solution to inflation is increased regulation that will make U.S. oil and gas more expensive,” Commissioner Christian said. “More than 96% of everyday consumer goods, such as plastics, food, pharmaceuticals, etc., are produced from petroleum. These new regulations for U.S. oil and gas producers are sure to drive up prices.
“These new rules are likely to disproportionately impact smaller producers, which account for more than 83% of U.S. production. The industry's most important industries come at a time when producers face a financial drought on Wall Street and political headwinds from Democrats in Washington. What’s not needed is more bureaucratic red tape killing the business,” Christian continued. “It's disingenuous for the United States to kill clean fossil fuel jobs, claim it ensures a clean environment, and then implore our foreign adversaries to produce more products using less environmentally friendly methods. Americans are fighting high oil prices, addressing The answer to this conflict is simple—increase U.S. oil and gas production.
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Learn more: https://www.rrc.texas.gov/news/120523-texas-oil-gas-commissioner-slams-biden-administration-s-job-killing-oil-gas-rules/
All the environmental regulations proposed by Biden/Harris could push financially distressed small companies into the arms of larger companies, either through outright mergers or by joining umbrella groups of big companies in exchange for help with compliance. Even those small businesses that retain some independence under the new order may no longer feel completely free to compete and undercut the prices of the larger companies they relied on for protection from the Biden/Harris administration bureaucracy.
U.S. oil and gas M&A activity surged 57% last year due to industry consolidation
Nicole Rao
August 21, 202412: 21 am GMT+10
NEW YORK, Aug 20 (Reuters) – Deal activity in the oil and gas industry rose 57% last year as energy companies boosted development spending on the back of higher profit cash flow in previous years, according to a report released on Tuesday.
Ernst & Young reported that M&A spending by top energy companies was $49.2 billion in 2023, up from $31.4 billion in 2022. This growth has been driven primarily by large transactions between integrated oil and gas companies.
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Cash-rich companies are focused on gaining efficiencies through scale and leveraging existing operations, he said.
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Learn more: https://www.reuters.com/markets/commodities/us-oil-gas-ma-activity-jumped-57-last-year-amid-industry-consolidation-2024-08-20/
If Trump clears away bureaucracy, opens up new frontiers for exploration, and restores full market access for lean, low-cost independent operators, freeing up small businesses to try to drive down prices, consumers will benefit in some way. But the impact on profits could be devastating for some large energy companies, which have spent all their cash buying up struggling smaller operators.
Big businesses that took advantage of the Biden/Harris market distortions and spent all their cash buying up struggling small businesses may suddenly be forced to compete instead of using their market dominance to keep gas prices high and inflict pain on average consumers. The huge profits extracted are put into his own pocket. Fat cats may have to take a pay cut. Some of them may even lose their jobs.
Deiter could have learned all this if he had been willing to do some extra research. The fact that such a slapdash piece of “Orange Man” bad news has emerged, filled with straw man fantasies about Trump's policy platform, is, in my opinion, confirmation that the journalistic standards of today's mainstream media have plummeted.
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