In exclusive comments to The Epoch Times, Tim Stewart, the president of the U.S. Oil & Gas Association, said his industry has faced unprecedented hostility from D.C. under the Biden administration.
“In my 30 years of working in Washington, this has without a doubt been the most unfavorable political and regulatory environment for our industry I have ever seen,” said Stewart. “It started on Day One, and it continues.”
Stewart referenced President Joe Biden’s promise at last Friday’s press conference that he would “work like the devil” to lower gasoline prices. He said it ran contrary to the administration’s prior actions on oil and gas, including cancellation of the Keystone XL pipeline and a freeze on oil and gas leasing on federal lands and waters.
“My response would be: ‘You’ve worked like the devil to jack up prices until last Friday,’” Stewart said.
Energy analyst David Blackmon, an editor for Shale Magazine, voiced strong agreement with Stewart.
“In the U.S., we have a presidential administration that has spent a year now taking every action at its disposal to hinder domestic oil and gas production, as well as the build-out of transportation infrastructure to move it to market. We have Democratic majorities in both houses of Congress who inserted significant anti-fossil fuel provisions into their infrastructure bill and sought even more in the failed Build Back Better legislation,” Blackmon told The Epoch Times in an email interview.
“The oil and gas industry has never faced such a degree of open hostility from the political community,” he added.
Blackmon and Stewart spoke to The Epoch Times at a time when energy prices are surging.
Brent crude, a key international benchmark for oil prices, has increased from $64 per barrel in 2019 to more than $96 a barrel on Feb. 14, as reported by the Energy Information Administration (EIA) and Reuters, respectively.
While the EIA predicted on Jan. 12 that Brent would fall from $79 per barrel in the fourth quarter of 2021 to $75 per barrel in 2022, its February outlook revised the 2022 average upward to $82 a barrel.
The investment firm Raymond James projects that oil could hit $125 per barrel by midway through 2022, as reported by Bloomberg.
Gasoline prices have also risen. AAA reports the average national price of a gallon of regular gas was $3.488 on Feb. 14, up from $3.306 a month before and $2.505 a year ago.
Despite these signals on the demand side, many energy companies have started to sell their upstream holdings. In January, Exxon Mobil announced it was divesting from Appalachian shale assets. In December 2021, Shell completed the sale of its assets in the Permian Basin.
Additionally, on Feb. 14, New York State’s public pension fund withdrew $238 million from companies involved in shale production.
Some petroleum industry insiders, including ConocoPhillips CEO Ryan Lance, have said that upstream is not getting enough capital. (ConocoPhillips purchased Shell’s interests in the Permian Basin in December 2021).
Stewart said the push for ESG in the finance sector has contributed to the current pressure on shale companies. He told The Epoch Times that worries about ESG have stymied investments in new shale drilling operations.
“We’re seeing the negative impacts of two or three years of very quiet efforts on the ESG side, where there’s been incredible stakeholder activism to put pressure on Wall Street to debank the industry,” Stewart said.
An EIA spokesperson told The Epoch Times via email that the agency anticipates the Permian Basin will continue to drive growth in domestic production over the coming years, generating 5.3 million barrels per day in 2022 and 5.7 million barrels per day in 2023.
Permian crude oil production rose from 4.4 million barrels per day in 2020 to 4.8 million barrels per day in 2021.
The EIA spokesperson noted that “some exploration and production activity in the United States during 2021 did not respond as quickly to the price increase as it has in the past.”
Contrary to EIA’s projections, global oil inventories dropped during January, helping to fuel the rise in prices.
“Oil prices have also risen as a result of heightened market concerns about the possibility of oil supply disruptions, notably related to tensions regarding Ukraine, paired with receding market concerns that the Omicron variant of COVID-19 will have widespread effects on oil consumption,” the spokesperson added.
Stewart said the EIA’s longer-term projections are likely accurate.
“In the short term, we’re starting to see rig counts creep up, and prices are still going to remain high until inventories catch up,” he added.
The Epoch Times has reached out to an anti-fracking group for comment.