Hacker News Reader

Comment by jonnycomputer | Hacker News Reader

"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://tradingeconomics.com/united-states/crude-oil-rigs

View on HN

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.

> 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=m...

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.

Because there was a massive recession?

>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.

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-explaine...

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?

> 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...

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-d...

Mar 2021: The Biden EPA Withdraws a Key Permit for an Oil Refinery on St. Croix

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-or...

Oct 2021: Drillers Would Face First-Time Methane Fee Under Biden Deal

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/2021/10/2...

Nov 2021: Biden asks FTC to investigate oil and gas companies

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-...

Jun 2022: Biden Administration Considers A Windfall Tax On Oil And Gas Profits

https://finance.yahoo.com/news/biden-administration-consider...

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.

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.

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/) 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.

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.

Information on the web says it takes about five years to develop a new lease.

In your expert commodity pricing opinion/method, how much do you ascribe pricing deltas to each of:

1. General inflationary forces 2. Disruptions in the euro market due to Russia/Ukraine 3. Global output / pricing forces 4. Biden’s future/sentiment based policy positions

I'm not trying to explain high oil prices, I'm trying to explain why US oil producers aren't quickly ramping up production despite the high prices.

From April 2021-22, US oil production increased by just 400K barrels per day, compared to 1.4M from April 2017-18 and 1.6M from April 2018-19.

And prices were lower back then.

But does it explain it though? Ramping up production because prices are currently high can be a losing strategy, since the price of gas is volatile, and ramping up production is slow, and expensive.

btw, even if I disagree, I don't think your comments should be dv'd. part of productive dialogue

Unfortunately, it's normal.

There are a lot of Democrat partisans here who upvote any pro-Biden nonsense, however poorly supported, and downvote any con-Biden facts, however well sourced.

Advancing their cause matters more to them than seeking truth.

Reply on news.ycombinator.com