Democrats look for ways to lower gas prices, Republicans cynically want to keep them high
Category: News & Politics
Via: john-russell • 2 years ago • 105 commentsBy: joanmccarter (Daily Kos)
S E E D E D C O N T E N T
Democrats look for ways to lower gas prices, Republicans cynically want to keep them high
Joan McCarter Daily Kos Staff 5-6 minutes
Republicans have developed a strategy to try to play both sides of the ban on Russian oil and imports. They want to pretend they oppose Russian dictator Vladimir Putin and are on Ukraine’s side, while at the same time attacking President Joe Biden at home over gas prices. If Democrats respond forcefully to oil company price gouging, they can expose the lie and put Republicans on defense.
House Minority Leader Kevin McCarthy was at it again Wednesday morning ahead of a scheduled House vote to codify Biden’s import ban. “These aren’t Putin prices, they’re President Biden prices.” That was in response, in part, to Rep. Jim McGovern, who said on the floor Wednesday morning “we also ought to understand that part of these price hikes, in addition to the Putin price hike, is the oil company price hike.” The oil companies are using this crisis to jack up oil prices, he argued. “I love the fact that we can’t even get anybody to express the slightest bit of outrage over the fact that oil companies are gouging us, making record profits,” he continued.
He meant anybody on the Republican side, of course. Because Democrats have been all over it, and are looking at a potential solution: a windfall profit tax on oil companies gouging Americans with high gas prices.
Tags
Who is online
428 visitors
After losing nearly 90% of its value from 2014 through October 2020, the Oklahoma City-based oil and gas producer was the top-performing 2021 stock in the Standard & Poor's 500, thanks to a concerted strategy of throttling back on exploration, squeezing costs and taking less risk. It turned a 2020 loss of $2.5 billion into a $2.8 billion profit for 2021, raising its dividend 45% and plowing nearly $600 million into stock buybacks after spending just $38 million the year before, with promises of more cash to rain on once-beleaguered shareholders soon.
"Devon generat[ed] the highest level of cash flow in our prestigious 50-year history," CEO Rick Muncrief crowed on a conference call. "We delivered exactly what our shareholder-friendly business model was designed for, and that is to lead the industry in cash returns."
Nine days later, Russia invaded Ukraine.
Now Devon and other producers face demands that the U.S. and Europe cut Russia off from world energy markets – not easy, since Russia's 10 million barrels a day make it the world's No. 3 producer of oil, and its natural gas supplies much of Western Europe's heat and electricity. Even though a new Quinnipiac poll says 71% of Americans favor expanding sanctions on Russia to include its oil and gas industry, U.S. oil isn't dying to pick up the slack – including Devon.
There's little wonder why oil isn't eager to ride to Ukraine's rescue: The exploration industry as a whole had nearly $20 billion in negative free cash flow as recently as 2015, losing $78 billion between 2005 and 2017 as hydraulic fracking took over the industry and drove crude prices lower amid oversupplied markets and overextended drillers. Free cash flow is a financial measure that accounts for the amount oil companies invest in new wells, which is deducted from accounting profits over the expected life of the wells.
Big Oil's rebound and reluctance to drill
Devon's turnaround was one of the more dramatic. In 2021, it reinvested only 32% of its operating cash flow in new wells, retired $1.2 billion in debt, raised its dividend, and bought back nearly $600 million of its stock just in the fourth quarter. This year, it planned for more of the same: Another $1 billion in debt reduction and $1.6 billion in stock buybacks, a company worth $32 billion before war broke out, with only a third of cash flow being reinvested in more drilling.
The next day, Goldman Sachs analyst Neil Mehta's bullish report on Devon didn't mention Ukraine. No analyst had asked about it on Devon's conference call to discuss quarterly results.
But as they said in The Godfather, just when Big Oil thought it was out, people want to pull it back in. And Devon CEO Rick Muncrief, for one, isn't rushing to produce more, at least not without more explicit instructions from the White House.
"When you start thinking about investment decisions, upping capital budgets, trying to grow more, you really have to think about inflationary pressures and also think it will be about a year when you start to really see that production come in," Muncrief told CNBC's Jim Cramer last week. "So most publicly traded companies such as ourselves will be very thoughtful, very cautious about this. We've some head fakes, we understand the concerns about commodity prices right now, but we need to be somewhat patient and disciplined and stay focused."
Days before that, though, he told Bloomberg that he was "mystified" that President Biden has not reached out to discuss raising oil production, as that might allow energy companies to make the case to shareholders more easily.
On Wednesday, in a speech to oil and gas executives at CERAWeek by S&P Global, the energy industry's main annual conference, Secretary of Energy Jennifer Granholm called on the industry to produce more .
"We are on a war footing," Granholm said. "We are in an emergency, and we have to responsibly increase short-term supply where we can right now to stabilize the market and minimize harm to American families," she said, though she also indicated that further releases from the Strategic Petroleum Reserve are not off the table.
"I hope your investors are saying these words to you as well: In this moment of crisis, we need more supply... right now, we need oil and gas production to rise to meet current demand," Granholm added.
On Wednesday afternoon, a Devon spokeswoman said nothing had changed in its position since the comments Muncrief provided to Cramer, but she stressed that the situation is fluid.
Replacing Russia's 10 million barrels
Replacing the 10 million barrels a day of crude oil that Russia produces, according to the International Energy Agency, would take both time and money. President Biden's announcement Monday that the U.S. would ban Russian imports was the easy part: The U.S. imported only 90,000-100,000 barrels a day from Russia, according to recent data, a tiny fraction of the 18 million barrels a day Americans consume. Replacing the four million Russian barrels that go to Europe daily – as well as Europe-bound natural gas – is much harder.
The industry quietly hopes to stay on the sidelines, as politicians like Senator Elizabeth Warren rage , and even as crude reaches $125 a barrel on world markets, analysts say. And investors plan to hold their feet to the fire, according to Rob Thummel, portfolio manager at Tortoise Capital, a heavy investor in energy stocks. The new financial arrangements in the oil industry suit Wall Street after it lost money on energy for years, with the S&P 500 Energy Index, dropping 75% from 2014 to early 2020, he said.
More oil production would mean the price would drop, but it doesnt appear that the oil companies want the price to drop. They want to keep their stock prices growing !
The more the price rises, the less people will be able to afford it and will look for alternative transportation. Less sales and the stock goes down anyway.
The irony of this article seems lost on some.
When conservatives were in control consumer energy prices were down and corporate energy company profits were down. Now with liberals in control both are up.
I thought liberals were suppose to be best at helping consumers and conservatives best at helping corporations.
And yet, the opposite appears to be true today. Oh the sweet irony .....
Wow, the group that is vehemently against any oil production saying they want to totally shut it down are now saying we need more oil production and it is the GOP and oil companies that are stopping it.
You can't make this stuff up.
That explanation does not line up with your assumptions.
Big business always wants everyone else's interests to suffer but theirs.
I know .... anyone with more than a half a pea brain can figure it out and yet many, many don’t.
A lot of folks here should ask for their money back for any of the education they managed to muddle their way through.
Complete fail.
And they all waited for Joe to be president to turn the screws and raise prices of gas. But the real point of my comment was the hypocrisy of the left wanting to shut down oil production and now screaming for more oil production and blaming everyone but themselves and their bad policies for the problem that just happened to start with Joe becoming president.. That is a fact, not an assumption.
The oil industry lost profits due to the pandemic and the apprehension that climate change measures would decrease the need for oil long term. Now that the opportunity exists to regain that profit and then some they will take it.
What happened to risk in business? These companies and investors want guaranteed profit, even if it means high gas prices for American drivers.
Business is in business to make money for their shareholders. Their shareholders are part of "everyone" and are taken into consideration, maybe just not to the degree some would like. If you are looking for a different structure maybe there are places that the government owns all the business and can focus on "everyone's interest" as they see fit.
And Joe thought this would be a good time for bad policies and railing against fossil fuel so he could get the left wing loon votes.
Stop bitching about the government causing rising gas prices then if the decisions are being made by oil company executives.
I will as soon as the government stops with the bad policies and regulations that are being taken into consideration when oil companies are making decisions
Stop whining about everyone except the inept government now in place.
The government doesnt set oil prices. The oil industry can control that by manipulating production.
Be like Kamala and look for the root cause.
The government sets policies and regulations that have an impact on oil industry decisions. How much money do you think any company would invest in future drilling or production if the government made it clear with their rhetoric, policy and regulations that their main goal in life was to put you out of business?
Quit insulting loons. They are very nice birds and more intelligent the the majority of the left.
Good point. I did have a few other adjectives but they would probably get the PC police called on me.
But they want that oil production increased in countries that hate the US.
Screw US oil production.
But the government makes policies that affect the prices of oil.
The fuck up in the White House has nothing but policies that are detrimental to the American family.
All of them, not just oil policies.
You mean it was the oil companies that shut down the Keystone pipeline? Were they responsible for having other pipelines slow down and lowered capacity? Are they throwing other regulations that prevent more onshore and off shore drilling?
Do show credible (non left wing) sources showing that.
Not at all, prices have been going up consistently for years, we are just seeing a culmination of several different factors all coming together at the same time. IMO now is the time to invest as heavily as possible into renewable energy and make sure this type of shit can't happen in the future.
Wrong, starting around 2015 gasoline prices for example were on a steady decline until about 2021.
And I have nothing against renewable energy, I’m all for it and support it but in a logical, phased approach.
Many liberals have a completely unrealistic approach to its implementation today. Completely unrealistic.
Bullshit.
Lowest average price of gas in 2015 was $2.11 a gallon. In 2018 it was $2.90 a gallon. A year later it was at $2.85 a gallon. When Covid hit and driving dropped dramatically we saw a drop in gas prices initially, from $2.55 a gallon in January 2020 to $1.84 a gallon in May of 2020. That wasn't Republicans doing, it wasn't Trump, it was the fucking pandemic. And since then, even through Trumps final year, gas prices rose, back up to $2.34 a gallon by January 2021 when Biden took office. And yes, as we got back to work, got the economy rolling, gave the American people billions in financial relief when they needed it most, gas prices, along with just about everything else, got more expensive. Virtually every economist predicted a surge in inflation after massive bailouts, but when dealing with the effects of a deadly pandemic it was the lesser of two evils. The bailout was necessary, it's allowed the economy to not only survive but grow, and yeah, shits getting more expensive, but millions more of us get to survive and adapt to a new post-Covid financial landscape than would have if we hadn't bailed out the American people in their time of need.
It's just pretty sad that some right wing conservatives are such bottom feeders that they try to use the inevitable negative aftereffects of the pandemic to bash the President and political party that kicked their candidates ass last election cycle. Oh, but I'm sure they harbor no hard feelings and their opinions about Biden are completely objective... /s
I’d try to explain how to properly scribe an averaging slope line to a data set [deleted]
Suffice to say the data I linked supports my comment.
100%
Bunch of jealous losers!
Renewables will NEVER meet the domestic or global demand for affordable energy
Not as long as republicans stand in the way of it.
Only based on current technology. Future tech may make the difference and allow for this to meet the demand. The problem is that because it cannot meet the current demand has not stopped the progressive wing from their hard push to move the country to renewables by working to escalate the cost of fossil fuel which is causing real hardships with those who can least afford the cost right now.
So the Joe (Lets Go Brandon) Biden is out and out lying when he claims the the rise in oil prices is Putin's fault.
And what happened in 2021?...Biden Administration.
Give that man a ceegar .....
No, as the graph I linked shows gas prices were already on the rise due to many different factors, the most recent large increase did happen after Russia invaded Ukraine and the threat of sanctions on Russian oil and gas were put on the table, so yes the most recent jump in gas prices can be directly related to Putin's decision to invade a sovereign country for no fucking reason other than to rebuild his fantasy Russian empire.
And as I clearly noted it was trending down in the time frame I gave.
A reported post isn’t going to change that fact.
Lowest average price of gas in 2015 was $2.11 a gallon. In 2018 it was $2.90 a gallon. That is not, as you claimed, "starting around 2015 gasoline prices for example were on a steady decline until about 2021."
It's not just a reported post, it's a fucking fact.
How would you explain something to me that you clearly have no fucking clue as to how it works? If you even bothered to look at the graph it trends UP from 2015 to 2019. Then May 2019 to January 2020 it has a fairly steady decline, then it hits 2020 when the pandemic hit and drops off the cliff from 2:54 a gallon in January to $1.84 a gallon in April of 2020.
Since then gas prices have steadily risen, even during the last year of Trumps Presidency from the low of $1.84 a gallon to $2.33 a gallon in January 2021 before Biden took office. And even with the pandemic, the withdrawal from Afghanistan, the Russian attack on Ukraine and all the other crazy shit that's going on gas still hasn't hit the levels we saw after Republicans pushed to invade Iraq under GW Bush with gas prices reaching over $4 a gallon in Bush's last year as President.
Not even in the slightest, your link proves your comment was total bullshit.
If you were correct then surely you can point out where on the graph gas prices between March of 2016 and 2021 were below the price of gas in 2015. Surely you can do that if "starting around 2015 gasoline prices for example were on a steady decline until about 2021."
[ Deleted ]
[Deleted] The slope of that line for the period I spoke of yields a negative slope, cost trending downward.
All my comments stand as is.
[Deleted] Just not particularly knowledgeable in the topic at hand.
[Deleted]
If Joe and his minions spent as much time and energy fixing the problems as they do looking for someone else to blame the problems on we would be in much better shape than we are now.
I don't see gas prices lowering for quite some time. Currently people don't have much choice and have to buy gas at whatever price the suppliers set. Getting away from fossil fuels is the only option. We are a captive market at the moment.
While I agree I also think it is important to not shut off or diminish one source until the other is up and running to a larger degree. Limiting oil now saying battery powered cars is the answer ignoring the fact they are expensive and locations to recharge them is very limited right now does not help solve anything.
We just road tripped from Michigan to Tampa. About 1400 miles in two days.
Anyone care to guess when that could become a reality with electric vehicles?
My guess is 15 or so years for the price to come down in cars and infrastructure set up to accommodate charging them. But that is dependent on technology and desire to make it happen.
Minimum, the infrastructure alone will take that barring any major advancements in technology.
Building power generation alone to replace gasoline and diesel could take decades. I suppose existing gas stations could be converted to charging stations but you still have to get the power there.
Most don’t have the slightest clue what a gargantuan task that will be. Not unlike the interstate highway build of the 50’s. A massive project.
That is why they put Pete on the case. Once he is done making roads less racist he will focus on transportation charging station infrastructure.
And the one we finally got rid of in Michigan and barely managed to survive.
Granholm.
Uh...nobody cares? Even you didn't answer his question
Bored and trolling to pass the time are ya? There is no answer except "some day............maybe".
So what if I am? I'm using my newfound skills I learned from some of your buddies
You've got years and years of catching up to do with those guys TG.
Who learned them long ago from one special gerfren of yours and a few of your buddies. Isn't education great?
[Deleted]
What happened to you. You use to be somewhat reasonable. Now you sound like a replica of your buddy Jeremy.
[Deleted]
I give what I get. Haven't changed. Someone wants to go smartass, I go right with 'em. It's just hard when someone goes to a day old post to share meaningless observations especially when they could have done so on that day.
Aren't you supposed to be reading something? Oh wait...
He has his good days and bad days
Yes you have changed. Have become a meme of right wing hate.
Aren't you suppose to address comments to the people that said them?
Only to certain people on certain days. You can't tell me that there aren't those you cringe at when they come online. Trout doesn't happen to be one of mine and if you think that was being nasty, I beg to differ. We do have our back and forth days...........and I like it.
Maybe I was busy doing something else? I think you're miffed because I called you out on your crickets.
No, that isn't a requirement.
[Deleted]
Not miffed. You've misinterpreted my meaning. Sorry........................
Not the first time and definitely won't be the last
That doesn't bother me that much. Some people get busy. Now when they post to a comment from a week ago....
Most definitely..............guess it makes 'em feel good and let's them blow off some irrelevant steam LOL.
YeaY
How do you libs get away with the personal shit?
... wearing his postpartum blues.
The same way you reactionaries do all the time.
You shouldn’t be apologizing for getting harassed. Right leaning posts get tickets and left wing insults and harassment remains up .....
This place is a hoot .....
lol. Democrats entire energy strategy is to ensure Energy prices go up.
or do you not understand what they campaign on?
Democrats like Biden dont mind the oil companies manipulating prices. Biden is a capitalist through and through.
Wrong, true capitalists are not for bigger government or higher taxes. Biden is.
Like many politicians Biden is only a capitalist when it benefits him or his family.
Yep, Biden is a corporatist.
So what are Brandon and the dumb shit Democrats doing to ease regulations and taxes that Joe put in on Methane and fracking? Are they going to look at other environmental regulations that affect the cost of drilling and put a temporary hold on them? What are they doing to make drilling profitable for US oil companies in the short term in an effort to keep fuel prices down?
The answer of course is nothing; except attacking oil companies for price gouging. Brandon would rather deal with dictators that hate the US; and don't have strict environmental regulations in place. Even if he has to remove strict sanctions against Venezuela (Russia's #1 ally in South America) and Iran (US money for Iranian oil to fund Iran's nuclear program. Just what the world needs Iran with nukes.).
"Democrats Look For Ways To Lower Gas Prices, Republicans Cynically Want To Keep Them High"
I don't think even Joe said that, of course he will probably jump on that bandwagon soon. He made it quite clear the other day:
The article certainly doesn't match the headline. As usual, the Daily Kos is spreading misinformation. Democrats are NOT trying to lower prices. Democrats are trying to raise taxes.
The price of oil is not set by oil companies. The price of oil is determined by the interconnected global markets for oil. Europe shutting off a significant supply of oil from Russia will cause global oil prices to increase. That's the problem with globalism and free trade.
The US needs to become as energy independent as possible
According to the EIA domestic oil production is adequate to supply current domestic demand. The United States is already energy independent. Oil is imported into the US to be refined to finished product for export. The oil companies are importing oil to utilize refining capacity and lower the cost of refining.
The current increases in global oil prices isn't being caused by a shortage of oil production in the United States. The price of domestically produced oil is determined by global markets and not by domestic markets. Increasing domestic oil production won't significantly lower prices at the pump unless the price of domestic oil is separated from the global market. The oil companies can make more money by refining domestic oil and exporting finished product. Consumers in the United States really are competing with consumers around the world.
Yes. Apparently, nobody remembers what happened 2 years ago, when the Saudis flooded the market with cheap oil.
Yep. That's when a US President was begging Saudi Arabia to cut production. And the United States was already energy independent. In fact, the Saudis were blaming increased US production for the drop in oil prices even though, at that time, the US still barred export of raw crude.
You know, China is one of the world's largest consumers of fossil fuels. Biden trying to isolate Russia has given China a golden opportunity to obtain fossil fuels from Russia at a discount. Are we supposed to believe that China won't leverage the situation for its advantage? Biden is giving China another competitive advantage in the export markets.
What taxes? Be specific, link to those bills.
I am so grateful for my scooter right now. I can pretty much get done what I need to with very little gas usage. For the rare times I can't, a good friend helps me out. It usually costs me a lunch for his trouble.
I’m happy for you.
Have a little compassion for the fellow Americans you served who are suffering. For example, the ones who live in a winter clime where a scooter is useless this time of year, those in more rural areas etc, etc.
So many people in this country thinking only of themselves.
A big part of our problem.
On more than one occasion, I have given some friends who are suffering some money for gas so they can get to work. I told them they don't have to repay me. So excuse the fuck out of me Sparty for having fuel efficient transportation and WTF is a winter clime?
Michigan where its winter 9 months out of the year
My father was from MI and told me never to say that I will do something when Hell freezes over as Hell (a real town) MI does freeze over every year.
I never believed that statement, being a born and raised Arizona desert rat. Then I went to McMurdo Station, Antarctica and found that statement to be quite true. The coldest, windiest, driest place on Earth hands down.
I guess he meant climate.
I knew a guy who told his gf that he would marry her when Hell froze over. She proved it did. They have been married for about 30 years now.
No, I said what I meant.
Look up the word before serving up more hate.
My kind of place. I would be happy as a pig in slop living there.
I loved it because it was so unique. When you consider just how tiny a percentage of the total population actually get to go down there to work and live, you realize just how fortunate you are. I have talked to people that say they could never live down there because it is so bleak and isolated. I loved and reveled the sheer awesome beauty that such desolation presents. I spent 6 months a year for 4 years going down there and truly miss it.
I wasn’t the one questioning the use of the word. That said .....
No thanks but feel free to help yourself.....
Stats can be confusing for some people when they don't match up with the political rhetoric lies they are trying to sell.
How about some truth here...?
Joe Biden in debate with Bernie Sanders last election cycle ....
Joe Biden in debate with Donald Trump last election cycle ...
What did Trump do to lower oil prices and hence gas prices? Flood the international oil markets with cheap oil... Since the price of gasoline is tied to the price of oil, the pump price goes down... What Biden did was reduce production, thereby pushing the price of oil back up, hence the price at the pump goes up...
He does want pump prices at the highest he can get cause he wants to push everyone away from gasoline cars and into very expensive electric cars... Same as Obama was saying back when he was president saying that 5 bucks+ per gallon was a great thing...
If a rational person wants to take a stupid pill and buy the lies being spewed by this administration and their mindless parrots in the media and right here on this board, they can...
But given what they actually say when they want your vote tells a much more accurate story...
Biden hates the oil industry, the higher oil prices go is something he and all democrats want desperately, the hike in prices at the pump is designed and caused by Biden clearly reducing the production of domestic oil... Yes even today we are the largest producer of oil in the world, thing is Trump realized that an even small increase in our production causes the price internationally to go down...
Those are the things Biden terminated immediately when he took office, expanded production... And today, he realizing his dream of extremely high gasoline prices, and with first the pandemic and now the war in Ukraine, he has perfect patsies to blame it on...
And the democrat parrot mouthpieces are again repeating blindly everything that comes out of his mouth....
Nothing but the truth...
C'mon, man!
You know quoting Biden's own words won't fly with some on the left. They will claim you took those words out of context or made them up!
Looks like America (according to the polls) is waking up to the fact that Biden lacks the leadership skills necessary to lead the country.
Democrats really want to find a way to solve their problems and improve their election possibilities? Resigning is the only way.