“Drill Baby, Drill” Crippled Beyond Repair
The Trump Administration has given oil companies carte blanche to increase their exploration. In January of last year, the White House released an executive order titled “Unleashing American Energy.” Its premise was that the US had enough energy and natural resources, but that access to these needed to be unleashed. This was due to regulations that hampered expansion during earlier administrations, it added. It was aimed at helping oil companies expand their operating footprints. It turns out those companies are, for the most part, not interested.
Specifically, without limitless access to oil and natural gas, the American economy was being set back, the White House said. Demand for energy in the US was so high that an expansion of supply was needed to boost the national economy. “These high energy costs devastate American consumers by driving up the cost of transportation, heating, utilities, farming, and manufacturing, while weakening our national security.”
The order also eliminated the financial program to boost EV sales, which was the $7,500 federal tax credit. Additionally, it was the start of a war on green energy. The best example of this is the administration’s decision to shutter major offshore wind farm expansions. Several of the nation’s largest wind farm projects were halted; the President’s actions against wind farms were challenged in federal court, where the wind farm companies prevailed. However, the process did not end there. Recently, the administration paid TotalEnergies $1 billion to abandon a wind energy project and pivot “toward affordable, reliable natural gas projects that will provide secure energy for hardworking Americans.”
Instead of moving toward more drilling, large oil companies cut thousands of jobs. Skip York, an oil and gas expert and nonresident fellow at the Rice University Baker Institute’s Center for Energy Studies, told Oil and Gas News Watch, that exploration was an enemy to the stock prices of big oil companies. “The pressure on them is to keep delivering returns to investors. It’s not ‘drill, baby, drill. It’s ‘profit, baby, profit.’”
Another prime example of the oil companies’ lack of interest in exploration is the drilling leases offered in Alaska’s Cook Inlet federal waters. According to Alaska Beacon, there were no bids. The U.S. The Bureau of Ocean Energy Management, which oversees oil and gas leasing in federal offshore territory, announced on its website, “At this time, no bids have been received.”
The Iran war makes exploration even less likely. For the time being, oil companies can offer investors huge returns with no expiration. According to Reuters, with the surge in prices. “Exxon produces close to 5 million barrels of oil per day. Assuming the same price rise per barrel, additional revenues in March would add up to about $5.1 billion.”
Oil companies don’t need new leases. They can sit and watch their profits balloon.
