Charlottesville
June 15, 2022
I hate paying $5 per gallon of gas. I’m going to hate it more when the price is higher this summer (my wag) due to factors like demand, hurricanes, prolonged war in Ukraine. But I understand the price is determined by the international market.
I thought the following insights were helpful:
One factor driving U.S. gas prices is the pressure investors are putting on oil companies. Limited production creates higher prices that are driving record profits. In a March 2022 survey of 141 U.S. oil producers asking them why they were holding back production, 59% said they were under investor pressure. Only 6% blamed “government regulations” for their lack of increased production.
Oil companies are seeing huge profits and are using the money for stock buybacks to raise stock prices. BP, Shell, ExxonMobil, Chevron, TotalEnergies, Eni, and Equinor will give between $38 and $41 billion to shareholders through buyback programs this year. As EOG Resources wrote to its shareholders: “2021 was a record-setting year for EOG. We earned record net income of $4.7 billion, generated a record $5.5 billion of free cash flow, which funded record cash return of $2.7 billion to shareholders. We doubled our regular dividend rate and paid two special dividends, paying out about 30% of cash from operations…. This period of high oil prices allows us to further bolster the balance sheet. To support our renewed $5 billion buyback authorization and prepare to take advantage of other countercyclical opportunities, we plan to build and carry a higher cash balance going forward….”
A Morning Consult/Politico poll shows that 77% of registered voters—including 76% of Republicans— support government action to increase oil production and punish price gouging. Only 13% of voters outright oppose such a move (10% have no opinion).
Isn‘t it odd that we live in a capitalistic economy, but we want the government to intervene when the market is working as it is designed?
ESG, led by the World Economic Forum elites and The Left, want high gasoline & oil prices because they believe it will dampen economic activity and allow them to control consumer demand. President Obama was pushing this fundamental transformation more than ten years ago. This has nothing to do with capitalism, and is, in fact, a second antonym (besides Marxism) -- fascism, in which corporate interests collude with governmental interests in forcing average people to do their bidding. It is the exact opposite of market capitalism for labor, for the consumer, and for resource holders.
If any of this is not clear, let me give you three proofs: (1) the decline in nuclear and hydroelectric generation, both of which ar…
I had been reading about how the new environmental governance (ESG) were affecting investors/banks/etc... from providing funding to companies in the fossil fuel industry. without financing some cannot undertake new efforts to explore/produce/refine/etc... one article
https://www.thomsonreuters.com/en-us/posts/news-and-media/esg-regulations-financial-firms/