Oil and gas operators in Texas, New Mexico and Louisiana made it clear in a recent Federal Reserve Bank of Dallas survey, they are fed up with the Biden administration’s war on oil and gas.
Typical of the responses is one of those cited by the survey.
“Until the next administration is decided, we’re in a state of flux when it comes to making certain business decisions.”
Another responded to the survey this way, “I can’t recall a more uncertain time with disturbing world conflicts and the choice we have to make in the U.S. presidential election.”
The government’s new and more restrictive methane rules and regulations were criticized by one respondent.
“The strength of the market has increased, but the methane detection enforcement procedures for small producers is a looming crisis.”
They kept piling on the government as indicated inthis response, “Washington continues to pick business winners and losers, and this practice hampers cooperation and fairness across all sectors. The open denigration and policy blocking of hydrocarbons, a vital part of energy, needs to stop. Soundbites to undermine an entire industry that is critical to our country’s standing in the world do no one any good.”
Below are the comments of others.
- Growth in renewable electricity in the West Texas ERCOT region has led to less efficacy in the system due to intermittency. In turn, this had led to a higher heat load base, and as a result, power prices are increasing modestly even as natural gas fuel input pricing is historically low.
- Investor apathy will continue for the energy sector until it’s too late. The impending shale supply fiasco (drainage!) will be front-page news within the next two years, and inflation will be very hot again. Shale will likely be unable to help for round two, when oil prices are greater than $120 per barrel. Why do you think there’s been $250 billion of merger and acquisition activity in 12 months? Because the majors believe long term is $60 per barrel of oil? OPEC is back in the driver’s seat.
- Natural gas prices remain challenged, primarily due to the overhang of storage and lack of winter demand. Crude oil markets have continued to be constructive. We have decreased capital investments in our natural gas portfolio and increased capital investments in our oil portfolio.
- The volatility in geopolitical risk is more concerning than a year ago. Domestic political uncertainty has increased — no confidence in either party to lead.
- Continued governmental and regulatory stipulations have an increased bearing on project selection.
- Natural gas is currently pricing at or below costs of production.
- Permits to drill and operate on private land are too difficult to obtain from regulatory authorities in certain states such as Florida, California and Colorado. With respect to Federal leases, which are administered by the Bureau of Land Management, there is too much uncertainty surrounding future changes in regulations and permitting requirements. Such factors limit the ability of small petroleum companies to expand and grow.
- The Great Turnover (wave of retirements backfilled by greenhorns) is continuing to result in elementary mistakes in land work, division orders, and, thus, revenue distributions from oil and gas purchasers. I am seeing increased joint interest billings errors. Collectively, this is causing a diversion of staff time. The greenhorns in the positions making these mistakes are defensive and insisting they are right even when confronted with the facts. Washington’s war against domestic oil and gas is winning. Accounting firms don’t want oil and gas firms as clients, preferring only clients in a so-called reputable industry. Bankers are stiff-arming discussions.
- Natural gas is the primary commodity for our industry in East Texas. This makes our activity depend on pricing for natural gas. The low prices we are experiencing now are causing us to tuck it in and keep our powder dry. The administration’s efforts to curb the liquified natural gas (LNG) build-out has hurt our industry. America has lost jobs due to this. This climate change agenda is destroying GDP as well.