David Wethe 03/23/2022
(Bloomberg) – U.S. shale drillers are incurring record labor and equipment costs so they can take advantage of the highest oil prices in 14 years. They say one of the reasons they aren’t doing more is President Joe Biden’s perceived hostility to the mainstream energy industry.
Even as the Biden administration urges oil companies to increase production to make up for the lack of Russian shipments, many executives told Federal Reserve Bank of Dallas researchers they fear investing in new oil wells. shale because of the president’s long-term goal of eliminating fossils. fuels.
“The current administration will only hurt energy companies, driving up prices and severely hurting the middleman that keeps the economy going,” said an unidentified respondent in the Fed’s quarterly energy survey. Dallas released Wednesday. “We are in a world of suffering for the next three years.”
Russia’s invasion of Ukraine – and subsequent oil market disruption – has heightened already simmering tensions between the White House and oil CEOs who accuse the federal government of drilling permits slow and overly onerous in regulation. Their work is risky enough without having to worry that a new law or presidential decree will make certain facets of their business obsolete or illegal, they say.
But that hasn’t stopped drillers in the Dallas Fed Territory that covers Texas and parts of New Mexico and Louisiana from driving up oilfield activity 31% in the first three months of this year while increasing hiring, hours worked and wages, according to the survey.
In recent weeks, the Biden administration has accused the oil industry of leaving thousands of federal drilling permits untapped while questioning whether some in the industry are gouging consumers with gasoline prices of around $4. $ per gallon.
“The price gouging talk is boring,” said another respondent. “Discussing federal leases and unused leases without an honest discussion of all the constraints and regulatory issues related to drilling is also pointless.”