PXD CEO tells Team Biden not to expect more U.S. oil

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dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

PXD CEO tells Team Biden not to expect more U.S. oil

Post by dan_s »

Earlier this month, the White House’s top energy advisor Amos Hochstein called shale drillers “un-American” for their refusal to boost oil production despite the administrations’ multiple calls to that effect.

Now, the industry is striking back. Pioneer Natural Resources’ CEO Scott Sheffield, one of the most outspoken industry executives, has indirectly explained to the White House that shale drillers will not be drilling more and that is it. And he had an excellent reason for it. Speaking to the Financial Times in an interview, Sheffield said that returning to production growth now would cause an outflow of investors and energy stocks will plummet to the bottom of the stock market. And this is why no public oil driller would do it. “You’ve got to realise: when you produce a 2 per cent return on capital employed, you end up being at the bottom of the S&P 500,” Sheffield told the FT. “And so if we end up doing what he’s asking us to do, we’ll end up back at the bottom of the S&P 500.”

Investor pressure for higher returns has been one of the reasons given by both industry and analysts for the current unwillingness of the U.S. shale oil industry to start ramping up output the way it always did in the past when prices rose.
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I think the financial discipline by the upstream companies is a good thing. Supply Chain problems are still an issue and outside of the Permian Basin there is not a lot of Tier One leasehold left.
Dan Steffens
Energy Prospectus Group
Fraser921
Posts: 2954
Joined: Mon Mar 22, 2021 11:48 am

Re: PXD CEO tells Team Biden not to expect more U.S. oil

Post by Fraser921 »

His best reason is incoherent energy policy

-Cant agree on Alaska
-Cant agree on GOM
-Wont allow pipes > WAHA was almost free a few weeks ago to to lack of takeaway
-Shutting down Keystone, slow rolling MVP
- No new refineries in 50 years
- Banning of gasoline cars
- Subsides for EV's
-Slow permitting attacking energy non stop
- Climate crap nonsense and banks defunding

What good is drilling if you cant move the product?

Throw the blame where it should be.
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: PXD CEO tells Team Biden not to expect more U.S. oil

Post by dan_s »

More roadblocks to more US oil production:

Environmentalists sue to stop U.S. oil and gas auction off Alaska coast. Reuters.
Environmental groups sued the Biden administration on Wednesday to block a sale of oil and gas drilling rights off the coast of Alaska that is scheduled for next week. The legal action, filed in federal court in Alaska, comes as the Interior Department is preparing to offer nearly 1 million acres in the Cook Inlet on Dec. 30. The sale was among the concessions to the oil and gas sector included in President Joe Biden's climate change law, the Inflation Reduction Act (IRA). In the complaint, the groups alleged the sale's environmental review violated federal environmental laws by not adequately considering its impact on climate change as well as consequences for threatened species such as the Cook Inlet beluga whale and humpback whales.

U.S. pipeline regulator launched review of special permit process following audit of Keystone spills. Financial Post.
The special permit process that enables TC Energy Corp.’s Keystone pipeline to operate in the U.S. at a higher stress level than is allowed under federal pipeline regulations is being scrutinized as part of an independent review launched in response to concerns raised about Keystone’s recent track record of spills. The third-party review, first reported by Reuters, is being conducted by the Oak Ridge National Laboratory began last August, according to the Pipeline and Hazardous Materials Safety Administration (PHMSA). It was initiated following the release of a 2021 Government Accountability Office audit of Keystone accidents that pointed to data suggesting the severity of spills on the pipeline, which carries crude from Canada to refineries in Oklahoma and Texas, has worsened since 2017 — the same year the PHMSA granted TC Energy the special permit to fully operate Keystone at a higher stress level.

Mountain Valley Pipeline in West Virginia hits another roadblock. 13 News.
A controversial natural gas pipeline in West Virginia appears dead for now after it failed to make next year’s spending bill from Congress. There certainly could be renewed efforts with a new Congress coming next year, but the Mountain Valley Pipeline has hit a dead end for now. According to US Senator Joe Manchin (D-WV), this could cost West Virginia hundreds of millions of dollars over the years. The Mountain Valley Pipeline was designed to take natural gas from northern West Virginia to all the way southeast of Roanoke, Virginia, and then eventually into North Carolina. Supporters say it would have given the United States a huge power source and energy independence, and other natural gas could be sold to our European allies. But the U.S. Senate has been unable to shorten the permitting process.
Dan Steffens
Energy Prospectus Group
Fraser921
Posts: 2954
Joined: Mon Mar 22, 2021 11:48 am

Re: PXD CEO tells Team Biden not to expect more U.S. oil

Post by Fraser921 »

This is what I'm talking about. This is what CEO's should stress.

Not shareholders won't like it. That infers they could if they wanted too. In fact they can't for a number of reasons
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: PXD CEO tells Team Biden not to expect more U.S. oil

Post by dan_s »

Shale oil production can't grow at the same rate it did leading up to the pandemic. Every oilfield ever discovered goes on decline when most of the Tier One acreage is developed. That rule is TRUE for EVERY OILFIELD EVER DISCOVERED.

The Permian Basin is the only area with significant shale oil upside.

Another way to think about it is that we keep layering on more horizontal shale wells with steep decline curves. The U.S. depletion rate has tripled since the "shale revolution". So, we need to add more and more wells year after year just to hold production flat.

There is lots of shale oil potential in Europe, but the Climate Change Wackos will not allow it to be developed.

Most of the "Cheap Oil" has been harvested.
Dan Steffens
Energy Prospectus Group
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