U.S. Oil Industry Has Bigger Problems than Biden Fracking Ban

The U.S. oil business has bigger potential problems than Joe Biden’s promised fracking ban. There is no doubt that the Biden/Harris promise to ban hydraulic fracturing on federal lands and waters would severely hamper the nation’s oil and gas business sector.

In addition to curtailing about 20% of U.S. oil production that comes from federal leases, such a move would cause capital flight away from oil projects in the U.S., regardless of land type since it would send a signal that government policy in a Biden administration would present a high degree of risk and uncertainty. This is an outcome an already capital-strapped industry can ill-afford.

But as impactful as that potential problem would be, U.S. oil and gas producers face an even larger looming headache this morning: Uncertainty about the continuation of the OPEC+ agreement, the deal among large oil producing countries to limit output and exports onto the global market. The existence of that agreement currently has its member nations withholding about 7.7 million barrels of crude per day from the market. It is the main reason why the current U.S. benchmark price for West Texas Intermediate, which currently hovers above $45 per barrel, hasn’t collapsed back down below the $20/bbl mark.

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brian

Question for Mr Blackmon

So I’ve come across an interesting article stating that China was buying oil from Russia in yauns. It claims that China is trying to convince other nations to accept yuan backed by gold instead of the USPetro dollar. The goal that China is trying to wrangle with Russia is to cripple the PetroDollar and essentially remove the US as a world trade currency.

Just wondering if you have heard this and thoughts.

IMO, China will have a difficult time convincing anyone to accept a gold backed yuan after last years gold scam that originated in China, of all places.

Silas

Q — They wanted to do an alternate fee based on an onboard monitor here in Oregon. I got to participate in an in person poll panel regarding this. It never got off the ground. As the local news started covering it died a well justified death.

Q-D'Etat

Oregon is sane compared to Virginia? Say it ain’t so!

Just Me

So, if OPEC opens the spigot, pump prices might dip initially before soaring as the US oil industry falters.

Q-D'Etat

In Virginia, if you have a vehicle that gets good gas mileage, you pay a tax. In our case, over $20 for a fuel efficient vehicle when you get your annual sticker. .

“Fee for fuel efficiency
Since the gas tax is one of Virginia’s key funding sources for road projects, the Northam administration is proposing a fee on fuel-efficient vehicles to ensure users pay something closer to the amount that they use when it comes to roads.

Fuel-efficient vehicles would be those with a combined miles-per-gallon rating of 25 or greater, electric vehicles, or alternative fuel vehicles that run on something other than gasoline or diesel.

“The highway use fee is intended to try and ensure more equitable contributions to our system, again without penalizing people that have made [environmentally sound] decisions,” Deputy Transportation Secretary Nick Donohue said.

Under the plan, drivers would pay 85% of the difference between the gas tax paid by an average vehicle on Virginia’s roads today, which gets around 23.7 miles per gallon, and what the driver of a fuel-efficient car would pay based on the statewide average number of annual miles driven.

The fees would be updated annually.

For example, if the average car were paying $100 in state gas taxes, but the more fuel-efficient car would pay $80, then the additional annual fee would be around $17. An electric car owner would pay around $85 under that scenario.”

https://wtop.com/dc-transit/2020/01/new-details-on-va-transportation-plan-show-fuel-efficient-car-fee-speed-cameras-more/

You may also be “able” to pay a fee for miles driven, instead, but you’d have to do this:

“Fee per mile
As an alternative to the fuel-efficiency payment, Virginia drivers could sign up for a pilot program with the Department of Motor Vehicles to pay a fee for every mile they drive.”

Guessing that will mean you will have to have a monitoring device installed on your vehicle.

Next: “they’ll tax the pennies on your eyes.” (The Beatles, it seems, were prescient):

” Now my advice for those who die
Declare the pennies on your eyes
Cos I’m the taxman, yeah, I’m the taxman”

https://www.azlyrics.com/lyrics/beatles/taxman.html#:~:text=Let%20me%20tell%20you%20how%20it%20will%20be.,you%20try%20to%20sit%2C%20I%27ll%20tax%20your%20seat.

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