Prepare Yourselves for $5 per Gallon Gasoline

Gasoline prices hit a new all time high yesterday at $4.40 per gallon for a nationwide average. Diesel also reached a new all time high yesterday at $5.55 per gallon.

Now the Biden Administration will try and convince you it's all because of Putin's invasion of Ukraine. Don't believe them. As the graph below indicates, the price increase started long before Putin's invasion of Ukraine. It began with Biden's war on US fossil fuels when he took office. 




The effect of Biden's crude oil release from the SPR has also now worn-off (red insert box). After initially lowering prices by about $0.25 per gallon; prices were already on the rebound before the European Union began banning Russian oil imports. 

Let's face it, the Green Agenda has always been to shutdown the oil industry both here in the US and worldwide. Their most effective mechanism for this has been regulation.

First order of regulation is to choke-off the supply of drilling leases. It's simple, no leases and no drilling. The first 17 months of the first Obama Administration (2008-2009) there were 50 lease sales held in the US. With the Biden Administration, it's been 1 and since a Federal Judge annulled the results of that sale from November, 2021, it's effectively been zero.

They're at it again, canceling another 3 upcoming lease sales this week.

economictimes.indiatimes.com/news/international/us/biden-admin-cancels-3-planned-alaska-oil-and-gas-lease-sale/articleshow/91522589.cms

The Biden Administration defends cancelling the first of the three sales, one in the Cook Inlet, Alaska, because of lack of oil industry interest. The lack of interest there is because you can't get the necessary permits to drill once you get the lease. That's the second line of line of regulation against the oil industry. If they get the leases, deny them the permits to drill the well.

If they do get the permit to drill, then on to the third line of regulation; deny them the permits to build pipelines to transport the oil and/or gas to market. To my knowledge, not a single pipeline project in the US has been given the permits to proceed under the Biden Administration.

The result of all this regulation is oil production in the US is still approximately 1.5 million barrels per day below pre-Covid. To put that into perspective, Biden is releasing 1 million barrels per day from the SPR in an attempt to lower gasoline prices. Restoring US oil production to pre-Covid levels would be 50% better than burning through our emergency stockpile. 

Where did you get that crap, the United States energy industry is one of the most efficient in the world.  They didn't misread demand, why do think futures started to move months ahead of time ?   Good Lord you are an idiot.     



I also love the way you throw around "supply chain" like it is some sort of amorphous structure that can't be augmented and coordinated through effective national leadership.    The issue of course is Joe and his nitwits don't see or react to potential problems until they reach the crisis level.  Which is typical of liberals. 

No, getting new pipelines permitted and constructed does affect current production. I worked in the oil industry for 32 years. You did not. Here is the way it works.

Almost every oil well also produces natural gas with the oil. This is called associated gas and is part of the reservoir drive energy that brings the oil to the surface. Eventually this reservoir drive will deplete and the oil well will be placed on a pump to basically suck the oil out of the ground. But until that happens, you have to do something with the associated gas.

Depending on the state where the oil well is, companies are allowed a brief time period (usually 30 to 90 days) to produce the well to assure it will produce at economic quantities. You don't want to spend $1,000's on laying a pipeline if the well isn't going to produce in economic quantities. The produced oil can be collect in a stock tank on the lease, but the gas cannot. During this time, you are allowed to flare the gas which is essentially burning the gas at the wellsite. Once your 30 to 90 days is over, you are expected to have a pipeline in place from your producing well to the nearest gas gathering line with surplus capacity. That line will eventually hook into a more major gas pipeline that takes the gas to a gas market. 

It's getting these short gas gathering lines approved and permitted that is bottlenecking new oil production. These permits are being slow walked or just flat-out denied under Joe Biden's EPA. It's the clever way the Environmentalists are shutting down the US oil industry.   

Wrong again, of the 11.5 million BOPD the US produces each day, 8.5 million comes from what are called unconventional or shale oil wells. On average, these wells deplete 45% of their reserves in the first year of production, 70% in their first 3 years. It's a treadmill that is constantly in need of replacement. Basically you need to add about 3 million BOPD of production per year. Blocking these short gathering pipelines are in large measure why the US is producing 1.5 million BOPD less than at the end of 2019.

If 1.5 million BOPD is such a small fraction of all energy production, why is Joe Biden wasting his time releasing 1 million BOPD from the SPR?