US will see higher gas prices if oil production is not increased: Former energy secretary

[rebewranger]

US will see higher gas prices if oil production is not increased: Former energy secretary
Stephanie Giang-Paunon - Yesterday 4:06 PM
 
Former Energy Secretary Dan Brouillette warned if the Biden administration doesn’t increase oil production in the U.S., Americans will see higher gas prices.
 
Increasing oil production in US will ‘moderate’ gas prices: Fmr Energy Sec. Brouillette
 
Brouillette made the argument on "Cavuto: Coast to Coast" on Tuesday as the national average of one gallon of gas was $4.62, according to AAA. Last year it was priced at $3.04 -- $1.58 less, as Americans continue to pay record gas prices at the pump.

He suggested that the higher oil prices stem from the lack of energy production in the U.S., compared to other parts of the world.

"[In] 2019, we produced…almost 13 million barrels a day of oil here in the United States. Today, we're at about 11 and a half…there's a one and a half million barrel per day deficit," Brouillette said.

https://www.msn.com/en-us/money/markets/us-will-see-higher-gas-prices-if-oil-production-is-not-increased-former-energy-secretary/ar-AAXW2bn?ocid=msedgntp&cvid=000be310f773427db22ca1bf61a658d3

[Smokin Joe]

Had the Keystone XL pipeline been completed instead of killed in the first day of the Biden Administration (and there is no guarantee that it would be done and in operation, even now, had it not been shut down), it would be bringing 800,000 barrels of oil per day into the US when it went online, mostly from Canada, some from The Williston Basin (Bakken/Three Forks oil to cut the heavy Canadian crude).
The result would have been that 60% of that deficit would not exist, or there would at least be a light at the end of that tunnel.

[Fishrrman]

Fishrrman predictions:
Prices will hit $7 or higher by mid-late summer, pushing upwards towards $8.
$10 per gallon may be seen in some locations before the end of the year.

[Smokin Joe]

Fishrrman predictions:
Prices will hit $7 or higher by mid-late summer, pushing upwards towards $8.
$10 per gallon may be seen in some locations before the end of the year.

Entirely possible. With the cutoff in leases, operators aren't going to be in a huge rush to develop what they have, despite prices.
A boom would only cause the price of a well, completed, to increase, leaving that production with an uncertain price future after 2024, because a reversal of Biden policies would bring prices back down, leaving them in a buy high sell low situation.
CAPEX will be more cautious, keeping in mind that newer wells are still in the steepest part of their decline curve and seeking to replace that depletion with new production, but not so much as to increase supply back to 2019 levels just yet.
Slower, steady growth in the upstream end of the industry is far more likely, with caution.

A lot of the hands who were out here in the patch either got laid off around 2015 up here or really got bit during COVID when drilling activity slowed considerably. Many adjusted by finding other, steady, work, and won't be in a hurry to leave any job thy have adjusted to and whatever benefits packages they already have for a fast buck.

[rustynail]

Is demand destruction still a thing?

[IsailedawayfromFR]

Former Energy Secretary Dan Brouillette warned if the Biden administration doesn’t increase oil production in the U.S.

This is a very poor wording and is incorrect.

Biden cannot increase oil production anymore than he can increase the wealth in this country.  No government can as it is the private sector that does that.

The only thing Biden and the federal government can do is to stifle oil production, not increase it.  Just like the government can lessen wealth in this country by its destructive actions.

In other words, Just Get The Hell Out of The Way

[Fishrrman]

I guess my predictions above were on the late side:

https://www.foxla.com/news/chevron-responds-la-gas-station-charging-8-a-gallon

Los Angeles Chevron gas station charging over $8 a gallon
May 31, 2022 | Alexa Mae Asperin

One gas station in downtown Los Angeles is charging upwards of $8 a gallon for regular gas.

This comes as gas prices continue to rise across California and the U.S.  The average price in Los Angeles County rose to a record $6.172 on Tuesday.

However, the Chevron station off Alameda in Downtown LA is charging over $8 a gallon. Many people in the area say the station is price gouging.

In a statement released to FOX 11, Chevron said there are multiple factors that go into the price of a gallon of gasoline, "including some unique ones specific to California."

The company added that the majority of its branded stations in California - including this one - are independently owned. That means each station can charge its own prices.

"In addition to the price of oil, other factors include the competitive conditions in the marketplace, the higher cost to produce gasoline to the specifications required by the California Air Resources Board, costs associated with fuel distribution, local, state and federal taxes, California carbon-compliance costs, recent inflationary pressures, and fixed costs of doing business that are often higher in California relative to other states (e.g., the cost of commercial real estate)," Chevron said.

[Cyber Liberty]

The current Secretary of Energy doesn't give a shit about any of this.