The US Administration has criticised the profits of the supermajors for 2022 it described as “outrageous” and slammed the decisions of the major international oil and gas companies to increase returns to shareholders. At the same time, the US oil and gas industry continues to call on the federal lawmakers to treat the sector as an asset, not a liability, and one that could help bolster the energy security of America and its allies.
US supermajors ExxonMobil and Chevron reported record-high earnings for 2022, like all major international oil and gas firms, drawing – once again – criticism from the White House.
Exxon generated earnings of $55.7 billion and cash flow from operating activities of $76.8 billion for 2022 “by leveraging an advantaged portfolio and delivering strong operational performance.” Exxon’s earnings were the highest in its history and the highest ever for a Western oil major.
The other US supermajor, Chevron, also reported its highest earnings on record for 2022: adjusted earnings surged to $36.5 billion, from earnings of $15.6 billion for 2021.
Referring to the record earnings at Exxon, US President Joe Biden said on Twitter, “The only thing stopping Big Oil from increasing production is their decision to pay shareholders billions instead of reinvesting profits.”
“Instead of demanding accountability, Republican officials are blaming us. I'm doing my part to lower prices, it's time Big Oil did theirs,” the President said.
In the State of the Union Address in early February, President Biden said,
The President criticised the oil majors for investing too little of their profits in boosting US domestic production and keeping petrol prices down.
“Instead, they used those record profits to buy back their own stock, rewarding their CEOs and shareholders.”
“Corporations ought to do the right thing. That’s why I propose that we quadruple the tax on corporate stock buybacks to encourage long term investments instead,” President Biden said.
In response to the remarks in the State of the Union’s address, Tim Tarpley, President of the Energy Workforce & Technology Council, said “Tonight, we heard the President talk about investments in one type of energy resource, renewables. Unfortunately, what we have not heard are his plans to support an ‘all of the above’ energy strategy that promotes increased production of our domestic energy resources, including oil and gas.”
“In his remarks, he again showed the American people that he still doesn’t truly understand energy supply and achieving energy security. Implying that oil and gas will only be necessary for 10 more years, shows a frightening lack of understanding of the fundamentals of energy demand and energy supply,” Tarpley said.
“It is time to cut the misleading rhetoric of ridding the world of fossil fuels and wake up to the reality that U.S. oil and gas is powering our lives and will continue to be the major supplier of global energy for decades to come,” he added.
Employment in the US oilfield services and equipment sector rose by an estimated 3,069 jobs to 652,090 in January 2023, according to preliminary data from the Bureau of Labor Statistics (BLS) and analysis by Energy Workforce & Technology Council.
The January increases make OFS employment the highest since March 2020, and continues to reach closer to the pre-pandemic numbers in February 2020 of 706,528 jobs.
“Even with fewer employees over the past three years, our industry has been able to meet the spikes in demand and is producing close to pre-pandemic levels all while developing new technology and deploying innovative production processes that are lowering emissions,” said Energy Council CEO Leslie Beyer.
American Petroleum Institute’s Executive Vice President and Chief Advocacy Officer Amanda Eversole in early February sent a letter emphasizing API’s commitment to common-sense energy policymaking to House Energy and Commerce Chair Cathy McMorris Rodgers and Ranking Member Frank Pallone.
“The Committee’s renewed focus on restoring American energy leadership is critical to ensuring that American oil and natural gas reserves are prioritised as a long-term strategic asset that will serve as a foundation for economic growth and energy security,” Eversole said in the letter.
Pointing out the priorities of the Energy Workforce & Technology Council for 2023, its CEO Leslie Beyer commented that “Energy Workforce will continue to push our national and state officials and regulators to protect our domestic energy resources and encourage further investments in production and infrastructure.”
Energy Workforce called on policy makers to pass comprehensive permitting reform including reducing timelines for building critical energy infrastructure by streamlining application processes and expediting approvals.
In the middle of February, the U.S. House Committee on Natural Resources and the U.S. House Committee on Energy & Commerce held two committee field hearings in Midland highlighting the importance of domestic energy production.
“The Representatives attending these hearings had an opportunity to see the heart of domestic energy production in the Permian Basin, how the men and women working in this region produce energy cleaner and more efficiently than anywhere else, and how recent regulatory actions have impacted the industry as a whole,” Energy Workforce said.
The US petroleum markets were “resoundingly solid” in January, API said in its Monthly Statistical Report in the middle of February.
Overall US petroleum demand was solid in January 2023, and at 19.8 million barrels per day (bpd), it edged up by 0.2 per cent year over year, to its highest level for the month since 2020, according to API’s estimates.
US crude oil production increased by 300,000 bpd month-on-month in January 2023 to 12.3 million bpd, while natural gas liquids (NGL) production set a record for the month of January at 6.1 million bpd.
Total US petroleum exports of 9.6 million bpd – including 3.5 million bpd of crude oil and 6.1 million bpd of refined products – fell by 600,000 bpd from December. Yet, the United States remained a petroleum net exporter of 800,000 bpd—the lowest net exports since February 2022.
“These readings of solid demand, production growth, an easing of petroleum exports, and less refinery throughput for the month help to explain why higher oil inventories, which some may have interpreted as a bearish economic sign, could have been misleading,” API’s chief economist Dean Foreman wrote.
Moreover, API’s Distillate Economic Indicator, which is based primarily on diesel and distillate supply, demand, and inventories, had a reading of +0.6 in January – down from +0.7 in December – and a three-month average of +0.8.
“This showed slowed but continued growth year-on-year of U.S. industrial production and broader economic activity,” Foreman noted.
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