There is so much rhetoric around the energy sector’s going “Greener” as I like to say, or just plain politics. There is so much noise that it makes my head hurt. There is so much effort around getting the renewable energy tax credits and cash infusions that make me also ask if they are so cheap why do we need to use our taxes to fund them?
So the Build Back Better Bill that Senator Manchin has been asking legitimate questions, and on Sunday left Biden “Empty Handed” after he states that he won’t back the president’s economic agenda. I have to hand it to Senator Manchin to ask the tough questions, and actually think about the American people. It is nice setting aside the Democrat or Republican arguing points and getting down to the people’s business.
Bloomberg posted an interesting point. If the Biden administration can’t get this bill through, they can force the American people to submit to their desire to shut the United States oil and gas producers. The regulations and power that the U.S. regulatory agencies wield are unbelievable. Using these methods will take more time, money, time in court and ultimately may be overturned by the next political party in office.
On Sunday there were several news agencies covering Saudi Arabia’s Oil Minister Abdulaziz bin Salman warning of the potential energy crisis due to the complete lack of investments into drilling. The EIA is expecting U.S. oil production to remain below the pre-pandemic peak.
Putting the numbers in perspective, there is a 30% decrease in global expenditures of $309 billion and the spending needs to be at $525 billion a year until 2031 just to keep up with demand growth. The King Operating Research team is holding to their projections of $125 to $145 oil next year.
I have been saying that the privately-held E&P operators will have more freedom, than the publicly traded oil and gas operators for a long time. Harold Hamm, who owns 81% of Continental, said reverting to private ownership is appealing, if and when investor interest wanes. “You have to do what the market wants when you’re public,” Hamm said during a Bloomberg TV interview last week. “These privates, they have more freedom than we do.” Having the freedom to cherry-pick the best acquisitions helps us provide better returns for all of our stakeholders. This also is why our 2022 plan to $200 Million is right on track.
So during this holiday season, take a deep breath, hug your family and be thankful for all of the people in the oil and gas market that work tirelessly to provide a better life for all of us. We take our quality of life made possible by abundant, affordable energy for granted. Drilling, completing, and getting the oil and gas to market is not easy and takes dedication and fortitude.
Have a safe and Merry Christmas.
And visit the King Operating Website for more market information and insights.