November 2020

The last barrel

An American patriot
Craig Fleming / World Oil

I have been a student and vested participant in the U.S. political process for the last 43 years. We have all heard the strongly worded doctrines and personal convictions pontificated by an endless array of politicians promising to fight for working-class Americas and enact meaningful change. Yet, when these newly elected officials arrive in Washington D.C. and encounter the entrenched power structure, backroom deal-making and industrial military complex, they go-along to get-along and become irrelevant.

But President Trump has a different idea on how to effect change. He has the courage to reverse decades of counterproductive domestic and foreign policies. He has put America First and leveled the playing field, giving U.S. industries a fair chance to compete against other countries who have benefitted from our free markets and decades of unfair trade practices.

Consummate industry champion. During the oil bust of 1986-1989, there was not one single U.S. government initiative (that I was aware of) designed to support prices or displaced oilfield workers, who suffered through four years of $10-$12/bbl oil. It was quite obvious that cheap fuel and low-cost gasoline was great for every state in the union except Texas, Louisiana and Oklahoma.

Mr. Trump is the only President, during my 39-year oilfield career, who has the courage to support and defend the E&P industry, outright. President Trump supports completion of the Dakota Access Pipeline and the northern extension of the Keystone XL Pipeline. He introduced a tax plan—with far-reaching implications for independent producers—that lowered rates and allowed accelerated depreciation or outright expensing of capital costs.

Just six months after his election, President Trump, acting mostly on his own accord, changed the industry’s outlook. After decisive actions, the E&P industry now has more access to capital, new pipeline infrastructure and capability to export oil to other countries. President Trump is using America-made energy rather than supporting crippling legislation that would have forced the U.S. to import foreign oil.

Reckless behavior. However, President Trump’s willingness to expose the inter-workings of the Washington power structure, and the money-for-influence arrangement with foreign companies, enraged Democratic party leaders. Using a win-at-any-cost philosophy, the House of Representatives approved articles of impeachment on charges of abuse of power and obstruction of Congress. The Senate acquitted Trump of these charges on Feb. 5, 2020.

Is Biden the best the Dems have? It’s hard to understand how a man like Joe Biden is even running for U.S. President, especially considering the controversy surrounding his son, Hunter Biden, and his apparent influence peddling to the Chinese and Ukrainians. The mainstream press has censored or ignored evidence of collusion found on Hunter Biden’s computer and first-hand witness testimony that has raised critical questions about Joe Biden’s interaction with foreign officials. But if you’re a Democrat running for President in 2020, treason and potential criminal activity are overlooked. This is the same tactic used by Joseph Stalin, who committed robberies and kidnappings to finance Vladimir Lenin’s Bolshevik revolution between 1917-1923 (aka the end justifies the means).

Biden’s likely U.S. energy policy. If Biden manages to prevail, he intends to set the U.S. on a course for net zero greenhouse gas emissions by 2050 and end the use of natural gas by 2035. But there is a good chance that Republicans will retain control of the Senate, limiting how much of the Green New Deal Biden will be able to implement. He would have to temper bills to get them passed in the Senate. “The shift toward lower-carbon energy is not over, but it’s going to be on a more realistic timeline, absent a blue wave,” said Dan Eberhart, a Republican donor and CEO of Canary Drilling Services. “Biden is not going to be able to ram through a costly, zero-carbon mandate through a Republican Senate. Obama couldn’t do it with control of both the House and the Senate.”

If Biden does win, the federal government will be constrained, and state policies will be more important, said Wood Mackenzie’s Ed Crooks. The key influences shaping the U.S. energy industry are likely to be market forces, just as they were under Barack Obama and Donald Trump.

What industry leaders expect. While utilities that already embrace clean energy won’t see much impact, oil and natural gas suppliers are bracing for a bigger hit. Although Biden flip-flopped on his fracing position during the election, he’s expected to ban fracing on federal lands. “We are realistic that under Biden, doing business on BLM land will become more difficult,” said Marathon CEO Lee Tillman. Federal land in New Mexico makes up a large portion of activity in the Permian, but it also spills over into West Texas. The Gulf of Mexico also would be affected. If a permanent ban on new leasing is passed, GOM production would decline 30% by 2035.

Actions paint a vivid picture. From my study of history, I have concluded that great leaders don’t hide in the basement of their fortified house while a health crisis and civil unrest devastate the country. And great leaders don’t steal ideas and words of others and claim them as their own. That’s known as plagiarism and is certainly not an indication of an independent thinker or intellectual fit for the highest office in the U.S.

America First. Mr. Trump’s Presidency is an exemplary example of standing against the Washington status-quo to implement bold legislation designed to help Americans prosper and provide a better future for the next generation. Mr. Trump’s example has led to stronger, more transparent leadership that puts American jobs, and our homegrown industries, before self-enrichment and selling out the American people to foreign powers.

About the Authors
Craig Fleming
World Oil
Craig Fleming
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