So, it’s simple. Right? Let me just say that not much involved with economics is simple. So, when you hear President Biden place the blame on Putin’s war (not actually true) and Jen Psaki saying it’s the fault of oil companies for not drilling more, you know there is more to the story. Moreover, those explanations are misleading because so much required information has been left out. Beware of what politicians leave out. It’s just as dangerous as false statements and it can’t be fact checked. I hate to point a finger it but it is a liberal media tactic to leave out pertinent facts.

In this discussion, we’ll be looking at the U S only, not the world. One step at a time.

First of all we’ve stopped buying Russian oil but prices were climbing way before this event. In 2021 gas prices rose a whopping 46% on average. Clearly this was not due to the war on Ukraine. Also as a country our consumption of Russian oil was only 2 or 3 percent of our total consumption. Our government is now looking to Saudi Arabia, Iran, and Venezuela to make up that deficit. These companies can inflate their prices because of the demand and they’re not exactly friends of the US. That’s a topic of discussion in itself!

So, to understand the problem, Jen Psaki was partially right. You have to look at the oil companies. Her statement went something like this: Oil companies have the permits and they need to use them to drill and produce more oil. This is an oversimplified statement and again with missing factors.

So, start with looking at our big oil production companies, a short 10 years ago their approach was “drill, baby, drill!” Oil companies eagerly requested drill permits and now have a surplus of permits that are not being used. Well, times have changed. First, just like other industries there is a shortage of workers. Limited workers affect the amount of drilling that can happen. Second, there is an absence of equipment needed for drilling. It’s not just a shortage, it’s an absence of equipment. You can’t do a job without your tools. Third, the focus of large oil companies has shifted. There has been a dramatic drop of investors in oil companies. Because of less money in investments oil companies have decided to forgo the costs of increased drilling and production to provide increased compensation for the shareholders they have now. It’s easy to see how this shift happened as a result of Covid and the emphasis on green energy. Again it goes back to supply and demand. Oil companies are not going to invest money in production if the demand is ultimately going down. Furthermore, any new drilling and production would take months and years to make a difference if the oil companies had the intention and means to take on that endeavor.

So being energy self sufficient is harder than it sounds. It’s not entirely a matter of government suppression of production, pipelines, and drilling. It’s about circumstances like Covid, the available workforce, equipment, and changing trends in oil company priorities. It’s about supply and demand. “Let’s go Brandon” just doesn’t tell the truthful story nor the whole story.

Thank you for reading and commenting. I’m glad we can hold a conversation without rancor and blaming. I have much to learn and I find that I understand better through writing about what I’ve learned. Never stop learning!