An article in the Financial Times last Monday quoted Anne Hochstein, President Biden’s international energy envoy, as saying:
“I think that the idea that financiers would tell companies in the United States not to increase production and to buy back shares and to increase dividends when profits are at all-time highs is outrageous. It is not only un-American, it is so unfair to the American public.
You want to pay dividends, pay dividends. You want to pay shareholders, pay shareholders. You want to get bonuses, do that, too. You could do all that and still invest more. We are asking you to increase production and seize the moment. …
We are preparing and living from an energy perspective, in Europe and beyond, in a hand to mouth, step by step (way).”1
Sigh. It’s hard to where to comment first. I would like American shale and other oil and gas producers to produce more energy. But I don’t blame them for not doing so under the Biden administration. After all, on his first day in office, President Biden cancelled the Keystone XL pipeline. He also tried to cut back on leases for fracking on federal lands. Why should investors believe President Biden and/or his progressive/green successors, whether in the presidency, Congress, or the bureaucracy won’t, at the first moment possible, tell – or force – oil and gas companies to stop drilling and cut back on production, pretty much making all those investments worthless?
Also, if we really want to increase energy production – and get more natural gas to Europe, what are we doing to speed up the permitting and construction process for LNG terminals in the United States? What are we doing to allow pipelines to be built in the US, so the northeast doesn’t have to import LNG from abroad, but can get natural gas via pipeline from the United States, so those LNG supplies can go to Europe? Bottom line, what is the Biden administration doing to assure investors that the investments they are calling for will be allowed to operate until they can get a decent return?
Until President Biden can fairly answer these questions, investors and financiers aren’t being “un-American”; they’re being smart.
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1 Derek Brower, “Biden adviser blasts anti-drilling investors,” Financial Times, December 12, 2022.
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