OPINION:
The much-anticipated hearing on Wednesday in the U.S. House of Representatives Committee on Energy and Commerce, at which oil company executives were supposed to be barbecued, turned out to be a messaging disaster for the Democrats.
Some of them attacked the executives for using their company’s profits to buy back stock or increase dividends to shareholders. Good as far as it goes. However, in arguing against stock buybacks, the Democrats, led by Chair Frank Pallone of New Jersey, wound up explicitly advocating that companies spend that money — wait for it — exploring for and producing more oil and natural gas.
Some Democrats argued that the companies are making too much money because they can dig oil out of the ground for about half of the going price in the global marketplace. Again, the majority was making a solid case for more production.
On the other side of the ledger, some Democrats offered the discredited idea that we can’t drill our way to lower prices. That is both inaccurate and a little embarrassing for Team Biden. President Biden has acknowledged the utility of more oil production in reducing prices. He routinely and specifically asks Saudi Arabia and Venezuela and pretty much anyone he can think of (except American producers) to reduce the price of oil by … drilling for more oil.
Team Biden also acknowledges the role of production in reducing prices every day they treat the Strategic Petroleum Reserve as their own personal rainy-day fund.
Oddly, some Members chose to indict themselves by complaining about the tax treatment of oil and natural gas development and production. No one had the nerve to tell them that Congress and its members — not the oil companies — are actually in charge of the tax code and its provisions.
Former President Barack Obama used to say that “we can’t drill our way to lower oil prices.” Then the revolution in precision drilling and well stimulation proved him wrong. Having lost that fight, the bad guys changed tactics and made it painful for people and companies to invest in oil and natural gas. That led to underinvestment in oil and natural gas resources, which has created our current situation.
The hearing made it clear that the Democrats don’t know whether they favor producing more oil or not. That’s, of course, an unfortunate byproduct of their lack of knowledge about the energy industry more generally.
We hope they pick a side in this fight soon and get their messaging straight. In the meantime, we remain confident, knowing that greater production of oil means lower prices for consumers. We look forward to the Democrats catching up to the rest of us.
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