The United States added five oil rigs this week, indicating some acceleration in domestic oil production as oil prices rose above $110 a barrel.
The total number of oil rigs in the United States rose to 557 this week, data from oil and gas services firm Baker-Hughes showed on Friday. That’s a steady recovery in pace from 552 last week, 549 the week before and 548 three weeks ago.
The Permian Basin, where new production is thought to be most likely to occur, added zero for the fourth consecutive week.
The number of natural gas rigs in the United States increased by two to 146.
A net of two platforms have been added in Oklahoma. Two were added in Pennsylvania. Louisianna saw its rig count jump by four. The number of rigs in Texas and Alaska decreased by one each.
Some of the increase in US production was offset by the continued decline of Canadian rigs typical for this time of year. The number of oil rigs in Canada has decreased by three and natural gas has decreased by one.
The Biden administration has said it wants more domestic oil production, but until very recently refused to auction new leases for federal land. However, even when the administration announced the move, it made it clear that it despises fossil fuel companies and views them as dangers to the public good.
“For too long, federal oil and gas leasing programs have prioritized the needs of the extractive industries above local communities, the natural environment, the impact on our air and water, the needs tribal nations and, additionally, other uses of our shared public lands,” Interior Secretary Deb Haaland said in a statement. “Today we begin to reset how and what we view as the highest and best utilization of American resources for the benefit of all present and future generations.”
The administration also significantly increased taxes on oil and natural gas revenues from leased land, from about 12.5% to 18.75%, an unprecedented hike. No president in 100 years has undertaken such an increase.
Even still, climate change activists howled in outrage.
A number of Biden’s candidates have expressed antagonism to the fossil fuel industry, discouraging investment in the sector by making it clear what the Democratic Party’s view on it is. Last year, Biden appointed a former Fed official, Sarah Bloom Raskin, to the Federal Reserve’s top banking oversight post, who has advocated using regulations to discourage banks from investing in fossil fuels. He also appointed radical left-wing academic Saule Omarova, who has also called for using banking regulations to stop fossil fuel investment, to the Office of the Comptroller of the Currency. Both nominations were defeated when moderate Democrats in the Senate backed down.
Perhaps more importantly, major institutions poured money into so-called sustainability funds that looked at environmental, social and governance factors when making investment decisions. These funds avoid investments in fossil fuels. According to Deliote’s Center for Financial Services, assets managed by professionals with ESG mandates reached $46 trillion globally in 2021, representing almost 40% of all assets under management. The result is that it has become incredibly difficult to raise funds to expand fossil fuel production. Thus, even oil prices above $100 a barrel do not attract capital to the sector.
In a recent episode of Bloomberg’s Odd Lots podcast, Goldman Sachs’ top commodities strategist describes ESG investing as “a brutal instrument that reduces capital flows in a very critical sector.”