Please remember, Caribou is American too. Biden, in a desperate attempt to warm the bleeding hearts of his environmental extremist base, has decided to announce on the anniversary of the September 11th attacks on America that they could cancel oil and gas leases previously awarded in the Arctic National Wildlife Refuge (ANWR). Reuters reported that
“President Joe Biden, a Democrat, has pledged to protect the 19.6 million-acre (7.9 million-hectare) Arctic National Wildlife Refuge (ANWR) for polar bears and caribou. “As the climate crisis warms the Arctic more than twice as fast as the rest of the world, we have a responsibility to protect this treasured region for all ages,” he said in a statement.
This move comes as gasoline prices for Americans are just shy of an all-time for this time of year. We saw in the Fed Minutes Fed districts are warning that
“Consumers may have exhausted their savings and are relying more on borrowing to support spending.”
Part of the reason Americans are using their savings up and running up their credit cards is that the government has gone through a period of record spending, expanding debt, and skyrocketing energy prices that have cut into Americans’ wallets.
Now I know what you are thinking. As Americans are facing some of the most challenging economic times they have seen in decades, it might not be the best time to cancel drilling permits and screw over companies that made good faith investments based on the government’s word. Reneging on that could further lead to a greater lack of investment in American Energy production leading to even higher energy prices and even more pain for Americans struggling to survive. Well, we just must remember that we have to be fair for all, caribou and polar bears in ANWR are Americans too.
Of course, some might suggest that Biden’s trip to Alaska might be an attempt to distract attention from his disastrous Afghanistan pullout that experts said he tried to rush so he could make a big splash and announce the end of the US involvement in the Afghanistan war on the anniversary of September 11th.
Some say it’s a distraction to misdirect attention from the heartbreaking testimony of the Gold Star families that had their children lose their lives in a pullout that from Biden’s own words, was a success. Forget the fact that his generals warned against the pullout plan, and he failed to alert our allies, it’s time to move on and protect the caribou and polar bears.
Caribou and polar bears’ lives matter too. Besides, remember it was Trump who approved those leases so it’s only natural that Biden should vindictively rescind it just like he residence approval for the Keystone XL pipeline that would be bringing us heavy oil to US refineries primed for making diesel that we are short of.
Of course, the caribou have found some comfort in the cold in the Arctic as their population exploded and they find warmth with the warm oil pipelines. But if you focus on that and not the fact that the Arctic might not freeze them to death if it warms up, the same might not be said for Americans who may have the hardest time paying for heating bills in a generation since prices are rising and based on Fed warnings are already buried in debt.
It also comes at a time when we are seeing massive oil inventory drops in the US. Last night the American Petroleum Institute (API) reported that the US crude supply tanked by 5.521 million barrels last week. That puts US oil inventories if confirmed by the Energy Information Administration (EIA), to have fallen by almost 40 million barrels since mid-July.
We also saw a big 5.1 million barrels drop in gasoline supply as the rack was filled to meet strong Labor Day holiday demand. We also saw a slight 310,000-barrel increase in distillates as refiners face an upward battle to get supplies of diesel sufficient going into winter.
This comes as Bloomberg News Reports that, “There’s No Plan B’: Oil Chiefs Sound Alarm (NASDAQ:ALRM) on Refining Woes”. Bloomberg writes that,
“A lack of spare crude-processing capacity due to under-investment, and shutdowns happening more frequently with refiners ramping up on better margins and deferring planned work were common themes at the APPEC by S&P Global Insights conference in Singapore this week. That’s left fuels like diesel and gasoline vulnerable to sudden swings when there are unplanned outages.”
Bloomberg quotes many reasons to worry such as, “it’s becoming more expensive to fund normal refining projects, Alex Grant, senior vice president for crude, products and liquids at Equinor SA, said in an interview. Existing refineries will operate at the highest rates they can, with refining margins staying high, he said.
The refining system is “crying out” for fresh investment with oil demand still growing, especially in Asia, said Sri Paravaikkarasu, director of market analysis at Phillips 66 (NYSE:PSX). Refiners need to cater to it, while also accounting for the green energy transition, she added.
Oil prices are finally in overbought territory so we may see some opportunities to buy breaks so be ready. The gasoline crack spread may have bottomed assuming the EIA shows us a draw.
Natural gas should give us a bullish surprise.