Still, the Canadian crude Keystone would have carried is a particularly heavy oil that’s more expensive to produce and refine, said Jay Hakes, who served as administrator of the U.S. government’s Energy Information Administration. That means Keystone XL would not have been “bringing a low-cost product into the mix,” Hakes said, adding he’d be surprised if it made as much as a penny difference in prices at the pump.
Claim: Oil companies are raking in record profits
The world’s publicly traded independent oil producers will make record profits this year, surpassing the levels reached when crude hit an all-time high near $150 a barrel more than a decade ago, according to Rystad Energy, an energy consultant based in Oslo.
Next year should be even better, particularly for U.S. drillers, with free-cash-flow growth of 15% to almost $66 billion forecast for 2022, according Bloomberg Intelligence.
Meanwhile, as the world faces higher energy prices for the foreseeable future, oil and natural gas producers are resisting the urge to drill again, according to Chevron Corp.’s top executive.
“We could afford to invest more,” Chief Executive Officer Mike Wirth said in September in an interview at Bloomberg News headquarters in New York. “The equity market is not sending a signal that says they think we ought to be doing that.”
Oil companies that took a beating when prices plummeted during the pandemic are being more cautious about investments now and in some cases have “finally achieved profitability after so many years of underperforming investor expectations,” Book said. “Private companies are supposed to earn profits for their investors, and the providers of capital are saying ‘we don’t want you to keep drilling wells.’”
Claim: Gasoline suppliers aren’t passing on savings when oil falls
Biden has asked the Federal Trade Commission to investigate possible illegal conduct in U.S. gasoline markets. The administration alleges consumers should be paying 25 cents less per gallon given what refiners are charging for fuel and what motorists are paying for it.
While there is always a lag between changes in oil prices and resulting gasoline prices, this year what drivers pay at the pump has been especially sticky. The gap between gasoline futures and retail pump prices widened to $1.20 a gallon earlier this month, the most since 2008, excluding the early part of the pandemic.
When wholesale prices decline rapidly, it provides a window for retail operators to sell at high prices for a few weeks before lowering prices, said Ernie Barsamian, chief executive officer at the Tank Tiger, a storage broker. Eventually, pump prices will come down, but for now, some refiners and gas stations are enjoying the fatter margins, he said.
Republican members of the commission have asked the Biden administration for evidence to back up its assertion that illegal conduct could be driving high gasoline prices.