Over at The Pipeline, I walk through Biden’s latest demagoguery about energy, of which this is the key portion:
• Oil production and refining margins are at or slightly below average for all American manufacturing industries (between 5 and 12 percent, depending on region and product), and considerably below several other industries that are Democrat favorites because they’ve gone woke, especially tech.
• ExxonMobil is expected to earn less than one-half as much as Apple this year (Exxon: $41 billion; Apple: $100 billion), and Apple enjoys a much larger profit margin on sales than ExxonMobil (Apple: 26 % in its most recent quarter; ExxonMobil, 6.2%). But liberals never criticize Apple’s “profiteering” or Google, or Facebook, or…
• Our refineries are running over 92 percent of capacity‚ up from 86 percent last fall, and will likely reach 95 percent this month according to Biden’s own Energy Department. Our refineries can’t increase output much more even if they want to. And the government never offers to backstop oil companies or refiners when market downturns squeeze their margins close to zero, as periodically happens, such as 2009, when refining margins collapsed to -7 percent.
I decided to crunch the data a bit more fully, and herewith my original chart of the profit margin for ExxonMobil and Apple going back to 2009, based on raw data from YCharts.
Meanwhile, I note that ExxonMobil has politely, but in a devastating way if you know the scene, rebuked Biden with this response:
In the short term, the U.S. government could enact measures often used in emergencies following hurricanes or other supply disruptions — such as waivers of Jones Act provisions and some fuel specifications to increase supplies. Longer term, government can promote investment through clear and consistent policy that supports U.S. resource development, such as regular and predictable lease sales, as well as streamlined regulatory approval and support for infrastructure such as pipelines.
You can be sure that the Biden Administration will do none of these things.
UPDATE—Chevron is even more blunt than Exxon:
“Unfortunately, what we have seen since January 2021 are policies that send a message that the Administration aims to impose obstacles to our industry delivering energy resources the world needs.”
Exxon Mobil Corp., Marathon Petroleum Corp. and the other top US oil refiners are on course to reap a combined $10 billion in profits this quarter even as US President Joe Biden lambasts the industry for closing plants.
To repeat, Apple will reap $25 billion in profits this quarter.