The U.S. oil and gas industry needs a "Marshall plan" to boost gas production, according to the chief executive of JP Morgan, Jamie Dimon, who recommended this approach to the White House, Axios reported this week.
The recommendation comes as the federal government demonstrates confidence that U.S. oil companies will increase output by the end of the year.
"There will be a significant increase in supply by the end of this year, and we're hopeful that they live up to that," Energy Secretary Jennifer Granholm told reporters as quoted by Reuters.
For this to happen, judging by Dimon's words, the administration will need to provide the energy industry with more support. This support is one of the things that appear to have been discussed at a closed-door meeting between President Biden and senior industry executives, including Dimon, earlier this week.
"We have a historic set of ideas on the table for investment in the U.S. energy sector, which would strengthen our security and make us more resilient to actions by leaders like Putin," Axios cited one White House official as saying.
"Those ideas are concrete, and we welcome engagement from all those who would join us in driving investments to strengthen our energy sector," the official added.
At the same time, President Biden recently spoke against the oil and gas industry, saying that "Oil and gas companies shouldn't pad their profits at the expense of hard-working Americans."
Meanwhile, a group of Democrats in the Senate have proposed a windfall tax bill that "would protect consumers from giant oil companies taking advantage of world events to jack up prices," per the website of the main sponsor of the bill, Senator Sheldon Whitehouse.
It may be mixed signals like these from the administration and legislators that have contributed to the oil and gas industry's reluctance to increase output. Yet Secretary Granholm remains confident the output increase is only a matter of time. It could be more than a little time as some from the industry have noted shortages of workers, supplies, and equipment as some of the reasons for the stalling production growth.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
Comments
The Marshall Plan saved lives in Europe following the devastation of WWII. Any new Marshall-type plans need to also have strategic and healthy-living goals.
It disturbs me to hear how many Americans as well as our Administration think that the oil industry is now padding profit. After being unprofitable for so may recent years, it is only the last year that has seen reasonable profits due to improved spending discipline by industry management.
As a nation, we need to move ahead on petroleum production at this crucial time of war, but be prepared to reduce national petroleum dependency just as soon as we possibly can.