Chevron CEO Mike Wirth spoke at the Economic Club of New York on Thursday to warn about the Biden administration's cunning plan to refill the Strategic Petroleum Reserve around the $70 a barrel level. He said filling the SPR at that level is "not necessarily a wise move."
Wirth explained the SPR should be refilled regularly to maintain adequate reserves at reasonable levels while limiting volatility in price. He said Biden's communication to the oil industry about a minimum price floor at which the US government will purchase crude provides no "meaningful" incentive for oil companies to ramp up production.
The chief executive continued to say if companies operated this way, their trading desks could easily hedge the price of crude in markets themselves, adding the SPR is currently "at a level where we wouldn't want to see it go any lower."
Wirth was on a roll criticizing the Biden administration. He said their energy policies were very "lazy" and "sloppy" because of the inability to tap into the nation's abundant resources. He means that the Biden administration has inhibited the fossil fuels industry from expanding, indicating a considerable need to improve energy infrastructure such as pipelines, transmission lines, and ports to ensure all parts of the country are well supplied at all times.
"Durable and meaningful permitting reform" would be a "huge step forward," he said.
Wirth's comments followed a CNBC report Wednesday that cited multiple sources who said the Biden administration is mulling over more SPR releases ahead of winter.
The White House appears to be bracing for another potential energy spike in the coming months. Their ability to release additional oil from the reserves could face more pressure from a Republican-led House of Representatives at the start of the new year.
"It is imperative that DOE maintain the nation's petroleum reserves in a manner that does not limit our ability to prevent or reduce the adverse impacts of true energy supply shortages," Reps. Cathy McMorris Rodgers, R-Wash., and Rep. Fred Upton, R-Mich. recently said.
Wirth's comments provide valuable insight into how the fossil fuel industry views the Biden administration: an inexperienced bunch of clowns ruining the country's energy independence.
More Top Reads From Oilprice.com:
The leading economics blog online covering financial issues, geopolitics and trading. More