White House Neglects Obvious Funding Crunch for U.S. Oil Drillers

White House press secretary Jen Psaki on Wednesday omitted that American drillers need feasible financing teams to drill on private land.

“What additional permits do they need? The leases are there. The permits are there. I don’t think they need an embroidered invitation to drill. They are oil companies,” she claimed about the feasibility of oil drilling.

While the Psaki and President Joe Biden have cited numerous times that oil companies should be drilling on their 9,000 prepared oil leases to fill the void in the market, the cost of financing new oil sites has dramatically risen due to the Biden administration, which has effectively priced new oil production out of the market.

The cost of capital in 2022 is reportedly 20 percentage points more costly for long-cycle developments than in the past. “Ten years ago, the ‘cost of capital’ for developing oil and gas as compared to renewable projects was pretty much the same, falling consistently between 8% and 10%. But not anymore,” Bloomberg reported in November.

Oil companies have little incentive to make 10-year investments when politicians are disincentivizing the consumption of oil through renewable energy subsidies.

Biden has waged a war on both public and private financing of oil drilling while subsidizing green new deal-like energy plans. The result has been that American oil production is down from 2019, the year before the pandemic. Hard numbers suggest 2022 oil production is 12 million barrels or 8 percent less than in 2019.