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Why US oil companies aren’t coming to the rescue of Europe

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“The model has totally changed,” he said.

Oil executives also say they are spending a lot of money on new oil and gas production, but inflation is undermining their efforts. Exploration and production spending will increase by more than 20% this year, but about two-thirds of that increase will be used to pay higher prices for labor, materials and services, among other costs. according to RBN Energy, a Houston-based research firm.

“It’s a bit of a shock because we’re seeing inflation across the industry,” Jeff Miller, chief executive of Halliburton, which drills wells and provides other services to oil companies, told analysts during a briefing. a recent conference call.

Small private companies, financed by private capital, are responsible for much of the new activity. According to the Dallas Fed survey, the median growth rate for companies producing less than 10,000 barrels per day was expected to be 15% this year, compared to just 6% for companies producing more than 10,000 barrels per day. .

The big oil companies complain that even if they wanted to invest more, it would be difficult because Wall Street does not like to finance new fossil fuel projects. Some investors concerned about climate change are choosing to put their money in renewable energy, electric cars and other businesses instead.

It’s not that investors have become environmentalists. Many have analyzed the numbers and concluded that the recent spike in fossil fuel prices will be short-lived and that they are better off investing in companies and industries they believe have a better future.

“If you are an investor, has your vision for the next five to ten years really changed? I think the answer is no,” said Amy Myers Jaffe, executive director of the Climate Policy Lab at Tufts University’s Fletcher School. “History tells us that oil shocks accelerate the shift to alternative energy, not the other way around.”

Many oil executives also complain that the future of their industry is clouded by political and regulatory uncertainty. They acknowledge Mr. Biden has called on them to produce more, but they fear his administration will reemphasize the need for less oil and gas when prices fall.