Lesson of the day: When free money is sloshing around, everyone wants some of it. 
Big Oil Likes the Green New Scam
Oil companies try to persuade Trump and his Republican allies not to slash provisions of the Inflation Reduction Act potentially worth billions.
The Wall Street Journal reports Big Oil Urges Trump Not to Gut Biden’s Climate Law
In discussions with former President Trump’s campaign and his allies in Congress, oil giants including Exxon Mobil (XOM), Phillips 66 (PSX) and Occidental Petroleum (OXY) have extolled the benefits of the Inflation Reduction Act. Many in the fossil-fuel industry opposed the law when it passed in 2022 but have come to love provisions that earmark billions of dollars for low-carbon energy projects they are betting on.
At a Houston fundraiser for Trump in May, Occidental CEO Vicki Hollub took her case directly to the candidate, saying tax credits propping up the company’s huge investments in technology to collect carbon directly from the air should be preserved.
Meanwhile, company officials at Phillips 66, a $58 billion U.S. oil refiner, have told members of Congress the IRA’s tax credits are important for its business, people familiar with the matter said. Instead of crude oil, the company’s renewable fuels are made from used cooking oil, vegetable oil, fats and the like, which qualify it for large tax credits.
Green politics
Trump has called Biden’s climate efforts the “Green New Scam” and last month promised to cut unspent IRA funds. With the backing of influential conservative think tanks, Republicans in Congress have tried to repeal the law and provisions in it dozens of times and are expected to push for cuts again next year during the legislature’s budget reconciliation.
Expect Rebranding
Political strategists said Trump may try to rebrand the law, given the support for it among officials and companies in some Republican-leaning states, such as Oklahoma and South Carolina, who see it as a draw for new investments and jobs.
Yes indeed. Trump would rebrand this as his own just as he rebranded NAFTA into USMCA which he claims is the greatest trade deal in history.
Very little changed in USMCA other than to put US companies at the mercy of Mexican courts in arbitration, thereby making the agreement worse.
Meanwhile, Harris is adopting Trump proposals like no tax on tips. Both sides, led by J.D. Vance, want to increase child tax credits.
169 Republicans Vote to Expand Welfare, Bill Heads to Senate
In case you missed it. please recall 169 Republicans Vote to Expand Welfare
169 Republicans joined 188 Democrats to expand welfare. There were only 47 no votes from Republicans.
Vance now wants to expand that further. So does Harris.
USMCA Rebranding Success in Two Pictures
US Balance of Trade Select Countries Goods Only 2024 Q2
For discussion of the above charts, please see Trump Claims Tariffs Will Reduce the Trade Deficit. Let’s Fact Check.
Trump proposes 60 percent tariffs on China. Would that reduce the trade deficit? Where? How?
Expect more rebranding successes like the above, no matter who wins.
The True Costs of Net Zero Are Becoming Impossible to Hide
On February 6, I commented The True Costs of Net Zero Are Becoming Impossible to Hide
It’s increasingly difficult for Biden and the EU to hide the true costs of net zero mandates.
But hey, look on the bright side. Big oil now wants to participate. It’s sure to create jobs at a cost of $350,000 each or whatever.
On the home front, I am hoping for a subsidy to not drill for oil in my back yard on the soon to be announced “Keep Carbon in the Ground” KCIG initiative.
I also want to be paid for not growing wheat om my tennis court.
the industrial age is down to coal
whether its burned in the west or chy na and india
its still coal
Biden has been the best thing for coal biz since the shovel….he’s made the existing firms monopolies. The FCF generation is astounding.
Hubris doesn’t take away the need for most countries to abandon Electricity…Green create scarcity….and scarcity doesn’t work with Electricity with World citizens.
There’s 250 years of reserves in the US of the easy stuff to mine in coal. Burning coal clean is certainly a tad easier to do than build a million square miles of solar panels….you think? ;-))
“green” IS a scam.
to imply otherwise is just plain dishonest and/or delusional.
but but but… solar! wind! nuclear!
shut up. how’s germany doing, genius?
end of debate.
i want a subsidy for successfully not VOMITING this morning on this news. It is better for the environment if I do not produce my own Acid Rain.
It’s very simple. We’ve arrived at the moment that Big Oil has to diversify its energy production. If Trump wins, it’s going to be very hard for him to undo these green subsidies, and he’s not going to use political capital to do so.
Hopefully, his main priorities will be to get border wall funding and to deport all of the criminal illegals and those who are on government assistance.
That would be a good start.
This phenomenon of Wall Street advocating for subsidies in the energy sector is analogous to agriculture. As American farmers consolidate the investment groups, hedge funds and billionaires buying farmland take advantage of and push for ever increasing government ag subsidies. The voices in agriculture supporting a market economy are shut out.
Panderama!!!
Big Oil supports the Republican Party because it is the party of climate deniers. Oil is at the heart of much of the climate change currently undergoing on Planet Earth. If Standard Oil, led by John Rockefeller, were still around, it would be bribing politicians to stay away from the entire climate issue. I like Trump as a politician, but many of his “policies” are feckless, brainless, and driven by greed — both personal and corporate. His allies in the political arena seem to share as little concern for the environment as he does. Only Repubs such as former Gov. Arnold Schwarzenegger seem to grasp the critical importance of the environment. It is the only one we have. Sacrifices in the economic realm to prop up the sagging natural world are worth doing.
— Greg (my blog: dark.sport.blog)
“When the people find that they can vote themselves money, that will herald the end of the republic. – Ben Franklin
End the Fed. Quickly.
The US oil industry was looking forward to Trump’s Administration because he liked to talk about how he was going to cut their taxes, reduce regulations, and open up areas for drilling. The reality turned out quite different. He did cut their tax rates, but the industry did so poorly during his term that they didn’t profit much anyway. Over 40 oil firms went bankrupt during his term and Exxon was even removed from the Dow Index.
His attempt to reduce regulations was well-meaning but so haphazard as to be useless. And he did a 180 on drilling.
Yes, Trump signed legislation in 2017 to allow drilling in Alaska’s long-protected Arctic National Wildlife Refuge. But he reversed course to take away a bigger prize by extending a drilling moratorium off Florida’s Gulf Coast in a bid to woo voters in the crucial swing state.
That move also imposed a decadelong ban on drilling off the coasts of several mid-Atlantic states. The reversal shocked the oil and gas industry, which had been expecting the administration to open those areas to drilling after the election.
In contrast, the industry was not looking forward to the Biden Administration, as Biden was focused on expanding renewables, rather than oil and gas. Again, the reality is much better than they expected. During Biden’s term the US oil industry is producing record amounts of oil and gas and record profits. And they are taking advantage of the IRA to scoop up incentive money for green initiatives, which Trump wants to take away.
During the current campaign, Harris is promoting domestic drilling as well as renewables. Trump is promoting “drill baby drill” and is promising voters to cut energy prices in half. I have no idea which candidate the oil industry would prefer. But I know one thing: the US oil industry has no interest in “drill baby drill”. They do not want to spend billions to produce so much oil that prices get cut in half. That would be suicidal.
I still have some investments in US oil companies, but the bulk of my investments are in Canadian oil and gas companies. They are in much better shape than most US companies.
Cheers!
Thanks for a nide update PapaDave.
People don’t always agree with PD, including me, but he is consistent and I believe fair.
Thanks Mish. We will continue to agree on some things and disagree on others; but hopefully remain respectful on all issues. Though I admit, I can be an ass occasionally. Lol!
Comments are why we are here …. Reddit and ZH are …shall we say … trashy?
Also, check bogleheads.org … good moderation. Sound financial advice — not quite WSB tho.
Being an ass at times, which we ALL CAN BE, is part of the process of being human.
Some news today. Canadian Natural is buying Chevron’s oil sands and shale positions in Alberta for $6.5 billion in cash. Gotta love the huge cash flows of the Canadian oil companies. They are also using about $400 million a month for share buybacks, paying down debt, and paying a 4% dividend. One of my larger positions, which I have recommended many times here.
And they increased their dividend by another 7% at the same time!
I always feel B.R.O.K.E. after reading these kind of Posts from Mish.
When does the free money end? Only a 1929 event can save us now.
The 1929 crash “caused” most Americans to go broke. Why would you want that?
I don’t think he is suggesting he wants Americans to go broke … as much as he wants the free money to stop flowing for political favors.
Hmmm. I interpret it differently. He seems to be saying he “wants” a 1929 crash, which will somehow “save us”.
“Only a 1929 event can save us now.”
But such an event is sure to make most Americans poorer.
When our National Debt got into the teen-trillions … I figured when it hit $20T we’d collapse. Then $25T, then $30T. I have no idea if/when our absurd debt will finally cause sanity. I fear that it might instead bring on totalitarianism and a marxist “anybody with money is evil … go kill them” mentality (of course with an elite class who are on the side of the proletariat and thus should not be killed).
yep, Hunger Games … without the games, and Katniss, etc.
Katniss was too depressed to enjoy leadership to the fullest.
The Best part of a 1929 Repeat would be the jumping of Brokers off of Buildings in NY around the world. We can call it the 2024 Splat Moment. I would rather it would be the FED, though, as I would show up as a gallery participant.
Socialism is just fascism renamed but with a happy face coined in the Alps by an Italian enjoying Swiss immunity like Lenin. Funny how free money net zero bunga bunga never turns out to be free. .
“…saying tax credits propping up the company’s huge investments in technology to collect carbon directly from the air should be preserved.”
As an amateur, I question why would anybody do that?
Obviously, these projects require subsidies to be profitable, and likely have no path to profitability, either.
I thought ZIRP already made unprofitable project viable, and they still need subsidies?!
You hear these silly things during election time only.
Don’t worry.
If proof was needed that Trump is the ultimate swamp creature, there you are. Big Oil knows how to deal with his type of sleaze bag.
“On the home front, I am hoping for a subsidy to not drill for oil in my back yard on the soon to be announced “Keep Carbon in the Ground” KCIG initiative.”
So tax dollars to protect your backyard is a OK for you – hypocrite.
“Drill for oil in my backyard” LOL
Only idiots don’t recognize obvious sarcasm.
“It’s not socialism if Trump does it” should be the new catch phrase here.
There has always been a sense of “pigs feeding at the trough” when it came to congress and political graft but we now seem to have “dinosaurs feeding at the trough” and it will destroy the U.S. I use “dinosaurs” as a double entendre for both size of feeding and age for ideas that keep failing.
There is nothing anyone can do about this mess, just learn to profit from it with the intent to cash out your poker chips, leave the casino and go find a safe and peaceful place to live.
“It’s turtles all the way down and inflation all the way up!” -MPO45v2.
By the way, I am well positioned with oil companies to take advantage of the graft too.
How about we reignite honor, intelligence, grace, poise, leadership, trust, courage, humility, consideration, empathy, positiveness, and community.
All of those things always have and always will be the most “profitable”.
Like the crazy old family member one avoids at family events Trump’s Speeches, Increasingly Angry and Rambling, Reignite the Question of Age
With the passage of time, the 78-year-old former president’s speeches have grown darker, harsher, longer, angrier, less focused, more profane and increasingly fixated on the past, according to a review of his public appearances over the years.
The oil companies know how to game and exploit a moronic and lucrative government-sponsored grift when they see one-
https://www.whitehouse.gov/briefing-room/speeches-remarks/2024/04/16/remarks-as-prepared-for-john-podesta-columbia-global-energy-summit/
Exploiting grift, which is immoral, will not be profitable so any person or company who thinks its good should think again.
Trump should run on tax increases and spending cuts. It worked like a charm for Mondale.