With fuel supplies continuing to slip due to sanctions in Russia and promises to export more barrels to the European Union, the U.S. is looking to increase its domestic production. However, Canary CEO Dan Eberhart is warning that producers can’t simply pump more oil overnight.
“I think you’re going to see U.S. production rise,” he told FOX Business’ Stuart Varney, “but it also takes time.”
At a Glance
- The Biden Administration has pledged to export more LNG to the European Union so countries can stop buying Russian fossil fuels.
- Because of that, U.S. oil companies have to increase output to offset the low domestic and foreign oil supplies.
- However, one CEO claims that producers can’t pump more oil “on a dime.”
- Supply chain issues, employment issues, and even gas shortages are hindering oil companies’ attempts to get ahead.
Canary CEO Says Companies Need Time to Pump More Fossil Fuel
The comments came after Bident announced on Thursday that the U.S. will send more liquefied natural gas (LNG) to the European Union. That way, the countries would be able to break away from their dependences on Russian fuel.
With that promise, domestic producers are feeling the pressure to pump out more oil as quickly as possible. And with record-high gas prices across the globe, most companies were already dealing with the urgency.
However, increasing supplies isn’t as easy as it sounds.
“We can’t turn on a dime to add this production given the recent price increase, it’s going to take some time,” Eberhart continued. “There’s a lag.”
The same problems that are plaguing drivers and the supply chain are also affecting the oil industry. And companies are struggling to find ways to work around the mess.
“It’s hard to find labor, stuff from China is taking six weeks, not three, our insurance costs are up, our fuel costs are up, which, pun intended, does affect us, too,” he explained.
And with all these problems added to new promises to export more LNG, Eberhardt thinks that “the Biden administration has made it more difficult to be in the oil business.”
Canary is currently producing around 11.6 million barrels per day in its northeastern U.S oilfield. And Eberhardt thinks his company could up output to 14 or 15 million barrels. But he’s going to need some help from the Biden administration.
“[The Federal Energy Regulatory Commission] and the [Department of Energy] have been sitting on these permits for these export terminals for LNG,” he said. “And I think the administration’s going to have to pick up the pace on that so that we can help Europe and hurt Russia.”