Episode 249 – Biden’s War on Oil


Joe Biden wrote a scathing email to the oil companies and demanded they start investing and lowering the cost of their product, and that went over just about as well as you would think it did. The oil companies responded in kind, and it looks like there will be a stand off between the two that will cost the taxpayers more money in the long run.

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Episode Transcript

DISCLOSURE
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FULL TRANSCRIPT TEXT

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this episode is brought to you by travis
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so
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and now matt wright and
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spike cohen
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good morning good afternoon or good
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evening and welcome to the vanguard
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force spike machine gun
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cohen
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co
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cohen
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i am matt wright and together we are
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traversing the muddy waters of
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freedom first and foremost allow me to
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thank cava kevin for the cava i am
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and of course folks be sure to like
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notifications every single time we go
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live speaking of explosions
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oil prices
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oil prices are exploding they tend yeah
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they are
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um oil prices are no longer caused by
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putin’s war
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that’s great news kind of
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yeah
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um in
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in their quest to find someone to blame
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for high gas prices the white house
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has found a new villain
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refiners
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[Music]
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in a letter
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in a letter that biden wrote to exxon
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mobil ceo darren woods he says
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at a time of war which i want to know
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already
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what war
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do you mean the russian war against the
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ukraine that we’re not in the one that
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we’re not involved like yeah we’re proxy
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war i get it but yeah we’re not
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officially involved in what war are we
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are we fighting right now
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at a time of war
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anyway at a time of war i’m reading this
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in a normal voice because you know biden
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didn’t write it because it’s coherent
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yeah uh refinery profit
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refinery profit margins well above
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normal being passed directly onto
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american families are not
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acceptable
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he sent similar letters free at a loss
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most of the time oh my lord
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similar letters were dispatched to the
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heads of chevron shell philip 66 bp
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marathon and valero
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biden went on to say
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your companies need to work with my
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administration to bring forward concrete
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to bring forward concrete near-term
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solutions that address the crisis and
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respect the critical equities of energy
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workers and fence line communities
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any reduction what
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what does that even mean the critical
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equities
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of energy workers and fence line
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communities
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okay so there’s a chance biden did write
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this
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critical equities i think
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jean-pierre wrote this this yeah that’s
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also fair any reduction in your refining
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capacity since 2020 and any concrete
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ideas that would address to emit would
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address the immediate inventory price
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and refining capacity issues
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in the coming months including
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transportation measures to get refined
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products
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to the market
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how about letting them make new ones
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for the first time in decades
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it seems like the easy answer
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how about california not setting a a
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standard that’s so different from
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everyone else that the refineries have
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to go completely bone dry
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in between producing california-grade
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oil and producing everyone else’s oil
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which causes a i believe mid to high
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single digit uh disruption to
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uh the production of refined products
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biden went on and called
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i refinery profit margins
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unacceptable
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pledging to use
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and this is a very terrifying sentence
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all reasonable and appropriate federal
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government tools to bring more refined
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products to market and lower prices at
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the pump
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there’s one tool let them build more of
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them let them build more let them drill
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after those letters went out
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in a moment of
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korean kjp
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in kjp fashion of something that
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aged like
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spoiled milk
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the u.s energy information
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administration on friday released
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estimates that refinery utilization will
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reach a monthly average level of 96
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twice this summer near the upper limits
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of what refiners can consistently
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maintain
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yeah
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so at no point are they even going to be
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able to make it back to the hundred
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percent
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yep and we’re never gonna get over the
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100
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yep now this means that we won’t be
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increasing uh as biden is demanding
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because it’s not possible for them to
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partly but not completely because most
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u.s refineries are set up to process oil
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imported from overseas
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rather than fuel produced domestically
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which we have gone over multiple years
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in the past yes which we’ve talked about
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quite a bit yes this isn’t in the notes
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but somebody recently said he’s
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expecting this to continue going and
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we’re going to be seeing six dollar
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averages soon
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yeah
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they’ve they have nothing they have
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nothing that they are willing to
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actually do
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to try to deal with this no they’re
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gonna virtue signal about record high
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profits
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they’re going to uh uh implement
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nonsense that does nothing like the
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historic release of all the freaking oil
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that they have in the domestic reserves
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which works out there one million
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barrels a day that’s about what a uh uh
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an hour or two of that day’s worth until
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they run out in about a month
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yeah it’s like three actually less than
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a month
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so uh
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right now
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you know i don’t want to do a spoiler if
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this is in here
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right now i read it earlier today
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um
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there are 511
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[Music]
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million barrels
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left
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okay so a year and a half but this is
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also the lowest amount
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that we have had since like 1984 that
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it’s ever been at and the whole purpose
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of the strategic oil reserve is that uh
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is that they need to have that for
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strategic purposes
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and as we’ve talked about on this show
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and i know we’re redredging old stuff
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but we might as well in case someone
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missed it last time that’s not even oil
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that can be uh refined and and and
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shipped here nope yeah it has to be with
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that oil is being released to
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foreign refineries right it’s going to
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then be shipped back here it’s going
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over to china and it’s going over to
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india and it’s going to canada and then
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canada is shipping it to china and in
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china and china and india are shipping
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it back here like it’s
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so it’s not saving you any money the way
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that it’s happening
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increa allow new refineries to be built
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which hasn’t been allowed in decades yep
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and allow for more drilling it’s that
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simple and even though it that wouldn’t
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immediately increase the supply
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it would signal to the speculators that
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something that’s actually going to do
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something is being done and that would
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put a dent in it
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if they want to do the strategic release
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and all that stuff fine but
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everything we’re about to say will
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either do nothing or make prices go up
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go ahead
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during a speech at the port of los
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angeles uh last week biden ranted that
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exxon made more money than god this year
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shocking the pope because he’s seen
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those balance sheets uh before adding
9:08
exxon start investing and start paying
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your taxes
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so he’s telling a company you need to
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start investing you need to spend your
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money during this tumultuous time that
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i’ve helped create i’m not going to put
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it all on biden because yes trump spent
9:24
way too much money um
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oh yeah yeah this is also a trump
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problem yeah this is a trump and you can
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this was an obama problem before that
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and it was a bush problem before that
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like it’s this is a continuation um
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you’re gonna tell a company that during
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one of the worst economic periods that
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we have seen
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god i would like to say longer than 15
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years
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but i can’t
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this 2008 was pretty bad
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inflation wasn’t so high but the
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recession was
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yeah give it a minute yeah
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fair
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um
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so he’s going to say during this time
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you need to spend money and start
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investing and start paying your taxes
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well they
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pay the taxes that you guys wrote that
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you sir
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have signed off on laws for them to pay
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and they aren’t paying the ones that you
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signed off on law that you voted for
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that they don’t have to pay
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yes
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now several left-wing lawmakers have
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pushed punitive
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taxes on oil companies in response to
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what they consider price gouging in
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march senator bernie sanders proposed a
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95 tax on profits in excess of companies
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pre-pandemic averages
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go ahead with this other one too and
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then i’d like to note something that i
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hope everyone watching this already
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knows but go ahead
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this week
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uh senator well i guess last week uh
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senator ron wyden out of oregon chairman
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of the senate finance committee proposed
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a 21
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additional tax on oil and gas companies
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with more than one billion in annual
11:09
revenue
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okay
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people listening to and watching this
11:14
right now
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do you think that tax increases make the
11:21
price of something go up
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or down
11:28
and you wouldn’t have to go very far to
11:30
find out the answer you could ask bernie
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sanders and ron wyden when they
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complained correctly that trump’s
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tariffs but only trump’s tariffs not all
11:38
the other ones that were already in
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place but trump’s tariffs specifically
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drove up the price of goods and services
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for american consumers which they’re
11:46
right they did because their taxes and
11:49
tax well i don’t i’m sorry i don’t want
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to spoil the answer
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you can tell us in the comments if you
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think that taxes comment below make
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yeah comment below on whether you think
12:01
taxes make prices go up
12:04
or down
12:06
whether adding
12:08
to the price well again up to uh sorry
12:12
so
12:13
the american petroleum institute
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in their statement after reading this
12:19
letter
12:20
said the administration’s misguided
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policy agenda shifting away from
12:24
domestic oil and natural gas has
12:26
compounded inflationary pressures and
12:29
added headwinds to companies daily
12:31
efforts to meet growing energy needs
12:34
while reducing emissions
12:36
yes that’s 100 true that’s correct
12:40
they went on to say i reinforced in a
12:43
letter to president biden and his
12:44
cabinet yesterday
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10 meaningful policy actions to
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ultimately alleviate pain at the pump
12:51
and strengthen national security
12:54
including approving critical energy
12:56
infrastructure increasing access to
12:59
capital holding energy lease sales among
13:02
other urgent priorities
13:05
ahead of his travel to the middle east
13:07
next month we urge the president to
13:10
prioritize unlocking u.s energy
13:12
resources
13:14
that they are the envy of the world
13:16
instead of increasing reliance on
13:19
foreign sources
13:21
and the foreign sources are already at
13:23
full capacity too i mean at this point
13:26
if you’re going to cut off russia’s uh
13:28
supply to everywhere but china and india
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basically
13:35
everyone else except the us is
13:38
basically giving her all she’s got
13:40
captain like there’s not much left
13:43
we’re the only country on earth where
13:45
our government’s like not choke them a
13:47
little like it’s not that’s not a thing
13:50
in other countries it’s
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it’s insane it it is
13:55
i want to say uh the uh api the american
13:59
petroleum institute they said they had
14:01
10 initiatives
14:02
some of that kind of sounded like
14:04
cronyism somehow i mean i know those
14:06
were it’s like top line items it’s a
14:08
hundred percent chronic like
14:10
let’s yeah i’m i’m sure cause really
14:12
it’s not ten it’s two
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right let’s not let’s not kill ourselves
14:17
releases and allow for more drilling
14:19
permits
14:20
i guess that’s two
14:24
and let them build more refineries
14:27
if you want to get fancy and add a
14:28
fourth one
14:30
stop requiring this federal involvement
14:33
with eminent domain to be able to do
14:35
these pipelines because it blows up in
14:38
everyone’s faces when the judges shut it
14:40
down if you let them just
14:43
drill baby drill which i hate that term
14:45
but
14:46
what the hell whatever if you let them
14:47
drill it and you let them refine it then
14:50
they’ll be able to come up with their
14:51
own capital to be able to pay landowners
14:54
a market value to be able to build more
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pipelines
14:58
so let them do that yes
15:01
it’s
15:02
we are not energy experts
15:06
this is basic common sense supply and
15:09
demand stuff
15:12
yeah that this is this is the simplest
15:17
this is the simplest form free market
15:20
economics and it’s just
15:22
let them do this prices will go down
15:25
instead what you are doing and what you
15:27
are going like what you are attempting
15:29
to achieve will end up with prices going
15:31
up now what the api mentioned is that
15:34
they they brought up biden’s trip to
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saudi arabia this trip has been
15:38
postponed
15:40
multiple times sometimes because saudi
15:42
arabia postponed it and sometimes
15:44
because biden biden is both of them are
15:47
postponing it for the same reasons biden
15:49
has gone around and demonized saudi
15:52
arabia and i’m not even going to say
15:53
he’s wrong
15:55
not going to say he’s wrong
15:57
nope but he’s been going around
15:59
demonizing saudi arabia on a world stage
16:01
and working on a nuclear deal with iran
16:05
which the saudis don’t want
16:08
so
16:10
he knows
16:14
he knows that when he shows up to that
16:16
meeting with the
16:18
round prince of saudi arabia
16:21
he’s going to have to grovel harder than
16:24
he has ever groveled before to be like
16:27
can we have that’s what he was
16:28
practicing that’s what he was practicing
16:30
doing on the bike
16:32
just go there and just
16:33
like that just right on the ground see
16:35
how quickly i can kneel
16:38
this is the geopolitical problem with
16:42
with intentionally choking off your
16:44
economy to the benefit of cronies by the
16:47
way there’s a little bit of of of cat
16:50
and mouse uh cloak and dagger stuff here
16:53
so biden is oh you’re getting record
16:55
profits and that’s not right
16:59
he’s created a a a market in or a market
17:04
reality in the united states where the
17:06
energy companies don’t have to compete
17:08
with each other because they’re all
17:10
operating at full capacity
17:13
which means their profits can go through
17:15
the roof this is what we see with
17:16
manufacturing this is what we see with
17:19
tech this is what we see with all sorts
17:20
of different industries in the us
17:23
where the government intentionally
17:25
chokes off the market in order to
17:28
benefit the established cronies knowing
17:30
full well that we’ll just go to the
17:31
other countries for our surplus
17:34
that’s coming home to roost
17:37
it’s coming home to roost in the fact
17:39
that china is increasingly a a a world
17:42
power despite itself
17:45
and even though it’s an authoritarian
17:47
regime that’s you know threatening
17:49
everybody
17:50
increasingly
17:52
and now it’s coming home to roost and
17:54
the fact that there is no addition he
17:55
can go over there and grovel they’re
17:57
gonna go thanks for the gravel we’re
17:58
already at like 98 99
18:02
and unlike you
18:04
we’re we’re doing it all like this is
18:06
pretty much it this is we’re pumping it
18:08
out as fast as we can pretty much
18:11
boom
18:12
so no and he should be able to demonize
18:15
them even more he should be able to he
18:17
should be stopping uh the war on uh in
18:20
yemen by the way uh con call uh one
18:22
eight three three stop war you will be
18:24
connected with your congressman uh your
18:27
representative uh call for congress to
18:29
end uh the uh the war in yemen or u.s
18:32
involvement in the genocide in yemen but
18:33
that’s a whole other thing he should be
18:35
able to do that he should be able to uh
18:38
uh strike a deal with iran that will
18:40
actually probably be a good thing he
18:41
should do all of that but he’s having to
18:43
tiptoe around the saudis who can’t even
18:45
do anymore
18:47
he’s scared they’re actually going to
18:49
cut off the supply because you know what
18:51
the saudis can cut off supply by about
18:54
10 percent make a big deal of it that
18:56
they’re cutting it off and make the
18:57
prices go up so much that they make even
18:58
more money producing less oil yep and he
19:01
knows that because he’s screwed because
19:03
he can’t just admit that the last two or
19:06
three decades of u.s energy policy have
19:09
been absolute garbage
19:13
all you all legitimately all you need to
19:15
do
19:16
is let them build more refineries let
19:18
open up more leases let them drill yep
19:21
that’s all you need to do and that’s it
19:24
that’s it
19:25
everything else will fall into place
19:27
so the api uh recommended white house
19:29
action including the resumption of oil
19:33
and gas lease sales which were canceled
19:35
by the white house last month speeding
19:38
which yes speeding up uh approval of
19:40
liquid natural gas projects
19:43
i don’t know a lot about it but i’m
19:44
gonna say yeah but i would say yeah yeah
19:47
no that’s that’s another problem the lng
19:49
stuff they’re they’re they’re having it
19:50
they’re concerned that lng
19:52
uh when transported uh because it’s
19:55
liquefied and it’s it’s uh condensed to
19:57
either 16 or 30 or something times uh
20:00
density that it is a higher explosive
20:03
risk but my understanding is that
20:05
there’s never been a demonstrated
20:08
disaster as a result of transportation
20:10
of lng
20:12
yeah
20:13
so
20:14
do it
20:16
and they also
20:17
recommend
20:19
lifting tariffs on steel to speed up
20:21
construction of key infrastructure
20:23
yes
20:25
yes
20:26
if those were those their only points i
20:28
would be like yeah let’s do this
20:30
do it do it
20:32
yep do all of those things but of course
20:34
the white house refuses to do this
20:37
yes because they want this to get worse
20:39
so they can grandstand on your suffering
20:41
to push for more proposals now you’re
20:43
probably watching this and thinking but
20:44
wait a second why would the democrats
20:47
why would biden the democrats do
20:49
something they know is going to
20:52
have them completely just destroyed in
20:55
the next election
20:57
why would they do that the next two if
20:59
it means they’re going to get replaced
21:01
it’s almost like it doesn’t
21:03
matter which party is in charge
21:07
and they don’t care
21:09
and it’s all theater
21:15
so it also almost like that it’s almost
21:17
like that it also uh the api also
21:19
responded responded to widens tax
21:22
proposal
21:23
warning that imposing new taxes on our
21:26
industry will do exactly the opposite
21:28
and only discourage investment at a time
21:31
when it’s needed most yes it’s going to
21:33
discourage investment and it’s going to
21:35
cause prices to rise
21:38
that is what will happen with any taxes
21:40
that comes through on this
21:42
so if you commented below
21:44
earlier that prices would go up you
21:47
would be correct
21:50
wow and how incredible that you
21:52
completely unprompted knew the answer to
21:54
that
21:54
we’re proud of you we’re very proud of
21:56
you
21:57
we’re proud of you
21:59
it’s this is just absolutely infuriating
22:02
again we are not energy experts and
22:04
frankly you don’t have to be an expert
22:06
on most of this stuff i mean an expert
22:09
like you know someone from like cato or
22:11
something like that a a true energy
22:13
expert could sit down and look like at
22:15
the granular level at specific measures
22:18
that could be taken and make a white
22:19
paper with you know 38 measures that
22:21
could be taken right now at this point
22:22
you know and all of that that’s great
22:24
and that’s important because that’s
22:26
actually what turns into policy we’re
22:28
just talking like you know
22:30
bird’s eye view 30 000 foot view
22:33
allow for more production
22:36
allow for more refinement
22:39
that’s it and yeah stuff like lifting
22:41
tariffs on steel to you know uh allow
22:43
for
22:44
more and cheaper uh product to be able
22:46
to do construction yeah that’s all great
22:48
stuff like there’s there’s many many
22:50
things you could say but literally they
22:51
all boil down to free up the market yep
22:56
and instead they’re saying we’re going
22:58
to restrict the market and put more
23:02
taxes on it to ensure that the price
23:04
goes up because we want you to suffer so
23:07
that we can get more power more control
23:10
and more money from you and it doesn’t
23:12
matter if blue gets switched to red
23:15
because we’re just gonna do it on the
23:16
next thing and then red will switch to
23:18
blue and it won’t matter because we’re
23:20
all on the same side
23:22
and it’s when you realize that this is
23:24
not about red versus blue it’s about the
23:26
ruling class versus we the people
23:28
suddenly all this makes sense
23:31
including the good cop bad cop theater
23:34
but we have good news
23:35
the good news is
23:37
if you are a muddy waters media
23:38
subscriber
23:40
then this is not the last episode for
23:42
the week no there’s yet
23:44
one more subscriber exclusive episode
23:47
that’s coming out this weekend
23:49
and i know what you’re thinking how the
23:51
hell do i get to do that no one told me
23:53
about that
23:54
i hope it it doesn’t cost any more than
23:58
50 a month well i have a fantastic news
24:00
for you you’re gonna be shocked not only
24:03
is it not more than fifty dollars a
24:04
month
24:05
it’s not even forty dollars a month nay
24:08
not even thirty dollars a month why i’ll
24:10
tell you it’s not even twenty five
24:12
dollars a month in fact it’s not even
24:15
twenty dollars a month and i know what
24:17
you’re probably thinking it’s got to be
24:18
at least 17 a month no no no no
24:22
it’s not it’s not even 15 a month and
24:26
it’s not even 14 a month
24:29
let me check if it’s 13
24:31
no it’s not even thirteen dollars a
24:33
month and it it’s it it
24:35
it’s it should be at least twelve
24:37
dollars a month but it’s not it’s not
24:40
that it’s not even
24:42
is it it’s gotta be it’s eleven dollar
24:44
it’s not even 11 no it’s 10 a month for
24:47
only 10 a month you get to be a money
24:49
water subscriber a member of the money
24:51
mud people
24:53
family
24:54
of
24:55
you get to be a subscriber which gets
24:57
you every week an exclusive subscriber
25:00
member exclusive
25:02
episode and
25:04
access to a ad free listening experience
25:07
on spotify and anchor and a 10 discount
25:12
at the muddy waters media store which is
25:13
at
25:14
muddywatersmedia.com and you can get all
25:16
of that by going to anchor dot fm slash
25:19
muddy waters
25:20
subscribers and if you do that then
25:23
you’re going to get instant access
25:26
to
25:26
this weekend’s episode
25:28
and you’re gonna be so that episode
25:30
alone is gonna be worth the 10
25:34
i can tell you that right now
25:35
so
25:36
happy to have you join us uh thank you
25:38
again for uh watching this free episode
25:41
hopefully
25:42
we’ll get you subscribed so you can come
25:44
on over to the uh to the subscriber only
25:47
episode and uh we will see you then and
25:50
where we’re going we don’t need roads
26:01
[Music]
26:18
you


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