Drillers just won't drill

The U.S. oil industry has been the target of much political pressure for years but this year the pressure increased to grotesque (do you hear me, Mr. Guterres, grotesque!) levels.

Oil and gas were not only guilty of polluting the environment and being singularly responsible for the changing climate. They were also guilty of not producing more oil when the world — the U.S. — needed it. Who cares about paradoxes if you’re careful to not accuse them of both these things in the same speech?

In a surprising but quite amusing turn of events, however, U.S. oil producers appear to have refused to do what the White House tells them. EIA production data shows that U.S. oil output is growing but the rate of growth is nothing like the rate in previous years when the industrial cycle reached its peak. And this state of affairs is not changing any time soon, it seems.

The industry made it clear from the start, which was last year: with higher oil prices we will be returning more cash to shareholders and paying down debt; this was the industry’s message to every willing to listen. Politicians, however, are not famous for being good listeners, so the barrage of verbal attacks continued. The industry responded by entrenching itself in its new approach.

Rick Muncrief, chief executive of Devon Energy was the latest to reiterate this approach and he did it quite wittily.

“Unless we have shareholders that come in and say, look, we absolutely — we do not like these big dividends. We do not like your share repurchase programme. We want you to go back to a growth model,” Muncrief said last week, as quoted by the FT. “Until we see that, I see no reason to change our strategy.”