Good morning, here's what the Oilman has for you today:

• U.S. Oil Output Growth Set to Stall: Dallas Fed Survey

• Biden Threatens EV Import Hike

• Upcoming Oil and Gas Events

• Tweet of the Day

U.S. Oil Output Growth Set to Stall: Dallas Fed Survey

The latest Dallas Fed Energy Survey is in, and it’s not the most optimistic read.

Rather, it paints the image of an industry that is now chronically cautious.

And has no big plans for output growth.

A sharp quarterly decline and no big spending plans

The survey showed production growth has slowed down sharply this quarter.

Last quarter, the production index reading was 26.5.

That fell to 5.3 this quarter.

It doesn’t sound very optimistic for demand, but maybe drillers just decided to take a break.

What’s more, few producers plan big spending hikes next year.

Most are keeping their budgets close to 2023 levels or slightly higher.

But that’s no longer a reliable indicator of production plans, as we saw this year.

Even rig counts are no longer a reliable indicator.

Drillers can boost production at no change in rigs.

Not happy with prices, focus on debt and acquisitions

Oil and gas producers are not exactly cheering oil prices right now.

But they’re not wasting time complaining, either.

Instead, they are planning to continue paying down debt, whatever oil sells for in 2024.

They are also on the lookout for acquisitions.

These are seriously turning into the default growth path for the industry.

Many expect more megadeals in 2024 after the recent Exxon and Chevron purchases.

But you know what they don’t plan to do?

Investments in renewables and emission reduction.

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Biden Threatens EV Import Hike

The Biden admin is considering a hike in tariffs on Chinese EVs.

Chinese EVs are heavily subsidized, and that’s unfair.

And U.S. EVs are totally not subsidized.

All’s fair in the transition

Biden loves tariffs about as much as Trump did.

That’s why tariffs imposed on Chinese solar panels by the Trump admin remained.

They are indeed much cheaper than U.S. ones and, as such, a major threat to the local industry.

But here’s the irony: solar farm developers love cheap panels.

They don’t care where they’re made or how.

And drivers probably love cheap cars regardless of where they’re made.

Not so with carmakers.

They will breathe a sigh of relief if those higher tariffs kick in.

But the question is: double standards much?

Do as I say, not as I do

The argument put forward for the tariff hike is that Chinese EVs are heavily subsidized.

Well, American EVs are not exactly subsidy-free either.

In fact, subsidies could reach more than 10,000 per car.

And that’s just direct subsidies for drivers, carmakers, and utilities.

The whole transition is a subsidy game.

And the Biden admin is playing it as passionately as Beijing.

Upcoming Oil & Gas Events

• January 16: TIPRO/IPAA Leaders in Industry Luncheon, Petroleum Club of Houston, Houston, TX

• January 17: IPAA Private Capital Conference, The Post Oak at Uptown Houston, Houston, TX

• January 17-18: GO-WV Winter Meeting, Marriott Town Center Hotel, Charleston, WV

• January 18: Kansas Oil and Gas Day Legislative Reception, Kansas State Capital, Topeka, KS

• January 23-25: POWERGEN International, Ernest N. Morial Convention Center, New Orleans

Around the Global Patch

🇨🇦 Regulator denies trans mountain's pipe size.
🇨🇳 China halts rare earth exports amidst race.
🇷🇺 Armenia and Russia forge pact to upgrade Metsamor nuclear plant.

Tweet of the Day

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