Elon Musk Makes A Claim Big Oil Will Love But Not Tesla
Did Elon Musk reread his message before he posted it?
Many environmentalists and Tesla (TSLA) – Get Tesla Inc Report fans must ask themselves this question when reading the latest tweets from their hero.
The billionaire is credited with pushing for the electrification of the automotive industry, which is an important step in reducing Carbone dioxide emissions.
It is therefore expected that he will oppose any new oil drilling project or increase oil production.
But to everyone’s surprise, Musk is the one calling for increased oil production even though he admits it’s not good for Tesla. The company makes money when it manages to sell its luxury electric vehicles to consumers. The more they ditch gasoline cars for EVs, the better for Tesla,
Tesla’s Musk Wants More Oil?
“Hate to say it, but we need to increase oil & gas output immediately,” Musk posted to his more than 76 millions followers on Twitter Friday night. “Extraordinary times demand extraordinary measures,” Musk added while the invasion of Ukraine by Russia has led to a surge in oil prices.
The gallon of gasoline at the pump has exceeded the $5 threshold in California, a new reality that scares many Americans, at least those who do not have electric vehicles or hybrid vehicles.
And for the moment there are not enough electric vehicles produced to satisfy a possible surge in demand, seems to tacitly acknowledge Musk.
“Obviously, this would negatively affect Tesla, but sustainable energy solutions cannot react instantaneously to make up for Russian oil & gas exports,” Musk explained.
The tweets sparked heated debate on social media. Some users praise the billionaire’s selflessness and pragmatism, while others believe saving the planet should come first.
“Agree. Restart the US pipeline… People love the idea of electric, and it’s growing,” one user commented. “I love my Tesla over any gas car. But let’s be pragmatic!”
But another user disagreed.
“Drive less or get rid of a car or two,” the user urged.
Oil Pressure Mounts on Biden
Musk’s admission could be a weighty element in deciding whether or not the Biden administration should ban US imports of Russian oil.
Oil industry advocates are also rife with calls for increased US production.
“Putin’s Russia is an enemy actor who should be cut off completely—we don’t need their oil, gas or anything else. It’s simple: NOW is the time to unleash American oil and gas production for the future of our allies and the safety of our nation,” Wayne Christian, Texas Railroad Commissioner, Texas Energy Regulator, wrote this week in a letter to president Biden.
“With Russia’s unjust war on Ukraine, the unstable international oil market, and runaway U.S. inflation, America must unleash our hardworking oil and natural gas producers,” Christian argued.
“This will ensure energy security for the U.S. and our European allies, while lowering gasoline prices for consumers, decreasing the cost of the almost 6,000 consumer goods created with and transported by petroleum, and creating jobs and economic growth.”
Christian pointed out that “America became a net exporter of energy in 2019 for the first time in 67 years , surpassing Saudi Arabia and Russia to become the largest producer of oil and gas in the world.”
He urged Biden to “immediately” approve the Keystone XL pipeline, which could transport 830,000 barrels of Canadian crude oil a day, to remove all exporting restrictions on liquified natural gas (LNG), and to renew oil and gas leasing of federal lands and waters.
Russia is the third largest supplier of oil in the world, after the U.S. and Saudi Arabia. It produces 12% of the world’s oil supply, including 8% of the U.S.’s supply, Phillip Braun, professor of finance at Northwestern’s Kellogg School of Management told TheStreet Daniel Kline. “The market for oil is global, and the removal of Russia from the global supply chain has and will continue to push the price of oil up,” Braun says.
Since the invasion of Ukraine by Russia, oil prices have risen to record levels and in their wake have led to a rise in the prices of other raw materials and commodities.
