How US can help bring energy prices down: McDermott International CEO
Michael McKelvy says the oil and gas industry is facing 'a lot of pressure'
McDermott International CEO Michael McKelvy weighs in from the World Economic Forum in Switzerland, explaining how the U.S. can become a net exporter again.
McDermott International CEO Michael McKelvy explained on Monday how the United States can help bring energy prices down as the oil and gas industry faces "a lot of pressure."
McKelvy, the CEO of a global provider of engineering and construction solutions for the energy industry, provided the insight speaking from the World Economic Forum in Switzerland as gas prices have been hitting records for the past two weeks.
The national average for gas on Monday was sitting at a record $4.59 a gallon, a slight increase from the day before and nearly fifty cents higher compared to the prior month, according to AAA.
McKelvy stressed on "Mornings with Maria" on Monday the importance of the U.S. becoming a net exporter of oil again to help reduce prices.
RECORD GAS PRICES FOR THIS LONG ‘UNPRECEDENTED’: AAA
He noted that the U.S. and North America were net exporters of oil and gas in 2019.
"The regulations that we have in the country now make it a little bit more difficult to do that, there’s no question about it, particularly on the LNG (liquefied natural gas) gas side," McKelvy told host Maria Bartiromo.
"The regulatory requirements to get one of those plants up and running can take years in some cases and can be an inhibitor to the plant actually coming to pass at all," he added.
"So the simpler that that can be done for the oil and gas industry, then the quicker that we can get into that position where we can be a net exporter again and it can reduce the prices overall."
McDermott International CEO Michael McKelvy explains from the World Economic Forum in Switzerland how the U.S. can help alleviate soaring oil and gas prices.
He then pointed to data, noting that based on those numbers, the U.S. could be a net exporter again "probably mid-century, but that could all change depending on the regulations."
McDermott International CEO Michael McKelvy says the oil and gas industry is facing "a lot of pressure." (REUTERS/Angus Mordant/File Photo - RC29EH9MCQTN / Reuters)
Oil prices were higher on Monday with West Texas Intermediate futures trading around $111 a barrel and Brent crude futures trading at $113.50 per barrel.
McKelvy noted that energy is currently in "an interesting situation" globally "because the oil and gas industry basically has been under-invested for the last several years leading up to this crisis."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| USO | UNITED STATES OIL FUND - USD ACC | 69.75 | -1.54 | -2.16% |
| BNO | UNITED STATES BRENT OIL FUND - USD ACC | 29.05 | +0.74 | +2.61% |
"And so coming out of the pandemic, there was a downturn in the demand," he explained. "But then, when you come into a demand resurgence, coming out of the pandemic, it’s then in an under-invested market globally."
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"That creates the inflationary cost of oil and the demand on supply that we have today, which is really confounded with the events with the Russian invasion of Ukraine," McKelvy continued.
"It’s a big surprise hit to something that was already in place, and it has put a lot of pressure on all of us in the oil and gas industry."