Jamie Dimon, the CEO of JPMorgan Chase, says America needs a ‘Marshall Plan for energy’ to significantly boost domestic energy production, as oil and natural gas costs rise.
The Marshall Plan, named after its brainchild George C. Marshall, the former U.S. Army chief of staff and U.S. secretary of state, was a massive investment effort funded solely by the United States after the Second World War to rebuild a devastated Europe.
The program, which cost the United States the equivalent of more than $100 billion, helped Western Europe rebuild and modernize its economy and prevented Soviet influence from taking root there in the early stages of the Cold War.
Dimon said that American military policy and economic policy, including trade, needs to be transformed for national security and due to competition from countries like China.
Dimon Demands More Action From the Biden Administration on Energy Policy
At a White House meeting in March, Dimon called for more liquefied natural gas (LNG) facilities to be built in the EU, reduced reliance on Russian energy imports, and investments in new energy technology, such as hydrogen cells.He told Biden that higher energy costs were a major factor behind high inflation, and that left unchecked could trigger a recession.
A new Marshall plan would consist of increasing domestic production of oil and natural gas as well as improving alternative energy extraction from solar, wind, hydrogen, and other “green” energy sources.
However, at the same time, the Biden administration has reduced investment in traditional forms of energy at home in order to reduce America’s reliance on fossil fuels in the name of fighting climate change.
Biden has been touting the promotion of electric cars and green energy, with an added boost from the Inflation Reduction Act, which was passed in August.
“On the energy front, we need secure, reliable, cheap oil and gas,” Dimon told Face the Nation.
High Energy Costs Are Pushing the World Economy Into Recession
Dimon said that Europe is going through a recession due to high fuel prices and that the Russian war in Ukraine is having a serious impact on food prices around the world.He also told the panel that Europeans are taking the war in Ukraine and the food and energy crisis more seriously than the Americans due to their proximity to Russia.
Although Europe will get through the winter, the EU policymakers should be “definitely be preparing for it to get much worse,” as the oil and gas shortage will continue for years, he said.
Dimon noted that an increase in energy investments will lead to lower prices overall as a benefit from more production.
The JPMorgan CEO said that carbon emissions were going up because both rich and poor countries around the world were turning their coal plants back on due to the expensive rise in gas and oil, and that their economies cannot survive without energy.
Dimon Defends Energy Industry From Accusations of Price Gouging, Calls for More Leasing for Drilling
President Biden has blamed price inflation on corporate profits and on Russian President Vladimir Putin’s war in Ukraine, which led to a disruption in fuel supplies.Dimon criticized Biden’s proposed excise profit tax on the energy industry, and told the CBS panel that energy costs were not high because of price gouging but because of the dramatic decline in investments in energy.
The bank CEO said that the administration’s continued reluctance to issue gas and oil drilling permits on federally leased lands has resulted in reduced supply, especially in times of rising demand.
He said that lenders are reluctant to assist the oil companies in making those investments due to White House energy policy.
Investors are putting a lot of pressure on the energy industry to go “green,” but not to invest too much capital where they’re not making a profit with oil at a high price, Dimon said.
“We need to build grids. You know ... we don’t get permissions to ... permits to build ... build grids,” he complained, referring to the Biden administration’s lackluster policies.
“One of the deals that was done between the president and [Sen.] Joe Manchin [D-W. Va.] was the permitting bill. That permitting bill is for pipelines we need to get gas to Louisiana, to get that Louisiana gas to Europe to help our allies and reduce the costs there.”
“That also reduces their coal usage. So, it’s very green, if you look at it, on the margin. And so it gets ... it gets very complicated, and we just need to do the work.” continued Dimon.
Energy prices have dropped considerably since their peak in June due to a slow down in China’s economy and Europe’s recession—and a global recession will bring the future price of oil down even further, said Dimon, but he believes that downturn will eventually reverse in a recovery.
He said that the underinvestment in oil and gas will hurt the United States “two or three years out,” but the country still has time.
“I’m hoping the administration ... they’re looking at all these issues. I have spoken to John Podesta, who now runs the IRA [Inflation Reduction Act], about what we can do to accelerate ... to reduce CO2, but have better, cheaper, more secure energy, not just for us, but for our ... particularly allies around the world,” Dimon said.
A Green Marshall Plan Is Picking Up Steam Among the US and Its Allies
The new Marshall Plan for energy has been picking up steam among the West’s policy establishment.“Massive amounts of capital are to be mobilized across all energy sources, carriers, and fuels, notably renewables and green hydrogen, in pertinent sectors including transport, power, and industry as well as for infrastructure, grids, or demand-side measures such as energy efficiency,” said the report.
The United States and the European Union are looking to reconcile climate policy with boosting energy security by curbing the greenhouse gas emissions from new LNG production as far as possible.
Policymakers on both sides are also preparing that new gas infrastructure will also be “hydrogen ready.”
