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DAILY ENERGY NEWS | 05/16/2024

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The Hummer EV is not for the rational.

Motor 1 (5/9/24) review: "As you might expect of a bright orange T-topped SUV, it's not oozing practicality. The Hummer was 'please speak up' noisy at highway speed, courtesy of enormous all-terrain tires and a flat windshield. Steering feel is numb and heavy, and especially vague on-center. The steering wheel is barely adjustable, the synthetic leather seats are neither easy to wipe down nor luxurious, and the interior simultaneously comes off as gaudy and cheap. It doesn’t feel like a six-figure truck... Let us abandon rational auto-reviewer thought for a moment, though. Highway comfort and bragging rights be damned. In bright orange with the T-tops off, every living being in the city of Moab down to the kangaroo rats stared at me as I drove past. If you want attention—and Lord knows I do—it’s impossible to beat the Hummer, even with a Cybertruck."

"The self-proclaimed champion of democracy, the Left intentionally violates the “democratic norms” it claims to cherish by bypassing the deliberative processes where public issues belong. Climate radicals increasingly abuse the courts as an arena to penalize and shut down America’s energy sector, employing judges—not elected representatives—to codify their fever dreams of a future without hydrocarbons."

– A ndré Béliveau, Commonwealth Foundation

Climate goals or growth?

Bloomberg (5/15/24) reports: "When Microsoft Corp. pledged four years ago to remove more carbon than it emits by the end of the decade, it was one of the most ambitious and comprehensive plans to tackle climate change. Now the software giant's relentless push to be the global leader in artificial intelligence is putting that goal in peril. The Seattle-based company’s total planet-warming impact is about 30% higher today than it was in 2020, according to the latest sustainability report published Wednesday. That makes getting to below zero by 2030 even harder than it was when it announced its carbon-negative goal. Now to meet its goals, the software giant will have to make serious progress very quickly in gaining access to green steel and concrete and less carbon-intensive chips, said Brad Smith, president of Microsoft, in an exclusive interview with Bloomberg Green. 'In 2020, we unveiled what we called our carbon moonshot. That was before the explosion in artificial intelligence,' he said. 'So in many ways the moon is five times as far away as it was in 2020, if you just think of our own forecast for the expansion of AI and its electrical needs.'”

NERC issues another set of warnings.

NERC (5/15/24) report: "NERC’s annual SRA covers the upcoming four-month (June–September) summer period. This assessment evaluates generation resource and transmission system adequacy as well as energy sufficiency to meet projected summer peak demands and operating reserves. This includes a deterministic evaluation of data submitted for peak demand hour and peak risk hour as well as results from recently updated probabilistic analyses. Additionally, this assessment identifies potential reliability issues of interest and regional topics of concern...

Midcontinent Independent System Operator (MISO): New solar and natural-gas-fired generation and additional demand response (DR) resources are offset by generator retirements, lower firm imports, and increased reserve requirements. MISO is expected to have sufficient resources, including firm imports, for normal summer peak demand. However, it can be challenging for MISO to meet above-normal peak demand if wind and solar resource output is lower than expected. Wind generator performance during periods of high demand is a key factor in determining whether there is sufficient electricity supply on the system or if external (non-firm) supply assistance is required to maintain reliability.

NPCC-New England: With the retirement of two natural-gas-fired generators at Mystic Generating Station in May 2024 (1,400 MW combined summer capacity), ISO New England will have less capacity this summer. This makes it more likely that ISO New England will need to resort to operating procedures for obtaining resources or non-firm supplies from neighboring areas during periods of above-normal peak demand or low-resource conditions. Summer heat waves that extend over the entire area can limit the availability of excess supplies and increase the risk of energy emergencies in New England.

Texas RE-ERCOT: As a result of continued vigorous growth in both loads and solar and wind resources, there is a risk of emergency conditions in the summer evening hours when solar generation begins to ramp down. Contributing to the elevated risk is a potential need, under certain grid conditions, to limit power transfers from South Texas into the San Antonio region. These grid conditions can occur when demand is high and wind and solar output is low in specific areas, straining the transmission system and necessitating South Texas generation curtailments and potential firm load shedding to avoid cascading outages."

Ev tax credits: complex and costly.

RealClearEnergy (5/15/24) op-ed: "Electric vehicles (EVs) may be the most subsidized product in America. Federal taxpayers shell out $7,500 every time a new eligible electric vehicle is purchased (usually by wealthy buyers). State and local taxpayers chip in an additional $1,500 for each EV purchase. Then, there’s the tens of billions of dollars 'invested' by policymakers into building EV plants. Even these bank-breaking concessions aren’t enough to please the Biden administration. Recently finalized EV tax credit rules expand eligibility for the subsidy while maintaining bizarre trade sourcing rules likely to lead to further tariffs from China. It’s time for President Biden and lawmakers to ditch protectionism and finally end EV subsidies... Biden’s rules make production cost-prohibitive by restricting the foreign mineral inputs (e.g., graphite) that could go into tax credit-eligible EVs. The administration has since reversed course and allowed for a grace period for graphite sourcing. However, the new rules, 'introduce a stricter test for measuring whether 50% of the vehicle’s critical minerals come from the United States or a free trade agreement partner...[requiring] automakers to more precisely account for the value added at each step of the supply chain.' The net effect of all these confusing new rules is to expand the number of vehicles eligible for EV tax credits, while increasing compliance costs. And, of course, this cost will be passed onto taxpayers and consumers. Instead of tethering absurd rules to a complex and costly program, the Biden administration should start from scratch and axe the tax credit. EV subsidies are showered onto the wealthiest Americans at the expense of their poorer neighbors."

Energy Markets

WTI Crude Oil: ↓ $78.31
Natural Gas: ↓ $2.40
Gasoline: ↓ $3.60

Diesel: ↓ $2.93
Heating Oil: ↓ $242.22
Brent Crude Oil: ↓ $82.44
US Rig Count: ↑ 629

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