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DAILY ENERGY NEWS | 10/14/2024

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If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. EV edition.

Bloomberg (10/13/24) reports: "Germany’s Social Democrats, the party of Chancellor Olaf Scholz, is considering fresh subsidies on electric vehicles as a cornerstone of its economic policy ahead of elections next year. The center-left SPD wants to boost EV sales by re-introducing a purchase premium for battery-powered cars, providing tax rebates for electric corporate cars, and putting EV quotas in place for leasing providers, according to a strategy document the party plans to adopt on Sunday that was viewed by Bloomberg. The proposal comes as Germany’s auto industry struggles to adapt to the shift to EVs, amid intensifying competition from less expensive Chinese brands like BYD Co. as well as weaker demand. Volkswagen’s deliveries of battery-powered cars fell 12% in Europe last quarter, extending a downturn this year after Germany and other EU countries removed state subsidies for buying EVs, which still tend to cost more than their combustion-engine equivalents. Germany’s carmakers are also grappling with weaker sales in China, where a protracted real estate crisis has cut into luxury spending and domestic EV producers have gained the upper hand. BMW AG and Mercedes-Benz Group AG recently warned that the slowdown in China will hit profits this year."

"AI’s advance will depend not only on the design labs of Silicon Valley, but also on the gas fields of the Permian basin."

– Michael Wirth, CEO Chevron

The Unregulated Podcast #202: Higher Ground

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She wouldn't change a thing.

The Daily Caller (10/12/24) op-ed: "Vice President Kamala Harris, the Democratic presidential candidate, created a real problem for herself this week during an appearance on The View. Asked by the very friendly host Sunny Hostin, what, if anything, she would have done differently than President Joe Biden, Harris amazingly responded: 'There is not a thing that comes to mind.' This is a problem for Harris, who has served as Biden’s vice president for almost four years now, given her attempt to present herself as a 'change' candidate in what everyone agrees is a change election cycle. Most Americans are fed up with the direction in which the Biden-Harris administration has taken the country and are looking for someone who would change that direction. But the Democratic nominee cannot think of a thing — a single thing — she would have done differently had she been the president since 2021. That is a problem. Let’s think about what that means where the topic of energy is concerned. The folks at the Institute for Energy Research (IER) have since 2021 kept a list of things the Biden-Harris administration has done to make it harder to produce oil and gas in the United States. That list currently stands at no less than 250 items, starting on Biden’s very first day in office when he imperiously canceled the Keystone XL Pipeline, a move that immediately diminished America’s energy security. The list goes on and on and on from there."

Natural gas isn't going anywhere.

Yahoo News (10/9/24) reports: "As the demand for data processing surges with the rapid expansion of artificial intelligence (AI) applications, data centers are encountering significant energy challenges. Natural gas is becoming a key solution in the power strategies of these facilities, providing the reliability, scalability and cost-effectiveness required to support continuous, high-intensity data processing operations... AI data centers have become significant electricity consumers due to several key factors. Firstly, deep learning and other AI workloads require immense computational power. High-performance processors, such as graphics and tensor processing units, are essential to handle the billions of calculations needed to train large neural networks. This computational intensity drives up electricity usage substantially. Secondly, data storage systems, particularly those designed for high-speed access and redundancy, represent another major source of energy consumption. These storage systems are critical for rapidly retrieving and processing large datasets but require substantial power to operate efficiently. Finally, the heat generated by high-performance processors necessitates robust cooling systems to maintain optimal operating temperatures and avoid hardware damage. These cooling systems, while essential, add another layer of electricity consumption, further contributing to the overall energy demands of AI data centers."

Even the EIA agrees.

EIA (10/8/24) reports: "U.S. natural gas-fired power plants generated more than 7 million megawatthours (MWh) of electricity on August 2, 2024, according to our Hourly Electric Grid Monitor, making up almost half of all electricity generated in the contiguous United States that day. On August 2, 2024, 7.1 million MWh of natural gas-fired electricity was generated in the United States, 6.8% more than the previous summer’s record set on July 28, 2023. Nine out of the ten days with the most U.S. natural gas-fired electricity generation on record occurred in the summer of 2024; of those, six occurred in August 2024. Overall electricity generation for the summer (June–August) of 2024 was up by 3% from summer 2023. The daily average for natural gas-fired electricity generation for the summer also increased 3% to 5.9 million MWh."

Energy Markets

WTI Crude Oil: ↓ $74.10
Natural Gas: ↓ $2.56
Gasoline: ↑ $3.20

Diesel: ↓ $3.60
Heating Oil: ↓ $229.07
Brent Crude Oil: ↓ $77.60
US Rig Count: ↓ 622

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