The Crude Reality

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DAILY ENERGY NEWS | 01/29/2025

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It's complicated, President Trump...

Institute for Energy Research (1/28/25) report: "U.S. refineries, with a capacity of 18.4 million barrels per day, play a significant role in international trade—importing crude oil from Canada and Mexico while exporting high-value refined goods to regions such as Asia, Africa, Europe, and the Americas. Overall, the industry generates over $688 billion in annual economic activity and supports nearly 3 million jobs. The last major oil refinery built in the United States was constructed in 1976. Many U.S. refineries were built to process heavier crude grades because, at the time, many believed U.S. oil production was in long-term decline and didn’t foresee the shale oil boom. The assumption was that any increase in crude production would come from heavy oils in the Middle East, Latin America, and Canada. When you combine this with the proximity of Canada and Mexico, crude oil from these countries remains a vital resource for several U.S. refineries, helping to produce liquid fuels and other petroleum products for both domestic use and international export... A proposed 25% tariff on imports from Canada and Mexico would seriously disrupt the supply chain U.S. refineries rely on to produce the fuels and petroleum products Americans use every day... The greatest impact would be felt in the Midwest, where refineries are uniquely designed for heavier-grade Canadian crude to produce transportation fuels, and these fuels are primarily used for domestic consumption. In the Midwest region (PADD 2), Canadian crude accounts for 100% of crude oil imports, according to the latest data from the U.S. Energy Information Administration... Patrick De Haan, head of petroleum analysis at GasBuddy, told Marketwatch in November that gas prices could rise by 30 to 40 cents per gallon, and possibly as much as 70 cents, once the tariffs take effect. This increase could occur within days of the tariffs being enacted, with the most significant impact in the Midwest, given its reliance on Canadian crude."

"The urgency of undoing Biden’s energy legacy should now be obvious. The Inflation Reduction Act, its destructive policies, and its massive subsidies (with their moral hazards) still remain the law of the land."

–M ark Mills, Manhattan Institute

It turns out electric buses are challenging and costly.

WGME (1/27/25) reports: "Several Maine school districts are still dealing with anxiety over underperforming electric school buses. Yarmouth Schools received two Lion Electric buses about a year and a half ago, and they have only been driven a handful of times. Superintendent Dr. Andrew Dolloff says it's been challenging and could end up being costly. 'We are trying to work with Lion to have those buses replaced, or to receive compensation for those buses, but really not making much progress at this point and time,' Dolloff said. They're one of six districts facing significant troubles with Lion Electric school buses provided through funding for the EPA Clean School Bus Program. 'We run them for a day or so and then we get error messages about engine failures or battery failures,' Dolloff said. Dolloff says communication with Lion Electric has been a struggle and right now, there is no representative in the area who can service the buses."

Don't let the government control your business.

Just the News (1/22/25) reports: "Automakers have been backtracking on their EV goals over the past year as consumer interest failed to keep up with the vision automakers had. That vision appears to have been born from the idea that if the federal government mandated people drive electric cars, then people would buy them... Now, the automakers, who were already losing billions on EVs, could be in more trouble, depending on how much EV sales were buoyed by the mandates the automakers were counting on. 'I think the EV mistake has basically crippled the U.S. automotive industry, and unless there are bailouts, I can’t see these guys surviving,' Jack Lifton, executive chairman of the Critical Minerals Institute told Just the News. Trump’s order revokes a non-binding goal Biden had set in 2021 to make half of all new cars sold to be electric by 2030. In order to block the EPA’s tailpipe emissions standards, which by some estimates would require 66% of all new cars sold in the U.S. to be electric by 2032, Trump would have to work with the EPA to rewrite its rules. Either that or Congress could legislate the rule away."

Subsidies and mandates are a toxic brew.

The Daily Caller (1/28/25) reports: "A group of researchers says they have found high concentrations of heavy metals in a California estuary near the site of a major fire that destroyed a battery storage facility south of San Francisco earlier in January. San Jose State University-affiliated researchers from the Moss Landing Marine Laboratories detected substantially higher-than-usual concentrations of chemicals like nickel, cobalt and manganese in the Elkhorn Slough, a large intertidal area approximately one mile away from the Vistra Energy battery storage facility that caught on fire on Jan. 16. The investigators say they observed concentrations of the metals that are between 10 and 100 times higher than typical levels in the Elkhorn Slough, raising concerns that the blazes may have caused more environmental damage than initially indicated."

Energy Markets

WTI Crude Oil: ↓ $73.33
Natural Gas: ↓ $3.40
Gasoline: ↓ $3.12

Diesel: ↓ $3.67
Heating Oil: ↓ $244.46
Brent Crude Oil: ↓ $76.98
US Rig Count: ↓ 593

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