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MORNING ENERGY NEWS  |  06/01/2020
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Unleash American energy or permanently knee-cap our economy.


Washington Examiner (5/26/20) column: "Joe Biden’s proposal to ban new offshore oil and gas drilling in federal waters would cost nearly 200,000 jobs, strip the U.S. government of billions in dollars of revenue, and potentially push production to other countries, according to a new study commissioned by the industry’s trade group. The study, released Tuesday by the National Ocean Industries Association, does not name Biden. But its release is intended to underscore the potential consequences of Biden’s proposal to prevent the U.S. government from issuing new oil and gas drilling permits in federal waters, which had experienced record oil production before the coronavirus halted demand. Nearly all U.S. offshore drilling occurs in the western and central portions of the Gulf of Mexico, where nearby states are mostly reliably Republican. But the report shows jobs that support the offshore oil and gas industry, which is capital-intensive and reliant on the manufacturing of associated equipment such as sensors and pipes, are present in nearly all 50 states. 'You have this economic machine that is the Gulf of Mexico oil and gas industry that really feeds into the whole country,' said Erik Milito, president of the National Ocean Industries Association. 'You destroy so much when you take it away.'"

“Staying in the agreement could also pose serious obstacles for the United States as we begin the process of unlocking the restrictions on America’s abundant energy reserves, which we have started very strongly. It would once have been unthinkable that an international agreement could prevent the United States from conducting its own domestic economic affairs…. It is time to make America great again.”

 

– President Donald Trump,
June 1, 2017

America loves her trucks.


Energy Information Administration (5/29/20) reports: "The 729,000 vehicles sold in the United States in April 2020 amounted to the lowest total since early 2010. The seasonally adjusted annual rate (SAAR) of light-duty vehicle sales in April is the lowest in the U.S. Bureau of Economic Analysis data series that dates back to 1976. Car sales have fallen by a larger percentage than light truck sales: in April, car sales were down 59% from the previous April, and light truck sales were down 42%. These changes in the makeup of vehicle sales have implications for fuel economy because cars tend to use less fuel per mile traveled than light trucks. April 2020 was the first full month of widespread shutdowns following the stay-at-home orders and closure of nonessential businesses in an effort to mitigate the spread of the 2019 novel coronavirus (COVID-19). Much like the rest of the economy, car manufacturing facilities saw significant disruptions to their operations. According to the Alliance for Automotive Innovation, 43 out of 44 vehicle production facilities in the United States were shut down as of April 29. All vehicle size groups experienced double-digit declines in year-over-year sales in both March and April. Pickups experienced the smallest drop, likely because of record-high incentives per unit. Sales for all types of cars were down at least 50% in April 2020 relative to April 2019."

So much for me moving to Virginia from the People's Republic of Maryland. ¯\_(ツ)_/¯
 

Manhattan Contrarian (5/30/20) column: "A few days ago I had a post about how tightening “green” energy regulations in Europe are gradually strangling sectors like the automobile and chemical industries.  The post was titled 'Europe Is Firmly Committed To Economic Suicide.'  Here in the U.S., we have a large coterie of 'blue' states that are hungering to follow the EU economic model — California, New York, New Jersey, Connecticut, Massachusetts, and others.  A latecomer to this party is Virginia. In Virginia, you may be aware that in 2018, for the first time in a generation, the Democrats took control of both houses of the legislature. They wasted no time in passing a big chunk of the progressive agenda en masse, in the form of over a thousand bills that had been blocked by their adversaries for decades...And finally I come to Ms. Small’s contention that all of this constitutes a tremendous 'economic development' opportunity for Virginia. If the people of Virginia are forced to pay 50% or 100% more for the exact same electricity, I would have said that they are poorer by that amount. This is the opposite of economic development. As an analogy, suppose that Charlottesville agrees to pay double the low bid price to build a needed new bridge. Wouldn’t everybody agree that this is not a good idea?"

China solar profiting off of the global pandemic.


Bloomberg (5/31/20) reports: "Chinese manufacturers that dominate nearly every step in the global solar power supply chain are being forced to slash prices as the coronavirus disrupts projects around the world. Costs for components like wafers and cells have fallen by as much as 20% since the start of the year. They likely haven’t bottomed out yet, either, as the outlook for demand remains uncertain and new mega-factories threatens to add supply. It’s bad news for the companies that make solar components and could lead to consolidation among some of the smaller players in the industry. The bargain-basement prices, though, could also spur demand for a solar boom when the global economy recovers...The supply chain that creates those solar power plants is almost entirely housed within China. From producing polysilicon ingots, cutting them into wafers, forming those into cells to combine into panels, Chinese factories comprise at least 73% of global capacity in every step, according to BloombergNEF data." 

Energy Markets

 
WTI Crude Oil: ↓ $34.56
Natural Gas: ↓ $1.77
Gasoline: ↑ $1.97
Diesel: ~ $2.41
Heating Oil: ↓ $102.46
Brent Crude Oil: ↓ $37.46
US Rig Count: ↓ 317

 
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