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MORNING ENERGY NEWS  |  06/18/2020
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Highway(bill) to the danger zone.


Bloomberg (6/18/20) reports: "Democrats continued efforts to push climate-friendly provisions into big-ticket legislation yesterday, this time with a massive highway bill that made its first stop in the House at the Transportation and Infrastructure Committee. Committee Chairman Peter DeFazio (D-Ore.) has backed a broader 'defossilization' of the highway measure to help cut transportation carbon emissions. At yesterday’s markup, he defended efforts to use the highway measure as a tool for reducing emissions, noting that the U.S. transportation sector has overtaken power plants as the number one source of greenhouse gas emissions. 'I believe it is absolutely necessary if you believe in climate change and you believe we need to reduce the impacts of fossil fuels on the environment,' DeFazio said. The package (H.R. 2) would authorize roughly $500 billion over five years and includes climate-friendly provisions to make roads, bridges, and other infrastructure more resilient to severe weather and other climate-related effects. It also would authorize funding of electric vehicle charging and hydrogen fueling infrastructure."

"In the middle of a recession, folks have less money to spend, the economy is in bad shape. Any increase in taxes is just going to take money out of people's pockets."

 

– Baruch Feigenbaum,
The Reason Foundation

Enough is enough is enough for EVs.


Washington Examiner (6/13/20) column: "Electric cars once stood on their own. 'In the late 1890s, at the dawn of the automobile era, steam, gasoline, and electric cars all competed to become the dominant automotive technology,' wrote David Kirsch in The Electric Vehicle and the Burden of History. 'By the early 1900s, the battle was over, and internal combustion was poised to become the prime mover of the twentieth century.' In 1896, in fact, when a young Henry Ford asked Thomas Edison about electricity for his horseless carriage, Edison banged the table with a 'no,' citing reduced driving range from a heavy battery and inconvenient recharging. But today, it's government policies that have put EVs back into the market — for the elite. There are federal write-offs of $7,500 per vehicle and 30% for EV refueling stations. What's more, car dealers use EV credits to push the average down on regular SUVs to meet Corporate Average Fuel Economy standards. Even so, consumers remain wary."

Elon's days of California dreamin' might be over.


Wall Street Journal (6/17/20) reports: "Registrations of newly purchased Tesla Inc vehicles plunged in the critical California market over the past two months, according to new data, underlining the challenge Chief Executive Elon Musk faces to keep investor enthusiasm that has helped propel the company’s share price. The data from research firm Dominion Enterprises shows registrations fell by a combined 37% in April and May, offering the first window into how the U.S. quarantining measures to slow the spread of the coronavirus affected domestic demand for the Silicon Valley auto maker. It initially seemed more immune to problems than rivals when it posted a surprise first-quarter profit...In California, Tesla’s largest U.S. market, registrations for the auto maker fell 16% in April to 6,260 new vehicles, compared with a year ago, according to Dominion’s Cross-Sell report. They dropped 70% to 1,447 in May. Industrywide, registrations in the state fell 52% each month compared with the same periods a year ago, the report said."

You can't keep a shale man down.


Reuters (6/17/20) reports: "U.S. shale producers are expected to restore roughly half a million barrels per day (bpd) of crude output by the end of June, according to crude buyers and analysts, amounting to a quarter of what they shut since the coronavirus pandemic cut fuel demand and hammered oil prices. Such a swift rise in U.S. production would complicate efforts by top producers Saudi Arabia and Russia to encourage global allies to fulfill their pledges to make record production cuts. They, along with allies in a group known as OPEC+, agreed to big cuts in April to balance oil supply to prop up prices, and anticipated similar economic cuts by the likes of the United States as well. U.S. producers cut supply by roughly 2 million bpd. But the recovery in benchmark oil prices to around $40 a barrel makes some shale output profitable again, even though that level is unlikely to spur additional new drilling activity. Larger producers are re-opening the taps in low-cost plays in Texas, but also in expensive shale basins in North Dakota and Oklahoma." 

Energy Markets

 
WTI Crude Oil: ↑ $38.07
Natural Gas: ↓ $1.62
Gasoline: ↑ $2.11
Diesel: ~ $2.42
Heating Oil: ↑ $118.34
Brent Crude Oil: ↑ $41.00
US Rig Count: ↓ 294

 
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