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MORNING ENERGY NEWS | 03/24/2021
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** There is no 'right' number for a carbon tax.
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National Review ([link removed]) (3/24/21) column: "In the closing days of February, the Biden administration set its interim social cost of carbon, a metric that aims to capture the aggregate economic harm caused by an additional increment of carbon-dioxide emissions, at $51 per ton. The Biden administration’s $51 estimate will serve as a placeholder until, in its own words, the White House evaluates and incorporates the latest climate science and economic research. But while the White House has stressed that this exercise will restore policymaking norms, developments behind the scenes suggest that the administration will put its policy cart before the horse of climate economics...The flaw here is obvious: If we don’t have trustworthy estimates of climate damages, as Kaufman alleges in Nature, how do we know zeroing out carbon emissions is a cost-efficient endeavor? The Nordhaus approach, inconveniently for Biden and
his new CEA hire, finds that the policies required to achieve a goal like Biden’s for 2050 would cause more harm than they would alleviate through emissions reductions...For right-of-center analysts and policymakers, the Pigovian aim of internalizing the costs of human activity is attractive. While the new school of climate thinking deploys some of the language of the Pigovian tradition, it ditches its foundation. Biden’s climate advisors, far from restoring norms, are crossing a methodological Rubicon. Unable to substantiate its preferred outcome, the Biden administration will scatter the deck and revise the rules to push our economy in a direction climate economics does not justify."


** "It's not even a slam dunk that EVs will combat climate change, given that they shift pollutants from the tailpipe to the power plant. 'Your battery-powered vehicle is only as green as your electricity supplier,' as Scientific American explained. Maybe we should leave it up to carmakers rather than pretend that California lawmakers have the wherewithal to save the planet?"
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– Steven Greenhut, Reason ([link removed])

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Another green journalist giving away the playbook.

** Grist ([link removed])
(3/23/2021) reports: "The United States made its last, best attempt to pass a comprehensive climate plan 12 years ago. The bill, known in Congress as the Waxman-Markey Act, was big, splashy, and controversial. It included a nationwide cap on carbon dioxide emissions, restrictions on coal plants, and $190 billion in clean energy spending. For some Americans and oil lobbyists, it was sure to lead to higher fuel prices and lost jobs. For others, it looked like the last chance to avoid increasingly dangerous levels of global warming. Waxman-Markey is now seen as an object lesson in the problems with giant, well-publicized legislation. The bill died, only narrowly passing in the House and never reaching a Senate vote. And it was the start in a long string of failures to curb carbon pollution across the country: President Barack Obama’s follow-up, the Clean Power Plan, got tangled up in the courts and was never implemented. Statewide proposals for prices on CO2 in Washington and Oregon were shot
down by those worried about rising energy costs. Now, with President Joe Biden — who has said that “we can, and we will, deal with climate change” — in the White House, and his fellow Democrats in control of Congress, the country is poised to try again. But this time lawmakers and policy experts have a new idea about the best way to shepherd the U.S. into a new, greener era. It’s not big or splashy, not a sweeping, nationwide carbon tax, or a giant, economy-transforming Green New Deal. It’s “quiet climate policy” and, in the post-COVID-19 era — with Congress planning a package to revamp the country’s decrepit infrastructure — it just might work."

Far from a knockout, U.S. shale is just getting ready for the next round.

** Forbes ([link removed])
(3/19/21) reports: "The shale industry is making it rain for investors, generating record free-cash-flow (FCF) on the back of pandemic-related cost-cutting and rising oil prices. And the party is just getting started. Oil prices are expected to continue to rise as the year progresses, and the global economy recovers with Covid-19 vaccinations ramping up. Wall Street bank Goldman Sachs now sees Brent prices averaging $75 a barrel in the second quarter and $80 in the third quarter, up from around $70 now. U.S. benchmark West Texas Intermediate (WTI) typically trades about $5 a barrel below Brent, and recent WTI prices of $65 have most shale plays firmly in the black, generating strong returns. This marks a step-change for shale, a sector infamous for its “cash burn” — where capital expenditures exceed cash flow from operations — since its inception a decade ago. The sector’s newfound profitability has made U.S. exploration and production (E&P) companies darlings with investors in recent
months. It could prompt greater access to capital markets if these firms can stay the course and resist the urge to invest in lower-return growth projects. And based on recent Q4 earnings presentations, the leading U.S. shale E&Ps plan to do just that. The result will be an unprecedented windfall for these companies and their shareholders."

Make highway bills about roads again!

** Bloomberg ([link removed])
(3/23/21) reports: "Republicans signaled they weren’t going to engage in infrastructure negotiations Tuesday at a House panel event to gather members’ priorities for a forthcoming package. Democrats said they want a bipartisan bill, but advocated for a broad definition of infrastructure that Republicans reject. House Ways and Means Committee ranking member Kevin Brady (R-Texas) said no members of the GOP would participate in the committee’s members’ day hearing because Democrats had over-politicized the infrastructure process. 'As you know, infrastructure has long been a bipartisan issue in Congress. For decades Republicans, Democrats have come together on finding common ground on key issues,' Brady said. 'Regrettably, in our view, today’s hearing is nothing more than another partisan exercise so the Democrat House leadership can set up yet another multi-trillion-dollar one-sided spending bill.' The Biden administration is considering as much as $3 trillion worth of infrastructure
investments. House Ways and Means Chair Richard Neal (D-Mass.) said lawmakers need to update their definition of infrastructure to include social infrastructure programs such as affordable child care as they put the package together."

Energy Markets


WTI Crude Oil: ↑ $59.65
Natural Gas: ↑ $2.54
Gasoline: ~ $2.87

Diesel: ~ $3.10
Heating Oil: ↑ $178.95
Brent Crude Oil: ↑ $62.72
** US Rig Count ([link removed])
: ↓ 478



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