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DAILY ENERGY NEWS | 05/09/2022
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** Never doubt Republicans' ability to snatch defeat from the jaws of victory...
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Washington Times ([link removed]) (5/8/22) column: "Two Senate Republicans — Kevin Cramer of North Dakota and Bill Cassidy of Louisiana — seem to be taking West Virginia Sen. Joe Manchin III’s latest legislative effort as a moment to advocate for higher energy taxes for consumers. That sounds crazy, right? Who would want to increase the price of energy when oil and natural gas prices are two or three times as much as they were a year ago and especially when they show no sign of abating? It turns out these senators favor something called a carbon border adjustment tax. It is actually a pretty simple mechanism. If the United States imports energy that has the potential to create greater emissions of greenhouse gases like carbon dioxide than our own domestic energy, a tax would be imposed on those imports...There are, obviously, a couple of problems with this idea. First, and most destructively, it creates a
backdoor tax on energy. Everything made, everything transported and everything that keeps people warm or provides electricity invariably involves the use of natural gas, oil or coal. No matter where or when it is imposed, a 'carbon dioxide' tax is a tax on energy. Make no mistake. Consumers will pay this tax; businesses will just pass along the cost. Second, as a practical and legal matter, an import tax on carbon dioxide would require the U.S. to impose a tax on our own domestically produced energy and goods. Trade agreements are going to preclude us from pulling a number out of thin air. This is, of course, the real goal of the enterprise — to impose an energy tax on the American economy by whatever means."
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** "If Exxon, Chevron, Shell coordinate to restrict gas supply & spike prices, we’d call that an antitrust violation and prosecute the alleged felons. But when their top shareholders like BlackRock & Vanguard force them to do the same, we call it 'ESG' instead. Funny how that works"
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– Vivek Ramaswamy ([link removed])
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What did the U.S. have before the Green New Deal? Reliable electricity.
** Wall Street Jounral ([link removed])
(8/8/22) reports: "From California to Texas to Indiana, electric-grid operators are warning that power-generating capacity is struggling to keep up with demand, a gap that could lead to rolling blackouts during heat waves or other peak periods as soon as this year. California’s grid operator said Friday that it anticipates a shortfall in supplies this summer, especially if extreme heat, wildfires or delays in bringing new power sources online exacerbate the constraints. The Midcontinent Independent System Operator, or MISO, which oversees a large regional grid spanning much of the Midwest, said late last month that capacity shortages may force it to take emergency measures to meet summer demand and flagged the risk of outages. In Texas, where a number of power plants lately went offline for maintenance, the grid operator warned of tight conditions during a heat wave expected to last into the next week...'The risk of electricity shortages is rising throughout the U.S. as traditional power
plants are being retired more quickly than they can be replaced by renewable energy and battery storage. Power grids are feeling the strain as the U.S. makes a historic transition from conventional power plants fueled by coal and natural gas to cleaner forms of energy such as wind and solar power, and aging nuclear plants are slated for retirement in many parts of the country...The challenge is that wind and solar farms—which are among the cheapest forms of power generation—don’t produce electricity at all times and need large batteries to store their output for later use. While a large amount of battery storage is under development, regional grid operators have lately warned that the pace may not be fast enough to offset the closures of traditional power plants that can work around the clock."
When things get real, people realize what's important.
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Not supporting additional oil drilling is inflationary. Climate policies are inflationary. And we have a lot of inflation.
** Bloomberg ([link removed])
(5/7/22) reports: "Big Oil is raking in historic amounts of cash, but the windfall isn’t being invested in new production to help displace Russian oil and gas. Instead, executives are rewarding shareholders -- setting the world up for an even tighter energy market in the years ahead. The West’s five biggest oil companies together earned $36.6 billion over and above their spending in the first quarter, or about $400 million in spare cash a day. It was the second-highest quarterly free cash flow on record and enough to relegate billions of dollars of Russia-related writedowns to mere footnotes in their recent earnings reports. Oil booms typically spark a chase for higher production -- but not this time. All five supermajors have kept their capital expenditure budgets firmly in check and pledged that this discipline will hold in future years -- even as oil prices have closed above $100 a barrel on all but five days since Russia invaded Ukraine in February. With wells naturally declining in
production every year and large projects taking half a decade or more to come online, any expansion lag happening now will push the possibility of new production even further into the future."
Energy Markets
WTI Crude Oil: ↓ $105.05
Natural Gas: ↓ $7.40
Gasoline: ↑ $4.32
Diesel: ↑ $5.54
Heating Oil: ↓ $383.89
Brent Crude Oil: ↓ $107.87
** US Rig Count ([link removed])
: ↓ 784
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