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DAILY ENERGY NEWS | 05/11/2022
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** Taxing energy creates zero good outcomes.
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National Review ([link removed]) (5/11/22) op-ed: "A carbon border tax would increase costs for U.S. consumers and harm some of America's most vital international relationships. According to the April 28 estimate from the Bureau of Economic Analysis, real gross domestic product fell in the first quarter of the year at an annualized rate of 1.4 percent. Inflation, meanwhile, has surged, with prices rising 8.5 percent in the past 12 months. For the first time in four decades, we are flirting with the most dreaded of economics portmanteaux -- stagflation. With our economic health faltering, now would be an inopportune -- indeed, inexplicable -- moment to ratchet prices higher still. And, yet, that is precisely what a coterie of U.S. senators intends to do."
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** "There is no evidence that the actual cost of electric vehicles will be dramatically lower than those of internal combustion vehicles. Currently the average price of an electric vehicle is $56,000. What does this say about your ability to travel freely in the coming years if the federal government effectively bans our use of internal combustion vehicles?"
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– Levi Russell, The University of Kansas ([link removed])
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Shot:
Chaser:
** Bloomberg ([link removed])
(5/11/22) reports: "Talen Energy Corp. placed its Talen Energy Supply unit in Chapter 11 bankruptcy on Monday after rising power and gas prices disrupted its hedges and sparked a liquidity crisis. At least eight of the company’s 18 power plants rely on natural gas to make electricity, which means that when prices spiked in recent months, Talen was 'exposed to market price volatility' restructuring adviser Ryan Omohundro said in court papers. Talen’s strategy of using derivatives to manage commodity and power market volatility backfired when power and natural gas prices spiked last year, according to the filing. The hedges forced the company to post more cash collateral for its counterparties, sparking a 'significant liquidity squeeze,' Omohundro said...Talen Energy Supply, the company’s debt-issuing vehicle, said it had struck a restructuring deal with a group of bondholders that will see the creditors inject up to $1.65 billion of new equity, according to a statement on Tuesday. The
company is scheduled to appear in bankruptcy court at 4 p.m. on Tuesday in Texas."
Biden gives another inspiring speech!
** Wall Street Journal ([link removed])
(5/10/22) editorial: "Consider energy and food. The Administration’s war on oil and gas created enormous regulatory uncertainty that is stanching investment in new production despite high energy prices. Producers can’t find workers. Many left the industry when prices nose-dived early in the pandemic and are reluctant to return because Democrats have promised to put drillers out of business. Then there’s the left’s blockade on pipelines, which is limiting natural gas production in the Northeast’s rich shale deposits. Progressives blame rising gas prices on natural gas exports, but the larger culprit is increasing demand in the U.S. Hefty subsidies for wind and solar forced coal and nuclear plants to close down, but renewable power needs to be backed up by more gas. Mr. Biden says more green energy will reduce electricity prices. But then why have power prices increased by 11.1% in the last year? More green energy will make the grid less reliable and increase demand for gas along with
diesel-powered emergency generators, as it has in California and Texas. Speaking of which, diesel prices have increased by $2.40 a gallon in the last year, a buck more than gasoline prices, amid increased demand from freight and reduced refining capacity. Higher diesel prices filter through to food prices as ships, trains, trucks, tractors and other farm equipment rely on the fuel Biofuel mandates and subsidies have spurred refineries to shut down or shift to producing smaller amounts of “renewable” diesel from cooking oils. This is also a large reason soybean oil prices have more than doubled from pre-pandemic levels and why the American Bakers Association has urged the Administration to ease renewable fuel mandates.”
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Energy Markets
WTI Crude Oil: ↑ $105.27
Natural Gas: ↑ $7.68
Gasoline: ↑ $4.40
Diesel: ↑ $5.55
Heating Oil: ↑ $404.85
Brent Crude Oil: ↑ $107.44
** US Rig Count ([link removed])
: ↑ 789
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