Reality mongering

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DAILY ENERGY NEWS | 06/21/2022

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It's not fear-mongering. Reality is just that scary.

Hot Air (6/20/22) reports: "The title of this article may sound like some sort of alarmist doom porn from people who are warning about the downstream impacts of the green new deal, but it’s actually quite serious. The statement that there will probably never be another new oil refinery built in the United States came from Mike Wirth, the CEO of Chevron and a person who should know a thing or two about how the oil and gas industry works. We previously examined the reality that we are heading for devastating shortages of gasoline, diesel, and jet fuel because of the number of oil refineries that have gone offline or been converted to process biofuels. Ed Morrissey reported on Joe Biden’s demands that the 'greedy refiners' move to 'turn the refineries back on' and produce more fuel. Industry leaders responded with a letter explaining how ludicrous that demand was. Now, as the Institute for Energy Research explains, the reality is setting in that there probably won’t be any new refineries being constructed and it’s entirely the fault of the Democrats’ policies...The green warriors out there are probably tooting horns and throwing confetti into the air over the idea of the end of oil refineries in America. But when the reality of the coming liquid fuel shortage fully hits home, they will be singing a different tune. Renewable energy still only accounts for at most 13% of the power consumed in this country. We aren’t remotely close to being able to fully convert to electric vehicles, to say nothing of being able to recharge them all. And very nearly all of the food that you eat and the other products you purchase are brought to market in trucks and rail cars that use diesel to operate."

"Has no one in the administration asked the obvious question, to wit, what a plausible (or even an implausible) increase in GCC/Saudi crude oil output might yield in terms of U.S. gasoline prices? Amazingly, it would appear not, as the answer is surprisingly small in the context of gasoline prices now averaging over $5 per gallon for the U.S. as a whole."

– Benjamin Zycher,
American Enterprise Institute

I've been reliably informed by noted scholar John Kerry that coal is pretty much dead. So how come China, the UK, Austria, the Netherlands, and Australia are all cranking up their coal plants?

Reuters (6/20/22) reports: "China could face further power shortages this summer despite taking drastic measures to boost coal production, as much of the new supply is of lower quality than before and burns more quickly in power stations, traders and analysts told Reuters. The world's top coal consumer relies on coal for 60% of its electricity. Last year, lower domestic coal production led to a weeks-long power crunch that hit manufacturing across the world's No. 2 economy. Beijing has since ordered a ramp-up in coal output to record levels, and capped coal prices to ensure they are affordable for power generators. But traders say the price cap is encouraging miners to prioritise coal quantity over quality, leaving power generators needing growing volumes of coal as they look to raise output. 'For miners, they don't have much incentive to produce high quality coal as margins are so low due to the price caps. Their priority is to churn out enough volume of coal to fulfil the targets set by government,' said a China-based coal trader...While China is the world's largest coal importer and number two importer of liquefied natural gas (LNG), the country depends primarily on domestic fuel supplies for power needs, and controls local power and fuel prices and domestic coal output to try to ensure sufficient affordable power is available."

If you liked "never let a crisis go to waste," you'll love this one.

Yeah, I'm sure the only thing holding back the "next generation of vehicles" is their adoption by the U.S. Postal Service...

Real Clear Energy (6/15/22) op-ed: "Last year, President Biden signed the Postal Service Reform Act which, among other things, gave the United States Postal Service (USPS) a $58 billion taxpayer and Medicare bailout. The agency got a sweet deal with this legislation, as Congress gave it another financial lifeline without reforming the financial and accounting practices that failed the USPS in the first place. In fact, this legislation only exacerbated these problems by creating an integrated service network that gives USPS the authority to bundle expenses and earnings of its package business alongside its letter mail service, which makes it impossible to know where it makes money and where it does not. Now, 83 House Democrats have set their eyes on their next environmentalist campaign: making the postal service’s fleet 'at least 75 percent electric or zero emission vehicles.' At least, that’s the bar set by the Green Postal Service Fleet Act of 2022, introduced by Virginia Representative Gerry Connolly. Earlier this year, USPS entered into a multi-billion-dollar contract with Oshkosh Defense for the production of the 'Next Generation Delivery Vehicle.' However, under Rep. Connolly's legislation, the agency would be prohibited from implementing or carrying out the contract unless three-fourths of the fleet is green. The Democrats’ campaign to impose the Green New Deal on USPS is not feasible and fails to make economic sense

Energy Markets

WTI Crude Oil: ↑ $112.47
Natural Gas: ↓ $6.84
Gasoline: ↓ $4.96

Diesel: ↓ $5.81
Heating Oil: ↑ $454.00
Brent Crude Oil: ↑ $116.08
US Rig Count: ↑ 824

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