Self-Sabotage

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DAILY ENERGY NEWS | 12/21/2022

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Russian aggression didn't force Europe into choosing three decades of self-destruction, it just laid the choice bare for everyone to see.

Epoch Times (12/20/22) reports: "Though many blame the Russian attack on Ukraine as being the main driver of Europe’s energy crisis, the actual reason began well before the conflict, and is linked to bad energy decisions by the bloc, according to an analysis by the Institute for Energy Research (IER). Post the COVID-19 lockdown in 2021, energy demand in Europe 'came back with a vengeance,' according to the analysis published on Dec. 19. However, since Europe had cut leases for oil and gas production, banned hydraulic fracking, and shuttered its nuclear and coal plants while pushing renewable energy policies, the region did not have enough readily available energy to meet the rising demand. As a result, Europe was forced to use its energy stockpiles, and the region eventually faced an energy crisis following the Russia–Ukraine war. 'Now, Europe is faced with energy shortages, skyrocketing energy prices, and major uncertainty regarding its energy and economic future. Yet, it has not given up on its energy transition to renewable energy (wind and solar power) despite their weather dependency and lack of firm power capability,' the analysis said."

“We’re really thrilled about the opportunity to get to 100% clean energy much faster.”

– Laura Deehan,
Environment California.

Probably the right call for a city surrounded by gas and where it isn't unprecedented for winter temps to dip below -20 degrees.

The Colorado Sun (12/21/22) reports: "Denver City Council declined for now to ban natural gas hookups in newly built homes as a way to combat climate change, tabling the question as part of a larger revision to building codes that were praised by many as progressive and environment-friendly. A coalition of climate and environmental justice advocates had asked a key city council committee to amend the new building code to include a ban on fossil fuel hookups, saying full electrification of new homes will send another signal that Denver is a national climate change leader. But the council’s land use and transportation committee said it needed more study of such a sweeping change, and sent the new building codes on to a full council vote in January without the gas prohibition. The revised code took months of revision by city and citizen advisory committees for both commercial and residential buildings, and includes 'green codes' altering energy and water use meant to address environmental concerns. "

Over 1,700. years of data on the ineffectiveness of price controls and it's still the best the EU could come up with.

Reuters (12/21/22) reports: "A gas price cap agreed by the European Union will be easy to avoid and is unlikely to achieve the bloc's aim of reducing energy prices, analysts and market participants said. After months of wrangling over the idea, EU countries on Monday agreed to a gas price cap that would be triggered if Europe's benchmark gas price exceeds 180 euros per megawatt hour and is 35 eur/MWh higher than liquefied natural gas prices for three days. 'We have succeeded in finding an important agreement that will shield citizens from skyrocketing energy prices,' Czech industry minister Jozef Sikela said after the deal was struck. Analysts and market participants, however, questioned whether the cap will achieve that aim. 'My view is that this likely would not transfer to savings for consumers... in some cases, it could increase prices,' said Jacob Mandel, senior associate at Aurora Energy Research, pointing to various ways firms will be able to keep trading gas at prices above the cap."

Looks like we're going to need a bigger windmill.

Wall Street Journal (12/19/22) column: "This column has been making the case that replacing efficient forms of reliable energy with politically favored intermittent power sources is not as easy as it looks. Some jurisdictions seeking to replace fossil fuels and/or nuclear plants with wind power may not have adequately considered the costs and benefits.Perhaps no political class outside of California has been as hostile to cost/benefit analysis as the elected officials of Massachusetts. Now Jon Chesto reports for the Boston Globe: 'The state’s nascent offshore wind industry suffered a big setback on Friday when Avangrid told state regulators it wants to end its contracts with three major utilities to build a massive wind farm south of Martha’s Vineyard...In September, chief executive Pedro Azagra said Avangrid would postpone construction of Commonwealth Wind, which could eventually provide enough power for up to 750,000 homes, by pushing its completion date out to 2028, and would need to rewrite the contracts because of a sharp increase in commodity costs. With Friday’s move, Avangrid has given up on those renegotiation efforts.' Some readers may feel like they’ve been hearing about how close wind power is to commercial viability for virtually their entire lives. Regardless, this seems to be another reminder that the desires of politicians cannot change the underlying physics and economics."

Energy Markets

WTI Crude Oil: ↑ $77.75
Natural Gas: ↑ $5.46
Gasoline: ↓ $3.10

Diesel: ↓ $4.72
Heating Oil: ↑ $315.82
Brent Crude Oil: ↑ $81.60
US Rig Count: ↓ 854

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