Tag Archives: energy

Cajoling Producers

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In a Friday Wall Street Journal op-ed centered on the high and rising cost of fuel and the deleterious effect that’s having on our businesses and our economy, Collin Eaton, David Harrison, and Doug Cameron had this remark:

The administration has also tried cajoling US oil companies into increasing production, but few have chosen to do so, instead sticking to leaner budgets urged by investors.

That’s laid off to the maxed out refineries in the US, so there’d be no place to ship increased production, anyway. That’s a player, certainly, but it’s a relatively minor one.

The far more important factor, and it plays to refiners, also is this. Drilling new wells and reopening closed wells each costs lots of money, and it takes years to recoup those costs. It’s the same for the pipelines and other transports used to get the oil and natural gas to refiners, and it’s the same for the refiners.

The Biden administration, though, cannot be trusted not to pull the rug out from under anyone in the oil and gas industry before those costs have been recouped.

There’s no reason, then, for refiners to (re)expand their capacity, even were there product ready for refinement. Biden and his Progressive-Democratic Party syndicate cronies are actively blocking the construction of additional pipelines with which to transport increased production. Biden and his Progressive-Democratic Party syndicate cronies are constantly promising to put the remaining hydrocarbon energy producers—oil and natural gas producers—out of business. This is a plain extension of what Biden’s favorite bud and predecessor ex-President Barack Obama promised to do to the coal producers and largely succeeded in doing.

A Critical Item

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President Joe Biden (D) wants half the new cars sold in the US to be electric, and he wants and 500,000 new charging stations for them, both by 2030. He considers reliable EV charging stations to be critical to getting us switched over to battery cars.

Charging stations are necessary (assuming the switchover itself is necessary; it’s not, but that’s a separate story), but they’re far from sufficient. The important thing here is reliable electricity running to each charging station—electricity from the grid. But that requires hydrocarbon-powered electricity generating plants, and it requires the electric grid, itself barely able to handle current loads—see the rolling blackouts that are routine in California and that have become a risk in Texas—to be upgraded to handle the vastly increased loads imposed by all those battery-powered vehicles, whether charged at the charging stations or in the home garage.

Also necessary, but not sufficient even in concert with the above, is an adequate definition of “fast charging.” If a battery-powered vehicle cannot be charged to the 400-mile range of a full gasoline tank in substantially the same 5 minutes it takes to “charge” that gasoline tank to an internal combustion engine-powered car to a 400-mile range, the battery-powered vehicle will remain impractical.

The true Critical Items, then, are at the origin and near-origin: deregulating domestic oil and natural gas production and deregulated electricity generation so there will be energy to put onto that upgraded grid.

One Way to Make the Question Moot

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The US 5th Circuit Court of Appeals is hearing a case concerning whether the President personally has the authority to suspend new oil- and gas-lease sales. The particular case centers on climate change concerns as the rationale, but the authority is much broader than that, or it’s non-existent.

The State plaintiffs argue that

a 1987 law dictating the ways in which oil and gas leases will be sold stipulates that a sale must be held at least four times annually in states with eligible land. … “…President Biden put his campaign promises above federal law: By executive fiat, he halted oil and gas leasing on federal lands.”

President Joe Biden’s (D) government employee lawyers argue that

the US president is not an “agency” and therefore not subject to the Administrative Procedure Act.

Biden’s argument strikes me as a frivolous quibble, and the States should win, with the Appellate court upholding the district court’s ruling that, in essence, in this sort of context, a President is, too, an “agency,” and so he has no such authority.

The question can be made non-existent in future, though, with a straightforward fix (however politically difficult it might be to enact): at least on Federal property, make oil- and gas-leasing and -permitting a will-issue matter with licensing requirements, including environmental questions and leasing costs, explicitly barred from being used as barriers to leasing and permitting.

A Two-Edged Sword, and another Thought

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Russia is a, if not the, major exporter of energy to Europe, and that helps hold Germany especially, and Europe generally, back from fully supporting Ukraine against Russia’s invasion of that nation.

The two-edged sword is this.

If Russian gas to Europe stops flowing entirely, “this would do severe damage to Europe’s economy and also undermine global growth,” Mr [EurasiaGroup’s Director, Energy, Climate & Resources, Henning] Gloystein said.

That damage, were it to be inflicted by Russia’s President Vladimir Putin, should prod Europe, and especially Germany, decisively away from Russian gas (and oil) altogether, as it would make clear—or should make clear—just how many weapons, including economic, the men and women of Russia’s government are willing to use in order to club Europe into submission.

The disruption from such an assault on Europe would not be felt until the next fall and winter; Europe has reserves enough to finish the present winter. That should be sufficient time for Europe to find more reliable supplies of energy. It might even convince German Chancellor Olaf Scholz to reverse ex-Chancellor Angela Merkel’s panicky cancelation of the nation’s nuclear plant energy production (although, maybe not—Germany has gotten used to tacit subservience to Russia).

The additional thought flows from this remark by President Joe Biden (D) in the context of that Russian invasion, quoted in the article at the link:

I will do everything in my power to limit the pain the American people are feeling at the gas pump. This is critical to me.

This is virtue-signaling dishonesty. Biden’s “everything” consists of begging OPEC and Russia(!) to pump more oil. Biden utterly refuses to open Keystone XL; to get his Cabinet and himself out of the way of exploring, drilling, and pumping lease permits on Federal land and water; to get his Executive Orders and his Cabinet rules and regulations out of the way of our oil and natural gas production and fracking for same; to get his administration out of the way of liquid natural gas production and port development so we can export LNG; to do anything at all to support and expand our domestic oil and gas production.

Biden-Harris’ determined war on our American hydrocarbon energy production industry represents a strong impediment to Europe’s ability to wean itself off Russian energy, and his war supports the Russian invasion effort by contributing heavily to the rapidly increasing price of oil (which underlies those rising “gas pump” prices), which in turn increases revenue for Putin’s Russian economy.

 

[NB: Germany has agreed a limited SWIFT sanction against “selected” Russian banks, and it has authorized shipment of some anti-tank RPGs, stinger anti-aircraft missiles, and 10 metric tons of fuel to the Ukrainian military.]

Using the Power Ceded to Them

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OPEC once again has rejected pleas to increase oil production in the face of rising oil prices.

Ministers of Arab oil-producing countries gathered in Saudi Arabia on Sunday, refusing pressure for OPEC+ to increase production again amid coronavirus pandemic recovery efforts and as a potential war looms in Europe.

And

On Sunday, Saudi energy minister Prince Abdulaziz bin Salman told an industry conference in Riyadh how the pandemic and recovery efforts have “taught us the value of caution,” Reuters reported.

Bin Salman and his OPEC counterparts also have learned another thing: the value of supporting Russia—the major OPEC ally that adds the ‘+’ to OPEC—rather than a timid and irresolute Progressive-Democrat American administration.

Bin Salman and his OPEC counterparts also have been reminded of OPEC’s economic power as the world’s major oil producer, a power the organization also wielded against the US in the ’70s when we really were dependent on Middle East oil for our economy.

The difference today, of course, is that we have no need to be dependent on others—not OPEC, not an enemy nation oil and natural gas exporter—for our economic independence (which means our political independence, also). Our current dependency is solely the work of President Joe Biden (D) via his active war on our energy production industry and his surrender to Russia on Nordstream 2 after Russian President Vladimir Putin’s minions shut down Colonial Pipeline as a demonstration of things to come if Biden didn’t yield.