On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the midterms and what the pending results mean for the rest of the Biden presidency and 2024.
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On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the midterms and what the pending results mean for the rest of the Biden presidency and 2024.
Links:
COP27 began in Egypt over the weekend, as about 200 nations meet to supposedly agree on climate policy. The Conference of the Parties of the UNFCCC, or COP27, is the 27th United Nations Climate Change conference and this year is being held in the luxury resort town of Sharm El Sheikh, Egypt. Global greenhouse gas emissions have increased since last year’s Glasgow climate conference, exceeding their pre-pandemic levels. A recently released United Nations report shows global emissions on track to increase by 10.6 percent by 2030 compared with 2010 levels. According to the Paris Climate Agreement of 2015, those emissions need to drop 43 percent by then for temperatures to be 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels. For the first time since climate talks began, delegates at the U.N. climate summit have agreed to discuss compensating poor nations for damage that may be linked to global warming, placing the topic on the agenda. The loss and damage funding is to be paid by the world’s largest emitters for ecological reparations to developing countries. One study estimates that funding for loss and damage could run up to $580 billion a year by 2030. This is noteworthy since the U.S. Senate has never bound the United States to the agreement, as is customary in a treaty establishing obligations upon signatories.
Developing countries want wealthier nations to help finance their transitions from fossil fuels. To date, wealthy nations have fallen short of their promises on transition funding and they have not agreed to new funding beyond what they already provide. They failed on a promise to provide $100 billion per year by 2020 to help developing countries cut carbon dioxide emissions. In 2009, developed countries promised that by 2020 they would transfer $100 billion per year to vulnerable countries. In 2020, they provided $83.3 billion – falling $16.7 billion short of the target, according to the Organization for Economic Co-operation and Development. Recently, two small countries have offered funding. Denmark committed 100 million Danish crowns ($13 million), and Scotland pledged £2 million ($2.28 million).
South Africa, for example, wants wealthy countries, along with international development banks, to pay over 400 billion rand ($26.6 billion) to transform its power system out of coal. At COP26, the U.S., Germany, France, the U.K. and the EU said they would mobilize $8.5 billion over the next three to five years to help South Africa quit coal by replacing coal plants with renewable energy and finding new livelihoods for mining communities. Note that the pledge is not enough money to even transition one country — South Africa —out of coal and into renewable energy. South Africa is the fifth largest coal producer in the world.
The International Energy Agency indicated that just two of the 55 components needed for the world to reach net-zero emissions by 2050 are on pace to be achieved. Those two are electric-vehicle deployment and switching to LED lighting. Factors such as shutting down coal plants and capturing carbon dioxide from the atmosphere are lagging behind.
New Ideas and Issues Abound
The United States is focusing on a new plan for carbon credits, which the Biden administration is hoping to announce at the summit meeting. John Kerry, President Biden’s climate envoy, is supposedly gathering support for a system in which governments would earn credits for cutting their power sector’s emissions, which companies could then buy to offset their own output. In many ways, it resembles the “Cap and Trade” bill promoted by Congressmen Henry Waxman and Ed Markey in 2010. Kerry’s plan lacks key details, however. Also, centering the plan on credits is contentious, because they do not always result in a reduction of emissions. Despite that, credits have grown in popularity as a way for companies and governments to incentivize reducing carbon output.
Corporate commitments to addressing climate change also appear uncertain. Mark Carney, the former governor of the Bank of England who now leads the Glasgow Financial Alliance for Net Zero, indicated that the group’s members were no longer required to follow a U.N. initiative to phase out fossil fuels. Members of the coalition, which have a combined $150 trillion in assets, raised antitrust concerns. Bank of America and JPMorgan Chase, for example, are worried that they could be sued for following global decarbonization pacts. There has been no major climate-related litigation on antitrust grounds thus far, but a number of regulators and officials are exploring it and it has all the hallmarks of collusion in restraint of trade.
Senators including Tom Cotton and Chuck Grassley have sent letters to 51 major law firms warning them of potential antitrust violations for advising clients on environmental, social and governance (ESG) issues. The letter advises the law firms that they and their clients should preserve documents relevant to the clients’ ESG practices in preparation for Congress’s oversight of antitrust violations due to ESG collusion. The letter stated: “The ESG movement attempts to weaponize corporations to reshape society in ways that Americans would never endorse at the ballot box. Of particular concern is the collusive effort to restrict the supply of coal, oil, and gas, which is driving up energy costs across the globe and empowering America’s adversaries abroad.”
The billionaire Mike Bloomberg, a special U.N. envoy on climate change, is focused on reducing coal use. He announced a new international initiative to help 25 developing countries in Africa, Asia, and Latin America phase out coal by 2040 with some wealthier countries ending coal use by 2030. (Bloomberg provided more than $500 million to help green groups phase out coal use in the United States.) Bloomberg’s initiative would include devising business plans, national policies and technical resources to increase the use of renewable energy, but it does not include a new financial commitment.
The alliance of governments — under a partnership with Bloomberg Philanthropies and Sustainable Finance For All, a United Nations body — intend to concentrate on countries where energy demand is projected to grow, and where renewable energy potential is plentiful. Attracting private-sector dollars for wind, solar and other renewable power has been a challenge, particularly in developing countries. Indonesia, for example, is the third-largest coal producer after China and India, and its energy plan foresees coal providing a quarter of its power mix by 2050. Shutting down its 118 coal plants could cost $37 billion, according to a recent report. Many nations in Africa have enormous wind and solar resources but because of potential risks, financing costs may be higher.
Conclusion
Nearly 200 countries are meeting in Egypt as part of COP27 to discuss ways and finances to reduce their greenhouse gas emissions, which are growing globally. European countries have turned to coal as a means to fuel their economies and to keep their residents warm this winter as Russia has drastically reduced its exports of natural gas to them as a means of retaliation against sanctions imposed due to its invasion of Ukraine. Other countries such as China and India have enormous coal potential and use and do not intend to reduce that consumption any time soon as they grow their economies and, in the case of India, electrify its country.
Developing countries want wealthier countries to pay for their transition to renewable energy as reparations for their industrialization. New ideas are coming from John Kerry and Mike Bloomberg for emissions reductions, but the global situation is such that any true and lasting developments are unlikely. U.S. taxpayers should be aware that new obligations may be agreed to at the conference which would seek to raise their tax and energy bills in pursuit of the U.N.’s COP27.
*This article was adapted from content originally published by the Institute for Energy Research.
On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the final stories shaping the upcoming midterm elections.
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The Energy Information Administration indicates that U.S. oil production is nearing pre-pandemic levels, but President Biden wants to ruin that by placing a “windfall profits” tax on oil company profits. “Their profits are a windfall of war,” Mr. Biden said, referring to the Russian invasion of Ukraine as the reason for high prices for oil and gasoline. Biden could easily increase domestic oil production by changing his anti-oil and gas policies that began on his first day in office. Gasoline prices per gallon were in the mid-$2 range when Biden took office, increased to $5 a gallon in early June and then slowly declined to $3.76 per gallon by his temporary manipulation of the market through record-breaking releases of oil from the Strategic Petroleum Reserve (SPR) that was set up to be used during emergencies—not for high prices caused by his own government policies. By releasing oil from the emergency reserve and adding supply to the market, Biden recognizes that markets determine oil prices, not oil companies. But he still wants oil companies to give up their profits, despite not helping them when they incurred enormous losses during the pandemic lockdowns. Increasing taxes on oil company profits will just discourage investment in new production and raise prices higher, hurting American consumers even more. And by offering the fewest amount of federal lands for leasing since WWII, the president limits the ability for oil companies to invest in U.S. resources.
Biden needs to act quickly if he is committed to a tax on oil profits as both houses of Congress would need to pass it and he would need 60 votes in the Senate to break a filibuster. A group of Democrats did introduce legislation earlier this year that would impose a per-barrel tax equivalent to 50 percent of the difference between the current price of crude oil and the average price between 2015 and 2019.
Besides releasing 260 million barrels of oil from the SPR, Biden asked the Federal Trade Commission (FTC) to investigate whether oil-and-gas companies are participating in illegal conduct aimed at keeping gasoline prices high. The FTC has yet to get back to him, although his request was made in November, 2021.
Biden also indicated that if companies do not increase capital expenditures, they would face other restrictions beyond a prospective windfall profits tax. He has threatened to place restrictions on fuel exports, due in part to diesel shortages where stocks are at a 25-day low, particularly affecting the Northeast, where distillate is still used to heat homes. Refinery closures, outages, and conversion to biofuel production where profits are much higher due to government subsidies have put pressure on the remaining refineries that recently needed to undergo routine maintenance, which was postponed earlier in the year to assist in meeting demand.
A significant share of existing oil refining capacity, including facilities operated by some major refiners like Phillips 66 and Marathon, has been or is being converted to manufacture biofuels due to the subsidies and to make progress toward Biden’s net zero carbon economy. In California, refiners producing biofuels currently receive a premium of $3.70 per gallon due to government policies. More than 1 million barrels per day of U.S. capacity has been shut or converted over the last few years. Investors are wary of building new refineries due to the changing energy market and pressures of the transition to “green” energy, as well as onerous government regulation. Even if fuel markets are well supplied with oil, the ability to refine oil into gasoline and diesel would be reduced if existing refineries continue to shutter.
The Energy Information Administration (EIA), an independent government statistics agency, indicated that U.S. oil output increased 0.9 percent to about 12 million barrels per day in August and September—the highest level since March 2020 and the onset of the COVID-19 pandemic. That level was close to the average oil production in 2019 of 12.3 million barrels per day. Overall U.S. output peaked at 13 million barrels per day in late 2019, and has not returned to that level since the pandemic started as costs for equipment and labor increased rapidly and President Biden started imposing his anti-oil and gas policies in January of 2021. EIA projects that next year, the country will produce an average of 12.4 million barrels per day in 2023, which would beat 2019’s record-high production. The agency estimates that this year’s average oil production will be 11.7 million barrels per day.
Conclusion
President Biden keeps trying to make oil companies out to be the bad guy when he is the one who is escalating oil and gasoline prices and causing shortages of diesel fuel by his anti-oil and gas policies. While blaming others for his policies, candidate Biden promised “to end fossil fuels.” He has been working to fulfill that guarantee since his first day in office. Now he is threatening to make matters even worse by asking Congress to pass a windfall profits tax on oil company profits, which will just reduce supply more and increase prices higher. Typically basic economics tells you that if you want less of something, you tax it. And, this is not the first time that Biden has threatened such a tax but he must get 60 votes in the Senate to counter a filibuster to do it. His boasts are all rhetoric to get Americans to believe him before they go vote. Americans need to understand the issues and not fall for his rhetoric. His policies are creating the problems, all in pursuit of his climate agenda, which he has stated repeatedly is “an existential threat” to the United States.
*This article was adapted from content originally published by the Institute for Energy Research.
WASHINGTON DC (11/02/2022) – Joe Biden and Congressional Democrats have a plan for American energy: make it harder to produce and more expensive to purchase. Since President Biden took office, his administration and Congressional Democrats have taken over 125 actions deliberately designed to make it harder to produce energy here in America.
A PDF of the full list is available to download here.
AEA President, Thomas Pyle, issued the following statement:
“Publicly, the Biden administration claims to be working to lower energy prices through temporary measures, like releases from the SPR, that won’t solve the long-run problems plaguing energy markets. But as our list shows, behind the scenes, the Biden administration and Congressional Democrats are doing everything in their power to block the production of reliable and affordable energy. This is exactly what the Green New Deal agenda is, making the sources of energy needed every day for families around the country too expensive to afford.”
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For media inquiries please contact:
[email protected]
Joe Biden and Congressional Democrats have a plan for American energy: make it harder to produce and more expensive to purchase. Since Biden took office, his administration and Congressional Democrats have taken over 125 actions deliberately designed to make it harder to produce energy here in America. A list of those actions appears below. A PDF of the full list is available to download here.
On January 20, 2021,
On January 27, 2021,
On February 2, 2021,
On February 4, 2021,
On February 19, 2021,
On February 23, 2021,
On March 11, 2021,
On March 15, 2021,
On April 15, 2021,
On April 16, 2021,
On April 22, 2021,
On April 27, 2021,
On April 28, 2021,
On May 5, 2021,
On May 20, 2021,
On May 28, 2021,
On July 28, 2021,
On August 11, 2021,
On September 3, 2021,
On September 9, 2021,
On October 4, 2021,
On October 7, 2021,
On October 21, 2021,
On October 28, 2021,
On October 29, 2021,
On October 30, 2021,
On November 2, 2021,
On November 4, 2021,
On November 5, 2021,
On November 12, 2021,
On November 15, 2021,
On November 17, 2021,
On November 19, 2021,
On November 26, 2021,
On December 14, 2021,
On December 21, 2021,
On December 30, 2021,
On January 13, 2022,
On January 14, 2022,
On February 9, 2022,
On February 18, 2022,
On February 21, 2022,
On February 28, 2022,
On March 1, 2022,
On March 8, 2022,
On March 9, 2022,
On March 11, 2022,
On March 16, 2022,
March 21, 2022,
March 28, 2022,
March 30, 2022
March 31, 2022
April 5, 2022,
April 12, 2022,
April 15, 2022,
April 19, 2022,
April 20, 2022,
April 21, 2022,
April 25, 2022,
April 28, 2022,
May 18, 2022,
May 19, 2022,
June 2, 2022,
June 7, 2022,
June 8, 2022,
June 28, 2022,
July 6, 2022,
July 7, 2022,
July 14, 2022,
July 15, 2022,
August 16, 2022,
August 17, 2022,
August 18, 2022
August 22, 2022,
September 6, 2022
September 12, 2022,
September 19, 2022
September 20, 2022,
September 30, 2022,
October 5, 2022,
October 7, 2022,
October 2, 2022,
October 6, 2022,
WASHINGTON DC (11/1/22) – The American Energy Alliance (AEA), the country’s premier pro-consumer, pro-taxpayer, and free-market energy organization, released its annual Congressional Scorecard last week. The AEA scorecard scores voting and co-sponsorship decisions on legislation affecting energy and environmental policy, educating voters on how their senators vote and holding members accountable for those decisions. This year’s Senate scorecard compiles 28 votes and 1 co-sponsorship decision from the full 6-year terms of the Senators up for reelection in 2022.
Sen. Raphael Warnock (D-GA) received a score of zero percent from the American Energy Alliance.
The American Energy Scorecard is guided by the following core principles:
AEA President Thomas Pyle issued the following statement:
“Georgia’s economy depends on reliable and affordable energy. It is home to the world’s busiest passenger airport and natural gas accounted for 49 percent of the state’s electricity generation in 2020. Yet time and again, Sen. Warnock has voted to make energy more expensive for Georgia families. Senator Warnock promised to be an independent voice in the Senate, but he voted in lockstep with New York Senator Chuck Schumer to support President Biden’s anti-energy agenda.
Senator Warnock said he ran for office to make life better for Georgia families, but has consistently voted for policies that make electricity, gasoline, and home heating more expensive for Georgians and make America more dependent on other nations – like China and the Middle East – for our energy.
Instead of working to provide relief for Peach State residents from high energy and gasoline prices, Sen. Warnock sided with proponents of the Green New Deal. That’s a bad deal for Georgia.”
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According to the Energy Information Administration (EIA), the United States now has less than 25 days of diesel stocks, the lowest level since 2008—and down from 34.2 days during the previous four weeks. The fuel is already being rationed in the Northeast, with suppliers in several states forced to conserve heating oil as the winter months approach. New England’s stockpiles are at less than a third of their usual levels for this time of year and the lowest levels since April 1992, which is concerning since those states rely on the fuel for heating more than any other part of the country. Diesel is also used for transporting goods as well as powering construction, farming and military vehicles and equipment. Unlike gasoline and jet fuel, demand for diesel recovered at a much faster pace from the coronavirus pandemic. In 2021, the U.S. transportation sector consumed 46.82 billion gallons, or 1.11 billion barrels of diesel fuel — at an average of about 128 million gallons a day.
Total national diesel stockpiles are at 106.187 million barrels, down about 34 percent since Biden took office. According to EIA, demand eased in the past week, coming in at 4.072 million barrels, although consumption is still up nearly 20 percent compared to the previous four weeks.
The national average price of diesel as of October 24 was at $5.34 a gallon — $1.63 more than last year. Traders are paying more for prompt deliveries than longer-term deliveries as they expect prices to drop in the future — a downward market structure known as “backwardation.” The market usually moves into “contango” — the opposite of backwardation, where demand is lower and suppliers build up inventory with the expectation of higher future prices in the summer. However, strong domestic and international demand, shrinking domestic refining capacity and sanctions on Russian petroleum imports have kept the diesel market tight throughout the year.
The Northeast Home Heating Oil Reserve holds one million barrels of diesel in case of a disruption in supplies. However, diesel demand is so high, that if a million barrels of diesel were delivered from the Northeast reserve, those barrels would be depleted in less than six hours.
Biden’s Strategies
The Biden administration recently announced it would be tapping into the country’s emergency oil reserves again to counter rising gasoline and diesel prices, despite concerns over the long-term efficacy. Due to the Biden Administration’s depleting the reserve since November 2021, the Strategic Petroleum Reserve is at levels not seen since June 1984. In November, Biden tapped the reserve for 50 million barrels of oil ahead of Thanksgiving. In March, Biden tapped the reserve again for 30 million barrels at the onset of Russia’s war with Ukraine. Shortly thereafter, Biden followed up that release with the 180 million barrel drawn down. Biden is now tapping the last 15 million barrels of the 180 million barrels just before Election Day to keep prices from rising as the electorate goes to the polls.
By the end of the year, Biden will have depleted 260 million barrels of oil from the reserve, which has an authorized capacity of 714 million barrels. The reserve now holds about 400 million barrels of oil, marking its lowest level since June 1984. The emergency petroleum reserve, established in the 1970s to prepare the United States for a sudden and severe disruption in supply is being used by the Biden administration to keep gasoline and diesel prices from rising.
White House officials are also considering petroleum export restrictions. Banning or limiting the export of refined products would likely decrease inventory levels, reduce domestic refining capacity through closures or conversion to biofuels, put upward pressure on consumer fuel prices and alienate U.S. allies during a time of war. In California, refiners producing biofuels currently receive a premium of $3.70 per gallon. Setting minimum inventory levels could also affect the number of exports being sent out to foreign countries. And even if domestic supply sees some relief, prices could still be pushed up around the rest of the world.
Meanwhile, two vessels carrying about 90,000 tons of diesel and jet fuel are scheduled to arrive in New York after being diverted from their original European destinations. In addition, Delta Air Lines’ Trainer refinery in Pennsylvania is poised to return from seasonal maintenance, which will help increase diesel output. Since 2020, the United States lost about 1 million barrels per day in operable refining capacity. Over the past decade, the number of refineries dropped to 129; in the Northeast, only seven refineries remain. Refinery utilization rates have been averaging above 90 percent. Despite knowing how tight the refinery market is, Biden is doing nothing to encourage more refineries to be built or expanding existing ones.
Conclusion
U.S. diesel inventories are unacceptably low as demand is surging ahead of winter — with only 25 days of supply left. The low level of inventory and the escalating prices, over $5 a gallon, has gotten the attention of the White House going into the mid-term elections. Diesel is the second largest cost to the trucking industry, after labor, and the high diesel prices will continue to affect inflation through the production and delivery of food and merchandise. As the SPR is being decimated of the quality of oil that U.S. refiners need, Biden is running out of ways to bring prices down. Further, the Northeast is in dire shape as winter approaches with distillate stocks down by about a third, inadequate pipeline capacity and fracking bans. The Northeast is taking on many of the characteristics of Europe when it comes to energy.
*This article was adapted from content originally published by the Institute for Energy Research.
On this episode of The Unregulated Podcast, Tom Pyle and Mike McKenna discuss the future of the Yankees, midterm elections, and Bono’s midlife crisis.
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WASHINGTON DC (10/27/22) – The American Energy Alliance (AEA), the country’s premier pro-consumer, pro-taxpayer, and free-market energy organization, released it’s annual Congressional Scorecard last week. The AEA scorecard scores voting and co-sponsorship decisions on legislation affecting energy and environmental policy, educating voters on how their senators vote and holding members accountable for those decisions. This year’s Senate scorecard compiles 28 votes and 1 co-sponsorship decision from the full 6-year terms of the Senators up for reelection in 2022.
Sen. Margaret Wood Hassan (D-NH) received a score of zero percent from the American Energy Alliance.
The American Energy Scorecard is guided by the following core principles:
AEA President Thomas Pyle issued the following statement:
“Voters in New Hampshire have seen the effects of energy policies that put energy consumers last, leading to high energy prices and an impending fuel and gas shortage. Sen. Hassan’s score reflects her abysmal record of supporting policies that would provide consumers access to affordable and reliable energy in New Hampshire.
Time after time, Sen. Hassan has voted for policies that make electricity, gasoline, and home heating more expensive for New Hampshire and make America more dependent on other nations – like China and the Middle East – for our energy.
New Hampshire currently has the eighth highest electricity prices in the country. Instead of working to provide relief for Granite State residents from high electricity and home heating prices, Sen. Hassan has sided with proponents of the Green New Deal. That’s a bad deal for New Hampshire.”
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