Oil / Nat Gas are so much more complex than people think. Headlines try to make something complex simple, here are some facts.
- Oil is fungible so sanctions never work
- Our independence is based solely on our coal exports ( yes they include them) which offset our oil imports
- We do not have enough refining capacity and need to stop NIMBY thinking
- We depend on Canada for a high percentage of our imports
- Gas prices always go up this time of year (Late winter / spring) as refiners begin maintenance and Summer blend changeover
- Our refining assets are a bad match with the crude we get out of the ground thus we import oil and export gasoline etc.
- Much of our increased "oil" comes from NGL's which are related to our nat gas field development
- We will be using fossil fuels for many decades to come and in increasing amounts (worldwide) as energy is the major determiner of higher standards of living
- Mineral production (e.g. lithium / rare earths) in the US will never meet our needs as environmental groups will stop it by delaying and making capital allocation difficult due to risk
- We will need more pipelines not less as nat gas is the winner and pipelines are the only real way to transport
- Wind and Solar will never make a material impact as the associated costs and fact that they cannot be base load sources will become more and more apparent
- Our electric power demand is set to explode due to blockchain along with AI / cloud demands
Hope it makes you think.
1. Sanctions absolutely do work, and the fungibility of oil is still up for debate. The oil market definitely isn't a "free market", so on that front i would agree with this line of thinking.
2. It's not solely on coal exports, though it absolutely does have an effect. Especially with the Biden administration leveraging US coal contracts in the ME with US Navy protection in the Red and Arab seas.
3. Agreed, we need more refining capability, as well as upgrades to current plants to improve the efficiency of refining the light crude we produce domestically.
4. Agreed again.
5. Agreed again.
6. Agreed again.
7. Agreed again.
8. Agreed again. We need to open up in roads with SA (specifically Argentina, Brazil, Chili, Venezuela) about their REM deposits. They are the nearest countries to the US with the largest deposits yet to be mined.
9. Agreed, but due to the low NG prices we're currently dealing with there's a lot of halts on NG pad development. One of my biggest clients had budgeted 30 pads to be installed in 2024 based on 2023 numbers, but once January came around that number dropped to 8 pads due to the current price of NG.
10. Agreed, but they are a tremendous supplemental source of energy. The last ~3 weeks in Texas we've experienced a tremendous boon from renewable energy output, but yeah it'll never be enough to fully support US needs.
11. A lot of thew new data centers being erected across the country have supplemental solar farms being developed alongside them, which should help, but it won't cover all the needs of the facilities. I am excited to see how the new Hybar steel mill in Arkansas manages since they're using 100% solar power/renewable energy to power their boilers.