Recruiter’s View

The government has generated so many energy crises that they’re running into each other.  Some of the industries it wants to destroy are actually seeing a resurgence.  

My friends in the Energy Industries know far better than I what’s going on.  I invite you to send me your thoughts and corrections.  (Try the “Get In Touch” link at the bottom of this page.)

Here’s my best shot at untangling this mess…

When I was in high school, we were presented with definitive evidence that a new man-made Ice Age was about to begin.  Massive glaciers would consume New York City and continue south to cover the continent.  Terrible things would happen, and we would all feel sad.

Decades later, we learned that the Ice Age was over and, instead, we were about to die from global warming.  Different terrible things would happen, and we would all feel sad about that.

There was a hole in the ozone layer.
We didn’t know why it was there, but we did know it was our fault.
It seems to have closed.

We now need to be “carbon neutral” to save the planet.
Of course, plants require CO2, but that doesn’t count.

Over a decade ago, dairy farmers learned they could capture methane from their cattle.
It’s a power source sufficient to run an entire dairy operation.
Naturally, some City Slickers want to eliminate cattle, because, umm… climate.

So, depending upon your emotional make up, this is all either horrifying or silly.

That said, here’s a quick rundown on my sense of the various energy sectors and how they’re doing today.

Coal

I once stood in a brand-new nuclear power plant that was never commissioned, because nuclear power is scary.  The plant was converted to a coal-burning facility.  It turns out that our super-abundant coal supply was offensive to the Obama administration.  So, the industry has been mercilessly throttled back, scrubbers be damned.

As we work to eliminate this inexpensive energy source, the rest of the coal-burning world seems to be suffering from power outages.  I understand that heavy rains have caused China to close 60 mines.  India is in trouble.  And Europe is having problems.

Oil and Gas

Not long ago, the US was oil-independent.  Not any more. 

Biden killed the Keystone XL Pipeline, immediately after his inauguration.  That eliminated an easy 800,000 barrels a day, offered from Canada.  Then he moved to cripple the rest of the oil industry.

Capital investment is cut off.  Major players like Blackrock are redirecting their investments away from Oil and Gas, and into renewable energy. 

Producers are abandoning their positions.  They are disposing of their equipment.  And employees are leaving the industry. 

The backlog of Drilled but Un-Completed wells (DUCs) is declining.  As production from current wells falls off, the industry will have fewer new wells to bring on line. 

That’s unfortunate, because we don’t have sufficient oil production.  In fact, we aren’t even trying to have sufficient oil production.  

We’re already pulling from our reserves.  And external suppliers may be unreliable for a variety of reasons.

In their October 13 release, the Bureau of Labor Statistics reported that the gasoline index rose 42.1 percent over the last year.  The natural gas index rose 20.6 percent.

We’re just getting started.  The US Energy Information Administration released its Winter Fuels Outlook.  They said that, “…retail prices for energy are at or near multiyear highs in the United States.”  Households using natural gas, propane, or heating oil will spend 30%-50% more to heat their homes this winter.  

Wind and Solar

If you’re a wind and solar enthusiast, we can probably agree that energy storage is the number one difficulty for these industries.  Solar panels don’t work at night.  And Texans couldn’t heat their homes last winter, when their wind turbines froze up.  The power generated from these energy sources only has value if it can be stored.  Otherwise, it is lost.  That brings us to batteries… 

Batteries

“Clean Energy” relies on batteries for its special effects.  While batteries have some great benefits, they are not going to save the planet, as advertised.  Mining for lithium has its own ecological challenges.  And batteries have to be charged and re-charged.  Depending on your set up, “plugging in” draws power from all the normal energy sources.  You just don’t see it.

Serious studies conclude “Clean Energy” is neither clean nor cost effective.  (But it is fun.)

Here’s the real problem…  By recent estimates, China controls something like 80% of the world’s lithium.  That would be less of a problem if China weren’t publicly preparing for war with the United States.

But let’s not get all grumpy about that.  Auto production is already constrained by a shortage of semiconductors.  In September, General Motors halted production at six North American factories because of a chip shortage.  Now, deep into October, the Orion plant is still waiting for battery packs for the Chevy Bolt.  

That’s a little early.  Industry projections anticipated a shortage of battery cells, beginning in 2022.  They forecast the problem will continue until at least 2030.

Nuclear 

We’ve already touched on this.  Abundant nuclear power was sidelined, because it was scary.  As I mentioned, some nuclear plants were converted to coal.  After that, they just weren’t built at all.  Now, older plants are scheduled for decommissioning.  And another entire industry will begin winding down.

But wait!  Bill Gates wants to build a nuclear power plant.  Who saw that coming?

He founded TerraPower in 2008 and got clearance from the Feds to build an “advanced nuclear reactor.”  

The advancements he envisions apply technology to safety concerns and accident prevention.

If you want to follow his comments, his blog is called GatesNotes.  

The blog site has a good search function.  I was able to type in “TerraPower” and “nuclear” and get some useful results.  

Recruiter’s View 

Command-and-Control Energy policies have us caught in the switches.  Even as Biden has moved to eliminate the oil and gas industry, high oil prices are bringing it back.  According to the Baker Hughes Rig Count, the number of active drilling rigs has doubled since last year.  That’s nice, but not nearly enough.

Government meddling has caused shortages, supply chain failures, and inflation. 

Every foreseeable problem and solution supports oil and gas, but only temporarily.

Longer-term, look for nuclear power to come back into favor.  

That’s my take on it.  I welcome observations from my friends in the Energy Industries.  (I need all the help I can get!)  Scroll to the bottom of the page for the “Get In Touch” link.  

All the best.  -TD