What You Should Know About Oil and Gas Today
The Big Story
Why not just do it now? – California Governor Gavin Newsom issued an order on Wednesday calling for a phaseout of gasoline-powered cars by the year 2030, and also endorsed a ban on fracking. So, unlike presidential candidate Joe Biden, the Governor of the largest population state in the country has staked out a clear and unambiguous position on the matter.
The Los Angeles Times reports that Under Newsom’s order, the California Air Resources Board would implement the phaseout of new gas-powered cars and light trucks and also require medium and heavy-duty trucks to be zero-emission by 2045 where possible. California would be the first state in the nation to mandate 100% zero-emission vehicles, though 15 countries already have committed to phasing out gas-powered cars.
Banning fracking is a fairly simple thing, especially in California, which is essentially a one-party state at this point. All Newsom would need to do to get that done is convince his party’s massive super-majorities in both houses of the California legislature to pass a law, which they will no doubt be more than happy to do. California already imports the vast preponderance of its daily oil consumption from other states and countries, and fracking is already quite rare in the state. So, the impact on the public from such an action would be relatively inconsequential, other than the jobs that would be lost.
But those oil and gas jobs are mostly in the highly-Republican Central Valley part of the state, and California Democrats care little about that part of the state, anyway. So, that part of Newsom’s grand plan would be pretty straight-forward and Democrat politicians would have little if any price to pay for implementing it.
Getting to zero gasoline-powered cars by 2035 is a little more complicated. Newsom gets the ball rolling in his order by requiring the California Air Resources Board to implement the phaseout of new gas-powered cars and light trucks in the coming years, and also require medium and heavy-duty trucks to be zero-emission by 2045 where possible.
But what about where that’s not possible? Because replacing the millions of diesel-powered heavy trucks that move most of America’s goods with EVs is certainly not possible today and is not likely to become possible anytime soon. Maybe that’s why Newsom allows an extra 10 years for that miracle to come about.
On his Twitter feed today, Allen Gilmer had a great suggestion:
I think Governor Newsome and everyone in his office immediately swear off all primary and secondary uses of petroleum products to serve as an example to the citizens of the world how it's done and to identify quickly what needs to be invented right now. #LeadFromFront
— A Crude Awakening (@allengilmer) September 24, 2020
That would be the truly-principled stance for not only Newsom and his staff, but also for everyone employed by all myriad activist groups that make up the massive “environmentalist” lobby today, and for every Democrat politician who supports this sort of economy-destroying exercise to take. But of course that will never happen, because that would require these people to live with the consequences of their own actions.
Still, it’s a fun thing to think about.
Meanwhile, in other news…
Did BP really state that global oil demand has already “peaked”? No, the company didn’t really say that, as I detailed in a piece yesterday.
Ok, well, what about U.S oil production – did oil executives really say it has “peaked” as Reuters reports this morning? Well, yes, and it’s pretty hard to argue otherwise. In a survey conducted by the Dallas office of the Federal Reserve, 66% of 154 oil and gas firm executives contacted believe U.S. crude oil production has peaked. The survey includes executives from Texas, Louisiana and New Mexico.
But what does that really mean? Do these executives think it has “peaked” forever, or just for the time being? That’s a key distinction since every “expert” for well over a century now who has sagely predicted that we have reached “peak oil” production has ended up being proven wrong, often comically so.
After about 10% of Gulf of Mexico production had to be shut-in due to the passage of Tropical Storm Beta, S&P Global Platts reports today that is well on the way to being fully reactivated.
That’s all for today.