Energy Report: Green New Deal Preview

Rolling blackouts! Frozen wind turbines, the shutdown of refineries, and environmentalists are pointing fingers at the oil and gas industry and the oil and gas industry is pointing fingers back at them. Well, whoever is to blame the power situation in Texas as well as a host of 13 other states, it is a major crisis. With over 5 million people without power and lives at risk, it shows the need to not demonize any form of energy.

Pump Jack, Oilfield, Oil, Fuel, Industry, Petroleum

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To meet the needs of the people of the U.S. and to keep them healthy and safe, we need an everything and all diversified energy vision. That includes oil and gas as well as wind and solar. Yet it is natural gas that is proving to be the most reliable during this crisis and that should be a warning sign to those who oppose fracking or are banning natural gas power in their cities. That decision may put people’s lives at stake. While what we are seeing is an extreme example, it is one that will be repeated unless we take seriously the reliability of not only our power grid but the need for oil and gas and more pipelines. If we are not prepared to handle this cold, what will happen when we start producing millions of electric cars. Renewables are proving that they are far from reliable when we see extreme conditions. While the cold snap of this magnitude is a once in 30-year event, we know at some point it will happen again. Lives and businesses are at risk as well as the credibility of our economy. As for oil and gas prices, this event solidifies the bullishness that we have been predicting for some time. While we may see a pullback when the cold goes away, the reality is that this cold snap wipes away the veil and shows that our energy sector is going to face severe challenges and sharply higher prices in the future.

The cold snap is having a big economic impact and businesses must shut down. I had a report that the Texas RR Commission, the agency that regulates natural gas usage, has told milk processing plants in Littlefield, Texas to cut back or completely discontinue the use of natural gas because of the record cold across the whole state. I am not 100% sure on the math but the net loss to dairy farmers who rely on their milk being processed could be up to $600,000/ per day, depending on their size, if they are forced to dump their milk.

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