Energy Report: Green Wash

Texas is getting back to normal while green energy proponents try to green each solar and wind epic failure. Oh sure, you can say that they were not probably prepared to face an unexpected arctic blast, yet when the going got tough, it was natural gas and coal that kept whatever power that Texas has, up and running. If you look at the fuels that worked and those that did not, it is clear that the use of power from nuclear, coal, and natural gas went up, while wind and solar crashed.

Fuel, Pump, Energy, Gas Pump, Gas Station, Diesel Fuel

Image Source: Pixabay

The failure of wind and solar caused the natural gas plants to shut, creating the domino effect that helped leave Texans in the cold. Yes, there was a host of other issues but if we do not acknowledge the fact that wind and solar are the most unreliable sources of energy on the grid, then this country will go down the path of energy weakness. Our economy will suffer. Also, don't believe anyone that tells you this cold blast was because of climate change! Texas has seen this type of cold snap many times before, even well before the industrial revolution. They can try to greenwash this, but we must take a lesson in our rush to green up the energy industry.

The Department of Energy reports that "An arctic air mass has receded after impacting the Central United States, bringing snow, ice, and extremely cold temperatures from the Canadian border as far south as Texas, causing record winter power demand and impacting power generation, natural gas and oil production, and refinery operations. The Electric Reliability Council of Texas (ERCOT) has returned to normal conditions after balancing generation and load to restore customers who were under controlled power outages across Texas since early Monday. The Southwest Power Pool (SPP) and the Midcontinent Independent System Operator (MISO) also implemented controlled outages on both Monday and Tuesday. Temperatures in Texas are expected to remain moderate throughout the week.

The Biden administration is in a rush to undue U.S. strength in the Middle East by extending the olive branch to Iran to rejoin The Joint Comprehensive Plan of Action known commonly as the Iran nuclear deal or Iran deal and could make the peace progress we have seen in the Middle East start to reverse. Israel is more at risk even as traditional foes in recent years have acknowledged their right to exist.

Oil traders must also prepare for a potential flood of Iranian oil if the U.S. rejoin the accord. Yet it might not be as quickly as traders thought last week. Iran’s grand Ali Hosseini Khamenei is signaling that he won't even talk to the Biden administration until all sanctions are lifted. I do not think even the Biden administration is ready for that seeing that Iran is currently violating the agreement and spirit.

Energy traders will also have to get ready for big draws in oil and product inventories. Refinery shutdowns, the biggest drop in U.S. production in history, will leave the country feeling the pain from this storm for some time. Massive drops in inventory and spikes at your local gas station. We do have some refineries that are restarting but it will be some time before we are getting back to normal.

Reuters reported that, "Exxon Mobil Corp has begun restarting its 369,024 barrel-per-day (bpd) Beaumont, Texas, refinery and adjoining chemical plant, a company spokesman said on Sunday. Exxon posted an online notice to nearby residents that the refinery was starting up after a shut-down driven by severe cold weather and the curtailment of the natural gas supply. Some units at the complex were kept in operation to return power to the grid, Exxon said in an earlier statement, producing 200 megawatts and supplying electricity to 100,000 homes.

North Sea oil production has been fading but to keep Brent a viable contract, they are tweaking it. Platts announced that from July 2022 it will incorporate into the current Brent basket (BFOET) a new grade: WTI Midland from the United States. The Brent benchmark won't just reflect just North Sea crude anymore.

Crude supplies should fall by 8 million barrels. Gasoline by 5 million barrels distillates by 5 million. 

Natural gas is fading with a bit of a warm-up yet may not be taking into account the massive production drop in the U.S.. Look to buy calls for summer on weakness. We should see a 343 withdrawal this week.

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Backyard Hiker 3 years ago Member's comment

Don't agree with this.