JP Morgan CEO Jamie Dimon made it about as plain as it can get saying, "the President of the United States needs to stand up and say we may not meet our 2050 climate objectives because this is a f---g war.”
Zero-Hedge reported, “He also said, 'Time to stop going hat in hand to Venezuela and Saudi and start pumping more oil and gas in the U.S.A.”
Echoing what he has said before, Dimon said this is the way the U.S. maintains its standing, by pumping more oil and gas and using energy security to ensure Western unity. And he did say when it comes to ESG “investors don’t give a [shoot],” warning not to “cede governance to do-gooder kids on a committee.”
Regardless, Joe Biden’s economic adviser and avowed do-gooder Brain Deese suggested that they have no plans to turn back on their green energy transition. According to Fortune, “Brian Deese denied that U.S. efforts to sway the Saudis to hold off on production cuts were guided by political considerations. “What I’m saying to you is that our strategy has always been grounded in an assessment of the economics of the situation and what is prudent for the global economy, for the U.S. economy and U.S. families,” Deese said Thursday in an interview with Bloomberg Television.
This seems to suggest that the White House is oblivious to the pain that the green energy movement and the ESG movement are having, not only on the global economy, but the impact it’s having on the lives of the poor and the middle class. The poor and the middle class are bearing the burden of this green energy transition, while the rich global elites line their pockets.
It also seems to be ignoring the fact that going into winter we’re seeing acute shortages of distillate inventories, not only here in the United States, but especially in Europe. The shortages, in large part, have been caused by the green energy transition, which is helping spur a war between Russia and Ukraine and now put in danger the lives of many poor Europeans.
In the U.S., the EIA said that distillate diesel inventory in the United States decreased by 4.9 million barrels last week and is about 23% below the five-year average for this time of year. The reason why supplies are so tight and why they’re close to the lowest level we’ve seen almost from the 1950s – except for one-off in the 1990s – is because of the war on fuels, the heavy oil needed to produce diesel fuel. It’s been restricted not only because of the war in Ukraine but because of sanctions on Venezuela and the fact that the Biden administration decided to put more regulations on refiners making it harder for them to stay open.
In Europe Quantum Commodity Intelligence points out that diesel cracks in Europe have gone through the roof, as refining capacity is already squeezed and they’ve had refinery strikes and refinery outages.
The EIA shows U.S. inventories are tight all over. EIA says that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 9.9 million barrels from the previous week. At 439.1 million barrels, U.S. crude oilinventories are about 1% below the five-year average for this time of year. Total motor gasoline inventories increased by 2 million barrels from last week and are about 8% below the five-year average for this time of year. Finished gasoline inventories decreased, but blending components inventories increased last week.
The U.S. needs to turn back from this dangerous policy of energy dependence on other countries and take away the risk to the U.S. economy from both the geopolitical risk factor standpoint as well as an economic standpoint. The Biden administration should not squander all of the innovation that the U.S. oil and gas industry has made being the cleanest oil and gas producers on the planet.
Natural gas found a little bit of support because it got the first somewhat supportive EIA report in months. The EIA also says that U.S. households that primarily use natural gas for space heating will spend an average of $931 on heating this winter (October-March), which is $206, or 28%, more than last year. Natural gas is the primary heating fuel for 47% of U.S. homes, according to the U.S. Census Bureau’s 2021 American Community Survey. The retail price of natural gas and the amount of natural gas consumed largely determine how much households spend on winter natural gas bills. Higher retail natural gas prices are the main driver for the expected increase in natural gas heating expenditures this winter. On average, retail natural gas prices in the United States are expected to rise from $13.02 per thousand cubic feet (Mcf) last winter to $15.95/Mcf this winter, a 22% increase. We expect the largest increase on a percentage basis in retail natural gas prices to occur in the Midwest, where prices rise to $13.80/Mcf, a 27% increase compared with last winter.The increase in retail prices reflects rising natural gas spot prices over the past year. For example, the natural gas spot price at the U.S. benchmark Henry Hub will average $7.26 per million British thermal units this winter, up 54% from last winter. Changes in natural gas spot prices typically get passed through to retail prices over a period of months because of regulatory rate structures. Utilities generally cannot profit or lose money from natural gas commodity sales, the costs of which are passed through directly to the consumer.