EagleSpeak: 07/01/2023

Wednesday, July 19, 2023

Remember When We Were Protected from Oil Price Increases Because We Were Basically Petroleum Energy Independent?

Reuters headline Saudi Arabia, Russia deepen oil cuts, sending prices higher

Saudi Arabia and Russia, the world's biggest oil exporters, deepened oil cuts on Monday, sending prices higher despite concerns over a global economic slowdown and possible further interest rate increases from the U.S. Federal Reserve.

Oh. gosh, was it only a few years ago that the US was mostly petroleum independent? Well, Reuters has an article that declares that the US was not really energy independent, because, well, it depends on how you define "independence"

For Andrew Campbell, Executive Director of the Energy Institute at Berkeley Haas ( here ) “energy independence” is a “political slogan, not an economic or technical concept with a clear definition” often used by politicians to “imply that a country is insulated from global energy markets”.

“This is rarely the case,” he said.

“If a country produces all of the energy that it consumes, does not participate in international trade in energy, does not import energy-intensive products and does not send energy-related pollution to its neighbors or the atmosphere, then I would consider it energy independent. I don’t think any country meets that definition.”

Harrison Fell, a Senior Research Scholar at the Center on Global Energy Policy at Columbia University SIPA ( here ) said “energy independence is a tricky concept” and said it was often quantified by comparing energy production to energy consumption, but cautioned that the implications of this may be misunderstood.

So, we pass laws making it virtually impossible to build new refineries, which means we ship crude offshore to be refined, and that means we can't ever be energy independent?

Reuters also reports the EPA is screwing around small refiners by denying exemptions from a ridiculous law, which means lower output of gasoline and other products - which will raise the price of gasoline to consumers U.S. EPA denies nearly all biofuel blending exemption petitions

President Joe Biden's administration on Friday denied almost all outstanding petitions from oil refiners asking to be exempted from mandates that require them to mix biofuels into their fuel.

The Environmental Protection Agency (EPA), which has the authority to issue the exemptions, denied 26 petitions from 15 small refineries who applied for waivers for the 2016-2018 and 2021-2023 compliance years, the agency said on Friday. There are still two pending petitions.

The agency also disclosed which oil refiners submitted petitions in July 2022 or later, as well as which oil refiners are participating in an alternative compliance schedule that allows them flexibility in complying with biofuel blending laws.

Under the Renewable Fuel Standard (RFS), oil refiners must blend billions of gallons of biofuels into the nation's fuel mix, or buy tradable credits from those that do. The EPA can, however, award exemptions to some small refiners if they prove that the obligations cause them undue harm.

I keep being reminded of the old Walt Kelly comic in which Pogo announces who is responsible for problems, which when it appeared in 1971, was directed at the problem of pollution. Now we find the "cure"- when carried too far - is no piece of cake either. Moderation in all things.