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Biden to call for a suspension of all federal gas/diesel taxes for three months

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People act like EVs are the answer but that electricity EVs use is currently being generated primarily by fossil fuels. Solar and wind are highly inefficient.  If we want to greatly reduce fossil fuels we’d better start building nuclear power plants ASAP. 

And that assumes the rest of the world will follow suit. 

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On a related note from Seeking Alpha today:

U.S. oil refiners will try to convince the Biden administration not to ban exports of domestic fuel to combat record-high gasoline prices during tomorrow's scheduled meeting with Secretary of Energy Jennifer Grandholm, Reuters reported on Wednesday.

Refining executives reportedly will seek to make the case that an export ban would anger allies and lead to refining production cuts as companies lose access to global markets that have become crucial to revenues, ultimately raising prices.

The U.S. is the world's biggest exporter of refined products, and Mexico, Canada and Japan are among the top buyers of those partners, while Europe has increased purchases in recent weeks to make up for lost Russian supply.

"If refiners aren't allowed to export, they're just going to slow down production and cut the refinery utilization rate," Mizuho's director of energy futures Bob Yawger told Reuters, adding that excess products likely would be sent into inventories, which are at multi-year lows.

U.S. capacity to refine crude oil into fuel and other products has dropped below 18M bbl/day to hit its lowest level since 2014, according to the Department of Energy's latest annual refinery capacity report.

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On 6/22/2022 at 6:45 AM, bornontheblue said:

Attacking a supply problem with a demand solution. It will make the problem worse, while taking away money needed for roads. This is a dumb idea. 

Sadly this is what I was thinking too.

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On 6/22/2022 at 6:40 PM, grandjean87 said:

On a related note from Seeking Alpha today:

U.S. oil refiners will try to convince the Biden administration not to ban exports of domestic fuel to combat record-high gasoline prices during tomorrow's scheduled meeting with Secretary of Energy Jennifer Grandholm, Reuters reported on Wednesday.

Refining executives reportedly will seek to make the case that an export ban would anger allies and lead to refining production cuts as companies lose access to global markets that have become crucial to revenues, ultimately raising prices.

The U.S. is the world's biggest exporter of refined products, and Mexico, Canada and Japan are among the top buyers of those partners, while Europe has increased purchases in recent weeks to make up for lost Russian supply.

"If refiners aren't allowed to export, they're just going to slow down production and cut the refinery utilization rate," Mizuho's director of energy futures Bob Yawger told Reuters, adding that excess products likely would be sent into inventories, which are at multi-year lows.

U.S. capacity to refine crude oil into fuel and other products has dropped below 18M bbl/day to hit its lowest level since 2014, according to the Department of Energy's latest annual refinery capacity report.

 

Is Biden going to go "America first!!!"?  Seems this would piss off most of the g-20 outside of the Saudis and Russia while giving little relief at the pump here at home.

Don't do it Biden. 

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On 6/22/2022 at 7:01 PM, halfmanhalfbronco said:

 

Is Biden going to go "America first!!!"?  Seems this would piss off most of the g-20 outside of the Saudis and Russia while giving little relief at the pump here at home.

Don't do it Biden. 

It would be STOOPID.  

The key is it could cost refine efficiency.  That’s still our main supply constraint. 

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On 6/22/2022 at 7:12 PM, grandjean87 said:

It would be STOOPID.  

The key is it could cost refine efficiency.  That’s still our main supply constraint. 

Not a fan of any of the ideas floating out.  The tax holiday is meh.  The rebate cards would just make inflation worse.  This is the worst idea floated out yet though, primarily for that reason.

 

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On 6/22/2022 at 7:24 PM, halfmanhalfbronco said:

Not a fan of any of the ideas floating out.  The tax holiday is meh.  The rebate cards would just make inflation worse.  This is the worst idea floated out yet though, primarily for that reason.

 

They are political ideas not practical solutions.  The SPR release hasn’t seemed much of a help, but at least that was practical. It’s got a few months left.  I’d slow it gradually starting now. 

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On 6/22/2022 at 10:38 PM, bornontheblue said:

Biden is a fool. Brow beating gas station owners is ridiculous. They are not at fault here.

 

 

This is BS but it did not sound like he was blaming gas station owners.  Still, just dumb.  And you know clerks making less than livable wages are going to have to deal with more BS.

 

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On 6/22/2022 at 6:50 PM, grandjean87 said:

They are political ideas not practical solutions.  The SPR release hasn’t seemed much of a help, but at least that was practical. It’s got a few months left.  I’d slow it gradually starting now. 

Evergreen.

The political ideas could better align with the practical solutions if we weren't so entitled,  shortsighted and generally stupid, but here we are.

 

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On 6/22/2022 at 2:06 PM, East Coast Aztec said:

Okay, so it is a problem the Feds are doing it based on the intent belying the cause of the issue they have a hand in.

With the reserves being used, I wonder what the true supply issue is that is keeping prices high, or if that is just an easy excuse to mask all of the other variables, to include getting the industry stabilized or firms getting fat and happy on the margins.  Or just point at the easiest explanations because complexity hurts brains.

The supply issues are years in the making and multifaceted. Hostility against the industry has made it a less reliable sector for investment. The Trump years saw it focus on expansion instead of profits and the change in attitude between administrations has dampened even the expansion. Few want in because nobody knows what the environment for investment will be. With the stated goals of the current regime being kill the industry, who would want to? They’ve done plenty in the past year and a half to make it seem like a long term investment loser, so put your money elsewhere. Meanwhile, the world will struggle. I guarantee they aren’t being tight about supply because it’s more profitable to be, it’s not. They would love to be filling the gap and reaping the benefits.

We’re all sitting in the dugout. Thinking we should pitch. How you gonna throw a shutout when all you do is bitch.

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On 6/22/2022 at 11:28 PM, thelawlorfaithful said:

The supply issues are years in the making and multifaceted. Hostility against the industry has made it a less reliable sector for investment. The Trump years saw it focus on expansion instead of profits and the change in attitude between administrations has dampened even the expansion. Few want in because nobody knows what the environment for investment will be. With the stated goals of the current regime being kill the industry, who would want to? They’ve done plenty in the past year and a half to make it seem like a long term investment loser, so put your money elsewhere. Meanwhile, the world will struggle. I guarantee they aren’t being tight about supply because it’s more profitable to be, it’s not. They would love to be filling the gap and reaping the benefits.

Now I’m just a simple country lawyer but seems to me like there’s a ton of good old market demand for ev’s, solar, et al. I’d bet the room the energy companies are reading is bigger than just the posturing and attitudes of the last couple presidents.

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On 6/22/2022 at 8:30 PM, sean327 said:

Cash for clunkers was another dip shit ideas that hurt lower income people. It priced many out of the used car market. We still feel the effects of that stupid move today.

?? they had to have bad gas mileage. until we had a year and a half of disrupted new cars to mess upt he whole market, there were plenty of old ass civics and camrys to go around. 

Remember that every argument you have with someone on MWCboard is actually the continuation of a different argument they had with someone else also on MWCboard. 

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On 6/23/2022 at 4:28 AM, toonkee said:

 

Yep. It’s a purely political play by a president who is being bludgeoned politically by the high price of gas. This is the problem with answering to an electorate that thinks the president can wave a magic wand to lower gas prices. Bad ideas are spawned from the ignorance of the masses.

Ultimately, it won’t do much to help people. (It won’t do much to goose demand either.) And because it won’t pass, it will ultimately hurt him politically. So, great move there. 

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It doesn’t matter if it falls flat.  It may be just as well politically. Republicans stopping all the brave efforts to prevent gouging and lower gas prices.  Biden is no fool.  He’s the consummate political animal.  He and his team know the political scoreboard.  Doing/proposing nothing isn’t an option. 

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On 6/23/2022 at 5:28 AM, toonkee said:

 

Our legislature explored a "fee holiday" last session in an attempt to lure more business to Wyoming. Just from my section of my Department they would have lost $2.5MM in 3 months and it would have been a logistical nightmare to pull off. Naturally it got yanked.

There is no easy solution to combat this. The last 2 administrations have teed up this explosive inflation, and there's no quick way to fix it. I personally think the feds should start regulating energy companies to get costs in-check, but most people would probably call that over-reach (which they have every right to do).

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On 6/23/2022 at 7:04 AM, NVGiant said:

This is the problem with answering to an electorate that thinks the president can wave a magic wand to lower gas prices.

This. The right-wing strategy of “blame democrats for everything bad” works so well. If they get trump back and a majority in 2024 they’ll watch it go up to $15/gallon and find reason to celebrate. 

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On 6/23/2022 at 5:38 AM, toonkee said:

Now I’m just a simple country lawyer but seems to me like there’s a ton of good old market demand for ev’s, solar, et al. I’d bet the room the energy companies are reading is bigger than just the posturing and attitudes of the last couple presidents.

They’ve been reading it since 2014ish.  It’s just a long, long transition to Alt./renewables and the EV world.   I’m looking forward to catching the new Exxon docu.  Ironically, only a few years before the shale revolution fundamentally changed the U.S. oil market in relation to the global market after 4 decades of being a mass net importer ended.  By 2015, we ended the long ban on crude exports to help the light, sweet shale production find end markets. 

Until the pandemic production cuts, U.S. crude production charts went steadily up and to the right.  The cut in ‘20 was significant, but mostly because production recovery and new production time is so lengthy.  Capex spending continued to lag through ‘21.   It wasn’t about Joe Biden being mean to oil unlike Donald who liked “the oils”.  The ‘20 price plummet was worse, but it was the third or fourth one in a decade-plus.  No wonder capex remained a bit muted. 

U.S. firms are remarkably going to hit the pre-pandemic production highs w/in months.  If we have that recession, we’ll have plenty of oil for domestic consumption, Russian war continuing or not.  

Now, about refining capacity…

 

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