Can You Navigate Tight & Wet Spots?

Driving is a fairly simple procedure unless you go out of your way to make it difficult as these two clips clearly illustrate, tight wet spots can be tricky.

Plus a few thoughts on the future of car industry

June 21 2022 – USA

True, the national average price for a gallon of regular unleaded gasoline is back below $5 this morning. But the effects on one’s standard of living? They still sting.

It fell to Treasury Secretary Janet Yellen to take the bullet on the Sunday talk show circuit this past weekend… and deny that Biden administration policies have anything to do with it. (Which only reaffirms our ongoing suspicion she’ll “resign” sometime before the midterm elections.)

“Actually,” she said, “consumption of gas and fuels are currently at lower levels than pre-pandemic, and what’s happened is the production has gone down. Refinery capacity has declined in the United States and oil production has declined.”

Well, that’s true, as far as it goes. As we said last week, the number of U.S. refineries has plunged from 301 in 1982 to 129 as of Jan. 1, 2021.

But Yellen begs the question why refinery capacity is down.

“The last major refinery to be built in the U.S. was in 1977,” says the anonymous blogger who goes by the pen name Doomberg. “And by major, I mean more than 100,000 barrels a day. There’s been some small ones put in, and some specialty ones here and there. But by and large, because of environmental pressure, the U.S. has not made a new refinery at scale in 40 years, 45 years, which is pretty incredible,” he said in a recent interview with Real Vision.

Adds Mike Wirth, the CEO of Chevron, “I personally don’t believe there will be a new petroleum refinery ever built in this country again.

“At every level of the system, the policy of our government is to reduce demand, and so it’s very hard in a business where investments have a payout period of a decade or more,” Wirth said at a conference earlier this month. “And the stated policy of the government for a long time has been to reduce demand for [petroleum] products.”

Precisely. “Refineries and pipelines have a 30, 40, 50 or more year service life,” says statistics maven and financial blogger Karl Denninger. “Nobody in their right mind is going to put forward capital investment with a 30-year payback when you’re told that investment will be destroyed.”

And that threat is totally credible — indeed, a rare campaign promise that’s being kept. “I guarantee you, we’re going to end fossil fuel,” said Joe Biden in September 2019.

Which brings us to the bait-and-switch: “As a medium-term matter,” Yellen said, “the way in which we can assure reasonable energy expenses for households is to move to renewables to address climate change.”

The White House’s “climate czar” John Kerry is keen to accelerate the medium term: “We have to deploy renewables five times faster than we are right now,” he said last month at a conference in London. “We have to transition to electric vehicles about 20 times faster than we are right now.”

Dream on, says Doomberg: “That our politicians would think despite all the evidence before them, that somehow, we can wave a magic wand and accelerate the adoption of electric vehicles by a factor of 20 when we don’t have enough lithium, nickel or cobalt to even support the current growth trajectory. It’s just crazy. Where’s the diesel going to come from to mine all the cobalt and nickel and lithium that we’re going to need?”

Denninger again: “To make an EV battery you must dig up 500,000 pounds of earth. For one battery. Which has a service life, after which it must be replaced. Which has no current means of economically recycling the components either, so unless you’d like the price of the pack to wildly exceed the crazy levels it is at now you will throw the old away and buy another one with another half-million pounds of earth dug up. All of which are dug up, transported and processed using fossil fuels because there is no other rational way to do so.”

Yes, it’s bonkers. Not that it’s going to stop this bunch from trying, right?

➢ An ironic footnote from overseas: How well is Europe’s green transition going? Well, for lack of Russian natural gas at the moment, Germany, Austria and the Netherlands now plan to restart coal-fired electric power plants. (already happening)