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"Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav

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On 10/26/2022 at 3:11 AM, Tom Nolan said:

https://oilprice.com/Latest-Energy-News/World-News/A-Diesel-Shortage-Is-Spreading-Across-The-US.html

A Diesel Shortage Is Spreading Across The U.S.

By Charles Kennedy - Oct 26, 2022, 2:00 AM CDT  {Read Article]

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 

https://oilprice.com/Latest-Energy-News/World-News/Energy-Execs-Tell-Granholm-Shuttered-US-Oil-Refineries-Wont-Restart.html

Energy Execs Tell Granholm Shuttered U.S. Oil Refineries Won’t Restart

By Julianne Geiger - Oct 25, 2022, 1:30 PM CDT

U.S. energy executives told Jennifer Granholm that shuttered crude oil refineries won’t restart, Valero’s Chief Executive Joe Gorder said on Tuesday.

The comments were made to the U.S. Energy Secretary at a recent White House meeting with energy executives, Reuters reported on Tuesday.

“The one interesting thing that came out of it, too, was there was consideration for the ability to restart refining capacity that had been shut down, and  I think the general sentiment was that wasn’t going to happen,” Gorder said.

Limited U.S. refinery capacity—and perhaps more critically, refinery capacity in specific U.S. geographic areas, known as PADDs—has spared worry in the United States over high gasoline prices and energy security.

US refinery run rates were north of 90% for much of the summer, according to the EIA’s Weekly Petroleum Status Report.

Shuttered refineries unlikely to start back up are the latest nail in the U.S. refinery coffin. In June, Chevron CEO Mike Wirth posited that there would never be another new refinery built in the United States.

“Building a refinery is a multi-billion dollar investment. It may take a decade. We haven’t had a refinery built in the United States since the 1970s. My personal view is that there will never be another refinery built in the United States,” Wirth said at the time.

Oil and gas companies would have to weigh the benefits of committing capital ten years out that will need decades to offer a return to shareholders “in a policy environment where governments around the world are saying ‘we don’t want these products to be used in the future,’” Wirth added.

Refinery utilization in the United States for the week ending October 14 was 89.5% of their operable capacity, the most recent EIA data shows.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

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More trouble in Paradise. The fish greenies stomp on the energy greenies:

US approves world’s largest dam demolition project in history

"U.S. regulators approved a plan Thursday to demolish four dams on a California river and open up hundreds of miles of salmon habitat that would be the largest dam removal and river restoration project in the world when it goes forward."

"enough to power about 70,000 homes"

"Across the U.S., 1,951 dams have been demolished as of February, including 57 in 2021, American Rivers said. Most of those have come down in the past 25 years as facilities age and come up for relicensing."

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https://oilprice.com/Alternative-Energy/Renewable-Energy/Americas-Electric-Grid-Cant-Support-The-EV-Revolution.html

America's Electric Grid Can't Support The EV Revolution

By Irina Slav - Nov 21, 2022, 10:00 AM CST
  • America’s electric grid is in dire need of a makeover.
  • While the Inflation Reduction Act has promised a lot of money into renewable energy and electric vehicle infrastructure projects, more focus needs to be placed on America’s ailing grid.
  • Without much-needed upgrades to the grid, both the renewable and EV revolution could face major challenges.

The Inflation Reduction Act that Congress passed earlier this year was hailed by the wind, solar, and EV manufacturing industries and environmentalists as the key to the energy transition, providing billions in funding for low-carbon electricity production and, of course, EVs.

Because of the ambitious EV plans of the administration—and of several state governments—building a charging network across the country was a crucial part of the IRA. But it could turn out to be one of those things that are easier said than done.

A recent study by the U.S. division of British National Grid—in partnership with a couple of transition nonprofits and two EV-focused tech firms—found something that electricity-savvy people have been saying for years: the EV revolution will lead to a massive uptick in electricity demand.

It’s not just the increase in demand, either. It’s a specific increase in demand at future charging points for EVs and trucks that would make it necessary to increase the supply of electricity at these points. And this increase will need to be quite substantial. 

According to the study, which focused on New York and Massachusetts to gather its data and make its predictions, current traffic patterns in the two states suggest that many sites—such as truck stops, for example—would need to be equipped with 20 fast EV chargers or more in a best-case scenario where the adoption of EVs and electric trucks is as massive as hoped.

And this, in turn, means that these sites would require the same amount of electricity as a small town, the study’s authors note. Now, let’s extrapolate from the New York and Massachusetts data: mass adoption of EVs and electric trucks would likely lead to the emergence of a lot of “small towns” across the United States. And some of the country’s utilities are already experiencing trouble securing a reliable supply of electricity.

This summer, blackouts were a threat in several parts of the United States, and not just California, which has had these problems before, None other than MISO, the Midcontinent Independent System Operator, which oversees the Midwest’s grid, said there is a risk of blackouts because the supply of electricity is falling behind demand. And the reasons for this discrepancy are far from gone 

At the time, the risk was explained by greater exports of coal and gas to Europe amid the continent’s supply crunch in the wake of the Russian sanctions but also with the retirement of coal and gas-powered plants.

“Conventional power plants are being retired and there are significant supply chain and technology challenges to replace this base load power. Planned renewable energy and storage projects are being delayed and costs are rising due to these challenges,” one energy cooperative wrote in June.

A Bloomberg author, Tom Randall, dismissed the problem of electricity supply in a commentary piece on the National Grid study, saying that even if all carmakers stopped making ICE cars by the early 2030s, this would increase global electricity consumption by “no more than” 15 percent by 2040, per BloombergNEF data. That 15 percent might seem like nothing much to some, but it is, in fact, 15 percent of a huge figure. For example, in 2019, the last year before the pandemic, the world consumed 22,848 TWh of electricity, which was up 1.7 percent from 2018, according to IEA figures.

The two pandemic years featured a slump in this consumption, but since 2021, demand for electricity has rebounded, and it has rebounded strongly. Over the first half of the year, according to transition nonprofit Ember, global electricity consumption reached 13,393 TWh, up from 13,004 TWh 

Related: Russia’s Oil Output Set To Fall By 1.5 Million Bpd In December

So far, so good, because, Ember added, the whole increase in demand for electricity was met by additional wind and solar power capacity. An argument echoed by Bloomberg’s Randall, a buildup in wind and solar has been promoted as the solution to any potential shortfalls in electricity supply.

In fact, Randall made a point of not only brushing aside any concerns about shortfalls, but said that “In the age of cheap wind and solar power, that’s [the 15-percent consumption increase] not a lot.”

The fact is that the age of cheap wind and solar power is on its way out, and this is what could really change the economics of all those optimistic clean energy and transport electrification plans 

In the EU, some are already sounding the alarm already. Solar power equipment manufacturers are calling on governments for more financial help because their costs are soaring and costs are soaring because electricity and fossil fuel costs are soaring, and the production of solar power equipment is often an energy-intensive process, ironically dependent on fossil fuels.

The U.S. appears to have been more generous with its support, but no amount of government subsidies can solve the problem of the looming supply shortage in key materials such as copper and lithium.

These shortages are already beginning to push up the costs of EVs as well as wind and solar installations. It might be wise not to try and overlook this aspect of transition efforts when making plans for adding the equivalent of dozens of new small towns to the U.S, or any other, grid.

By Irina Slav for Oilprice.com

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On 11/9/2022 at 6:00 PM, RichieRich216 said:

What blood bath, Republicans control the house therefore the check book! Either your not from America or you were smoking pot and missed your education!

Likewise einstein

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I am astonished to the degree in the skill you have in the use of words

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On 11/21/2022 at 2:48 PM, RichieRich216 said:

I am astonished to the degree in the skill you have in the use of words

We occasionally read your scribes here and find them quite entertaining and laughable. Glad you have a high opinion of yourself.

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Even though you are alert wing DemocRat/Socialist hope you and yours have a Happy Thanksgiving if you practice this holiday!

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On 11/9/2022 at 2:33 PM, Itsover In2020 said:

How's that bloodbath working out for ya?

Took the House, Lame Duck President besides a stupid old man.

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2 hours ago, RichieRich216 said:

Took the House, Lame Duck President besides a stupid old man.

Yep, nothing to do but nominate judges.

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Most open Judge position were filled by President Trump. Hope you and yours have a Happy Thanksgiving if you practice it!

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On 11/22/2022 at 8:49 PM, RichieRich216 said:

Most open Judge position were filled by President Trump. Hope you and yours have a Happy Thanksgiving if you practice it!

Biden has appointed more federal judges than any president since JFK at this point in his tenure

FT_22.08.04_BidenJudges_1.png?w=640

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9 hours ago, Jay McKinsey said:

Biden has appointed more federal judges than any president since JFK at this point in his tenure

FT_22.08.04_BidenJudges_1.png?w=640

The District Court judges just hear cases, not interpret law. Trump appointed more Appellate Court Justices. In addition, only 3 of the Appellate Court Justices and zero of the Supreme Court Justices replaced Republicans with Democrats. This is where legal opinions take place. Trump was able to flip many Appeals Courts from Democrat dominated to Republican dominated (also Pew Research.) 
"The appointments, all for life, have led to the ideological “flip” of three of the country’s 13 federal appeals courts, one level below the Supreme Court. The Atlanta-based 11th U.S. Circuit Court of Appeals, the Manhattan-based 2nd Circuit and the Philadelphia-based 3rd Circuit all had Democratic-appointed majorities when Trump became president in 2017."
https://www.reuters.com/article/us-usa-trump-legacy-factbox/factbox-donald-trumps-legacy-six-policy-takeaways-idUSKBN27F1GK

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10 hours ago, Jay McKinsey said:

Biden has appointed more federal judges than any president since JFK at this point in his tenure

FT_22.08.04_BidenJudges_1.png?w=640

Key Circuit and Supreme Court are Republicans

 

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5 hours ago, RichieRich216 said:

Key Circuit and Supreme Court are Republicans

 

HaHa, yep and that is a big reason you lost the election. Republicans will never win the Presidency again as long as abortion is in play.

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In a world where China has not yet recovered to pre-covid levels and where tourism travel is also not yet recovered is addressing a supply/demand ratio the answer to the high gasoline prices? I remember not all that long ago (pre-covid) where oil was over $100 and consumption (demand) was higher than it is right now (world economies were booming), and gasoline was about 30% cheaper than it is now, with oil at only about $80 as of the writing of this post. So why is it that with oil prices about 25% lower than then and demand lower and supply higher than then, is gasoline prices about 30% higher than then? A look at ANY major oil companies quarterly report might hold the answer. Oil companies are gushing with record profits not even thought of just a few years ago! The US is built on the assumption that the "Free" market will set prices but the market is NOT free right now! That would need competition to be a factor which it clearly is NOT! Oil companies have united in an all out attack on the clean energy agenda (to save our planet) and are holding the world economies hostage. Can OPEC production effect gas prices? YES of course it can... in a "Free" market, but in a world ruled simply by corporate greed, NO it does not!! Lower oil prices simply means more corporate profits that in a united oil company attack does not create competition. Does OPEC set the price of gasoline or do the oil companies? Are the corporate insane levels of profits coming from $80 oil or the price of gasoline?  Because of free market rules there is only so much the Biden administration can do and they are doing what they can! The solution has to come from the market, the PEOPLE!! We have to unite as the greedy oil companies have, and answer in one LOUD voice that profits are ok and expected of companies, but destroying the world economies is NOT ok!! We need to pick one of the oil companies and STOP buying their gasoline till they lower gas prices 10%!! Then buy all gasoline from them till another oil company lowers their gasoline prices another 10% lower than that, till a reasonable profit level is reached!! There are technologies that will make oil companies MUCH cleaner than they are but instead of making those investments it is more profitable to BEAT the economy into submission!! Their demands ... Let us continue to kill the planet or we will kill the world economies!! Have you noticed when oil goes up "X" amount, gasoline jumps 10 cents but when oil drops back to that SAME previous price gasoline drops 5 cents? So we are left with a decision, do we unite and address the REAL culprit in this crisis or do we submit and kill the planet?? Another question... In a world of clean energy will we ever be vulnerable  to oil company greed like this again? Or have to go hat in hand to OPEC again?In a world where the answer to these questions is NO, is that world worth the fight now? YES!!!

  • Rolling Eye 2

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13 hours ago, Jay McKinsey said:

HaHa, yep and that is a big reason you lost the election. Republicans will never win the Presidency again as long as abortion is in play.

After the Current Performance oF Biden, Who has dementia, and Harris, who can not put a sentence together even though it's written and on the teleprompter, it would easily be a safe bet.

So take out you tin can, and let's bet! 

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On 11/2/2022 at 11:34 AM, Gregory1972 said:

I find it disturbing how easily we can be manipulated by the Saudi's.

Whats really disturbing is the Republican Party  crying about American debt and yet running up 7.8 Trillion more in debt when in power, claiming to be "for" police but voting against funding them, claiming to support the military yet voting against their health benefits, claiming to be against the inflation crisis yet voting against every effort to reduce the inflation, supporting the oil companies which are the absolute cause of the inflation, fighting to keep health costs at the highest costs to the population in the world, claiming to be against crime yet laundering Russian mob money in a certain someone's casinos, claiming to be supporters of the constitution and doing everything they can to suppress or downright take away the peoples right to have their vote counted etc... Yet EVERY time they get in power they prove what they are really for, reduce taxes on the rich, run up the debt and blame the democrats for the mess they leave behind and somehow the obvious escapes their base. Trump once said in an interview "Lets face it, if everyone got to vote the Republicans would never get in power". Another quote of his is " Don't believe what you see, believe what i tell you." Is the Republican base really that unable to process information and facts that they cannot believe their own eyes and simply have the mental limitations that will only allow them to believe what they are told to believe? I am afraid the evidence does not support a good answer to that question, which is probably one of the reasons Biden wants to raise family incomes, lower family costs of living and make community college free. Speaking of college how is it that Republican politicians are within their right (being millionaires themselves) to accept MILLIONS in forgiven loan debt yet it is unconstitutional and unAmerican for the average American to accept or receive 10 or 20 thousand in college debt relief? Here is one last question on the integrity of a Republican politician... How can you tell when a republican politician is lying?... Their lips are moving!!

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10 hours ago, Peterwp said:

there is only so much the Biden administration can do and they are doing what they can! The solution has to come from the market, the PEOPLE!!

I am neither Republican nor Democrat.  I am a Voluntaryist.   Peter, You are correct that the "solution" resides in the people.  But first, you need to really research what this "Climate Change agenda" is all about and who is really promoting it and why.  Until you have all the facts about who is behind it and why, you are pimping the enslavement of the population by those who want to deceive and control you.  A political faction (Democrat or Republican) cannot solve the situation.

See this

 

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Authored by Tsvetana Paraskova via OilPrice.com,

https://www.zerohedge.com/energy/us-shale-boom-officially-over

The US Shale Boom Is Officially Over

Tyler Durden's Photo
by Tyler Durden
Friday, Nov 25, 2022 - 10:20 AM

Authored by Tsvetana Paraskova via OilPrice.com,

  • The days of the U.S. shale boom may be over, with production rising at a much slower rate than it did before the 2020 crash and showing no signs of ramping up.

  • A combination of supply chain constraints, inflation, and the new shareholder-focused strategy of shale companies have transformed how the industry operates.

  • With shale production facing headwinds, OPEC has regained its position as the world’s swing producer.

The days of explosive growth in U.S. shale oil production are over. American oil production is rising, but at a much slower pace than it did before the 2020 crash, and at lower rates than expected a few months ago.

The new priorities of the shale patch – capital discipline and a focus on returns to shareholders and debt repayments – have coupled with supply chain constraints and cost inflation to drag down U.S. oil production growth.

The Biden Administration’s mixed signals to the American oil and gas industry, with frequent blaming of the sector for high gasoline prices and, most recently, a threat of more taxes, are not motivating U.S. producers, either. Many are reluctant to commit to spending more on drilling when there isn’t any medium-to-long-term vision of how the U.S. oil and gas resources could be used to boost America’s energy security and help Western allies who depend on imports.

2022-11-24_ftvlxudm9p.jpg?itok=93RcVLHZ

Oil Production Growth Forecasts Lowered 

This year, the U.S. Energy Information Administration (EIA) and various analysts have been downgrading their forecasts of crude oil production for 2022 and 2023. Although the EIA still expects output to set a new annual average record next year, it has significantly revised down its projections since the start of this year.

Oil firm executives, for their part, say the U.S. Administration’s policies and anti-oil rhetoric, inflation, contractor time delays, and regulatory uncertainty are negatively impacting drilling and production planning.

The EIA expects U.S. crude oil production to average 11.7 million barrels per day (bpd) in 2022 and 12.4 million bpd in 2023, which would surpass the record high set in 2019, per the November Short-Term Energy Outlook.

Despite the expectation of a record output next year, the EIA has downgraded the numbers several times in 2022 so far. The latest cut is a massive 21% reduction in the growth estimate, according to calculations by Reuters.

In the October forecast, the EIA had already downgraded the average production estimate for 2023 to 12.4 million bpd from the September forecast of 12.6 million bpd.

“Lower crude oil production in the forecast reflects lower crude oil prices in 4Q22 than we previously expected,” the administration said in October.

Weeks before the Russian invasion of Ukraine, which upended global energy markets, Enverus Intelligence Research expected U.S. oil production growth to accelerate in 2022 above around 900,000 bpd.

However, inflation and supply-chain delays from the second quarter onwards have materially worsened the outlook on U.S. crude oil production growth. Enverus Intelligence Research (EIR) cut this month its forecast for U.S. production growth, due to “the headwinds created by oilfield services limitations, the risk of recession and reduced performance from wells drilled recently in the Permian Basin.” 

Therefore, the Lower 48 oil production forecast has been significantly downgraded and EIR now expects growth of around 450,000 bpd exit-to-exit in 2022 and 560,000 bpd growth for 2023.

“OPEC Back In The Driver’s Seat” 

A top industry executive said last week that the U.S. shale patch is no longer the swing oil producer and OPEC is back as the most important driver of oil supply fundamentals. 

“Shale was thought of as a swing producer, the Saudis and OPEC have waited this out. Now, really OPEC is back in the driver’s seat where they are the swing producer,” Hess Corp CEO John Hess said at a conference in Miami last week.

The executive believes that U.S. crude oil production will average 13 million bpd over the next few years, where it will plateau, as investors pressure U.S. oil companies to focus on returning money to shareholders instead of investing in aggressive growth strategies.  

The current state and prospects of the U.S. oil industry are in stark contrast with the growth of the decade to 2019.

Between 2009 and 2019, U.S. producers captured all the incremental global consumption in three out of 10 years and at least two-thirds of incremental consumption in six of those years, according to estimates by Reuters’ senior market analyst John Kemp.

“US liquids production increased by 10 million b/d from 2011 to 2022, capturing a scarcely believable 10% of global supply in the process,” Wood Mackenzie said last month. Nearly 6 million bpd of that increase came from Lower 48 crude and condensate production, with two-thirds from the Permian Basin alone, while the rest of the increase is natural gas liquids produced from shale gas plays.

This year, while U.S. oil and gas production continues to increase, the growth is capped by cost pressures and supply-chain delays, executives said in the Dallas Fed Energy Survey for the third quarter. The shale patch cites labor and equipment shortages, as well as the Biden Administration’s inconsistent policies, as the key hurdles to expanding drilling activity.

The administration's lack of understanding of the oil and gas investment cycle continues to result in inconsistent energy policies that contribute to rising energy costs. This continued inconsistency increases uncertainty and decreases investments in energy infrastructure,” an executive at an oilfield services firm said in comments to the survey.

“We are in an energy death spiral that will lead to higher highs and lower lows. Volatility will increase, and the public is in for a very difficult ride.”

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17 hours ago, Peterwp said:

In a world where China has not yet recovered to pre-covid levels and where tourism travel is also not yet recovered is addressing a supply/demand ratio the answer to the high gasoline prices? I remember not all that long ago (pre-covid) where oil was over $100 and consumption (demand) was higher than it is right now (world economies were booming), and gasoline was about 30% cheaper than it is now, with oil at only about $80 as of the writing of this post. So why is it that with oil prices about 25% lower than then and demand lower and supply higher than then, is gasoline prices about 30% higher than then? A look at ANY major oil companies quarterly report might hold the answer. Oil companies are gushing with record profits not even thought of just a few years ago! The US is built on the assumption that the "Free" market will set prices but the market is NOT free right now! That would need competition to be a factor which it clearly is NOT! Oil companies have united in an all out attack on the clean energy agenda (to save our planet) and are holding the world economies hostage. Can OPEC production effect gas prices? YES of course it can... in a "Free" market, but in a world ruled simply by corporate greed, NO it does not!! Lower oil prices simply means more corporate profits that in a united oil company attack does not create competition. Does OPEC set the price of gasoline or do the oil companies? Are the corporate insane levels of profits coming from $80 oil or the price of gasoline?  Because of free market rules there is only so much the Biden administration can do and they are doing what they can! The solution has to come from the market, the PEOPLE!! We have to unite as the greedy oil companies have, and answer in one LOUD voice that profits are ok and expected of companies, but destroying the world economies is NOT ok!! We need to pick one of the oil companies and STOP buying their gasoline till they lower gas prices 10%!! Then buy all gasoline from them till another oil company lowers their gasoline prices another 10% lower than that, till a reasonable profit level is reached!! There are technologies that will make oil companies MUCH cleaner than they are but instead of making those investments it is more profitable to BEAT the economy into submission!! Their demands ... Let us continue to kill the planet or we will kill the world economies!! Have you noticed when oil goes up "X" amount, gasoline jumps 10 cents but when oil drops back to that SAME previous price gasoline drops 5 cents? So we are left with a decision, do we unite and address the REAL culprit in this crisis or do we submit and kill the planet?? Another question... In a world of clean energy will we ever be vulnerable  to oil company greed like this again? Or have to go hat in hand to OPEC again?In a world where the answer to these questions is NO, is that world worth the fight now? YES!!!

Ah, typing on backwards day.  So let me translate for the rest of rational human beings... What you mean in reality is low energy prices = no one looking for more efficient forms of  transportation and when energy prices are high, more efficient means of transportation are sought...  Yes, that is how economics work, I agree...  Oh wait, you typed the opposite of reality.  Two thumbs up!

So according to your brain drain, companies can take losses, but not profits.  Ah, spoken like a true thief/communist/progressive/socialist(is no difference)

Ah yes, play make believe the planet can be killed.  Uh, no.  Plant and animal life THRIVE on higher CO2 levels.  co2science.org should be your stop of choice to inform your ignorance where you can then look up said studies... After reading/studying a basic biology book/class.  Plant life and invertebrates LOVE higher CO2, this is their Fertilizer and allows them to work using fewer minerals and use less water.  If we can hit 600ppm(50% increase over today), Rice, etc will yield 66% more food per acre and do so in a quicker time period, using LESS minerals and LESS water.  That is an average of 10 different studies by the way...  Your doomsday fool prophets didn't bother to tell you this did they?

Do you like bread?  At 900ppm CO2, Wheat produces 80% more per acre(4 different studies).  In one study, at temps averaging over 30C(much hotter than today for where wheat is grown) wheat production per acre will DOUBLE if CO2 increases.  Your doomsday fool prophets didn't bother to tell you this did they?

If you like flowers, (most of our food comes from flowers) then Roses and many others will DOUBLE the number of roses per plant as high CO2 tells plants that there is PLENTY of food available to convert into their seeds.  Your doomsday fool prophets didn't bother to tell you this did they?

But hey, basic science you know... Plant life's ability to adapt is based on CO2, not water, not temperature.  Their range for where they can grow increases with available CO2 and their range shrinks as CO2 levels shrink.  Your doomsday fool prophets didn't bother to tell you this did they? 

Animals, last I checked, eat plants and other animals who eat plants.  More plant life able to grow over a wider range using less inputs, = MORE animals who can eat plants and more animals who eat both. 

But hey, basic science. 

 

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Biden Screws Americans on their 401(k)s with ESG regulations

(It was sneaky...happening on Thanksgiving week.  See this:  https://www.zerohedge.com/political/thanksgiving-biden-stuffs-americas-401ks-esg

WSJ editorial: Biden Puts Your 401(k) to ESG Work

The Biden regulatory machine doesn’t rest, even in Thanksgiving week. On Tuesday the Labor Department finalized a rule that empowers retirement plan sponsors to invest based on environmental, social and governance (ESG) factors and put your 401(k) to progressive political work.

The Labor Department casts its rule as a mere clarification of the 1974 Employee Retirement Income Security Act (Erisa), which requires that retirement plan sponsors act “solely in the interest” of participants and beneficiaries. A Trump Labor rule barred retirement managers from considering factors that weren’t material to financial performance and risk.

Asset managers and union pension plans claimed the Trump rule limited their discretion to consider such ESG factors as climate, workforce diversity and labor relations. The Biden DOL says it created a “chilling effect” on ESG investing. Its replacement rule gives plan sponsors nearly unlimited discretion and legal protection to invest based on these often political considerations.
“A fiduciary may reasonably conclude that climate-related factors” including “government regulations and policies to mitigate climate change, can be relevant to a risk/return analysis of an investment,” the rule says. Ditto workforce diversity, inclusion and labor relations since they may affect employee hiring, retention and productivity.
….

The main point of the Biden rule is to give legal protection to retirement plan fiduciaries that invest based on ESG. A secondary goal is to steer more retirement savings into ESG funds that often charge higher fees by allowing retirement sponsors to offer them as default options in 401(k) plans. Workers automatically enrolled in default funds can opt out, but they usually don’t.

AND

FTX had stellar ESG ratings right before implosion

FTX Bankruptcy Exposes ESG’s Flaws

ESG ratings agencies such as S&P Global, MSCI, Sustainalytics, and Truvalue Labs calculate scores for individual companies and compile ESG indices based on a variety of factors such as the degree of diversity among board directors, exposure to greenhouse gas emissions, firearms, and human rights violations. According to an ESG score from Truvalue Labs, FTX scored higher on “leadership and governance” than ExxonMobil. However, FTX’s new CEO overseeing the bankruptcy stated, when talking about FTX, that he had never “seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information.”

Although still under investigation, FTX has been accused of several corporate governance failures. The company lacked a coherent board of directors. It also allegedly transferred customer funds to crypto hedge fund Alameda Research to conduct speculative transactions, failed to establish proper cash management procedures, and possessed unaudited financials.

When Sam Bankman-Fried (SBF) led FTX, the company prided itself on its social and environmental activism. The FTX Foundation, FTX’s charity arm, stated its dedication to climate change, animal welfare, and future pandemic prevention. The Foundation established projects such as the Future Fund, which was funded mainly by FTX’s top leaders, to “make grants to nonprofits and individuals, and investments in socially-impactful companies.”

While noble causes at face value, the board of directors’ fiduciary duty is to its shareholders and ensuring the maximization of financial returns. Too much focus on ancillary ESG factors distracts from a company’s fiduciary duty.

WSJ editorial: Sam Bankman-Fried Becomes an ESG Truth-Teller

Mr. Bankman-Fried is also acknowledging that he genuflected to regulators and Democratic lawmakers to win political protection. ESG ratings company Truvalue Labs even gave FTX a higher score on “leadership and governance” than Exxon Mobil, though the crypto exchange had only three directors on its board. The directors were Mr. Bankman-Fried, another FTX executive and an outside attorney. Truvalue Labs says FTX was given an overall “laggard” score.

“ESG has been perverted beyond recognition,” Mr. Bankman-Fried confessed in an interview this week with Vox in which he also acknowledged that his advocacy for strong crypto regulations was “just PR.”

He said he feels “bad for those who get” harmed by “this dumb game we woke westerners play where we say all the right shiboleths [sic] and so everyone likes us.” Ah, yes, the poor saps who invest in companies because they claim to be sustainable.

JDSupra: Evaluating ESG In The Aftermath of FTX

At this time, there is no fully agreed-upon measure of what items should be evaluated in determining an ESG score, and there also is no agreement on how these items should be evaluated. That remains up to the individual entity itself, which obviously causes problems. There are organizations that try to publish their own guidelines about how to do this, but so far there is no “rating agency” using metrics generally agreed-upon in the same way as Moody’s and Standard & Poors work in the financial agency (although we saw in 2008 how susceptible they are to malfeasance).

Now comes FTX, which in one day literally wiped out billions of dollars of shareholder value, and is threatening the entire crypto-currency industry. As more information comes out about FTX, it becomes more likely that even the most basic levels of corporate governance and institutional transparency may not have been met. Indeed FTX’s new CEO, John J. Ray III, wrote in a bankruptcy court filing that “never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

What makes this failure at FTX relevant to the corporate, governmental and airport world is that, just last week, it became public that one of the agencies trying to rate companies for ESG, Truvalue Labs, had given FTX a higher ESG score for governance than it had given to Exxon Mobil. Again, this score was given to FTX by an ESG rater despite the fact that it appears FTX had almost no level of corporate governance.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 

The Employee Retirement Income Security Act (ERISA) of 1974 is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry.

ERISA imposes a fiduciary duty on these players, and in one particular, the employers in selecting appropriate funds for default choices in 401(k)s. Before this latest move by the Biden admin, the fiduciary duty meant the focus was the financial performance of the fund (and thus focused on the investment strategy and the fees charged), and so this kept a rein on how outlandish the funds could get.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Points and Figures: The Newest Web: ESG Investing is a Fraud

But, if you are a mom-and-pop, you might put your money in a Fidelity-type fund. Due to the change in language, the manager of that fund can now invest into companies that will yield zero or negative return and suffer no consequences from doing it. Not only that, the government has shielded them from legal consequences as well.

The line about how the Trump administration verbiage “chilled” investment into these sorts of entities is telling. The language was put in to prevent fraud. That bad orange man Trump “limited their financial discretion”. Oh, the humanity. They might actually have to compete and earn the best return on investment for their customers.

The people in the game can’t play the game if they have to suffer legal consequences for playing it. They have to compete. They don’t want to compete because they might lose.

All this stuff that is being rammed down your throat invites fraud. It’s an engraved invitation with no RSVP on it. Come when you want as long as you toe the line. When you don’t have standards, you can’t have competency. If you can’t be held accountable, then you can do anything you want in the name of whatever cause du jour is the current thing.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Some script taken from...  https://marypatcampbell.substack.com/p/esg-and-erisa-pity-the-poor-tort

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On 11/2/2022 at 12:53 PM, Tom Nolan said:

https://oilprice.com/Energy/Crude-Oil/How-OPEC-Outplayed-Biden.html

How OPEC Outplayed Biden

By Robert Rapier - Nov 01, 2022, 5:00 PM CDT

  • Although the SPR has been used infrequently for “emergencies”, it has been used frequently by politicians seeking to influence gasoline prices in election years.
  • President Biden’s attempt to bring down gasoline prices with the largest SPR release in history has backfired.
  • Saudi Arabia took advantage of Biden’s political vulnerability to capitalize on higher oil prices.

In December 1975, when memories of gas lines were fresh on the minds of Americans as a result of the 1973 OPEC oil embargo, Congress established the Strategic Petroleum Reserve (SPR). The law was designed “to reduce the impact of severe energy supply interruptions” such as that caused by the embargo. This crude oil is stored in underground salt caverns at four major oil storage facilities in the Gulf Coast region of the United States. There are two sites in Texas and two sites in Louisiana.

Is the SPR Obsolete?

There was once a period during which the U.S. was heavily dependent upon OPEC for oil imports. Just a few years ago, OPEC was responsible for about 40% of the oil we imported. Today that has declined to about 10% as a result of the resurgence of U.S. oil production.

The U.S. was a total petroleum net exporter in 2020 and 2021. We still import about 8.5 million barrels per day (BPD) of crude oil. However, we export a bit more than that in petroleum and finished products.

Why, then, does the SPR still matter? Does the SPR still make sense given the turnaround in U.S. oil production? We can certainly argue that with the growth of U.S. oil production over the past 15 years, the SPR has become less important than it was when it was originally established.

But selling off the oil in the SPR is a risk. According to the Department of Energy’s website on the SPR:

“SPR oil is sold competitively when the President finds, pursuant to the conditions set forth in the Energy Policy and Conservation Act (EPCA), that a sale is required. Such conditions have only existed three times, most recently in June 2011 when the President directed a sale of 30 million barrels of crude oil to offset disruptions in supply due to unrest in Libya. During this severe energy supply interruption, the United States acted in coordination with its partners in the International Energy Agency (IEA). IEA countries released altogether a total of 60 million barrels of petroleum.”

The Politics of the SPR

Although the SPR has been used infrequently for “emergencies”, it has been used frequently by politicians seeking to influence gasoline prices in election years. There is a long history of this. Arguably, this was the primary reason that earlier this year President Biden announced the largest SPR release in history.

Since the beginning of the year, nearly 40% of the SPR has been sold off. It is at its lowest level since 1984. This has undoubtedly helped drive down oil prices, but this situation is unsustainable. We now have significantly less oil in reserve should a true emergency occur. A significant supply disruption in the Middle East, Venezuela, or Nigeria could quickly remind us of the SPR’s importance.

But why should any of this matter if we are essentially self-sufficient in our oil production? For the same reason, the loss of Russian imports earlier in the year helped drive gasoline prices much higher. The oil we import is a good match for U.S. refineries, and often the oil we export is not. So, a substantial loss of oil imports — and an inability to make up for that loss with the SPR — could cause significant disruptions that lead to price spikes in both oil and gasoline prices.

Related: Colombia’s Oil Industry In Jeopardy As Cocaine Production Soars To New Record

Saudi Arabia certainly recognizes this vulnerability, and they have used it against us. Over the past six months, the U.S. has drawn down the SPR by close to 1 million BPD. But at its most recent meeting, OPEC — led by Saudi Arabia — announced plans to reduce oil production by 2 million BPD from November levels.

The SPR as Insurance

I have compared the SPR to an insurance policy on your home. The odds that your home will be destroyed are small. But, if it does happen you will be very glad you had that homeowner’s policy.

Now consider that you greatly reduced your insurance coverage, AND someone had an incentive to somehow profit from that. You have placed yourself in an extremely vulnerable position.

That’s where we are now. We are more at the mercy of OPEC than we have been in a few years. I don’t think there’s any question that Saudi Arabia, in particular, would rather deal with Republicans (especially with Donald Trump).

So, in effect they are killing two birds with one stone. By restricting production, they are potentially hurting the Biden Administration by driving up oil prices. Second, the drawdowns from the SPR have cost them money, and this will be a way for them to profit from our vulnerability.

By Robert Rapier

More Top Reads From Oilprice.com:

 

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This prediction has worked out well as gas coil and oil prices have all fallen and US dependcy on coal and gas for power generation is falling by the month

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The Labor Department casts its rule as a mere clarification of the 1974 Employee Retirement Income Security Act (Erisa), which requires that retirement plan sponsors act “solely in the interest” of participants and beneficiaries. A Trump Labor rule barred retirement managers from considering factors that weren’t material to financial performance and risk.

Asset managers and union pension plans claimed the Trump rule limited their discretion to consider such ESG factors as climate, workforce diversity and labor relations. The Biden DOL says it created a “chilling effect” on ESG investing.

So i am afraid you are misrepresenting the facts as republicans are so consistent in doing. As you claim not to be a republican then i would conclude it is you my friend who is unknowingly pimping for the wrong team.Let me start by saying i am an oil and gas investor but i invested in one of ( if not the) most ESG responsible oil and gas companies in North America and pleased to say i am up about 120% so far this year, so i am NOT against oil and gas companies, just the dirty ones! ESG IS a factor in investing as it is an investment movement and profitable companies can (and DO) have their stock go down and unprofitable companies have their stock (and DO) go up, and it is factors including ESG that contribute to this. Let me address the Trump law passed which is TOTALLY political nature. Trump was Republican leader, oil companies are by FAR the biggest donors to the Republican party...need i say more? Trump did NOT address the fraud you mention he addressed the investment movement that was hurting oil stock prices, actually making it illegal to invest in ESG considerations. Fund managers themselves say this was hurting their ability to invest for their clients. Has there never been an oil company found to be fraudulent for something, but by your own reasoning then (and the republicans) it should be illegal to invest in ANY oil companies, what about the mining industry... well scratch that off the investment list too or real estate developers (had to throw that one in lol) so scratch that off the list as well... get my point? Biden didnt pass a law saying they can ONLY invest in ESG as Trump did to say they cannot invest in ESG. He passed a law that says they have to invest ONLY in what is in best interest of the fund participants.Which includes the dirty oil companies stocks if they so deem it to be good investments. Do you not agree that pollution is slowly killing the planet? There are technologies that will clean up the oil industry, my own investment says they will be net ZERO polluters by 2050 and are investors themselves in developing new technologies that will help them and the industry achieve these goals all while making me a nice profit. Bidens law makes fraudulent schemers accountable but protects ethical funds right to invest in good companies whether they be ESG or not. It also encourages those dirty companies to be environmentally responsible, as what should be obvious to anyone who buys gasoline, the BEST way to get them to be more responsible is through their stock price ( or their pocket book). When they come to the realization that ESG considerations are not only an investment movement that is here to stay and even grow over time and actually critically vital to the planet the world will be a better place for your children and future generations...unfortunately that realization will not come from any ethical responsibility they may (but dont) have.

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30 minutes ago, Peterwp said:

The Labor Department casts its rule as a mere clarification of the 1974 Employee Retirement Income Security Act (Erisa), which requires that retirement plan sponsors act “solely in the interest” of participants and beneficiaries. A Trump Labor rule barred retirement managers from considering factors that weren’t material to financial performance and risk.

Asset managers and union pension plans claimed the Trump rule limited their discretion to consider such ESG factors as climate, workforce diversity and labor relations. The Biden DOL says it created a “chilling effect” on ESG investing.

So i am afraid you are misrepresenting the facts as republicans are so consistent in doing. As you claim not to be a republican then i would conclude it is you my friend who is unknowingly pimping for the wrong team.Let me start by saying i am an oil and gas investor but i invested in one of ( if not the) most ESG responsible oil and gas companies in North America and pleased to say i am up about 120% so far this year, so i am NOT against oil and gas companies, just the dirty ones! ESG IS a factor in investing as it is an investment movement and profitable companies can (and DO) have their stock go down and unprofitable companies have their stock (and DO) go up, and it is factors including ESG that contribute to this. Let me address the Trump law passed which is TOTALLY political nature. Trump was Republican leader, oil companies are by FAR the biggest donors to the Republican party...need i say more? Trump did NOT address the fraud you mention he addressed the investment movement that was hurting oil stock prices, actually making it illegal to invest in ESG considerations. Fund managers themselves say this was hurting their ability to invest for their clients. Has there never been an oil company found to be fraudulent for something, but by your own reasoning then (and the republicans) it should be illegal to invest in ANY oil companies, what about the mining industry... well scratch that off the investment list too or real estate developers (had to throw that one in lol) so scratch that off the list as well... get my point? Biden didnt pass a law saying they can ONLY invest in ESG as Trump did to say they cannot invest in ESG. He passed a law that says they have to invest ONLY in what is in best interest of the fund participants.Which includes the dirty oil companies stocks if they so deem it to be good investments. Do you not agree that pollution is slowly killing the planet? There are technologies that will clean up the oil industry, my own investment says they will be net ZERO polluters by 2050 and are investors themselves in developing new technologies that will help them and the industry achieve these goals all while making me a nice profit. Bidens law makes fraudulent schemers accountable but protects ethical funds right to invest in good companies whether they be ESG or not. It also encourages those dirty companies to be environmentally responsible, as what should be obvious to anyone who buys gasoline, the BEST way to get them to be more responsible is through their stock price ( or their pocket book). When they come to the realization that ESG considerations are not only an investment movement that is here to stay and even grow over time and actually critically vital to the planet the world will be a better place for your children and future generations...unfortunately that realization will not come from any ethical responsibility they may (but dont) have.

By the way, the information presented came from media sources (like the Wall Street Journal), not from my speculations.

Peter, it seems that you want rules to be dictated which control people's lives and their finances in order to serve an agenda.  Is this true?  Do you desire that Technocrats monitor and control society?

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