While freely admitting to a propensity for wistful thinking, this writer can’t help but wonder if automotive backpaddling on government strong-arm electric vehicle (EV) production mandates and an oil and gas company landgrab for increased reserves during their war on fossil fuels might suggest that they foresee an upcoming consumer and voter revolt.
It’s one thing to ask the public if they support “clean energy”, which is typically couched in terms that brand essential plant-nourishing CO2 as climate pollution, and quite another to ask what they are willing to pay for these green fantasies in terms of increased gas pump and heating costs, food and commodity inflation, and artificially reduced automotive market choices.
Customers expecting to make up added average Kelley Blue Book costs of $11,000 or more to buy a plug-in than a full-sized gas-powered car and nearly $30,000 more than the average compact in net mileage efficiency are delusional as “gas guzzlers” are replaced with “electricity drainers.”
Regarding those EVs, the simple fact is that most of the public isn’t buying them largely because they cost more and impose long, uncertain recharging requirements for long trips.
As for saving the planet from climate change, according to an environmental assessment accompanying the Department of Transportation’s newly proposed fuel standards, including a 2% increase in mandated requirements each year would reduce average global temperatures in 2060 by 0.000%.
Despite generous taxpayer-funded subsidies, EV sales have slowed due to a limited pool of consumers.
As Wall Street Journal contributor Sean McLain notes, “The first wave of buyers willing to pay a premium for a battery-powered car has already made the purchase, dealers and executives say, and automakers are now dealing with a more hesitant group, just as a barrage of new EV models are expected to hit dealerships in the coming years.”
With falling demand, Ford pushed back a plan to produce 600,000 EVs annually to late 2024 instead of the end of this year, and as sales for that model falter, is reportedly considering canceling a shift of factory production on its electric F-150 Lightning truck.
According to Ford CEO James Farley, his company lost nearly $60,000 on each EV it sold during the first quarter of this year, largely due to high battery costs.
Ford has temporarily cut one of the production shifts for the electric pickup and has paused construction of a $3.5 billion battery plant in Michigan.
General Motors has said it will delay opening a planned large EV truck factory in Michigan by a year.
Meanwhile, there is no sign on the horizon that oil and gas companies are going to surrender their core businesses to climate alarm cartels anytime soon.
Quite the opposite, we are witnessing what The Wall Street Journal characterizes as “the smell of mergers and acquisitions in the air” this month following more than $110 billion worth of oil megadeals to increase holdings.
ExxonMobil cut a $59.5 billion deal to buy Pioneer, which, in turn, apparently put pressure on rivals to pursue competitive purchases of their own.
Chevron signed a $53 billion agreement to acquire Hess, Devon Energy is eyeing Marathon Oil and CrownRock, and Chesapeake Energy is reportedly considering a bid for Southwestern Energy.
As observed by Dan Pickering, chief investment officer at Pickering Energy Partners, “The FOMO [fear-of-missing-out] component of it is only going to accelerate. See one or two more deals, and there could be a scarcity premium that starts to emerge.”
This trend may hopefully be countering a recent liberal government multi-agency policy push that has hamstrung fossil energy companies with punitive regulatory Environmental Social Guidance (ESG) requirements, including investments in money-losing “green alternatives.”
Whereas drillers have largely kowtowed to accommodate ESG pressures since Joe Biden took office, a new pro-hydrocarbon administration and Congress would be a huge boon to their profitability and American energy independence.
Meanwhile, drilling isn’t only in the U.S. interest — global demand for oil last month surpassed its last peak — a pre-COVID-19102.3 million barrels a day, reached in August 2019.
Saudi Arabia Energy Minister Prince Abdulaziz bin Salman has said that recent multi-billion-dollar acquisitions by U.S. oil majors ExxonMobil and Chevron of smaller rivals showed that hydrocarbons were “here to stay.”
Accordingly, his country is investing heavily in increasing its oil production capacity by one million barrels per day (bpd) to 13 million bpd by 2027.
Supporting this policy, the secretary general of the Organization of the Petroleum Exporting Countries (OPEC) projects that global oil demand will increase by 23% through 2045, rising to 110 million barrels a day in about 20 years.
A report by the International Energy Forum (IEF) and S&P Global Commodity Insights records that oil and gas capital expenditures increased by 39% in 2022 to $499 billion, the highest level since 2014 and the largest year-on-year gain in history.
Further, IEF projects that annual world investment will need to increase to $640 billion in 2030 to ensure adequate supplies.
Who will supply this demand?
That answer — an urgent national security matter — will depend upon whom Americans elect in 2024 to sit in the Oval Office and majority congressional control.
This article originally appeared at NewsMax
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