JACKIE: WELCOME BACK.
OIL PRICES ARE POINTING SLIGHTLY
HIGHER THIS MORNING, YOU CAN SEE
CRUDE OIL TRADING AT 93, 55.
ENERGY SECRETARY JENNIFER FRAN
HOMEGRANHOLM URGING DOMESTIC OIL
REFINERS NOT TO INCREASE
EXPORTS, SAYING THE BIDEN
ADMINISTRATION COULD TAKE ACTION
IF THEY DON’T BUILD UP
INVENTORIES.
JOINING ME NOW, THE SHORT GROUP
CO-FOUNDER AND PRINCIPAL, STEVEN
SH OFHORK.
TO SPEAK TO THE COMMENTS
SPECIFIC LIRKS IT’S NOT LIKE
PRODUCERS AND REFINERS HAVE THE
INVENTORY TO EXPORT ANYWAY.
RIGHT NOW, EVERYTHING THEY’RE
PRODUCING RIGHT NOW IS GOING
OUT.
THAT’S PART OF THE PROBLEM.
>> YEAH, ABSOLUTELY, JACKIE.
REFINERIES ARE DOING YEOMAN’S
WORK THIS SUMMER, RUNNING
REFINERIES AT BREAK NECK PACE
TRYING TO GET AS MUCH PRODUCT TO
THE MARKET AS POSSIBLE.
I THINK GRANHOLM’S COMMENTS
DEMONSTRATE HER LACK OF
UNDERSTANDING OF HOW THE GLOBAL
HYDROCARBON ECONOMY WORKS.
IF THEY WANT TO HELP ALLEVE
SHORTAGES IN HE LOCAL MARKETS,
RESKINNED THE JONES ACT --
RESCIND THE JONES ACT.
IT’S A LAW THAT STATES THAT
COMMERCE, INTERSTATE COMMERCE
THOSE BE TRANSACTED ON U.S.
FLAGGED VESSELS.
U.S. FLAGGED VESSELS, THERE’S A
SMALL INVENTORY OF THOSE VESSELS
AND THEREFORE THE PREMIUM TO
HIRE THE VESSELS IS VERY HIGH.
IF I’M PRODUCING GASOLINE IN
HOUSTON AND I WANT TO GET TO NEW
YORK HARBOR THERE’S A LIMIT TO
HOW MANY U.S. FLAGGED VESSELS I
CAN PUT THAT GASOLINE ON.
THEREFORE, I WOULD HAVE TO GO TO
A FOREIGN FLAG, WHICH IS MUCH
MORE EXPENSIVE BECAUSE IT’S
GOING TO TRADE AT A PREMIUM TO
THE JONES ACT VESSELS AND THAT
ARTIFICIALLY RAISES THE COST.
SO WE’RE SAYING DON’T EXPORT OUR
PRODUCT BUT WE’RE HAMPERING OUR
ABILITY TO T GET THAT PROBLEM
WHERE IT’S BEING PRODUCED
DOMESTICALLY TO GET IT TO A
DOMESTIC CONSUMPTION MARKET.
THEREFORE, BY TRYING TO SAY
DON’T EXPORT, ALL YOU’RE GOING
TO DO IS CREATE LOGISTICAL
NIGHTMARES, YOU’RE GOING TO SWAP
CERTAIN MARKETS, DEPRIVE OTHER
MARKETS OF PRODUCT, CREATE
OPPORTUNITIES.
THIS IS A BOON FOR ENERGY
TRADERS.
JACKIE: WHAT DO YOU MAKE OF HOW
OPEC AND OPEC PLUS HAS BEEN
PLAYING THIS, TINY PRODUCTION
INCREASES THAT WILL START IN THE
FALL.
THE TALKING POINTS FROM THE OPEC
SIDE OF THINGS IS, WELL, IF THE
U.S. IS HEADED INTO A RECESSION,
THINGS ARE SLOWING GLOBALLY WE
DON’T WANT TO RAMP UP PRODUCTION
ONLY FOR DEMAND TO FALL.
THAT’S HOW THEY JUSTIFY KEEPING
THEIR OUTPUT PRETTY MUCH
CONSTANT.
>> ABSOLUTELY.
LET’S KEEP IN MIND, THEY’RE AT
LOGISTICAL STRAIN AS WELL.
SO IT’S NOT AS IF THEY JUST HAVE
A RESERVE SITTING THERE AND THEY
CAN OPEN UP THE SPIGOT.
LOOK, NEXT MONDAY IS LABOR DAY.
THE GASOLINE SEASON IS OVER L.
SO WE ARE GOING TO, REGARDLESS
OF RECESSION, WE ARE GOING INTO
AN AREA WHERE REFINERS GO INTO
MAINTENANCE CALLED TURNAROUNDS,
THEY’LL BE BUYING FEWER BARRELS
OF CRUDE OIL SO THIS IS A
NATURAL TIME TO PULL BACK ON
PRODUCTION AS WE GO INTO AN AREA
WHERE DEMAND IS WEAK AND SO NOT
ONLY ARE WE SEEING THAT SEASONAL
HE DECLINE IN DEMAND BUT, YES,
THE GLOBAL DEMAND A,, WE’VE ALRE
SEEN GASOLINE DEMAND THIS SUMMER
WAS EXTREMELY LOW RELATIVE TO
THE YEAR AGO AND SEASONALLY
ADJUSTED NORMS.
WE’VE SEEN THE IMPACT OF WEAKER
DEMAND, QUESTIONS WITH REGARD TO
THE HEALTH OF THE GLOBAL ECONOMY
AND WE’RE GOING INTO THE PART OF
THE SEASON WHERE DEMAND IS GOING
TO FALL OFF.
IF YOU GO AND CUT PRODUCTION,
THIS IS THE CORRECT TIME TO DO
IT.
JACKIE: LET’S TALK ABOUT ELON
MUSK.
HE MADE COMMENTS THIS MORNING
SAYING THE WORLD STILL NEEDS OIL
AND GAS TO SUSTAIN CIVILIZATION
WHILE DEVELOPING OTHER
SUSTAINABLE SOURCES OF ENERGY.
HE SAID HE BELIEVES BY 2030
ALMOST HALF OF ALL CARS WILL BE
MADE ELECTRIC.
YOUR THOUGHTS?
YOUR COMMENTS ON THIS VIEW OF
THIS WITH RESPECT TO THE
SHORT-TERM AND LONG TERM.
OBVIOUSLY THIS IS AN
ADMINISTRATION THAT IS
PRIORITIZING ELECTRIC CARS AND
OTHER GREEN ENERGY INITIATIVES
BUT RIGHT NOW IS ALSO THROWING
THE BABY OUT WITH THE BATH
WATER, RIGHT?
>> YEAH.
INFEED.
INDEED.
THAT’S THE BIGGEST SIN WITH
RESPECT TO ENERGY POLICY WITH
THIS ADMINISTRATION A.
THEY PURSUED ZERO SUM GREEN
AGENDA.
EVERY EV I SEE ON THE ROAD I
HAVE TO ERADICATE A FOSSIL FUEL
COMBUSTION ENGINE.
THE GLOBAL ECONOMY IS NOT THERE
YET.
WE ARE GOING THERE.
I WILL NOT ARGUE BY 2030 THAT
WE’LL HAVE A SIGNIFICANT MORE
AMOUNT OF EVs.
I DRIVE AN ELECTRIC HYBRID.
THIS IS THE WAY THE FUTURE IS
GOING.
BUT WHAT WE’RE TRYING TO JUMP
START IT AND THE GLOBAL -- LOOK
WHAT’S HAPPENING IN POLAND.
THEY’RE LINING UP NOW, CONSUMERS
ARE BUYINGLINING UP TO BUY COAL
THE WINTER.
THE GERMANS DON’T HAVE ENOUGH
NATURAL GAS, DON’T HAVE ENOUGH
OIL THE TO HEAT THEIR HOMES THIS
WINTER.
10 YEARS FROM NOW WE’LL BE
DRIVING A LOT MORE GREEN CARS, A
LOT MORE RENEWABLE ENERGY.
WE’RE NOT THERE YET.
MUSK GETS IT.
GRANHOLM DOESN’T.
JACKIE: LET ME ASK YOU ABOUT
THIS.
NEW DATA SHOWS THAT RISING
ENERGY PRICES ARE LEADING TO
HIGHER ELECTRICITY BILLS FOR
AMERICANS AND YOU ACCORDING TO
THE NATIONAL ENERGY ASSISTANCE
DIRECTOR’S ASSOCIATION,
20 MILLION U.S. HOUSEHOLDS HAVE
FALLEN BEHIND ON UTILITY BILLS
WITH SOME EXPERTS WARNING OF A
TSUNAMI OF CUTOFFS AS WE’RE
HEADING INTO THE FALL AND
WINTER.
THIS IS PART OF THE LARGER
INFLATION PROBLEM THAT WE’RE
TALKING ABOUT, THE ASTRONOMICAL
COST OF NOT JUST ENERGY, FUEL,
BUT ALSO FOOD FOR CONSUMERS
RIGHT NOW.
>> YES.
ABSOLUTELY.
INFLATION IS STILL HIGH
REGARDLESS OF THE NUMBERS WHICH
WERE ENCOURAGING LAST WEEK.
BUT IT’S STILL HIGH AND THEY’RE
GOING TO REMAIN HIGH.
CRUDE OIL PRICES REMAIN ABOVE
$90 A BARREL.
WE’RE GOING INTO THE FALL
HARVEST.
WE HAVE SOME BAD NEWS OUT LAST
WEEK THAT A MAJOR REFINERY IN
THE MIDWEST HAD A FIRE.
IT SHUT DOWN.
THIS IS THE RISK, WHAT HAPPENS
WHEN YOU RUN REFINERIES AT BREAK
NECK SPEED SO NOW THERE’S A
CONCERN WITH REGARD TO HE DIESEL
FUEL WITH REGARD TO THE FALL
HARVEST OR T HEATING OIL IN THE
NORTHEAST WHERE 70% OF THE HOMES
USE HEATING OIL.
JACKIE: I KEEP SAYING GOT
FORBID WE HAVE A BAD HURRICANE
SEASON, WE KEEP TAPPING THE SPR
TO WORK ON FUEL PRICES HERE,
THAT’S THE ADMINISTRATION’S
STRATEGY AND THEY COULD BE
PUTTING US IN JEOPARDY.