When we left Texas for our mountain retreat, we paid $1.63 for a gallon of gas in Austin, Texas. Gas has been cheap, dirt cheap. We can thank fracking and Trump for relief from Federal government regulations over the past four years. But cheap gas is about to end… perhaps forever.
The “green machine” is about to take office and here go gas prices up again most likely to double like the last time Biden was in the White House with Obama’s people.
Check the chart, in 2012 in the middle of the Obama-Biden administration, we were paying $3.63 a gallon. Gas is $2.00 a gallon cheaper today
No we didn’t make this chart up. Our source is— The U.S. Energy Information Government website.
A 20 gallon fill-up today costs $32.60. Under Obama-Biden the same fill-up cost $72.60. That was inflation and will be inflation again, but Washington does not include energy in its “official inflation” figures.
The new “green” administration of President Biden will add to the coming inflation by choking off U.S. oil and gas production thereby reducing the supply. Americans are almost guaranteed to have dramatically higher gasoline, jet fuel, and heating oil prices as energy costs may double.
The View from the Oil Fields of West Texas
We drove halfway across Texas yesterday from Austin to the mountains of New Mexico. We wove through an incalculable number of old oil pumps and new windmills.
We can report that the oil pumps are still running, but we did not see one single fracking project or a single drilling platform. For the first time in a decade, it was silent in the oil patch.
Everywhere, equipment was idle. The March Coronavirus crash in oil prices and the pandemic lockdowns have already wiped out $54 Billion Dollars of debt.
On October 14, 2020, Forbes reported—
“Bankruptcies abound in America’s oilpatch. So far this year 40 oil exploration and production companies have gone under, according to analysis from lawfirm Haynes & Boone, involving $54 billion in debt. The biggest failure so far, with $11.8 billion in debt remains Chesapeake Energy More Chapter 11s are coming.“
The disappearance of capital, the restructuring of debt, the loss of jobs and wages echo across the quiet oil fields. Newly built buildings for companies supporting the oil boom are empty and have been boarded over already.
Back in Austin— Tesla, Oracle, Amazon, Microsoft, Apple, Dell, and IBM are building new facilities. Their booming industries are hiring the world’s brightest minds and moving them to Austin.
On the way out of town, the tents of the homeless had again popped up on street corners and at every highway underpass. No home, no friends, no family, no place to go for the holidays. The bust. It’s ugly.
Texas Booms and Busts
Texas has always been a tale of two cities, a place where the oil booms and busts, meet the cities and the wide open plains. The cotton we wear and much of the bread we eat started it’s journey to us from the cotton fields and wheat fields of West Texas.
From oil fields to windmills, Texas somehow always remains at the heart of the energy business powering America— and the food business feeding the world.
Costly and Long Time Frame to Green Energy
It’s a long, slow transition for the world to adopt green energy. It will take 20 years, 30 years, maybe 50 years to complete. Meanwhile, we’ll be dependent on this country’s God-given blessings of cheap energy that comes out of the ground.
Don’t be fooled into thinking the greening of America will be cheap or quick. As the cost of gasoline rises to $2, then $3, then $4 a gallon, we need to remember that progressives moving back into the White House in January will reimpose strict regulations and limitations that will cost us dearly to go green.
During a continuing pandemic and an economic bust, can we afford to take away America’s unique marketing advantage of high productivity and cheap energy for manufacturers?
Up north, the cost of moving away from the use of heating oil will be prohibitively expensive. I can promise you that those diesel trucks rolling down the highway won’t be running on batteries in my lifetime. Fuel oil runs trucks, trucks move everything in America.
Green Energy Has Extreme Limitations
Energy is never cheap, never without limitations, and always determines the winning and losing industries— and where manufacturing will be located. There won’t be less pollution for steel made in China either.
As I passed by a lone field of solar panels that were covered with West Texas red dirt, I was reminded that today is the shortest day of the year. It was so cloudy and foggy that little power could possibly be generated by solar cells. Then the night comes and the solar panels are useless. What then powers the lights, internet, computers, TVs, and street lights at night?
In the heart of Texas today a blue norther was providing plenty of wind for the windmills, but what happens on days when there is no wind at all? The giant white wind turbines sit still produce nothing, nada.
Before we turn off all the generators driven by clean, cheap natural gas let’s take all the facts into consideration.
The one question we should be asking Tesla is this— when you plug those electric cars in every night, where will the electricity come from?