November 16, 2021

We all know the conflicts and differences in opinions in Washington are as massive and wide as the Grand Canyon. But I think there are some huge underlying changes on the horizon. They will be as big as the industrial revolution. People are waking up to the energy crisis and how we got here. 

A couple of key nuggets: 

First: The new infrastructure bill will help the oil and gas industry in ways the renewable fans and investors would not have thought possible. Some items include the funding for the clean energy EV’s and the LNG, compressed natural gas, hydrogen, propane, and biofuels in alternative fuels definition of financing. This matters because the technology is not available for the manufacturing of all of these clean fuels without significant quantities of natural gas. The classification of natural gas will be the first time stealth adoption of fossil fuel as being in the clean energy groups. 

This stealth adoption of natural gas will allow for greater adoption of drilling by all United States E&P companies. The administration does not have to come out and endorse fossil fuels, but it does, for the first time, set the stage for smoother migration to renewable energy. This will allow the current administration to start having some success without offending their voting block.

The data from our King Operating Research Team has shown that the more we migrate to renewable energy without the supporting energy technologies, we will be using more fossil fuels. And subsequently causing more harm to the environment by the insatiable demand for rare earth minerals and increased fossil fuels required to support the migration without the supporting technology. 

Secondly: Irina Slav an Energy Writer in Bulgaria has noticed out of the COP26 summit, there is a softening in the language in the dramatic cut from fossil to renewables. 

“Such a change is indeed worthy of tears. It is blatantly obvious proof that the world is not all on the same page when it comes to climate change and it may never be. But there was also something else that the summit delegates did not reach an agreement on and it just might have a lot to do with why they agreed to the “phase-down” compromise.” – Irina Slav

In a Fox Interview with Senator Joe Manchin, his response sums up some real key points on the next steps required. 

Manchin - Eye of the Storm interview with Bret Baird

Senator Joe Manchin, (D-W.Va.):  President Biden says OPEC is to blame, others say climate policies have changed the dynamic. What do you say? I say that we can basically do more for ourselves. We’ve been energy independent for the first time in 67 years. Why can’t we do more? Why can’t we produce more? We’ve got plenty of natural gas. My state beautiful state of West Virginia has an ocean of natural gas under it. It’s just let us build a pipeline. We could get the product to market. And why don’t we do more drilling and why don’t we do more basically production in the United States? I’m not depending on OPEC. I’m not depending on other countries for my energy anymore. We know how to do it. We have the technology. We should be relying on ourselves, the president wrong, and that I have a difference of opinion.

The Bottom Line:

Taking the stealth admission from the current administration, and the COP26 summit that there needs to be a “migration” rather than an abrupt stop is what is required is the foundation for the next talking environmentalist push. Setting the seed for a thought process without alienation of your base is critical in messaging. When emotions are involved this has to take baby steps. 

Senator Manchin lays out exactly what we need to do immediately. It will take time, but the foundation for the climate activist policy writers to soften and look to a plan is starting to shape. 

These are baby steps, but we have to get to renewables but now we have to counter 20 years of bad energy policies and behavior on all policymakers.  I think we are getting close to being able to talk to both sides in the next few years. We can only hope it is sooner than later. 

Stay tuned for more information from our King Operating research team on all of these subjects. 

Buckle up we are heading into interesting times in the energy, oil, and gas markets. 

Jay R. Young, CEO, King Operating

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