May 2023 - 1keystone.com

The World of EVs – Norway is 10 Years Ahead of the U.S. – What Does That Tell Us?

May 11, 2023 Article by Jeffrey Price

The New York Times ran a surprisingly interesting article on May 8^th on the unanticipated repercussions and benefits of a major shift to a national fleet of vehicles that is weighted toward EVs. There were all sorts of surprises. Among the takeaways were these: (1) improved air quality in downtown Oslo, (2) changes in parking patterns, (3) impacts on convenience stores, and (4) pleasant surprises for traditional auto mechanics. There’s more. Here’s the link: NYT Article.

Our own takeaway is that Permian-produced crude is going to be an essential energy source for decades to come. So, there needs to be a reliable infrastructure in this region to make that possible. That’s why our organization is dedicated to lease warehouse space in Pecos to make that possible. Meanwhile, the government and industries such as convenience stores will need to muster billions of dollars to build out the infrastructure that will support the charging of vehicles.

For the author here, I will continue to drive my 30 mpg mid-sized SUV to my summer cottage 345 miles away with zero anxiety about whether my car will crap out along the way.

The opinions expressed above reflect only those of the author and do not represent those of the First Keystone Pecos Industrial Park organization. First Keystone welcomes responsible fact-based discourses on these topics.

Conflict with Financial Goals — Another Installment — Is Big Oil Doing Enough?

Article by Jeffrey Price

Tuesday’s Wall Street Journal (May 9) lead story hit the nail on the head (https://www.wsj.com/articles/big-oil-has-150-billion-in-cash-and-investors-want-a-share-b5cdea35?st=kmn8twtikurvdoj&reflink=desktopwebshare_permalink). This story, rehashing the breathtaking profits generated by “Big Oil” in ’22 and now 1Q23, zeroes in on why aren’t oil companies spending more to boost daily production. Here is a critical excerpt:

“President Biden has called on producers to ramp up output in a bid to lower prices at the pump. “These balance sheets make clear that there is nothing stopping oil companies from boosting production except their own decision to pad wealthy shareholder pockets and then sit on whatever is left,” White House Assistant Press Secretary Abdullah Hasan said.

But investors have favored financial discipline, and executives are increasingly compensated based on shareholder returns. It marks an about-face in the U.S. oil patch, where companies for years chased production growth by tapping gushers of crude in regions such as the Permian Basin in Texas and Bakken shale in North Dakota.”

The basic point is that Boards of Directors have recalibrated their priorities to build value through shareholder distributions which means an abandonment of the historic mantra that has driven this industry for decades, “Build value through the drill bit”. That’s a depressing thought for companies positioned to service a vibrant and growing O&G industry. And that’s what we offer – Pecos industrial property to buy so that the critical service & supply sector can be domiciled in modern facilities. And, Reeves County and the greater Delaware Basin are the epicenter of America’s push to halt the invasion by the anti-democratic USSR (ooops! Made that mistake again!). As much as the oil industry wants to complain about the Democratic-led federal government, it is strange times to see the liberal-leaning government jawboning for more oil and the conservative-leaning oil industry resisting. What an upside-down world!

We urge you to check out this article through the link above (you do not need a WSJ subscription to view this).

Dirty Secret: Green Energy “Panacea” Revisited – Implications of Raw Materials Requirements for EVs

May 9, 2023 Article by Jeffrey Price

The panacea that is ascribed to a world that has migrated away from gas-powered automotive transportation to EVs has a dirty ~~little~~ big secret. In a nutshell, the disruptions to the environment and societies associated with magnitudinal increases in consumption of key elements (e.g., lithium, cobalt, and copper) are going to be colossal. Here’s another in an intensifying trickle – actually a flow – of articles about adverse repercussions of the transition to electrified personal transport, this one from the Wall Street Journal https://www.wsj.com/articles/net-zero-will-mean-a-mining-boom-electric-cars-minerals-oil-fossil-fuels-climate-change-policy-cb8d5137?st=wsk1xit42bvh24y&reflink=desktopwebshare_permalink. Places like the Congo, Bolivia, Argentina, and New Guinea are going to experience huge impacts – good and bad.

Add to those concerns this fact: Much of these raw materials when they are refined flow through China. The global strategic implications are colossal. Are any of the “leaders” clamoring for EVs giving thought about that “detail” while stampeding us to drive an EV? In my mind – as I witness the nasty Ukrainian War – it’s a pretty dumb strategic idea to shift our purchases of oil from ourselves to lithium batteries from Beijing. Russia is ill-equipped to win the Ukrainian War in no small part because the world is not tethered to its oil & gas. China is very well-endowed to prevail in a Taiwan conflict. Hello!? Wake up!

That’s why the Permian is so geopolitically strategic! It’s the reason the Russian oil ain’t so critical. In wading through this minefield of conflicting energy policies, we at First Keystone Pecos Industrial Park remain committed to providing infrastructure to support the U.S. domestic oil & gas industry by offering industrial land for sale in Pecos, Texas. We are part of the solution…not part of the problem!

In closing, we would suggest some due diligence be conducted by the EV advocates who earnestly want to cut down on carbon emissions by devoting some of their attention to the unintended consequences of their efforts.

Fact Check: What is the Real Policy of the Biden Administration Towards Fossil Fuels?

May 5, 2023 Article by Jeffrey Price

So many disparaging remarks are tossed around in casual conversations throughout the Permian Basin about the “terrible” policies of “what the Biden Administration does to” the oil & gas industry. Yet, with all the angst and complaining, it is difficult to really put one’s finger on a set of tangible policies and regulations that have hurt the industry. Indeed, an argument can be made that the Administration is methodically backing America’s fossil fuel industry as part of a grander geopolitical strategy in not only fighting a war in Eastern Europe, but in workibg to contain advances of autocratic regimes. For example, take a look at this article https://www.nytimes.com/2023/04/06/climate/oil-gas-drilling-investment-worldwide-willow.html?searchResultPosition=9 published by the New York Times on April 6, 2023 which lays out concrete steps taken by the Biden Administration that are part of hydrocarbon-friendly policies. This article is in contrast to those widespread disparagements freely aimed at “the feds”. Sure, the government is cracking down on methane emissions, but that’s the equivalent of regulating discharges of untreated sewage. One would hope they’re regulated! Isn’t it incongruous that Biden is jawboning the industry to pump more oil? And, it’s funny – but it’s not – that the left-wing of the Democratic Party criticizes him, too! Isn’t it funny – but it’s not – that many of the U.S.-flag leading producers are hanging back and curtailing year-over-year growth? What is it about this picture that’s backwards?

This is why the Permian – an outpost in the U.S. with less than one million residents – is arguably one of the Top 5 strategic sites in U.S. territory! On the opposite end of the size continuum, First Keystone is a tiny contributor that helps to lay the groundwork to strengthen American’s oil & gas industry – we do it by offering to industrial buildings for lease in Pecos, TX. We’re in a geopolitically crucial region!

The Biden Administration also has plenty of overt inducements designed to speed up America’s transition to “green energy”, but those moves do not cancel out these near-term policies that are meant to spur the U.S. forward to The World’s #1 position as an oil producer. They demonstrate a real politik approach to oil taken by the center-leaning Biden Administration.