One path to reliability

Demand for power this year will reach 4.086 trillion kWh this year, the EIA said.

In 2025, this will rise further to 4.165 trillion kWh.

The share of natgas in the energy mix this year will appropriately rise from 42% to 43%.

And then the EIA gets weird, saying gas will slide to 40% in 2025.

Guess why? Yes, because wind and solar will grow.

It seems the EIA hasn’t been following the news from Europe.

Recent developments show pretty conclusively that the more “renewables” you build, the more oil and gas you consume.

It will have to be a lesson that’s learned the hard way.

The hard way involves production restraint and higher prices.

Because all those data centers will be in a rush to get their hands on some reliable power.

They already are, and they’re contracting future production for their own needs.

The new gas era

Demand for electricity is rising.

That is, demand for stable, reliable electricity.

Burning gas is the cleanest way of getting this kind of electricity.

Well, that and nuclear, but nuclear takes ages to build.

So, the EIA’s expectation that the share of gas will decline in 2025 is quite unrealistic.

Gas will grow—just like coal use grew this year when everyone expected a drop.

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Listen to Life of an Oil Man

Last week’s billionaire feature was on Sid Richardson.

If you like hearing about his story, check out the Life of an Oilman episode on Clint Murchison - Sid Richardson’s best friend.

In Life of an Oilman, Adam Oxsen reads a biography of an oilman, and shares their story.

Some loom large and have a shining legacy. Others have been largely forgotten. But what they all did was enable an energy revolution that built our modern world.

This is Life of an Oilman.

“Fight, fight, fight” in a new light

Trump said he’d be slapping 25% tariffs on all imports from Canada and Mexico.

The Canadian oil industry warned this was not a good idea.

So did U.S. refiners.

It really is not the best idea if Trump wants to keep his promise of lower energy prices.

But it did spur the Canadian government into action.

Trudeau flew to Mar-a-Lago almost immediate.

Reportedly, there were promises made about better border control in the drug trafficking department.

Now, what if that was exactly the point of that tariff threat?

Trump no doubt knows that expensive feedstock leads to expensive end product.

But he also knows how important an export destination the U.S. is for Canadian business.

Basically he chose his target well. Now, this target is flexing muscles grasping for bargaining power.

Ontario exports electricity to the U.S. That’s what Ford threatened to stop if Trump goes ahead with the tariffs.

But:

A threat exchange that’s good for business

Suppose Trump does impose tariffs.

Suppose Ontario cuts off electricity exports to Michigan, New York, and Minnesota.

Grid operators will switch to local electricity generators, giving them a boost.

Those imports are not exactly 100% of demand, far from it. The U.S., in other words, will become more self-sufficient in electricity.

Doesn’t sound too bad, does it?

But Trump is probably not going to impose those tariffs, anyway...right?

Heavy crude would be hard to come by if he cuts off Canada as supplier.