Good morning, this is the Oil Patch. We're the giddy-up to your morning routine.

Here's what the Oilman has for you today:

• The Paradox of Renewable Energy and Union Jobs

• When Cuba Needs Fuel, They Call in the Russians

• Bitcoin Mining and the Environment

• Tweet of the Day

The Paradox of Renewable Energy and Union Jobs

President Joe Biden has promised to create millions of well-paying jobs through the clean energy transition while maintaining high unionization rates. However, the vast majority of announced domestic manufacturing investments to support the clean energy transition have been in states with right-to-work laws. These laws make it difficult for workers to unionize.

And oddly make those states better places to work and live.

Of the $50 billion in announced investments in domestic manufacturing since the passage of Biden's climate change law, 83% have been in right-to-work states.

Why?

Because right-to-work laws are good for both employees and employers

The IRA includes tax credits for businesses that produce clean energy components in the United States, but of the more than 50 factories announced, only a fraction will ultimately stem from Biden's economic agenda.

Additionally, a provision that would have created a $4,500 tax credit for union-made vehicles was stripped from the legislation.

The situation presents a paradox for Biden's administration

Secretary of Energy Granholm is selling the idea of a decarbonized America with high-paying clean energy jobs that will be as attractive to workers as those in oil refineries and coal mines.

While the IRA is viewed as a win for labor standards, companies building new US factories that will make everything from EV batteries to solar panels are not required to pay prevailing wages or hire unionized workers to receive subsidies.

The irony is that renewable energy projects, which are often seen as a progressive cause, are hesitant to work with union contracts.

When Cuba Needs Fuel, They Call in the Russians

Cuba's got a fuel shortage and they are turning to help from none other than Russia's state-run oil firm, Rosneft.

CEO Igor Sechin met with President Miguel Diaz-Canel over the weekend to discuss the dire situation.

Cuba's in a bit of a pickle

They've got a terrible economic crisis going on thanks to:

• COVID-19

• US sanctions

• And an outdated economy

The result? Long lines for food, fuel, and medicine. In fact, the fuel situation is so bad that service stations are temporarily closing, and people are waiting for hours just to get some gasoline.

Putin personally supervises issues related to Cuba

At least, that's what Rosneft's CEO reportedly told Diaz-Canel. While the reason for the visit wasn't publicly shared, it's probably safe to assume that Russia is looking to strengthen its ties with other countries that aren't too fond of the US.

Russia has already donated a whopping 25,000 tons of wheat to Cuba.

Why not help out with some fuel too?

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Bitcoin Mining and the Environment

This week, the US Senate Committee on Environment and Public Works will focus on the energy use from Bitcoin’s proof-of-work mining process.

Dennis Porter, the CEO of Satoshi Action Fund, argues that attempts to clamp down on Bitcoin’s energy usage or switch how transactions are processed would undermine the Bitcoin network and ultimately:

• Impede energy innovation

• Positive environmental outcomes

• Economic opportunity in America.

Bitcoin data centers use ASICs to secure the Bitcoin network and process transactions

Critics have highlighted the large amount of energy use of bitcoin miners and argued that governments should clamp down on bitcoin mining. 

Critics want to force miners to switch away from the proof-of-work protocol. Lip-service is paid to operating in a less energy-intensive fashion.

However, more energy is lost in transmission and distribution of electricity than the entire Bitcoin network uses annually.

A solution to the struggles of renewable energy

Bitcoin mining provides reliability, cost, and an additional use of renewable electricity throughout American power grids.

Miners can:

• Purchase excess energy from wind and solar farms

• Improve revenue for renewable generation

• Prevent taxpayers from subsidizing the generation of energy

• Miners can also smooth out the intermittent generation of renewables by participating in grid-balancing services

• Miners can turn stranded methane gas into electricity and use it to mine bitcoin

This generates both a monetary and environmental benefit.

The perils of proof-of-stake

Many have pressured those in the Bitcoin industry to move to another way to create new blocks of transactions, specifically a mechanism known as proof-of-stake. However, proof-of-stake comes with complications, and SEC Chair Gary Gensler has commented that any cryptocurrency using proof-of-stake could be a security and therefore fall under the SEC’s regulatory jurisdiction.

The Bitcoin community should continue on its current path and look to empower renewable energy, mitigate methane emissions, and utilize stranded energy to improve both the network and America’s power generation.

Bitcoin mining can help America achieve a balance between fundamental American needs such as energy reliability alongside environmental stewardship.

With this in mind, argues Dennis Porter, we should be embracing bitcoin mining and fostering its growth across the nation to ensure the US leads the globe in the next wave of energy and environmental innovation.

Around the Digital Patch

🛢️ War has wrecked markets according to Chevron CEO.🔥 Chesapeake strikes 15-year LNG deal. ⚡ China will nix any natural gas projects that compete with coal. 

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