Are we all having a Charlie Brown moment? Just when it seems that we, the energy consumers, are ready to line up the ball and kick it for a field goal, either politicians pull the ball away, or reality takes the ball and runs.
No doubt the latest profit numbers as reported by the major oil companies are… what’s the word?… numbing. The top four have poured $196 billion into their tills. Exxon, Imperial Oil Canada’s majority owner, accounted for $56 billion of the total. “Off with their greedy heads!” – screams the electrically energized media – “Tax these excess profits! Our government knows how to tax anything!”
What I’m hearing is that some people don’t want fossil fuels anymore, so their answer is to grind the oil industry into dust.
But wait a minute, before we kick that economic ball through the moving goal posts, let’s not forget that in 2020 Exxon lost $22 billion. Did their tax load fall?
Nope. Did the Canadian Government lower the GST on gasoline and diesel, which is a tax-on-tax by the way?
Nope. In fact, they increased the carbon tax.
Now let’s look at the imagined demise of supply and demand for fossil derived products. These numbers should all show a decline because it’s now the dawn of the Electric Car Revolution, right?
Not so. Internationally, the International Energy Association (IEA) is forecasting demand to increase in 2023 from 101 million bpd to 102.5 million bpd.
Yet, in the stampede to plug into their own vainglorious environmental agendas, our leaders seem to forget that there is a timing balance in the transition from oil to electrons, but they are clearly missing that train of thought, which the consumer is now paying for.
We are in a situation where pressure from the renewables lobby has forced Big Oil to back off investment in new oil and gas projects and switch to lower carbon businesses to cut their greenhouse gas emissions. This has reduced investment and maintenance programs in the refining business worldwide and is why prices for fossil fuel products will increase until such time as politicians realize that we, the consumers, are saying – “yes we need and want lower carbon energy, but it has to be affordable.”
Stop and think about it for a moment. And let’s ask our politicians to stop moving the ball on us!
– Roger McKnight – B.Sc., Senior Petroleum Analyst
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