You Will Drive Electric Vehicles, the Decision Has Already Been Made For You!
Automologist MAC laments the inevitable future…
The above joke was circulated to me this morning by a friend (thank you, Kevin) and it got me thinking about why the price of petrol is so very high and why even the mighty USA cannot do something to lower the cost of motoring.
So, is this one of the most perverse conspiracies that has ever been perpetrated on us, the unsuspecting population of the world, by some deep-state government? In an effort to get us all to drive electric cars, have ‘they’ (whoever they may be) engineered a massive spike in oil prices to make us accept overpriced electric vehicles as our more economical daily ride?
If you read this blog regularly, you will know that I am not a fan of an electric car future. There simply is not enough rare earth minerals to build the batteries nor is there enough electricity to charge them. Most countries would have to come close to doubling their electric-generating capacity before they can replace all the Internal Combustion Engine (ICE) cars with EVs. The only way to get the polluting cars off our streets is to stop personal car ownership and have the great masses of humanity subscribe to a ride-sharing future.
So, is this a conspiracy or is this just political bungling? Well, maybe a bit of both, or a lot of neither. Since the start of 2021, global average fuel prices have more than doubled as the world bounced back from the Covid pandemic. This surge was largely caused by a change of regime and thus policy in the US of A and further exasperated by Putin’s Winter Tour of the Ukraine. One hidden factor that probably knocked sentiment more than anything else though is the climate change headwind, which has caused a lack of investment in future oil and gas production and thereafter refining.
In case you hadn’t realised, there is a major effort by most major economies to push away from hydrocarbons and towards renewables to combat global warming. Joe Biden made this the centrepiece of his campaign and he is not alone. Across Europe, 2030 is the year that ICE power is superseded by EVs and by 2040, all cars will be EVs, allegedly. I am not sure why the world has picked EVs but they have, the decision has been made for us already and us mere mortals can sit down and shut up.
Getting the price of oil down means getting it flowing and this means investing capital into a high risk and very volatile market—most investors will say “no, thank you”. Worse than that, though, those who have previously invested are looking at a very short future and thus want to profit take now before it is too late and thus deprive the industry of working capital; as a result, there is now a shortage of refining capacity.
Many politicians are now wavering on their previous climate commitments but even if there were major announcements for the creation of new refining facilities and a restart to the Keystone pipeline or the Pieridae Gas Terminal in Nova Scotia, it would take years for them to come on stream and cool the market. Meanwhile, we will all be suffering the high prices as speculators make a fortune. For me, this is not a conspiracy but the result of the political elite sitting in their ivory towers looking down on the rest of us with a complete lack of understanding about how we can afford anything these days yet alone a tank of gas.