ERCOT urges Texans to cut back on power usage over weekend; 6 Power Plants Offline (West: to buy, tax)

[Trainwreck20]

Originally Posted by CarnivalGal

I'm sure money has/had nothing to do with it.

https://www.reuters.com/business/ene...rs-2021-05-06/

Yes, but that is not really where the money is made/lost. The electric generators did not see a windfall, but the gas suppliers did. The coal plants could make out well, but most of their profits were lost to the gas powered plants in the company portfolios that had to pay the gas suppliers.

The real issue is that a free market system does not encourage or reward excess capacity (*see 'baby formula'). A power plant that is only used every few months - much less years - is just wasted capital and O&M costs. And more plants would not have 'saved' us in a freeze, they would likely be starved for gas the same as the existing plants. More plants would help in the hot months, but they are not profitable at all and will not get built in a free market system.

There are really two issues: capacity and reliability. Reliability should be relatively easily addressed by requiring minimum levels of design and construction, although reliability for the gas supply is a bit trickier than the plants themselves. Capacity is the reason that most states regulate their energy system, though, and it is harder to fix via free market. There HAS to be a reward for excess capacity, which means some ability to charge for it. There are lots of ways to do that, I suppose, and integrate it in the free market system, but it will cost the end users money. And if you want a reliable grid, you have to be willing to pay for it.

[ScoPro]

Very true.
It’s like raising taxes on corporations…. They do not absorb the increases, they pass them on to the consumer.
BTW, natural gas is selling at $8+, triple what it was not long ago. Same for crude oil/gasoline.

Anyway, maybe this will clarify things for the panic button-pushers:

https://www.kxan.com/news/texas/erco...proactive-ask/

[Need4Camaro]

I paid $16 for 3.5 gallons of fuel.. ..I'm much more worried about that than ERCOT.

[Austin97]

Originally Posted by Need4Camaro

I paid $16 for 3.5 gallons of fuel.. ..I'm much more worried about that than ERCOT.

if you believe in global warming, high gas prices are good..

[Need4Camaro]

Originally Posted by Austin97

if you believe in global warming, high gas prices are good..

I do believe in climate change, but the time to have made adjustments for it and push for EV's was 50 years ago for a more gradual shift rather than suddenly hiking up the price of fuel and forcing everyone to electrify. If they did this properly, we wouldn't need to price fuel through the roof if EV's were at a level where everyone was comfortable with owning one. They would dominate the market.

This sudden shift is going to cause problems in the supply and delivery chain and the prices are going to be reflected in goods as well.

To add icing to the cake, the shift to EV's is not going to stop climate change. Everyone talks about the Co2 emissions from cars but noone talks about the Co2 emissions from concrete, agriculture, manufacturing, deforestation, developing nations, and so forth.. ..this is a global issue.. even if the U.S. did everything right, we would still only account for a relatively small part of the problem. we're already too far in at this point.

I do agree we should be more environmentally conscious society, but I greatly disagree with the way its being suddenly deployed. Very little thought is going into this other than 'lets quickly save the environment'.

[Trainwreck20]

The hike in gas prices was not a 'deployment'. It was a war in Ukraine and very little else.

[Need4Camaro]

Prices were increasing before the Ukraine war. Biden killing the Keystone Pipeline immediately pushed prices upward due to drop of (long) forecasted supply and at that period, fuel prices have increased beyond the point they were pre-pandemic despite the fact that at that period many of us were still working from home and not going out.

Biden during his current term and also as a VP in the 90's pushed to expand NATO and Russia does not want NATO as a neighbor (for better or for worse) .. Russia, while also wanting to reform the Soviet Union by retaking Ukraine (which I also disagree with), took Biden's presidency as a potential threat knowing that Ukraine wants to be a NATO member and deployed earlier than they normally would have to put a puppet in office to prevent any advancement of NATO expansion into Ukraine. I do not believe Biden was seeking to take Ukraine into NATO, but he also did little to de-escalate the matter by pushing for NATO expansion after taking office. After fuel prices have increased, very little in the way of effort has been made to increase domestic production. In the end this pushes Biden's Green Deal further along the road. The answer from his administration on the matter of high fuel prices is to go electric.

Yes, we are approaching the end of the gasoline era, but this is being induced by the top, not the market.

[Trainwreck20]

Originally Posted by Need4Camaro

Prices were increasing before the Ukraine war. Biden killing the Keystone Pipeline immediately pushed prices upward due to drop of (long) forecasted supply and at that period, fuel prices have increased beyond the point they were pre-pandemic despite the fact that at that period many of us were still working from home and not going out.

Biden during his current term and also as a VP in the 90's pushed to expand NATO and Russia does not want NATO as a neighbor (for better or for worse) .. Russia, while also wanting to reform the Soviet Union by retaking Ukraine (which I also disagree with), took Biden's presidency as a potential threat knowing that Ukraine wants to be a NATO member and deployed earlier than they normally would have to put a puppet in office to prevent any advancement of NATO expansion into Ukraine. I do not believe Biden was seeking to take Ukraine into NATO, but he also did little to de-escalate the matter by pushing for NATO expansion after taking office. After fuel prices have increased, very little in the way of effort has been made to increase domestic production. In the end this pushes Biden's Green Deal further along the road. The answer from his administration on the matter of high fuel prices is to go electric.

Yes, we are approaching the end of the gasoline era, but this is being induced by the top, not the market.

Domestic production is a matter of the free market, and it HAS increased. In fact, although prices are not way down or anything, the 'gap' between crude prices and gas station prices has grown and the refiners are raking it in right now. There is a lot of opportunity for more drilling, but drillers are opting to not sink additional dollars into it right now for whatever reason. Apparently, they are uncertain of the intermediate- to long-term impact of the Ukraine invasion. That is not a government thing.

The pipeline things are stupid, with both parties over-stepping their bounds, but not the main cause - or even a significant cause - in crude oil price fluctuations.

Ukraine was never going to join NATO. Russia knew it, the US and Europe knew it, the Ukraine knew it. Putin was waiting patiently for NATO to fall apart or fracture, as that was the direction it was heading. Under the current administration, that was not going to happen, or happen soon enough, so he went ahead and invaded. This was never REALLY about NATO anymore than it was about Nazis. Putin was more worried about Ukraine joining the EU and/or wanted to rebuild a 'Soviet Union' of sorts. The Ukraine has very significant resources of oil and gas and was preventing Russia from having a stranglehold on the fossil fuel market in Europe.

The answer to high gasoline prices is to find alternatives and that really is the advantage of a capitalistic country. It can happen, yes it will be painful - more so for some than others - but dictating an answer is a bad solution. Go back in time and invest in Valero a few months back .

[CarnivalGal]

Originally Posted by Trainwreck20

The hike in gas prices was not a 'deployment'. It was a war in Ukraine and very little else.

Well, oil companies could mitigate it somewhat, but as this article states, "Many companies are choosing to enjoy their high profits rather than increase the supply of oil."

https://www.cbsnews.com/news/oil-pro...as-fed-survey/

[Trainwreck20]

That is a misleading article. Not a single company said they were choosing to enjoy high profits rather than increase supply. In fact, they could could increase profits (short-term, anyway) by drilling more wells, but they would have to spend a lot of capital to do it and could very likely get burned with a rapid fall in oil prices. The oil companies do not exist to keep gas prices low, they exist to make a profit. They will start upping production when they figure they can safely make some money of volume.

At these prices, you will see independent drillers go out there and make some money, as well.