Monthly Archives: June 2022

Gas pump reality

Gas pump reality by Peter Burrows 6/22/22 

I just took a quick look at Exxon Mobil’s second quarter earnings. While Bernie Sanders and other morons rail on about the huge profits earned by the evil-dirty-bastard oil companies, the numbers show that America’s biggest investor-owned oil company is about as profitable as the average electric utility. 

Here we must distinguish between profits and profitability, a very important distinction that the average person should have some awareness of lest they be fooled by the Bernie Sanders of the world. Profits are in dollars; profitability is in percentages.  For example, Exxon Mobile’s 2Q profits were $8.8 billion, which is a helluva lot of money, but the annualized return on assets was only 10 percent. 

That’s about what Public Service of New Mexico, a regulated public utility, earns on assets. 

Sometimes the profits/profitability distinction can result in a seemingly paradoxical situation where a company earning a large dollar profit is called “unprofitable.” For example, if a company earns a billion dollars but has assets of 100 billion, the return on investment is only one percent and pundits will describe it as “very unprofitable,” the “relative to assets” part being implied.  

I also took a look at Exxon’s profit per gallon of petroleum product sold. I didn’t separate out profits from non-petroleum operations, such as chemical operations. That’s too much work. I just threw all the profits into the petroleum sector, which may overstate the profit per-gallon a touch. I came up with 4.05 cents per gallon. 

The Federal per gallon tax at the pump is 18.3 cents, and the New Mexico tax is 22 cents. That means we are paying ten times as much in tax per gallon as Exxon makes in profit per gallon.  

My analysis was pretty quick, so if anybody would like to check my numbers, here is the URL:  

Cold facts about coal

Cold facts about coal – by Peter Burrows 6/10/22 elburropete@gmailcom   

Back in 2012, New Mexico had four operating coal mines that produced 22.92 million tons of coal, most of it used to generate electricity. By 2020, that number had dropped to 10.25 million tons and by 2045, if not sooner, it will drop to zero.     

Burning coal, you see, creates carbon dioxide, and carbon dioxide creates climate change, and climate change is an existential threat to all of humanity. New Mexico, doing its part to prevent such a calamity, passed a law in 2019, The Energy Transition Act (ETA), phasing out the use of coal, or any fossil fuel, to generate electricity in the state.    

Electricity instead is to be generated by renewable energy, which in New Mexico means photovoltaic solar panels and wind turbines, backed up by batteries: 50% by 2030, 80% by 2040 and 100% by 2045.  New Mexico’s political and environmental leaders were ecstatic:   

“New Mexico’s Energy Transition Act is the strongest package of its kind in the country,” said Energy, Minerals and Natural Resources Department Secretary Sarah Cottrell Propst.    

“The ETA cements New Mexico’s place as a national leader in the transition to a new, renewable energy economy,” said sponsor Sen. Jacob Candelaria.     

“The ETA protects consumers and reduces electricity costs as New Mexico moves away from coal.” – 350 New Mexico.    

And on and on it went. WOW! Little New Mexico leading the country (world?) toward a future of renewable energy, free from electricity produced by evil, dirty, deadly coal.    

There’s only one tiny problem: The rest of the world isn’t following our lead. China, the world’s number one producer and consumer of coal, is planning on INCREASING coal production by 300 million metric tons this year on top of an increase of 220 million tons last year. That’s 520 million tons MORE COAL in two years.    

Since those are metric tons, 10% larger than the short-ton measure used in the US, that equals about 570 million tons in New Mexico. BTW, China’s total coal production this year will be 4.4 BILLION metric tons.    

And then there’s India, the world’s number three coal producer/consumer:  The government there estimates that thermal coal demand will increase to 1,500 million metric tons by 2040, up from current levels of 955 million tons.   

If China merely holds production flat, which is highly unlikely, the two countries will be producing a total of 5.9 billion metric tons by 2040, an increase of over 900 million short tons from 2020-2021. This is 90 times the amount of coal tiny New Mexico, “a national leader” is going to eliminate by 2045.  

If California and Germany are examples, this will increase our electric bills by at least 50% and make blackouts a regular occurrence. And will this have any meaningful effect on climate change? Of course not. The only thing it will do is make Public Service of New Mexico more profitable and reveal New Mexico’s politicians and environmentalists to be a bunch of virtue signaling, narcissistic morons.