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Musings From The Oil Patch – Nov. 21, 2017

Much has been made of the success Norway has achieved in driving electric vehicle sales to nearly 30% of new car sales this year, placing it at the top of the list of countries with leading EV penetration.  We did a deeper dive into those countries to see there were other drivers explaining their success besides government subsidies.  We looked at car sales, gasoline prices, population, land mass, density ratios, road systems, people per kilometer of roads, etc.  We also examined Ukraine, which is #5 on the list, but has low gasoline prices and doesn’t provide subsidies, yet.  Outside of Ukraine, subsidies and potentially high gasoline prices are the best guide to EV success.  The upcoming winter weather forecast doesn’t provide much encouragement for the natural gas market, given the volume of storage we ended the injection season with.  Will this be another warm winter, crushing gas prices, or could we see some Polar Vortex winter cold temperatures?

Donald Trump has called climate change a hoax.  Maybe he isn’t right about climate science, but maybe his word choice it to highlight his belief that the push by the European Union to beat up on the U.S. over its climate change stance is more likely a hidden economic war.  We examine the history of Europe since the end of WW II and the continent’s energy situation, and how it may have shaped a strategy of using climate change to force the U.S. to stop using its cheap energy, thereby lifting U.S. business costs.  Higher energy costs would create a more competitive landscape for EU industry.  Our examination impressed us with how vulnerable Europe is to high energy prices, and why raising U.S. energy costs how be a competitive benefit.  TransCanada is rumored to be considering a name change.  We use the Dragnet approach to understanding the potential motivation for corporate name changes.  Just the facts, ma’am.

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