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Alex Epstein Profile picture
@AlexEpstein
Jan 18, 2022 • 12 tweets • 5 min read • Read on X
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Breaking: A previously-unreleased pro-oil/gas letter sent by @BlackRock to Texas lawmakers and oil/gas executives reveals that the company is simultaneously 1) trying to gain status by supporting anti-oil/gas net zero goals, and 2) trying not to lose any pro-oil/gas investors.
🧵
BlackRock's Larry Fink is the #1 leader in the financial world for the economically baseless idea that the global economy should and will be net-zero by 2050. This idea would mean the rapid and total or near-total destruction of the oil and gas industry.
alexepstein.substack.com/p/the-esg-move…
In response to BlackRock and others advocating anti-oil-and-gas "net zero" policies, TX pension funds have started refusing to do business with anti-oil/gas institutions. BlackRock's response: a covert PR campaign to tell TX lawmakers and oil execs that it's very pro oil/gas!
Reading BlackRock's PR letter to TX lawmakers and oil execs, you would think that BlackRock has been a public champion of oil and gas--instead of the #1 advocate for "net zero" policies that necessitate the near-term destruction of oil and gas and have already slashed investment.
In his 2021 Letter to CEOs, Larry Fink said BlackRock is "committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner"--which means "emissions need to decline by 8-10% annually between 2020 and 2050."
This would obviously destroy the oil/gas industry.
The BlackRock-led "net zero" ESG movement is a major cause of oil/gas investment declining dramatically, leading to unnecessarily high prices. From 2011-2021, oil/gas exploration investments declined by 50%. Less investment = less supply = higher prices.
alexepstein.substack.com/p/the-esg-move…
BlackRock's TX letter repeatedly and validly praises oil and gas companies--e.g., "these companies play crucial roles in the economy" and warns against rapid elimination. But such thoughts and warnings were totally absent from Larry Fink's ultra-influential 2021 Letter to CEOs.
Larry Fink's 2021 Letter to CEOs was pure climate catastrophism and "net zero" fantasy--to the point that his only comment about China, which was and is rapidly increasing its fossil fuel use, was to praise China's "historic commitments to achieve net zero emissions"!
Larry Fink's 2022 Letter to CEOs should have
1) Explicitly acknowledged the immense value of oil/gas and the peril of rapid elimination and
2) Explicitly acknowledged and apologized for BlackRock's role in causing today's oil/gas underinvestment and shortages.

It does neither.
Instead of acknowledging oil/gas's immense value and apologizing for BlackRock's role in today's energy shortages, Larry Fink's 2022 letter makes a trivializing reference to their value and does not even mention today's energy crisis, let alone reflect on BlackRock's culpability.
Here is the full letter that BlackRock circulated among TX lawmakers and oil/gas executives.

While I am the first to release this letter, I am not breaking any laws/confidentiality in doing so.

Note: BlackRock mislabeled the year as 2021 instead of 2022.
industrialprogress.com/blackrock/
Texans and others shouldn't be fooled by BlackRock's PR campaign to pretend to be big supporters of oil and gas while leading the "net zero" policy push that will destroy oil and gas--and, as a result, the global economy and standard of living.
alexepstein.substack.com/p/the-esg-move…

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More from @AlexEpstein

Alex Epstein Profile picture
Apr 27
Canada has 3X the US’s oil reserves but less than 40% the production.

Why? Anti-oil politicians like Mark Carney who say they’re protecting Earth’s coldest country from global warming.

Here's the story of Canada's squandered oil opportunity—and how to reverse it 🇨🇦👇 Image
*Canada has the greatest oil opportunity on Earth: > 3 times the reserves of the US, with lower production costs.*

Canada has 170 billion barrels of proven oil reserves—by far the largest of any free country. And its producers can profit at $44 oil, vs. >$57 for US shale.

Canadian oil production is also continuing to get cheaper. Oil sands operating costs have dropped 19% over the past five years, and the industry—which is still fine-tuning how to coax oil-like bitumen out of oil sands—has substantial room for further cost reductions.

In addition to its massive proven oil reserves, Canada also has massive unexplored oil resources. Canada’s Northwest Territories may contain up to 37% of Canada’s total oil reserves, much of it light crude, which is even cheaper to extract and transport than bitumen from oil sands.
*Canada is squandering its oil opportunity, with < 40% of US production and much slower growth.*

Given Canada's massive oil reserves and lower production costs, Canadian oil should have been growing far faster than US oil—on a path to producing even more oil than the US does.

Instead, Canada is totally squandering its oil opportunity, with less than 40% of US production and slower growth since 2010.Image
Read 12 tweets
Alex Epstein Profile picture
Apr 25
Why Congress's new budget should eliminate all IRA "tax credits"

1. They are subsidies
2. They promote inferior energy
3. They raise energy costs
4. They make energy unreliable
5. They increase our debt
6. They make our economy less productive
7. They don't lower CO2 emissions
*Truth 1: IRA energy tax credits are really just subsidies*

Real tax credits let productive industries keep/reinvest more of their profits.

Most IRA "tax credits" are transferable tax reduction certificates that unprofitable industries trade for cash. I.e., subsidies.

A tax credit lets productive industries pay less tax on profits, which enables them to reinvest in additional productivity.

But most IRA "tax credits" support activities that are unprofitable on a free market—e.g., solar, wind, hydrogen—and therefore have no taxes to reduce with credits.

How can unprofitable activities be set to get a trillion dollars in IRA "tax credits"?

Because they are aren't really tax credits but *transferable tax reduction certificates* that can be easily sold for cash to profitable companies (and sometimes the government itself).

Giving a trillion dollars in transferable tax cut certificates to unprofitable activities that pay no taxes is no different than giving transferable tax reduction certificates to individuals who pay no taxes.

It's a trillion dollar subsidy, not a tax credit.
*Truth 2: Every IRA subsidy promotes inferior energy*

Every subsidy has lobbyists who say it's somehow improving American energy.

But the fact is, they are demanding subsidies because the energy they are pushing is inferior and couldn't survive or thrive on a free market.

The IRA's "45Y" and "48E" subsidies will give $241-901 billion to companies for "clean electricity," mostly intermittent solar and wind—which would be used far less in a free market because they are so unreliable. E.g., CA has chronic reliability problems from depending on solar.

The IRA's "45X" Advanced Manufacturing Production subsidies will give companies $132-193 billion to inefficiently manufacture batteries, as well as the solar panels and wind turbines that are created huge reliability problems on our grid and increasing the cost of electricity.

The IRA's "30D," "25E," and "45W" subsidies will give $117-393 billion to companies for EVs—whose mix of cost and (in)convenience most consumers won't pay market prices for, and therefore need huge subsidies as well as mandates to buy.

The IRA's "45Q" subsidies will give companies $34-210 billion to capture CO2 and pump it underground—a process companies would use very little on a free market since it's so costly. E.g., carbon capture for a coal plant costs 4 times the price of the coal!

The IRA's "45V" subsidies give companies $33-100 billion for hydrogen fuel—which would exist very little in a free market because it's so expensive to make. Hydrogen costs 10 times what gasoline does for the same energy! And favored "green" hydrogen is even more!

The IRA's "45Z" subsidies will give companies $43 billion for various "clean fuel" projects, mostly biofuels—which would be used far less in a free market since they are expensive to produce and compete with food for cropland.

The IRA's "25C" and "25D" subsidies will pay (mostly wealthy) property owners $28-276 billion to use government-favored "energy efficiency" technologies like solar panels and heat pumps that they wouldn't otherwise use or be willing to pay for.
Read 10 tweets
Alex Epstein Profile picture
Mar 28
⚠️ WARNING: The secret UN carbon tax that's about to fleece America

Next week, the UN votes on an ocean carbon tax that would spike the price of food, fuel, and everyday essentials—hitting US the hardest.

Here's what the admin and Congress can do to stop this in its tracks👇🧵 Image
The UN's International Maritime Organization (IMO) is supposed to ensure safe shipping around the world.

Instead, it's pushing a carbon tax on shipping fuel, with proposals ranging from $19 to $150/ton of CO2—the equivalent of adding $1.29 to the price of gasoline! Image
A $150/ton carbon tax on shipping would double fuel costs for large ships.

The marine fuel oil used to power most large ships costs ~$400/ton. Since burning one ton of marine fuel oil produces ~3.2 tons of CO2, a $150/ton carbon tax adds ~$480/ton—roughly doubling today's price.
Read 11 tweets
Alex Epstein Profile picture
Mar 12
Did the EPA really just take the "Biggest Deregulatory Action in U.S. History"?

Actually, yes.

Here are 18 important deregulatory actions EPA announced today, and why they will make life better for all of us.

🧵👇
1. "Reconsideration of regulations on power plants (Clean Power Plan 2.0)"

These Biden regs would effectively ban all coal plants and new natgas plants by demanding impossible 90% carbon capture.

Reconsidering them is essential to preserving the grid and unleashing electricity.
2. "Reconsideration of light-duty, medium-duty, and heavy-duty vehicle regulations"

These Biden regs paved the way for the EV mandate by imposing unachievable emission standards on gas vehicles.

Reconsidering them is essential for preserving automotive choice.
Read 20 tweets
Alex Epstein Profile picture
Mar 12
Amazing news: @EPA is challenging the single most destructive regulatory action in US history: the "endangerment finding."

This bogus "finding" allowed Obama/Biden to ban gas cars, shut down power plants, slow US oil growth, and lock up our limitless natural gas.

Full story 👇
Ever wonder why the Biden EPA was able to become an economic dictator, prohibiting most Americans from buying a gas car after 2032 and effectively banning all coal plants and new natgas plants after 2039?

It started with the Obama EPA's bogus "endangerment finding."
In 2009, the Obama EPA issued a "finding" that GHGs "endanger both the public health and the public welfare of current and future generations."

But GHGs mostly come from fossil fuels, which on net had clearly been enhancing health and welfare—and would continue doing so.
Read 13 tweets
Alex Epstein Profile picture
Jan 15
It may seem impossible, but 4 years from now America can have

1. Record oil and gas production

2. Cheap, plentiful, reliable electricity

3. High environmental quality

4. Low climate danger

5. A nuclear renaissance

Here are the 25 policy changes that will get us there.

👇 Image
1: Unleash responsible development on federal lands/waters

Anti-development policies prevent us from tapping enormous energy reserves on federal lands/waters.

Responsible development can unlock the full energy potential of ¼ of the US (!) while protecting environmental quality.
2: Limit NEPA

The leading source of project delays is the abuse of NEPA (National Environmental Policy Act) to require endless environmental reviews.

Dramatically limiting NEPA's complexity and scope will help all energy reach its potential, from oil to nuclear to geothermal.
Read 28 tweets

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