Industry Insight

Crude prices jumped $7-10 this week with the closure of the Strait of Hormuz. This feels like a relatively muted reaction to 20% of the world’s crude supply being cut off from the market. It seems that most buyers are expecting the Strait to reopen before inventories get pinched too hard, or for the “shadow” fleet to move enough to keep the markets unplugged.  

I was riding the train to work and decided to conduct a scientific, peer reviewed informal poll on gasoline prices with my friend-group. It’s Los Angeles (yes! I ride the train in LA), so most of my friends work in Hollywood or adjacent, but they’ve known me for over a decade, and heard me talk about my work in Big Oil Energy and Environmental Consulting, so I thought there was a chance they could answer: 

Kinder Morgan and P66 have announced open season for bidding on the new Western Gateway Pipeline. As part of this project, KM intends to reverse the SFPP west pipeline, which moves product from California to Arizona. If it’s built, for the first time there will be direct pipeline connectivity from Texas to the West Coast.  

The prevailing wage and apprenticeship (PWA) requirements were introduced as part of the Inflation Reduction Act (IRA) of 2022 to incentivize clean energy projects and job creation in the US. PWA are conditions that can enhance the value of clean energy tax credits within the IRA. The 45Q Carbon Capture and 45V Hydrogen tax credit sections of the IRA include PWA incentives that multiply the original credit value up to 5x if the appropriate conditions are met (2).