Notes From All Over -- Mid-Day Edition, Part 2 -- Bloomsday -- June 16, 2021

GM: with regard to my earlier note regarding GM, a reader wrote:

We use GM pickups for our shop truck. Plain, simple 2 door , 8 ft bed.

Found out today GM has stopped producing them.

They won’t say it’s permanent. They want to build and sell only high-end (high-margin) trucks since there is a “shortage” of components. Makes sense to maximize profit but we are not buying Denalis to go get parts.

My reply:

One gets the impression that GM is using high-margin vehicle sales (like Hummers) to pay for their pivot to EVs, particularly batteries. 

Canadian pipelines: this unsolicited note (with minor editing) from a reader --

The Trans Mountain expansion will increase the capacity of the pipeline from 300,000 barrels per day to 890,000 bpd, nearly tripling it.

The driving force behind it is that Alaska oil is running out and production is only 1/4 of what it was at its peak (Biden is going to make it worse by banning Alaska oil leases), and California oil is doing a similar thing because of state policies. 

California used to be the 2nd largest producing state, and now it is about 6th.

This leaves refineries in Washington state and California dependent on expensive imported oil from OPEC+ since the only pipeline bringing cheap domestic oil from the interior of North America to the West Coast is the Trans Mountain through BC. 

The US has no similar pipelines. New shale oil from North Dakota and Texas has to go to refineries in Washington and California by railroad.

The US West Coast is cut off from the big shale oil producing fields and refineries in Texas and other states, for those Californians who are wondering why their gasoline is so expensive. Don’t blame the domestic oil companies, blame OPEC and the California government’s environmental policies for the cost of fuel there.

The Trans Mountain also is a mixed crude oil and refined products pipeline that brings 70–80% of the gasoline, diesel fuel, and jet fuel to BC from Alberta’s big refineries, since BC basically has no oil refineries left except for a little teakettle thing in Vancouver that produces only premium gasoline and jet fuel. And people in BC are wondering why their fuel is even more expensive than California.

Note: I don't know about protocol for sharing this, but I've had a hard time getting info. about Trans Mountain. I was of the mind that Canada wouldn't do it unless they could export to Asia via a port in BC, now I'm doubtful.

My thoughts:

• in almost complete agreement with the reader's analysis
• California oil: holds my interest as much as the Libyan oil story, in other words, not at all; when New Mexico and North are running neck and neck at #2 and #3, for California to be #6 tells me all I need to know about the oil industry in California; good, bad, or indifferent, the state has learned to live with this fact;
• Biden's action on Alaskan leases will have no short-term impact on gasoline prices in California;
• gasoline prices in California are determined by policies set in place over the past decades; nothing will change this overnight;
• no mention of Canadian oil coming to the US east of California but it's very, very clear, that's the really big story -- and "Canada" must like what they see;