December 7, 2024 • 17 mins
On this episode host, Phil Tower welcomes back one of our favorite guests, Patrick DeHaan, Head of Petroleum Analysis at GasBuddy.com
Patrick is the leading source for reliable and accurate information on gas price hikes.
In this segment, Patrick joined us to discuss the impact of the new incoming Trump administration on oil prices globally and the domestic price of gasoline in the United States.
He also offered his analysis of President-elect Donald Trump's promise to levy 25% tariffs on imports from several companies around the world, including Canada, from which the United States purchases a significant amount of crude oil.
Patrick also discussed the impact of electric vehicles, slumping EV sales on oil prices, and the current state of gas prices across the country below three dollars a gallon nationwide.
Online: GasBuddy.com
Patrick is the leading source for reliable and accurate information on gas price hikes.
In this segment, Patrick joined us to discuss the impact of the new incoming Trump administration on oil prices globally and the domestic price of gasoline in the United States.
He also offered his analysis of President-elect Donald Trump's promise to levy 25% tariffs on imports from several companies around the world, including Canada, from which the United States purchases a significant amount of crude oil.
Patrick also discussed the impact of electric vehicles, slumping EV sales on oil prices, and the current state of gas prices across the country below three dollars a gallon nationwide.
Online: GasBuddy.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
This is iHeartRadio's West Michigan Weekend. West Michigan Weekend is
a weekly programmed designed to inform and enlighten on a
wide range of public policy issues, as well as news
and current events. Now here's your host, Phil Tower.
Speaker 2 (00:16):
And welcome in to another edition of West Michigan Weekend
from iHeartRadio. As you just heard our friend Jim Cutler say,
I am Phil Tower. It's always an honor and pleasure
to be with you across all of our iHeartRadio brands
here in West Michigan. And we're a podcast as well.
You can get us after you hear this conversation on
the radio at woodradio dot com on the left hand
(00:38):
side of the page.
Speaker 3 (00:39):
In the podcasting section.
Speaker 2 (00:41):
Tis the time of the year when we thought we'd
welcome back our friend Patrick Dehon. It's been a while
and he is a regular guest because he's so good
and he's got one of the most important topics to
talk about, which is oil prices and of course gas
prices what that means at the gas pump. Patrick d
Hans head of petroleum analysis at gasbuddy dot com. You
(01:05):
can follow him all over social media at gasbuddy Guy.
He has been interviewed hundreds of times as a gasoline
price expert for over twenty years. He used to hear
him regularly on Wood Radio. Still do a bit, and
he's back with us on West Michigan Weekend.
Speaker 3 (01:20):
Hey Patrick, happy holidays.
Speaker 4 (01:23):
And you as well. Thanks for having me.
Speaker 3 (01:24):
All right, let's start.
Speaker 2 (01:25):
With the biggest news that made news about a week ago,
and that is, of course, the news of President Trump
sending shockwaves across the northern and southern borders promising major
tariffs on Mexico, Canada, China, and who knows what other country.
He said he would impose a twenty five percent tax
(01:46):
on all products entering the country from Canada and Mexico.
Patrick dihon we import a lot of oil from Canada.
I would assume a good amount of oil from Mexico
as well. What you've been watching this story or closely?
What should we expect in this case? And of course
he has not been sworn into office yet, so he's
not president yet, but everybody's talking.
Speaker 3 (02:09):
About this well.
Speaker 4 (02:10):
I mean, it's certainly a huge change from the status quo.
You know, rarely do you see a blanket statement from
president the lact or president about you know, massive increase
in tariffs for your neighbors, you're some of your largest
training partners. To your point, the US imports just a
little bit less than a million barrels a day of
crudel from Mexico, and we import over four million barrels
(02:33):
a day from Canada. So this is a this is
a major potential to watch very carefully, especially here in
the Great Lakes region as well as the broader Midwest
and the Rockies, because refineries in these regions are primarily
hooked up and have been for many decades to Canadian
crew oil and almost exclusively, I mean some of the
(02:54):
refineries down in our neck of the woods northwest Indiana.
The VP revey back into two thousand and eight expand
it essentially increasing their ability to process Canadian crude oil,
which is a little bit different than what the US produces.
By the way, it's kind of like going in an
autopart store, right there's all sorts of different oil. Your
car needs one type, it can't really use much of
(03:17):
the other, though your manufacturer says not to. Oil refiners
are set up in a similar way. They were designed
and configured to run specific types or specific gravities of
crude oil, and most of the refineries here in the Midwest,
the Great Lakes, the Rockies have been set up to
run Canadian heavy crude oil, which takes a little bit
(03:37):
more refining than a lighter and sweeter crude oil. So
there's a big risk here that refineries that processed this,
potentially on President Trump's first day in office, could suddenly
see a twenty five percent tariff, which rough calculation would
be about a fifteen dollars barrell tax. Which it's kind
(03:59):
of like expect being a restaurant to be able to
absorb the increase in food costs without having to pass
it along. It doesn't work that way. Same thing with
oil companies. If suddenly refineries are paying fifteen dollars a
burro more, they don't have any ability to absorb that
without putting the business at risk and then going broke.
They passed that along to the end user, you and I.
(04:21):
So this is something that could potentially impact gasoline prices
in a significant way in areas where refineries process Canadian crew.
Speaker 2 (04:29):
Of one of his major promises as he was holding
rallies campaigning, and of course even up to the day
that he was re elected as president, he said, we
are going to cut gas prices by boosting domestic oil production.
We're going to drill, baby, drill. Yet, from what I'm reading,
the oil companies have been focused on keeping costs low
(04:52):
and maybe not spending so much a new oil exploration.
He promised to eliminate all the bands on fracking. What
is your take on that? Do you think he has
the power to get the oil companies to pivot once again?
Speaker 4 (05:07):
Not really. The president may think he is empowered to
be able to solve, you know, virtually all these situations,
but oil companies are not beholden to a president. They're
beholden to economics. Their business's success depends on economics, not
on a president, you know. As Excello Mobile's CEO correctly
pointed out, that they are oil companies that is, are
(05:28):
going to be more responsive to economic conditions than what
some guy you know is telling.
Speaker 3 (05:33):
Them to do.
Speaker 4 (05:35):
A president is telling them what to do or trying
to guide them on what to do. Now, President Trump
can ease regulations on a sector, and that can give
oil companies a bit of incentive to maybe drill a
little bit more, But ultimately, oil companies respond to the
price of oil, because that's that's basically what they're taking
from the earth, bring it to the surface, selling it
(05:57):
at a price. And if that price is attractive, they're
going to do more and more. And if that price
isn't as attractive, if they're losing money or not profitable,
they're going to do it less, just like they did
during the pandemic. So oil companies are very much backstopped
by economics, not taking direction from a US president.
Speaker 3 (06:16):
Yeah, well said so.
Speaker 2 (06:18):
One of the things that happens, especially around the holidays,
we see fluctuations in gas price.
Speaker 3 (06:24):
I mean, come on, we see this all year round.
Speaker 2 (06:28):
Just as a recap for our listening audience and for myself.
New different formulations of gasoline depending on the season, depending
on the time of the year. Help help us understand.
Pat dehon from gasbuddy dot com, help us understand what
happens with gas in the wintertime in terms of the formulation,
(06:51):
what it does for pricing. Obviously people are driving a
bit less. But what happens with gas in the wintertime traditionally, well.
Speaker 4 (07:00):
Generally we don't see ozone action days in the coldest months,
Emissions from tailpipes from whatever activities generally are not as
much of a concern when the ambient air temperatures are
cooler because that those emissions don't react in the same
way with cool air as they do warm air. So
in winter there's not quite the stringent regulations on tailpipe
(07:20):
emissions and on types of gasoline and winter gasoline generally
because colder temperatures, winter gasoline generally contains more buttane. Buttane
tends to emit more tailpipe emissions, but it also leads
to improved startability. It's easier to start in cold temperatures.
That buttane is generally much more plentiful, and it's far cheaper,
(07:41):
and that's why winter versions of gasoline tend to cost less.
But to your point, at the same time that we're
using cheaper winter gasoline, which has now been with us
for a little while, Americans don't lay as much. Outdoor
activities are are not as welcoming in the colder months
as they are in the warmer months, when about everyone
loves to get outside for majority of the summer. So
(08:03):
those two things usually lead gas prices to fall every autumn,
and gas prices generally remain low through the winter before
they start climbing in the spring, and then we start
to talk about the winter formulation switching back to summer gasoline.
That is something that starts in earnest, already in March.
So these low prices that we're seeing right now with
by the way, Gasbuddy tracking thirty states where average gas
(08:25):
prices are back below three dollars a gallon and almost
one hundred thousand stations, these prices will start to fade
away as winter does as well.
Speaker 3 (08:35):
Patrick Tihanas with us.
Speaker 2 (08:37):
Patrick is the head of petroleum analysis at gasbuddy dot com.
You can follow him and add Gasbuddy guy on social media. Patrick,
we were hearing just NonStop about EV's and what the
major automotive automobile manufacturers we're doing with evs, Ford switching
(08:57):
plants over, and that seemed to come to a near
halt at least in terms of the marketing and the hype. Yes,
the evs are still being built, they're still being sold,
but I'm just curious. We anticipate as more evs are
sold and manufactured, the demand for oil globally will go down.
(09:18):
But you've seen this happen. What is your take on
what's going to happen? In terms of the ev pause
or do you think this is just a blip and
this is going to continue for quite a while. Obviously
there are government mandates in place in certain countries.
Speaker 3 (09:34):
I'd love your take on that.
Speaker 4 (09:36):
Well, what we've seen with evs is when you try
to win the popularity contest and you know, respond to
trends before trends really exist. And car manufacturers kind of
threw all their eggs in one basket, especially some of
them who said, you know, we're not going to produce
internal combustion engine vehicles anymore, because you know, while it's
a popular move to move to evs, and while there's
(09:59):
a lot of incentives, it goes to show that if
those incentives start to disappear, you know, there are some
Americans that may not want to change yet. And so
car manufacturers now realize that, you know, it's getting a
little harder. Americans out there don't all want to jump
into you know, a different vehicle. The vehicles, you know,
(10:20):
because of inflation, evs have gotten much more expensive, as
have you know, internal commotion engine vehicles as well. But
I think we're seeing a healthy correction on how fast
we're willing to move to a new technology, and I
think the reason why we're backing a little bit or
slowing down significantly is because everyone was trying to win
the popularity contest and be the first person to do
(10:41):
this and to do that, and consumers said, no, wait
a minute, we're we don't want any of that, right,
so they I think a lot of overestimation occurred, and
now car manufacturers are having to grapple with reality that
they disconnected themselves from. And I think evs are still
you know, they may be a good idea for some people,
but not ever. And that's been the better rock of
(11:02):
American principle is the freedom to choose what you want
an EV or internal combustion engine vehicle or a hybrid
or hydrogen or anything. And people do not like being
forced to do something, and that's been the realization. Now
car manufacturers have readjusted their expectations.
Speaker 2 (11:20):
It's very well said, you can't force things, even if
you're the government. Patrick t han With US head of
petroleum analysis at gasbuddy dot com. We heard for years
about the Keystone pipeline. It was always mentioned in campaigns,
especially in the twenty twenty campaign. It died or at
(11:40):
least it has been dead. Do we think that will
change under President Trump? Could there be a rebirth in
a call for the Keystone pipeline or is that dead,
done and buried.
Speaker 4 (11:52):
Well, you know, here's the really interesting piece of irony.
When talking about the Canadian tariffs or the potential terrorift
on Canada, Trump has also been a very big proponent
of the Keystone XCEL. And by the way, a lot
of folks get the Keystone XL pipeline confused with just
the regular Keystone pipeline, which was successfully built and has
been running for over a decade, thank you, different pipelines.
(12:14):
But the Keystone Xcel has been Trump's, you know, kind
of little victory that he's wanted. The interesting thing now
is the Keystone XL pipeline has been lobbied very hard
by Canada's government, and it's been lobbied hard by oil
producers in Canada. And it's really important to make that
distinction because building the Keystone XCEL pipeline would be a
(12:37):
massive win for Canadian producers for the Canadian government. Canadian
oil producers have been selling oil to the United States
at a massive discount of about fifteen to sixteen dollars
a rail today. Why because Canada doesn't really have access
to the global market because all of this oil flows
down into the Midwest and it's stuck there. If you
(12:59):
build a Keystone Excel pipeline, which would connect all the
way down to the Port of Houston, you've just given
Canada a way to export its oil to the global market.
And especially if you're going to throw twenty five percent
terrace on that crude oil. Guess what if you build
a Keystone, You're giving Canada perfect route away from the
United States market, and then US producers or US refiners
(13:20):
lose their massive discount and oil and it diverts oil elsewhere.
So the huge irony here is it would be a
huge loss for the US building the Keystone Xcel pipeline,
especially if Trump is going to be putting terrace on
Canadian oil, because it's inherently going to allow the Canadians
to get rid of that oil exactly what they're looking
(13:41):
for very quickly. And by the way, the Canadians, in
the loss of building the Keystone XL pipeline, the Canadians
already said we're done with this. They already built another
pipeline called the Trans Mountain pipeline which is owned by
the Canadian government that allows Canadian oil to flow from
Alberta to Vancouver where boom it can be exported. Now,
(14:03):
that's only a million barrels a day. If you build
the keystone. The irony is it's going to hand Canada
a massive victory and a massive loss to the US.
Speaker 2 (14:12):
Patrick Dhan is with us here on West Michigan Weekend
on iHeartRadio, the head of petroleum analysis at gasbuddy dot com.
One quick question before we wrap things up, and it
has always love having you on the program. The e
eighty five boom, it seemed like it was going to
only pick up steam. Now it seems to have settled down.
(14:33):
I mean, we still see the yellow pump handles and
there are still eighty five vehicles out there. Is that
a thing in the past as well, and we're going
to see that kind of fuel phased out in the
long run.
Speaker 3 (14:45):
What's your thoughts on that.
Speaker 4 (14:46):
Yeah, that's a great question. That's real similar in my
head to what's going on with ev So it was
heavily pumped by the government. E eighty five was heavily
pumped by the government, by renewables, by farmers, who wanted
more things that they could sell their corn for. And
when you heavily incentivize something and the market doesn't want it,
what happens, Well, when the incentives run out, it's kind
(15:09):
of that's it. And the incentives kind of ran out.
Now there are still more incentives on E eighty five.
But the other thing is auto manufacturers didn't really support
a whole lot of vehicles with E eighty five. Right.
You still can't put E eighty five in a vehicle
unless it's specifically designed for it. And so the other
issue is that, you know, this is kind of a
multi layer system. Farmers want to sell more corn to
(15:31):
snol producers who refine that corn into E eighty five
and ethanol, and you need really widespread adoption. You need
a big buy in for manufacturers, right because if the
car manufacturers say we're not going to build this, well,
nobody's going to pump ethanol. So the other issue is
that there's only a finite amount of ffv's flexible fuel
flexible vehicles that can take E eighty five. But the
(15:54):
interesting thing fills on the other side of that issue
is E fifteen, which is being dubbed un loaded eighty eight,
which is a five percent increase in ethanol that's been
approved by the EPA. Most cars two thousand and one
and newer can take this E fifteen or on leaded
eighty eight, So I think you know what you're seeing
(16:14):
is kind of this move away from E eighty five
because manufacturers don't really support it as much. But E
fifteen is only a small increase in the amount of ethanol,
and most cars can take that.
Speaker 2 (16:27):
Always learn something speaking with you. Always love having you
on the program. Patrick Tihan, head of petroleum analysis at
gasbuddy dot com. He's been our guest in this segment
of West Michigan Weekend.
Speaker 3 (16:38):
Pat.
Speaker 2 (16:38):
Always appreciate your time, your wisdom, and your passion for
what you do.
Speaker 3 (16:43):
Thanks so much for joining us.
Speaker 4 (16:45):
Always great question, Phil, Thanks for having me.
Speaker 1 (16:48):
You've been listening to iHeartRadio's West Michigan Weekend. West Michigan
Weekend is a production of Wood Radio and iHeartRadio.
This is iHeartRadio's West Michigan Weekend. West Michigan Weekend is
a weekly programmed designed to inform and enlighten on a
wide range of public policy issues, as well as news
and current events. Now here's your host, Phil Tower.
Speaker 2 (00:16):
And welcome in to another edition of West Michigan Weekend
from iHeartRadio. As you just heard our friend Jim Cutler say,
I am Phil Tower. It's always an honor and pleasure
to be with you across all of our iHeartRadio brands
here in West Michigan. And we're a podcast as well.
You can get us after you hear this conversation on
the radio at woodradio dot com on the left hand
(00:38):
side of the page.
Speaker 3 (00:39):
In the podcasting section.
Speaker 2 (00:41):
Tis the time of the year when we thought we'd
welcome back our friend Patrick Dehon. It's been a while
and he is a regular guest because he's so good
and he's got one of the most important topics to
talk about, which is oil prices and of course gas
prices what that means at the gas pump. Patrick d
Hans head of petroleum analysis at gasbuddy dot com. You
(01:05):
can follow him all over social media at gasbuddy Guy.
He has been interviewed hundreds of times as a gasoline
price expert for over twenty years. He used to hear
him regularly on Wood Radio. Still do a bit, and
he's back with us on West Michigan Weekend.
Speaker 3 (01:20):
Hey Patrick, happy holidays.
Speaker 4 (01:23):
And you as well. Thanks for having me.
Speaker 3 (01:24):
All right, let's start.
Speaker 2 (01:25):
With the biggest news that made news about a week ago,
and that is, of course, the news of President Trump
sending shockwaves across the northern and southern borders promising major
tariffs on Mexico, Canada, China, and who knows what other country.
He said he would impose a twenty five percent tax
(01:46):
on all products entering the country from Canada and Mexico.
Patrick dihon we import a lot of oil from Canada.
I would assume a good amount of oil from Mexico
as well. What you've been watching this story or closely?
What should we expect in this case? And of course
he has not been sworn into office yet, so he's
not president yet, but everybody's talking.
Speaker 3 (02:09):
About this well.
Speaker 4 (02:10):
I mean, it's certainly a huge change from the status quo.
You know, rarely do you see a blanket statement from
president the lact or president about you know, massive increase
in tariffs for your neighbors, you're some of your largest
training partners. To your point, the US imports just a
little bit less than a million barrels a day of
crudel from Mexico, and we import over four million barrels
(02:33):
a day from Canada. So this is a this is
a major potential to watch very carefully, especially here in
the Great Lakes region as well as the broader Midwest
and the Rockies, because refineries in these regions are primarily
hooked up and have been for many decades to Canadian
crew oil and almost exclusively, I mean some of the
(02:54):
refineries down in our neck of the woods northwest Indiana.
The VP revey back into two thousand and eight expand
it essentially increasing their ability to process Canadian crude oil,
which is a little bit different than what the US produces.
By the way, it's kind of like going in an
autopart store, right there's all sorts of different oil. Your
car needs one type, it can't really use much of
(03:17):
the other, though your manufacturer says not to. Oil refiners
are set up in a similar way. They were designed
and configured to run specific types or specific gravities of
crude oil, and most of the refineries here in the Midwest,
the Great Lakes, the Rockies have been set up to
run Canadian heavy crude oil, which takes a little bit
(03:37):
more refining than a lighter and sweeter crude oil. So
there's a big risk here that refineries that processed this,
potentially on President Trump's first day in office, could suddenly
see a twenty five percent tariff, which rough calculation would
be about a fifteen dollars barrell tax. Which it's kind
(03:59):
of like expect being a restaurant to be able to
absorb the increase in food costs without having to pass
it along. It doesn't work that way. Same thing with
oil companies. If suddenly refineries are paying fifteen dollars a
burro more, they don't have any ability to absorb that
without putting the business at risk and then going broke.
They passed that along to the end user, you and I.
(04:21):
So this is something that could potentially impact gasoline prices
in a significant way in areas where refineries process Canadian crew.
Speaker 2 (04:29):
Of one of his major promises as he was holding
rallies campaigning, and of course even up to the day
that he was re elected as president, he said, we
are going to cut gas prices by boosting domestic oil production.
We're going to drill, baby, drill. Yet, from what I'm reading,
the oil companies have been focused on keeping costs low
(04:52):
and maybe not spending so much a new oil exploration.
He promised to eliminate all the bands on fracking. What
is your take on that? Do you think he has
the power to get the oil companies to pivot once again?
Speaker 4 (05:07):
Not really. The president may think he is empowered to
be able to solve, you know, virtually all these situations,
but oil companies are not beholden to a president. They're
beholden to economics. Their business's success depends on economics, not
on a president, you know. As Excello Mobile's CEO correctly
pointed out, that they are oil companies that is, are
(05:28):
going to be more responsive to economic conditions than what
some guy you know is telling.
Speaker 3 (05:33):
Them to do.
Speaker 4 (05:35):
A president is telling them what to do or trying
to guide them on what to do. Now, President Trump
can ease regulations on a sector, and that can give
oil companies a bit of incentive to maybe drill a
little bit more, But ultimately, oil companies respond to the
price of oil, because that's that's basically what they're taking
from the earth, bring it to the surface, selling it
(05:57):
at a price. And if that price is attractive, they're
going to do more and more. And if that price
isn't as attractive, if they're losing money or not profitable,
they're going to do it less, just like they did
during the pandemic. So oil companies are very much backstopped
by economics, not taking direction from a US president.
Speaker 3 (06:16):
Yeah, well said so.
Speaker 2 (06:18):
One of the things that happens, especially around the holidays,
we see fluctuations in gas price.
Speaker 3 (06:24):
I mean, come on, we see this all year round.
Speaker 2 (06:28):
Just as a recap for our listening audience and for myself.
New different formulations of gasoline depending on the season, depending
on the time of the year. Help help us understand.
Pat dehon from gasbuddy dot com, help us understand what
happens with gas in the wintertime in terms of the formulation,
(06:51):
what it does for pricing. Obviously people are driving a
bit less. But what happens with gas in the wintertime traditionally, well.
Speaker 4 (07:00):
Generally we don't see ozone action days in the coldest months,
Emissions from tailpipes from whatever activities generally are not as
much of a concern when the ambient air temperatures are
cooler because that those emissions don't react in the same
way with cool air as they do warm air. So
in winter there's not quite the stringent regulations on tailpipe
(07:20):
emissions and on types of gasoline and winter gasoline generally
because colder temperatures, winter gasoline generally contains more buttane. Buttane
tends to emit more tailpipe emissions, but it also leads
to improved startability. It's easier to start in cold temperatures.
That buttane is generally much more plentiful, and it's far cheaper,
(07:41):
and that's why winter versions of gasoline tend to cost less.
But to your point, at the same time that we're
using cheaper winter gasoline, which has now been with us
for a little while, Americans don't lay as much. Outdoor
activities are are not as welcoming in the colder months
as they are in the warmer months, when about everyone
loves to get outside for majority of the summer. So
(08:03):
those two things usually lead gas prices to fall every autumn,
and gas prices generally remain low through the winter before
they start climbing in the spring, and then we start
to talk about the winter formulation switching back to summer gasoline.
That is something that starts in earnest, already in March.
So these low prices that we're seeing right now with
by the way, Gasbuddy tracking thirty states where average gas
(08:25):
prices are back below three dollars a gallon and almost
one hundred thousand stations, these prices will start to fade
away as winter does as well.
Speaker 3 (08:35):
Patrick Tihanas with us.
Speaker 2 (08:37):
Patrick is the head of petroleum analysis at gasbuddy dot com.
You can follow him and add Gasbuddy guy on social media. Patrick,
we were hearing just NonStop about EV's and what the
major automotive automobile manufacturers we're doing with evs, Ford switching
(08:57):
plants over, and that seemed to come to a near
halt at least in terms of the marketing and the hype. Yes,
the evs are still being built, they're still being sold,
but I'm just curious. We anticipate as more evs are
sold and manufactured, the demand for oil globally will go down.
(09:18):
But you've seen this happen. What is your take on
what's going to happen? In terms of the ev pause
or do you think this is just a blip and
this is going to continue for quite a while. Obviously
there are government mandates in place in certain countries.
Speaker 3 (09:34):
I'd love your take on that.
Speaker 4 (09:36):
Well, what we've seen with evs is when you try
to win the popularity contest and you know, respond to
trends before trends really exist. And car manufacturers kind of
threw all their eggs in one basket, especially some of
them who said, you know, we're not going to produce
internal combustion engine vehicles anymore, because you know, while it's
a popular move to move to evs, and while there's
(09:59):
a lot of incentives, it goes to show that if
those incentives start to disappear, you know, there are some
Americans that may not want to change yet. And so
car manufacturers now realize that, you know, it's getting a
little harder. Americans out there don't all want to jump
into you know, a different vehicle. The vehicles, you know,
(10:20):
because of inflation, evs have gotten much more expensive, as
have you know, internal commotion engine vehicles as well. But
I think we're seeing a healthy correction on how fast
we're willing to move to a new technology, and I
think the reason why we're backing a little bit or
slowing down significantly is because everyone was trying to win
the popularity contest and be the first person to do
(10:41):
this and to do that, and consumers said, no, wait
a minute, we're we don't want any of that, right,
so they I think a lot of overestimation occurred, and
now car manufacturers are having to grapple with reality that
they disconnected themselves from. And I think evs are still
you know, they may be a good idea for some people,
but not ever. And that's been the better rock of
(11:02):
American principle is the freedom to choose what you want
an EV or internal combustion engine vehicle or a hybrid
or hydrogen or anything. And people do not like being
forced to do something, and that's been the realization. Now
car manufacturers have readjusted their expectations.
Speaker 2 (11:20):
It's very well said, you can't force things, even if
you're the government. Patrick t han With US head of
petroleum analysis at gasbuddy dot com. We heard for years
about the Keystone pipeline. It was always mentioned in campaigns,
especially in the twenty twenty campaign. It died or at
(11:40):
least it has been dead. Do we think that will
change under President Trump? Could there be a rebirth in
a call for the Keystone pipeline or is that dead,
done and buried.
Speaker 4 (11:52):
Well, you know, here's the really interesting piece of irony.
When talking about the Canadian tariffs or the potential terrorift
on Canada, Trump has also been a very big proponent
of the Keystone XCEL. And by the way, a lot
of folks get the Keystone XL pipeline confused with just
the regular Keystone pipeline, which was successfully built and has
been running for over a decade, thank you, different pipelines.
(12:14):
But the Keystone Xcel has been Trump's, you know, kind
of little victory that he's wanted. The interesting thing now
is the Keystone XL pipeline has been lobbied very hard
by Canada's government, and it's been lobbied hard by oil
producers in Canada. And it's really important to make that
distinction because building the Keystone XCEL pipeline would be a
(12:37):
massive win for Canadian producers for the Canadian government. Canadian
oil producers have been selling oil to the United States
at a massive discount of about fifteen to sixteen dollars
a rail today. Why because Canada doesn't really have access
to the global market because all of this oil flows
down into the Midwest and it's stuck there. If you
(12:59):
build a Keystone Excel pipeline, which would connect all the
way down to the Port of Houston, you've just given
Canada a way to export its oil to the global market.
And especially if you're going to throw twenty five percent
terrace on that crude oil. Guess what if you build
a Keystone, You're giving Canada perfect route away from the
United States market, and then US producers or US refiners
(13:20):
lose their massive discount and oil and it diverts oil elsewhere.
So the huge irony here is it would be a
huge loss for the US building the Keystone Xcel pipeline,
especially if Trump is going to be putting terrace on
Canadian oil, because it's inherently going to allow the Canadians
to get rid of that oil exactly what they're looking
(13:41):
for very quickly. And by the way, the Canadians, in
the loss of building the Keystone XL pipeline, the Canadians
already said we're done with this. They already built another
pipeline called the Trans Mountain pipeline which is owned by
the Canadian government that allows Canadian oil to flow from
Alberta to Vancouver where boom it can be exported. Now,
(14:03):
that's only a million barrels a day. If you build
the keystone. The irony is it's going to hand Canada
a massive victory and a massive loss to the US.
Speaker 2 (14:12):
Patrick Dhan is with us here on West Michigan Weekend
on iHeartRadio, the head of petroleum analysis at gasbuddy dot com.
One quick question before we wrap things up, and it
has always love having you on the program. The e
eighty five boom, it seemed like it was going to
only pick up steam. Now it seems to have settled down.
(14:33):
I mean, we still see the yellow pump handles and
there are still eighty five vehicles out there. Is that
a thing in the past as well, and we're going
to see that kind of fuel phased out in the
long run.
Speaker 3 (14:45):
What's your thoughts on that.
Speaker 4 (14:46):
Yeah, that's a great question. That's real similar in my
head to what's going on with ev So it was
heavily pumped by the government. E eighty five was heavily
pumped by the government, by renewables, by farmers, who wanted
more things that they could sell their corn for. And
when you heavily incentivize something and the market doesn't want it,
what happens, Well, when the incentives run out, it's kind
(15:09):
of that's it. And the incentives kind of ran out.
Now there are still more incentives on E eighty five.
But the other thing is auto manufacturers didn't really support
a whole lot of vehicles with E eighty five. Right.
You still can't put E eighty five in a vehicle
unless it's specifically designed for it. And so the other
issue is that, you know, this is kind of a
multi layer system. Farmers want to sell more corn to
(15:31):
snol producers who refine that corn into E eighty five
and ethanol, and you need really widespread adoption. You need
a big buy in for manufacturers, right because if the
car manufacturers say we're not going to build this, well,
nobody's going to pump ethanol. So the other issue is
that there's only a finite amount of ffv's flexible fuel
flexible vehicles that can take E eighty five. But the
(15:54):
interesting thing fills on the other side of that issue
is E fifteen, which is being dubbed un loaded eighty eight,
which is a five percent increase in ethanol that's been
approved by the EPA. Most cars two thousand and one
and newer can take this E fifteen or on leaded
eighty eight, So I think you know what you're seeing
(16:14):
is kind of this move away from E eighty five
because manufacturers don't really support it as much. But E
fifteen is only a small increase in the amount of ethanol,
and most cars can take that.
Speaker 2 (16:27):
Always learn something speaking with you. Always love having you
on the program. Patrick Tihan, head of petroleum analysis at
gasbuddy dot com. He's been our guest in this segment
of West Michigan Weekend.
Speaker 3 (16:38):
Pat.
Speaker 2 (16:38):
Always appreciate your time, your wisdom, and your passion for
what you do.
Speaker 3 (16:43):
Thanks so much for joining us.
Speaker 4 (16:45):
Always great question, Phil, Thanks for having me.
Speaker 1 (16:48):
You've been listening to iHeartRadio's West Michigan Weekend. West Michigan
Weekend is a production of Wood Radio and iHeartRadio.
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