America’s Grid Is Near Its Breaking Point — and Why That’s Great for Investors

Michael Tanner: [00:00:00] America’s grid is near its breaking point and why that’s great for investors next on the energy newsbeat stand up [00:00:06][6.4]

Stuart Turley: [00:00:14] America’s grid is nearing its breaking point. Hold on to this one. The United States power grid is a marvel of 21st century engineering. It is now teetering on the edge of a collapse as demand surges from emerging technologies like artificial intelligence. That’s AI. Data centers and electric vehicles and aging infrastructure struggle to keep up recent blackouts as escalating costs and regulatory bottlenecks are painting a picture, a system pushed to its limits. And we want to go through some of that. Extreme weather exacerbates whole problems. The heat waves in Texas and storms have triggered widespread blackouts. But let’s take a look at behind the meter solutions in companies. Michael, when we sit back and take a, look the grid is breaking, but there’s places to money at it and that’s why I wanted to put a place here such as battery storage micro grids rooftop so they’re all gaining traction but are they the right traction They should allow businesses and households to generate and store power independently, reducing reliance on the main grid. My whole purpose in putting that in there is that you’ve got Tesla with their home batteries and their other storage. They, I think, are going to become a really big thing to take a look at when you take a look at the DOE is allocating 32 million in 2025 for smart EV Charging and distributing systems. Still. So I think this is something that’s keep an eye on. [00:01:50][96.5]

Michael Tanner: [00:01:51] Yeah, 23 million for EV charging. So what, they’ll get three done. They’ll get 3 done. Hopefully, they at least get one. I find it really fascinating, Stu. You put a bunch of really interesting stats in here. As everybody knows, electrical demand is skyrocketing. A lot of this. And it’s kind of funny. You say 21st century engineering. I would say the grid is 20th century engineering relative to when it was built. A lot these components are about 50 years old. AI data centers are consuming gross. 4.4% of U.S. Electricity and that was in 2023 and that number is expected via the EIA to triple by 2028. The EIA also forecast that electricity sales will jump to about 4,097 billion kilowatt hours in 2024 all the way up to one point, you know, one four thousand one hundred, I mean, these are just huge numbers, four point one hundred billion trillion cubic kilowatt hours in 2025. It’s pretty unbelievable. Basically, that’s the equivalent of adding the power needs of seven Seattle-sized cities over the next decade. You mentioned those extreme weathers that sort of causes. I think it has less to do with the extreme weather and more to do with what we’re adding to the grid. I completely agree with you on some of this behind the meter stuff. And I think there’s a huge play. I mean, you look at what Deloitte estimates the U.S. Power sector will require in terms of capital investments between 2025 and 2030, it’s $1.444 trillion. So now, the real question is, are you gonna be able to make a return on that? Because I think you look at a lot of what these, I think people look at the amount of capital that AI is deploying into data centers, and the question will be, will the AI data centers or the AI companies make money? It’s a little bit like the gold rush. Who made money in the gold brush? A couple gold miners, but everybody who sold the shovels and sold the carts on the way to the gold mine. So if you’re looking at an allocation of capital standpoint, I actually think being in the power generation sector, whether you’re selling nat gas turbines or whether you are looking at some small modular nuclear reactors, we just had a great lunch with our good friend Todd and so point of the matter is it’s aligning yourself on where the capital is actually going to make a return because unless you’re getting straight open AI allocation and not third tier fund of a fund, of a fun, of fund, who’s invested in OpenAI, you’re going to be left, I think, with your hands up. So it’s going to fascinating and I think you mentioned it exactly. The behind the meter is where the investment needs to lay. You bet. [00:04:24][153.1]

Stuart Turley: [00:04:24] And I’ve listed a few companies in here and we’re going to have more articles on who we should be investing in and taking a look at is for, as again, we don’t give investment advice, but I do happen to day trade. So we’ll see how that goes. Let’s go to the next story. $14 trillion rally expects a fed cut. What happens if they only get a quarter point? I had fun putting this one together. Bloomberg actually put out one that caused me to trigger to write this story. In the high stakes world of global markets, the U S stock market has been on a tear, adding a $14 Trillion value since April vows with surging 32%. Is highlighted in a recent Bloomberg analysis. The current marking, Michael, they are assuming that we are going to get a 93% probability of a 25 basis point cut, bringing the federal cuts rate down from its 4.25 to 4.5 range down to 4 to 4 .25. I think that they are going cut, but I still think beyond that, expectations are for a gradual path. The Fed’s dilemma is real, cut too aggressively and it risks overheating prices, hold back and recession fears could mount. Markets, however, have largely priced in the baseline 25. If we get anything less than a 25, we’re going to see some grumpy investors. I think it’s going to be 25. [00:05:56][91.7]

Michael Tanner: [00:05:56] Yeah, I definitely think it’s going to be 25. I think the Fed has signaled that and I would agree with the market. I mean, you can’t get less than 25. It either is a zero or 25 basis point cut. There’s not much you can really do because remember the Fed gives a guidance window. The current guidance window is four and a quarter to four and a half, and that 25 basis-point cut is just a guidance range from four to four-and-a-quarter. So it’ll be fascinating to see what they see. I think, the real question, and I like what you put in here is what does this mean for the energy sector? Again, invest, we just talked about it in our last article. 1.4 trillion of investment needed into just the power generation sector. And part of that is definitely natural gas infrastructure, natural gas drilling. Well, that’s going to basically flow on back. And I love what you put in here. Our good, good friends at BlackRock, just mostly a joke, but some BlackRock analysis suggests that if there are multiple cuts, So about 75 basis points through. 2026 portfolio returns in energy ETFs could see a large increase relative to what the overall consumer CPI might see if you’re sort of playing that long short analysis. I think it’s extremely fascinating. I mean, look at all these oil companies right now that have huge debt balances. Any lower in the rate cut is going to allow them to roll over their debt, continue to make investments and really drill through this low point. I mean, I tend to sort of… You’ve nailed it. Yes. And I tend to fall in the middle here. I think if you spend too much time on X, you’ll hear people screaming, you can’t drill at these prices. You’re incompetent if you drill at this prices. You’re not allowed to drill. It’s a waste of money. And on some level, I can agree that. But on some level, I don’t agree with that from the standpoint of if there is enough cheap capital, you can use debt. I mean, I know it’s a scary word, but you can use debt to make investments. Some of the largest companies in the world have scaled their businesses off taking out debt. Now, you have to be smart about it. You don’t want to go too far down the debt route. You end up over leveraging yourself and it’s actually kind crazy. So I think the point is it’s understanding how cheap the capital is and where the best way to invest. And it may not be actually drilling the wells. It may be enhancing your mid-frame infrastructure. It maybe allocating towards like what we mentioned, some of the power generation stuff. So, I think it’s going to be very interesting, but I like your bottom headlines, Stu. We’re going to definitely be navigating the uncertainty because that 14 trillion rally is going to hang in the balance because if he doesn’t cut, some that’s going to get wiped off. [00:08:22][145.8]

Stuart Turley: [00:08:23] You bet. And I want to point out Walter Frerich, a Bloomberg Weekend put out this. I want just give him a little bit of a shout out. I think he brings up a really big point and go, why are we here? Boson says their essay is noting the elephant in the room. The president and himself want slower rate. Authors argue that the best critiques of the Fed require politicians to confront hard decisions like balance, inequity and growth. But don’t forget the backdrop. The Fed is an expert institution in an anti-expert, anti-institutional age. 74% of Americans had confidence in Alan Greenspan would do the right thing. According to Gallup in 2025, 37% have confidence that Powell will trust in the president and Congress has fallen over that period. But in 2025 listen to this in their tenure together, more Americans have Confidence in Trump to do the thing for the economy rather than the Fed That is critical. [00:09:27][64.3]

Michael Tanner: [00:09:27] It is. And it, as he ends his quote, you conveniently lest out the last sentence that does not bode well for Fed independence. So it’s going to be very interesting to see how things move forward. All right, let’s jump to California. What’s old oil slick up to? [00:09:39][11.7]

Stuart Turley: [00:09:40] Oh, slick. Holy smokes, Batman. You can’t buy that. Hey, I want to give a shout out to our production team. They’re working heavily in overtime. Just interviewed Steve Hilton, California, California failure on his book. He is, he needs to be the next governor of California. Let me read this article. California legislators strikes last minute deal to help oil industry, but limit offshore drilling. How dumb can you be? In a dramatic 11th hour California have forged a deal with the oil industry aimed at bolstering domestic crude production amid looming refinery closure. This agreement embeds in Senate Bill 237 streamlines environmental approvals for thousands of new wells in Kern County. This is onshore while imposing stricter regulations on offshore drilling. But I just found an article that is now saying pipelines are now having some other problems in the state, so he may fix one. This is going to be whack-a-mole of problems that Newsom’s not going to able to solve. He’s got more pipeline problems. They can’t deliver the crude to the refineries that are about to close. [00:10:53][73.0]

Michael Tanner: [00:10:53] Yeah, I mean, it’s he’s got himself in a real jumble there does Gavin Newsom and it’s going to be very interesting to see how it gets out of this. And as you mentioned, this this new Senate bill, it kind of wipes away. And that’s really what was holding back the oil industry. It was all these environmental regulations. That’s what Senate Bill 237 does. It really speaks. We talked about Valero last week and the kind of the craziness. And I do like you kind of end with is this is this too little too late? The real question is, sure, now that these environmental regulation have been lifted, The question is, will anybody even go about it? [00:11:23][29.8]

Stuart Turley: [00:11:23] I don’t know. I think that we, we are about to face the biggest energy crisis and test of the Trump administration, because we cannot have energy dominance with California’s energy failure. And I mean, that is a, that as a Stu Turley quote, energy dominance cannot be achieved with California’s failure. So this will be kind of interesting to go. Let’s go to the next one here. Got to love a Chris Wright story. The US urges EU to ditch oil and gas faster. I absolutely applaud President Trump in this story because he called out on truth social. I will go out and put in more sanctions on Russia if you all can stop using Russian oil and gas. Listen to this. EU countries should move faster to a abandoned Russian energy sources, this would help speed up the end of the war. The European Union could phase out Russian oil and gas faster would help ending of the U war. U.S. Energy Secretary Chris Wright says earlier European Commission Ursula von der Lund said the EU intends to accelerate the complete abandonment of oil and gas in about 20 years. The EU is already banned. They are so dumb. They’re funding. Both sides of the war. How dumb are they? They’re funding both sides of the war, Michael. This is just absolutely ludicrous. [00:12:54][91.1]

Michael Tanner: [00:12:55] No, it is unbelievable. I mean, what do you think good old president Ursula thinks about? I mean you think, I, I don’t think she fully understands this. That’s the crazy part. No. [00:13:03][8.4]

Stuart Turley: [00:13:04] She is one step above a potato bud as far as brain power goes. Let’s go to the next story. The IEA prepares to walk back predictions of peak oil, gas, and demand. I find this really funny, Michael, that this has got some hidden nuggets in it. Secretary Chris Wright threatened to pull funding. Suddenly, the IEA goes, whoops, we’re about to lose, I believe it was 30% of the IAEA’s funding. I have to go look that number up, but it’s a significant number, which is repeatedly predictions that the global oil demand will peak before 2030 has drafted a report admitting that both oil and gas demand are set to continue growing for decades. And I love Javier Blas. Bloomberg’s Avi Arbalaz reported on the news a call this week, citing a draft of the IEA report on the Energy Outlook, uses a set of scenarios from the future. Not only that, but Blaz noted that the IAEA then introduced another scenario that was favorable to the transition technology, but distant from factual reality. Chris Wright is calling them out and saying, look, if you’re supposed to be publishing numbers, let’s be scientific and deal in facts. The facts are, we have not been in an energy transition, we are in an Energy addition and at what cost. [00:14:34][90.3]

Michael Tanner: [00:14:35] Again, I completely agree. I find it absolutely hilarious that the IEA has to do this. I mean, they either have to do it or just laugh in the face that they were wrong and pretend like they have their head in the sand. I means, at least they’re doing this, you know, at LEAST. [00:14:50][15.3]

Stuart Turley: [00:14:51] Yeah, but they had a 30% gun to his head. You know, it’s like I’m about to lose budget. Oh, no quick put something [00:14:58][6.8]

Michael Tanner: [00:14:59] That’s a good point, but this was obvious they were going to have to say something if they even cared about their credibility because it was laughable what these scenarios were. It was laugh-able because what they do is they make all these future assumptions. How do they make those future assumptions? They assume that when California, for example, says they’re going net zero by 2030, they say, okay, that’s what’s going to happen. Can you really even blame them? You could, but you also say, well, hey, California says they are going net-zero. Let’s take good ol’ oil slick nuisance word and assume that happens, what’s it gonna actually have to take? The EU says they’re going net 30 by 2004, well let’s back, let’s figure out how to invent a time machine, go back and make everything net zero. So on some level, you can’t necessarily blame them because what they’re doing is they’re taking the face value for what these politicians are saying. Now if you’re saying they need to be in the business of figuring out whether or not those net zero things can be accomplished, that’s a slightly different argument. Yes, I do agree that it is classic that Chris Wright’s holding the funding over their head. But on some level, I think what they’re doing is just they’re listening to what these countries are saying and reacting to them. And it really, it comes back to really what are these countries saying that is lying, in my opinion. [00:16:11][72.0]

Stuart Turley: [00:16:12] Yeah. Hey, let me ask your opinion on this last story. U.S. EIA, this is not the IEA, but the U. S. E.I.A reveals latest Brent oil price forecast. According to the latest short term energy outlook, the EIA expects Brent spot price to be $67.80 per barrel and 25 and 2025 and 51.43 a barrel in 2026 and I Kind of disagree with this one, Michael. I’m not sure I’m buying that. I’m not buying what they’re selling with. What are you thinking? [00:16:48][36.5]

Michael Tanner: [00:16:48] I tend to probably, I tend to agree more with this than I disagreed. Do I think, I mean, that’s gonna put WTI in the high 40s. I mean that’s going to absolutely devastate the oil and gas business if that happens, to be square with you. If that actually happens, you’re gonna see that’s $45 oil in the oil and gas businesses. You know, Trump’s idea of drill baby drill is, is absolutely shot because sure, 60, 62 dollar oil here at WTI. You can make it. You can, there are some locations that will make money. Yeah, no one’s making money at $45 oil. So that really is shut down the rigs, shut it all in, produce, produce, produce. So I think the. The interesting part is, I think they see a slower wind down of US oil and gas production, which may or may not be true. I mean, one can make an argument that we’re sort of right now kind of drilling through this loft and that you could argue when we added as we’ll cover some rigs last week, you could theoretically say, well, we’re not actually dropping rigs as fast as maybe we originally thought. So this trough that we are in of lower oil prices or this troughs of apply that we think we might be in relative demand might not be as might not be as it might be greater because demand is lowering out so I think there’s a lot of things at play here I mean I wouldn’t be shocked if we saw 55 you know 50 to 55 dollar WTI next year now that’s you know 53 to 58 in terms of Brent oil prices because Brent’s gonna trade at a slight premium relative to WI so yeah I mean i think the oil and gas business needs to set in for set in for a hard look and I do think it’s partly why a lot of these companies are considering laying off. I think this is the sentiment that’s going around a lot of these large oil and gas companies today as they think about consolidation is that hey guys prices are going to go down. And we got to kind of right size our business for it. [00:18:32][104.0]

Stuart Turley: [00:18:33] Oh, I agree with a lot of this, but I’m still a little bully and it’s still not out there. The demand side of the equation is still there. If the EU and the UK collapse and they fail, if Japan or excuse me, if China and India can out demand what the slowdown in business in the UK and the EU are, I still think we will be in the 65 to 75 range. I’m still there. [00:19:07][33.9]

Michael Tanner: [00:19:07] Yeah, I guess I just, I disagree from just a pure supply and demand standpoint. Now, if you’re, you’re seeing these large inventory builds relative to production, actually like being and sold, I think that’s what’s causing a lot of this to come up. [00:19:22][14.8]

Stuart Turley: [00:19:22] The glut is not the glut. It’s not showing up. And I, I just wrote an article on that and the glut is not there, dude. So I’m, I’m just telling you, I just told you how the supply side may work. And if the supply side does work, the glut is not there. That puts the pricing mode back in. I may be the only one. I hope I’m right, but if I’m wrong, I’ll be the first to admit it. [00:19:47][25.1]

Michael Tanner: [00:19:47] Yeah, I was going to say the beautiful part is we’ll see what happens because I promise you we’ll be through this. [00:19:52][4.4]

Stuart Turley: [00:19:52] I’m just gonna write this date. [00:19:53][0.7]

Michael Tanner: [00:19:53] That we will be here. So well, with that stew, let’s jump over and cover oil and gas pricing. But before we do that, guys, let us quickly pay the bills as always. Thank you for checking us out. World’s greatest website, www.energynewsbeat.com. I hit the links in the description below timestamps links to all the articles. Subscribe to our sub stack, the energy newsbeat.substack.com the best place to stay up to speed daily and get a nice little three times a week, daily dump from Stu about really important issues in the oil and gas business. It’s a great way. Subscribe, subscribe, subscribe. The Energy Newsbeat. Substack. Com also guys shout out to friends of the show reese energy consulting for supporting the show if you would all need help in the midstream space guys reese’s energy consulting are your mid stream experts guys they have hundreds of years of experience have clients that range from two people in a garage all the way up to the largest publicly traded companies in the world so if you need and have a problem in the midstreamspace you are a perfect fit for them guys reese energy consulting.com tell them energy newsbeat sent you and they’ll give you a 45 000 discount on your services that’s a I don’t know what they’ll do, but I promise you they will be able to help solve your problem. And finally guys, investinoil.energynewsbeat.com guys, we’re coming up Q4 2025 guys. Taxes are coming. And if you want to give your money to the federal government so they can use it on figuring out if cocaine affects rats, go ahead. But if you don’t want to give your to the government, investing in oil and investing in energy is the best way to lower your tax burden, save on taxes, diversify your portfolio, and get a little bit of a distribution. It’s a great, great way to invest. We just talked about how the oil and gas needs all the investment it can get. It’s the perfect time to do that. Lower your tax burdens and diversify portfolio. InvestInOil.EnergyNewsBeat.com has a portfolio survey which will figure out if you are even qualified to invest in oil and gasses depending on where you think the market is going. We also have a tax calculator which tells you what your tax burden is and how much money you could save on taxes if you did invest in oil and gas. So fill that all out. Once we get that, we’ll shoot you a bunch of information and depending on your qualifications, we may or may not point you in the right direction. Guys, invest in OilThenEnergyNewsBeat.com. [00:22:06][133.1]

Michael Tanner: [00:22:08] Let’s jump over and talk a little bit about pricing, Stu. I mean, on Friday, from an oil and gas perspective, we actually saw a little of a run up. We saw prices jump all the way from, you know, below $62, ran up to $64, sort of settled in that $62-$60 range. You know, a lot of it has to do with kind of some… There was some interesting economic data that was driving prices one way or the other, and we’re obviously still in this sort of, you, know, tariff war with China. We did also see some Ukrainian drones which strike down Russia’s largest oil terminal. I mean, just for a second, Sue, what is going on in Ukraine or Russia? I mean… I, I, this has to come to an end at some point. [00:22:45][36.8]

Stuart Turley: [00:22:46] The drones that went to Poland that were actually Russian drones were actually a false flag that Zelensky did. That is just absolutely bull-huck. What we’re seeing is absolute disaster unfolding. Zelenski and the warmongers want to keep the war going. President Trump wants the war to end and President Putin wants the war to and this is absolutely stupid. Speaking of that, I’m interviewing General Flynn and I’m gonna ask him that exact question. What is going on? [00:23:20][34.2]

Michael Tanner: [00:23:20] Well, yeah, and what’s going to happen? I mean, it’s absolutely unbelievable what’s going on. I think DeMarco was also digesting on Friday, a little bit of that revised jobs report that basically said, we’ve actually only, we, we The previous announced 9111,000 jobs. It’s actually, no, it’s zero. So we’ve revised that number down about 900,000 fewer jobs in the 12 months through March, which is pretty unbelievable. CPI jumped by about four tenths of a percentage point. We also saw, again, we talked a little bit on what’s going with the ice. So just an interesting day all around relative to oil prices, Stu. We also our rig counts jumped two, frac count sprint jumped five, very interesting. So in the last two weeks, We’ve seen rig counts jump over seven and we’ve seen frat count spread jump seven. So very interesting from that standpoint. But that’s really about all I saw, Stu. People are, it’s kind of all quiet on the western front relative to what’s going on in the oil and gas finance. There’s some stories we’re running down and we’ll have it all for you. But my favorite time of the week, Stu, what are you worried about this week? [00:24:20][60.4]

Stuart Turley: [00:24:21] I’m not really worried. I think things are turning the corner. I know that we’re following the assassination of Charlie Kirk, but I think the world is going to go through some tough spots. The 3 million people that were in the UK gave me great heart, great job out in the UK. They’ve got to take their country back. I’ve got great interviews that are going on with great leaders, and I think we’re going to see the world heal. [00:24:48][27.0]

Michael Tanner: [00:24:48] Yes, well. Hopefully. Hopefully. So we’ll be really looking forward to that interview. We’ll try to turn there on as quick. We also do have a great interview. We’re dropping on Tuesday with Shale Haven partners. We love Graham Patterson and Nathan Myers over there at Shale haven guys. They have a really interesting, interesting oil and gas investing strategy. So if you heard our, our, our investing segment there, guys, they’re a great option. And if you’d like us to connect you with them to learn more about what it takes to invest in the oil and gas business, just reach out to me, LinkedIn, Substack, YouTube, we’ll hook you up guys with that. We’re going to let you get out of here, get back to work, start your week. We appreciate you checking us out here. Energy news beat podcast for Stuart Turley on Michael Tanner. We’ll see you later. [00:24:48][0.0][1467.3]