China’s SCO Meeting and the Power of Siberia 2 Pipeline
You won’t want to miss this wild discussion of the Shanghai Cooperation Organisation (SCO) summit, and the natural gas pipeline deal between China and Russia, just approved. The Power of Siberia 2 pipeline is set to reshape global energy markets, with President Putin announcing that all natural gas once destined for the EU will now flow to Asia.
The UK and the EU are facing significant challenges. With the Power of Siberia 2 pipeline now operational, it will realign all available gas previously destined for the EU and redirect it to the Asia markets. Stu pointed out the volumes in the EIA Report.
Highlights of the Podcast
00:12 – Introductions
02:13 – SCO Meeting Insights
05:13 – Competing with IMF & World Bank
05:54 – Oil Market Debate
09:47 – Europe’s Energy Challenges
13:28 – Sanctions & China’s Strategy
15:06 – Europe’s Social Strains
18:21 – U.S. Strategic Petroleum Reserve (SPR)
21:47 – OPEC, Trump, and Oil Prices
22:19 – SCO vs BRICS
24:18 – New Development Bank Implications
27:55 – Transactional Geopolitics
30:13 – Fermeuse Energy Announces LNG Export Development in Newfoundland and Labrador Canada
32:59- AI Isn’t Free. The first costs are on your bill, and more are coming
37:54 – Red State to house ‘First-Of-Its-Kind’ recycling center for used nuclear fuel
38:43 – US power capacity set for a big jump as renewable growth slows
43:25 – A China-Russia sweetheart gas deal could upset US energy exporters
46:47 – Why is China pouring billions into Brazil’s Energy and oil
52:27 – UK’s Fiscal & Energy Missteps
57:28 – Conservative Party Contradictions
China’s SCO Meeting and the Power of Siberia 2 Pipeline
Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Irina Slav [00:00:12] Hello and welcome to the Energy Realities Podcast with Tammy Nemeth. How are you today, Tammy?
Tammy Nemeth [00:00:19] I’m doing well, thank you, Irina. How are you?
Irina Slav [00:00:22] I’m great, thank you. How’s the weather over in the UK?
Tammy Nemeth [00:00:26] Hey, it’s sunny today, a bit windy, but can’t complain. It’s a beautiful fall day, or almost fall.
Irina Slav [00:00:33] Oh, wonderful. Those panels and those turbines must be producing sustainably. And we’ve got David Blackmon. How are you, David?
David Blackmon [00:00:44] Oh, I’m just thrilled to be here. It’s a wonderful, beautiful day in Texas as, as always.
Irina Slav [00:00:51] That’s great. You really love the place you live. I do. I love the places I live too. You have a great landscape as a background as well.
David Blackmon [00:00:59] Yeah, that’s the Texas Hill country. I’m not there. It’s fake.
Irina Slav [00:01:02] All right. And we’ve got Stuart Turley, who is where today.
Stuart Turley [00:01:09] I’m in Oklahoma today. I don’t know if this can be seen, but there’s the lake and we’ve got a beautiful full moon. I’ve reformed back into my original shape here. So I’m no longer hairy. So we’re ready to rumble.
Irina Slav [00:01:28] Great, we caught you at the right moment. Now today we’ll be talking about natural gas, or more specifically, the power of Siberia. And number two, pipeline two, because the Chinese finally signed a commitment to build that with Russia. And we’ll talking about the oil glove. Does it exist or not? Lots of news about the oilglot today, because there’s a conference that started in Singapore today, right after the Shanghai Cooperation Organization meeting last week. So there’s lots to discuss and I’m going to start with Tammy. The latest developments in oil and gas around the world.
Tammy Nemeth [00:02:13] Oh, well, I think what was really fascinating about the Shanghai cooperation organization meeting is that it’s this counter supposedly to NATO to some extent about it originally set up as this kind of defense organization after the collapse of the Soviet Union how to sort of make sure that there’s reasonable security in that area, no terrorism and all that kind of stuff. And it’s really kind of grown into not just a security organization, but this year in particular promoting economic cooperation. And I think besides the announcement of power of Siberia too, which is another really big natural gas pipeline from Russia into China, which would be a way for Russia. To divert whatever natural gas it would have sold into the EU will now be all going to China pretty much or to other Asian areas, was the announcement of a development bank. And I thought, wow, that’s really interesting because there’s already a BRICS bank that they set up in 2014 to sort of counter the World Bank and the IMF. And so now there’s another development bank. With seed money from China of 2 billion won, which is about, I’m not exactly sure what the exchange rate is, but I think it was something along $260 million or something like that. And so here’s another counter to the World Bank and IMF to help build infrastructure. And they were talking about all these kind of different economic arrangements between the members. And I’m just gonna give a quick rundown of some of the members because there’s 10 main ones. There’s China, there’s India, Russia, Iran, Pakistan, and then Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Belarus. So some of those countries are also in the BRICS, but some of them aren’t. I’d say about half of them aren’t in the Brics arrangement. So here’s another development bank. That’s supposed to be promoting infrastructure, trade, and supply chain integration. That was what they had talked about at this meeting. And this development bank is supposed to assist in this kind of alignment and integration, which then begs the question, how is this going to compete with the IMF and the World Bank that also offers these kinds of developmental loans and whatnot? And is there a concern that China… Will have too much power and control with these relationships. So it’ll be interesting to see how this plays out.
Irina Slav [00:05:13] I know how they will compete with the IMF and the World Bank. They will not be attaching climate change strings to their deals.
Stuart Turley [00:05:23] Exactly. And that will save a lot of money.
Tammy Nemeth [00:05:26] Well, they did talk about green transition in one of the statements at the meeting. But is that just pro forma, you know, to show the EU? Oh, look, we do care about climate. We’re, you, know, we’re not completely anti-climate. I don’t know.
Irina Slav [00:05:41] Yeah, I think it’s performing. You have to say it even if you don’t mean it You have say it David is there an old blood in the world right now?
David Blackmon [00:05:54] Well, you know, that’s a matter of debate. Um, I don’t think there is. I mean, the inventories have been, uh, uh. Declining all over the world there. I mean they’re like 40% down year over year, national crude inventories. And, uh that’s generally a sign of, uh of a under supplied market, not an oversupplied market. Yet the price continues to soften because you know signals coming from OPEC plus, which again. Over the weekend announced more production increases beginning October 1st to put more oil on the market. And, you know, when you look at who’s predicting the glut or who’s saying there’s a glut versus who’s saying there is not a glut, it’s hard to decide which is more reliable. I mean, OPEC obviously has a much more bullish outlook for crude. At the present and in the future than, uh, IEA and EIA and even ExxonMobil does. But at the same time, you know, I, to me, you, we just had 3.3% growth in the U S in the second quarter this year. Uh, that’s after a first quarter where we had essentially 0% growth and a fourth quarter of last year when it growth was also pretty low. That’s an indicator that the U S economy is heating up. Uh, and that generally is a sign that the global economy is hitting up. And that generally as a sign, that increase that demand for crude is on the rise, not on the decline. So I think it’s highly debatable whether there is a glut currently and whether it’s going to get worse down the road. I frankly don’t think there’s currently much of a glut, if there’s any at all. And, uh, that it’s not going to get worse as the year goes on. I think it’s going to, the market’s gonna get tighter. And so I’m kind of wondering, when you look at how the market responded to the OPEC announcement yesterday, even though they said they’re gonna put more crude on the market, crude prices overnight rose by 2% in response to that, because it was less of an increase than the analysts who are always wrong expected. As is always the case, it’s really hard to know exactly what’s happening in global crude markets and I suspect that’s not ever going to change, but no, that was a long way around to saying, no, I don’t think there’s a glut.
Irina Slav [00:08:34] Yeah, especially the monstrosity that the IEA says will hit us next year, 3 million spirals daily.
David Blackmon [00:08:40] Yeah, well that’s not gonna happen.
Irina Slav [00:08:42] Yeah, it’s not, but well, I find kind of schizophrenic about oil price prediction. It’s always been certain, of course, because you don’t know what will happen tomorrow or next week. But this time it’s really strange because it has all become about perceptions. You know, people expect OPEC to boost production, which OPEX said it would do. And prices go down. But when OPEC actually says buy how much they will increase production, market says, well, that’s not too bad. Let’s buy more oil. Now, Stu, because I really love your take on events in Europe, how do you think Europe will be affected, if at all, by this, you know, new Paris-Siberia deal between Russia and China, which will bring the total pipeline capacity from Russia to China to about the same as the combined capacity of Nord Stream 1 and 2, which is about 110 billion cubic meters annually.
Stuart Turley [00:09:47] It’s going to, the EU and the UK need to get their act together if it’s at all possible. It’s absolutely going to realign the entire natural gas market in the world. This is the Shanghai map. If you take a look at this. There are observer countries, Afghanistan and Armenia. Azerbaijan also had some real problems in this as over the weekend and stuff. So as we take a look at the map of the pipeline itself, a hundred, I mean, this thing is just huge. Here’s the problem. In this amount here is the this is from the IEA you take a look at here’s where the map is where the Siberia 2 pipeline is going to be rolling through. They say it’s going to take about five years but it’s already been under construction for part of this and is already rolling so I don’t know the timelines I’ve got to try to find that out but when you take look this goes right on into the direct area of the manufacturing for China. Let’s look at the gas volumes before Ukraine was invaded by Russia or by when before Zelensky started picking a fight with Russia, whichever way you want to look at that. Take a look at amount of volume that was there. Now take a look in 2024, they are in The EU is in a deindustrialization for two reasons, and fiscal collapse because of net zero policies and the lack of natural gas. Yes, they’re gonna get LNG, but there is a price difference between LNG and pipe natural gas, so you’re gonna see this shrink even more. The question that you’ve got to ask and president Trump, I love president Trump but I think he’s missed the boat. He says that he is going to crush the Russian economy by steeper sanctions. This great, great energy writer in the world has said sanctions don’t always work as intended, I believe is one of the greatest lines ever said about sanctions. And president Trump, if you’re listening to this podcast, you are wrong in how you’re handling this one because it is going to be a real problem.
Irina Slav [00:12:44] Yeah, but Trump has proven that he’s quite flexible. He can change his mind. If he sees that the pressure campaign is not working as expected, he could, you know, go back and do something else. In that he is an example that EU leaders should follow because they are the opposite of flexible. They’re just double down and triple down again. And again, I think this would be a real problem as you said there’s the LNG and they have actually made a commitment to buy a lot a lot more LNG from the U.S. But this will not bring down energy costs and now more industries are sounding an alarm you know the steel industry
Stuart Turley [00:13:28] Let me add to this. China has not bought LNG from the US in the last several months, and they’ve already bought three loads of sanctioned Arctic two LNG, from Russia. Uh, the third is already in the import being loaded right now. So, um, sanctions don’t work as intended. Um, and I think that this is going to bifurcate the world into the morons. And the ones that are gonna be successful. The morons are gonna the EU and the UK, and then you’ve got the head of the morons, the United States trying to lead a pack of countries that are in fiscal failure. And I mean, we’re talking the EU and the U.K. Are in a really big fiscal. We have $35 trillion worth of debt we’re trying to manage. So we’ve got a higher handicapped group here. Which one’s going to be the, the worst one out of this, then you’re going to have the bifurcation of, uh, China, EU. I mean, you’re gonna have the whole different India, Asia, everything else. I thought it was going to the bifercation of those following net zero and those following energy sanity. Boy, did I miss this.
David Blackmon [00:14:49] Uh, Stu, what do you think about Patrick Devine’s comment here? Europeans work well under pressure. Doesn’t that agitate your EU theory of being morons?
Stuart Turley [00:15:06] Uh, they. I see that their open border policies have absolutely destroyed much of the EU and the open border of policies have destroyed the UK. We are about to see some very big social unrest. What happens in energy policies is you get high energy prices, you get social unrest, You get open borders and you get all this done by the UK, the E, the, um, you in, and forcing all this in there, you have countries like Poland going, no way. Uh, you bad man, you, you not, not Poland. They’re going to be okay. It’s the countries that have had the open borders, uh, that are going to me in some serious trouble.
Irina Slav [00:15:53] Yeah, it’s interesting that Poland has not got into trouble with Brussels because of its close border policies, while Hungary got into troubles about it.
Stuart Turley [00:16:05] What’s even worse about natural gas is you have Zelensky, who was installed as a leader and has canceled the, the, um, voting of his own people. So who’s a dictator now, uh, has been bombing Russian natural gas pipelines, going to his neighbors. So it’s kind of like going, Hey dude. Uh, he just had a meeting with some of his, uh, Russian, his neighbors and they’re saying, please stop blowing up Russian assets. We need their assets. And he’s like going, no, I’m too stupid.
Irina Slav [00:16:45] No, he said these are sanctions. If you’re talking about the Druzhba pipeline, he said, these are sanctioned because Hungary and Slovakia continue buying Russian oil anyway. But our problem in Europe is that people are saying mostly that we keep electing insane people. And Patrick, we do work well under pressure up to a point, just like anybody else.
David Blackmon [00:17:09] Just like anybody.
Irina Slav [00:17:10] This thing is too much pressure!
Stuart Turley [00:17:17] I went on a David Blackmon rant this morning. I am sorry.
David Blackmon [00:17:21] Good that was quite a diatribe and filibuster there Phil
Tammy Nemeth [00:17:29] filibuster. Oh my gosh.
David Blackmon [00:17:29] Filibuster, filibuster. Yes, Senator, Senator Stu. Uh, the other question Patrick had is speaking of supplies, the U S government making progress on SBR. The answer is no volume in the SBR has increased since year over year, since Trump took office by just, uh, 26 million barrels. Okay. It’s virtually nothing. It’s a rounding here. So we have four hundred and three million uh, according to EIA at latest count in the strategic oil preserve, the capacity is over 700 million and there has been zero news. I don’t like to criticize Chris Wright, but there has been a secretary, right? But, uh, there’s been no news about filling the SPR since June out of the DOE. So anyway.
Tammy Nemeth [00:18:21] Yeah, I remember reading back in June that there was maintenance that they were doing on the facilities and it wouldn’t be until December that they would start putting more oil in just because they had left it empty for so long that it was affecting the salt caverns and whatnot and maintenance has to be done before they can put more in so I think maybe that’s why but
Irina Slav [00:18:51] That’s great because prices might go lower, making it even more enticing to start filling it.
David Blackmon [00:18:58] There you go.
Irina Slav [00:18:59] minute.
David Blackmon [00:18:59] Yes, I mean, if Goldman Sachs is right, it’s going to be fifty two dollars next year.
Tammy Nemeth [00:19:03] Yeah, yeah!
Tammy Nemeth [00:19:07] which is such a fine line, right? Between wanting to have the price high enough that additional production comes online to ensure there’s a consistency there, but you don’t want it to go too low because then no one’s gonna be producing more and then that’ll have an effect and then suddenly the prices will increase and they’ll be, you know, runs on.
Stuart Turley [00:19:33] I think Goldman Sachs subscribes to Jim Kramer’s newsletter, because they’re not right there.
Irina Slav [00:19:45] Probably. This is the problem because oil prices are moving on perceptions rather than actual physical world data. It’s very easy to have very low prices for an extended period of time which will discourage producers from expanding production and then an oil shock would be an oil price shock would only be a matter of time and none of us would like this.
Tammy Nemeth [00:20:11] Well, because then it affects inflation, it affects everything.
David Blackmon [00:20:18] So, I mean, so people and people are here in the United States are trying to give Trump all the credit for lower oil prices. Uh, has, has the administration influenced that a little bit? Yes. A tiny little bit, but the price for crude is set on a global market and there’s a thousand different factors that impact what the crude is traded at every day. That no American administration has any control over. Does he like prices being lower? Sure, he does because gas prices are low. We had the lowest gasoline price at the pump in America this year in five years and adjusted for inflation probably in 20 years this year. So that’s nice and that’s good for helping to kill inflation because transportation costs are such a big. Aspect of, of the inflation rate. And, uh, yeah, he likes it, but, but Trump doesn’t have this magic wand that, that just says, okay, I want prices at $62 and, and there it goes. Right. You know, I mean, it’s just the people he’s, he’s really powerful. He’s really influential on the global stage right now, but he’s not Superman. And, um, all price is a very complex. Subject that nobody really is an expert in, even though they pretend to be.
Irina Slav [00:21:47] Yeah, they pretend very hard and very frequently, as we’ve seen today. How long is this conference going to last? I forgot to check. In Singapore.
David Blackmon [00:22:02] Singapore. Singapore, yes. This I do not know.
Irina Slav [00:22:07] They’ll probably keep entertaining us for another couple of days at least.
David Blackmon [00:22:16] Sorry, I’m sorry what I interrupt.
Irina Slav [00:22:17] No, no, no. Go ahead.
David Blackmon [00:22:19] I mean, it’s just such an interesting thing, this Shanghai cooperation organization, and it’s almost a competitor to BRICS, right? And it seems the Shanghai organization seems to be gaining influence year after year, particularly with India’s decision, apparently, last weekend, to, I mean geopolitically align itself more with China and Russia now. Then with the United States, China and India have historically not been friends, not been best buddies. And, uh, and so that’s a, that’s really, really significant thing that Mo Di did last week, I think.
Stuart Turley [00:23:03] And President Trump hit himself in the foot with a hammer when he put the extra sanctions on India. The difference between the Shanghai group and BRICS is going to, I believe Shanghai organization has the potential of doing what BRICs wanted to do, and that is really destable the US dollar because it does not have. Um, South Africa and it does not have the baggage of Brazil right now. You have Brazil and Venezuela with China, heavily doing oil production in Venezuela and Brazil and having massive amounts of investment in there. And that is a gigantic problem for the United States.
David Blackmon [00:23:53] And of course, the other difference is Shanghai. I mean, BRICS is a trading alliance. Shanghai is a security trading, you know, all kinds of different aspects to what’s going on there. I’m sorry, what?
Tammy Nemeth [00:24:09] Irina said they overlap, yeah.
Irina Slav [00:24:11] They overlap, and they’re not mutually exclusive. So they’re kind of compatible. Go ahead, Tammy, sorry.
Tammy Nemeth [00:24:18] Well, I was just going to say that BRICS tended to be a more informal alliance, like a forum where, and then they set up their development bank. But the really big news out of this, besides the, the power of Siberia pipeline announcement was this development bank, because then it would be meant for those security members. You know, they have, uh, my understanding is that, um, the SCO has a secretariat, it has a more formal sort of alliance structure than BRICS does. And like David said, it doesn’t have the African countries. It doesn’t a lot of the Middle Eastern countries. I guess Iran, you could count as being straddling Middle East and Eurasia. But it’s for that And so if you’ve got, if you have like that area, with its own development bank and I think that the interesting thing there would be how do you settle the currency exchanges and and there’s some debate on how that’s going to work if other countries are going to put money in to this new bank is it going to be because the big concern with the BRICS development bank is controlled by China and so how do to deal with that in order to have these infrastructure projects to accelerate again. The Belt and Road Initiative, which, you know, other countries are kind of like, whoa, whoa whoa, what are you doing China? There’s lots of strings attached with that in a different way than how the IMF and World Bank operate. So it’ll be interesting. And one of the assessments I read from geopolitical futures was one of the problems with the SEO is that you’ve got these mortal enemies almost, India and Pakistan, and they don’t always agree on things and that that can be an issue. But. I don’t know, if you’ve got India and Russia and China as the anchors here, there’s probably a way to have an alternate to the sort of OECD NATO kind of structure.
Irina Slav [00:26:33] Patrick has a question about the funding of BRICS and SCO. Well, how well funded or supported is BRICs or SCOs from development moment? Well, apparently they do have money. I mean, they’re not they’re not poor countries that the West has, so maybe they can afford to, you know, fund projects, infrastructure projects in the region. And some of these Central Asian countries have a lot of resources, natural resources.
David Blackmon [00:27:12] Aren’t both of the development banks and BRICS and SEO basically Chinese operations?
Tammy Nemeth [00:27:21] China has the money China has to money and so they put it in there and then they create this kind of structure and my understanding with the Bricks Bank if I remember Is that other countries have put money in but it’s under the sort of Chinese banking structure, so it’s got a lot of sort of Chinese and Russian people in charge and and and some. Countries find that problematic.
David Blackmon [00:27:55] Hard to imagine why.
Irina Slav [00:27:57] I think what these developments actually show the rest of the world, if anyone is willing to listen, is that your politics and economic policies are not a matter of, you know, kindergarten disputes. You don’t have best friends. You have people you can work with to mutual benefit. Which is why India can work with China despite their long running territorial disputes, which is way India can be in the same organization as Pakistan. The two were close to a war just a couple of months ago. Exactly. I think this is a very important lesson that some people West of the Middle East need to learn, but they will not.
David Blackmon [00:28:53] Maybe all people west of the Middle East need to learn.
Irina Slav [00:28:56] Well, maybe not all, but definitely some.
David Blackmon [00:28:59] Yes. No, I think that’s a really good point.
Irina Slav [00:29:06] And it’s a very, very simple point, which should be blatantly obvious, but apparently is not.
David Blackmon [00:29:13] Well, it’s transactional in nature, isn’t it? I mean, India can work with China on certain things, and it’s all transactional. And the Trump administration, you know, it is largely how Donald Trump functions. Everything is transactional, but he gets himself in trouble sometimes when he’s up at two o’clock in the morning, putting out truths on Truth Social and saying things that piss off Modi and Putin and Zelensky. You know, I know he does some of those things for, for a good reason, but some of it just sounds like getting mad at two o’clock in the morning and saying things that the Caroline Levitt has to try to explain the next day.
Irina Slav [00:29:55] Well, no, but they sport.
David Blackmon [00:29:57] Yeah, right, exactly.
Irina Slav [00:30:00] Stories.
David Blackmon [00:30:02] Story. Sure. Okay.
Irina Slav [00:30:03] They’re all on the same line, some of them.
Tammy Nemeth [00:30:08] Okay, I think mine are not. We’ll have LNG then. Yes, so part of what Mark Carney has talked about and brought in was like one of the only things parliament did when it sat for like all of two weeks after the election was this sort of national interest building bill. So basically all of the different regulations and legislation in Canada that prevents pipelines and proper energy development from happening. None of that’s been repealed, but they put in a new piece of legislation that back at the end of June is that it can be expedited two years, decisions will be made by cabinet on what projects go forward. I mean, it’s insane. Anyway, so part of that is that provinces were supposed to submit projects that they would hope would be considered on the short list that would meet the expectations and requirements which are very vague on what’s a national interest project. And so Formuze Energy announced that it wants an LNG export in Newfoundland, which is the island on the east coast of Canada. They want to put up an L and G facility there because there’s a They’re promoting the development of some offshore natural gas fields. I forget what it’s called, Jeanne d’Arc, I think, is the big basin, and they believe that there’s an awful lot of natural gas there that they want to develop and then have an LNG facility to export that to Europe, which sounds great. So they’re hoping that this would be considered as one of these national interest projects that will help promote the development of the Maritimes and so on. And this flies in the face of Justin Trudeau who said there’s no business case for LNG to ship to Europe or Japan or wherever. But it also flies in face of what Alberta wants to do because they wanted to extend this pipeline across Canada to the Maritime and export its natural gas. Um, mingle it with whatever they develop on the East Coast, but have an outlet there so that they’re not, um, stuck exporting strictly to the South or now to the one LNG facility on the West Coast of Canada. So this is good news in, in some respects for, uh, energy development, LNG development in Canada as a whole, not so good for Alberta, but happy that there’s at least something happening. The second story is… Titled AI isn’t free the first costs are on your bill and more are coming and this is from the epic times basically AI facilities and data centers are being hooked up to the grid and customers are paying more for it instead of charging these companies a proper industrial price the price is being flowed through to regular rate payers, to regular customers. Um, and some analysts have gone through and sort of unpacked what people are paying in certain jurisdictions, particularly in the East Coast by Pennsylvania, New York, New Jersey, and those areas. And it turns out that they’re paying an awful lot more for their energy now over the past three months because of these data centers coming online. Um, these AI ones that are consuming so much energy. So, uh, big surprise. You know, a bunch of the grid operators were saying, well, if you’re going to build a data center, bring your own energy. And it turns out that’s not happening. So the.
Stuart Turley [00:34:08] Uh, is this because back East, I’ve noticed that many government data centers are asking for the additional transmission lines on taxpayer side of it and their government offices and data centers, so they’re not having to go out and get their own power sources. So I’m trying to find out the difference between. Or privately held data centers versus the governments. And I’m finding I don’t have all the data yet, but the consumers are getting messed over in the drive-through because of the government.
Tammy Nemeth [00:34:48] Great distinction, Stu. Yeah, I haven’t really been able to piece together what the differences are. And I wouldn’t be surprised if the bringing, like Patrick said, bringing the renewables or the wind and solar onto the grid and how that destabilizes things, how that is also an expensive proposition.
Stuart Turley [00:35:10] And in New Jersey, New Jersey’s got nuclear and natural gas. And I found that to be, wow, that’s net zero, the best you can possibly do. But their energy prices are so high because of their distribution and tax problems. So it’s Democrat run.
David Blackmon [00:35:29] I will say that the Texas legislature passed a bill in this year’s session that is going to require big data center operators to provide their own behind the meter power initially before they can be hooked into the grid until the grid can adjust and increase capacity to handle them without flowing through price increases to residential.
Stuart Turley [00:35:54] And David, was it SB6 that says that they can shut down the data center if they’re pulling too much power?
David Blackmon [00:36:02] When you see data centers going in in Texas, virtually all of them are going to be providing their own behind the meter generation. They’re obtaining it from a company like Exxon or Chevron, which are building enormous natural gas power plants right now to become providers, suppliers of energy to data centers. So there’s a lot happening in Texas that’s not happening in some of these other grids. Yeah. That’s very short-sighted in the rest of the country.
Tammy Nemeth [00:36:34] Yeah, that’s a great point to make, you know, all these different jurisdictions have different rules. And you would think it would make more sense to do what Texas is doing, saying, you know, if you’re going to be pulling, drawing so much energy off our grid, you need to be coming with your own before we hook you up or whatever. And whatever extra you have, then that flows to grid.
David Blackmon [00:36:56] Yeah, and by the way, I just want… one thing
David Blackmon [00:36:58] Our Lieutenant Governor, Dan Patrick, takes an awful lot of crap from his fellow Republicans and all these really smart Democrats in Texas for being this far right wing nut. Those provisions in Senate Bill 6 are there because of Dan Patrick. So I don’t want to hear any crap about him and the grid problem. Anyway, that’s just my diatribe.
Tammy Nemeth [00:37:27] I’m done. That’s it. Oh, you can find me on the name with report.substack.com. I try to publish every week and I’ve got different podcasts up there every so often and articles. So check it out when you have a chance.
David Blackmon [00:37:48] Oh, this is me. So, the first one, Red State to house first of its kind recycling center for nuclear fuel, basically is the story that it’s good to be a Red State right now. Oklo, recycler of spent petroleum fuel rods, is opening a big recycling center in Tennessee, because Tennessee is a favorite state right now in the Trump administration. Uh, and the Biden administration, this, this facility probably would have ended up located in New Jersey or somewhere. Um, so, but good for them. That’s, that’s, uh, I think a growth industry that they’re, uh first movers on here in the United States. And, uh. Oaklow has, uh long been in this business. And, and I’m sure this, uh center is going to be a big success and have a lot of demand for its products. Uh, second one is us power capacity set for a big jump. As renewable growth slows. This was in Reuters last week. This is a significant story. They did a survey. Reuters actually commissioned a survey and found that announcements of new construction, not just proposed plants, but new construction on new natural gas power plants in the United States increased by 154% year over year in July. Um, and so this is, you know, just part of the reality that we’ve been talking about here, predicting here for the last two years is now finally going into the construction phase in the United States, a lot more natural gas and, and that, and, that’s going to continue to be the trend in the U S, uh, for the next four years, at least, and depending on the 20, 28 election, maybe longer than that. And. And it’s just all part of the, it goes back to the data centers because we’ve talked about that. You know, they can’t do it with wind and solar, even with backup batteries. They have to be online 99.999% of the time. It’s their five nines uptime requirement. And you can only do that with coal, natural gas or nuclear and in the near term, it’s gonna be natural gas. And maybe some coal in there as the Trump administration moves in that direction of permitting new coal plants or keeping older ones open longer than currently planned. But in the longer term, the plan at least 10, 15 years out is to move more to nuclear. There’s a lot of moving parts to that and you hope that’s successful, right? I think we all do and believe that’s gonna happen. There’s an awful lot that has to happen in terms of government regulation and technology development and getting it approved by the NRC before that nuclear renaissance can take place. And the administration wants to move quickly on that, but they haven’t even reconstituted the N.R.C. Membership yet. And that’s a key to making everything happen. So it’s… That’s 10, 15 years in the future. In the meantime, it’s gonna be natural gas.
Stuart Turley [00:41:11] Timmy, was that a bat that went by your…
David Blackmon [00:41:13] Is that a bat?
Tammy Nemeth [00:41:14] No, it was a really big moth.
Stuart Turley [00:41:16] Holy smokes
Tammy Nemeth [00:41:19] I just my windows open and it came flying in.
David Blackmon [00:41:22] Oh, they’re tame. Yeah,.
Stuart Turley [00:41:24] Man. Get some garlic or something that looked like a vampire bat.
Tammy Nemeth [00:41:28] Well, you know, it flew in by the camera and I was just laughing. It’s like, oh, my gosh, it looks enormous.
Stuart Turley [00:41:35] Sorry i i was not and day and poor old david just kept going
David Blackmon [00:41:41] Yeah, I just, you know, hour three, I thought that I thought maybe it was a, you know, I was having a stroke or something. You can find me at energy transition absurdities. I wish I hadn’t named it that, but it’s too late to rename it, um, because everything is absurd and you know, it’s kind of redundant, but that’s where you can find David or blackman.substack.com and I would love to see you there.
Irina Slav [00:42:20] We have the same story!
David Blackmon [00:42:21] Oh my god, we have this, I’m sorry
Irina Slav [00:42:24] Which is actually great because I wanted to make an additional point about it. That wind and solar is slowing down and projects under construction or pre-construction there are declining because people are canceling projects. But at the same time the Solar Power Industry Association keeps harping on about how cheap… How quick to install and how reliable their energy is, their capacities. So do it, install it for stopping you. You just won’t have the subsidies if it’s so cheap, then it’s competitive. Compete.
Tammy Nemeth [00:43:08] They don’t have the transmission lines. They don’t have the transmittion lines. So.
Irina Slav [00:43:14] it’s not so cheap, then.
Tammy Nemeth [00:43:16] Yeah, everyone’s supposed to pay for it, right? But not the company, apparently.
Irina Slav [00:43:21] Well then you’re not competitive and you know shut up.
Tammy Nemeth [00:43:24] Exactly.
Irina Slav [00:43:25] The other story i saw in all the that’s not funny it’s a tragedy the other song i actually saw covered in pretty much the same way in in a couple of outlets that the power of siberia too will be will be bad for us lng export. Now my first thought was that if this was happening during a Democrat administration. They would not have written this. They would have said that it’s no problem because China is not importing any LNG from the US anyway. So what disruption are you talking about? It will have no effect whatsoever. And in fact, it could be kind of positive. For exports to Europe for as long as Europe has the money to pay for these imports because sooner or later they’ll go broke and won’t be able to to pay their LNG bill. But it was really You know, it’s clearly a narrative story And it’s the FD. So that’s no surprise, right?
David Blackmon [00:44:36] It’s the financial time. So the narrative aspect of that is no surprises.
Irina Slav [00:44:40] Yeah, it’s not just the FDA. I think it was a similar story was in Bloomberg and or Reuters, one of course, but two of the three covered it with the same message. Yeah, yeah. It’s not going to be a problem. Russia is switching to China from Europe. Europe is getting US LNG. Yeah. You know, as much as it can pay for. I will not stop pointing this out. Yeah, exactly. But that is your problem, you know, and then with growing demand at home, US gas producers, possibly at some point even LNG producers would be able to sell LNG on the domestic market, who knows, it could happen sometime in the future if the laws change. Yeah, so yeah, I thought it was interesting, kind of pathetic, but we know there are no depths to which they wants to.
Tammy Nemeth [00:45:39] America bad.
Irina Slav [00:45:41] That seems to be the only when Trump is in power. Only when Trump’s in power, it would be no good, no problem at all.
David Blackmon [00:45:49] It was all great when we had Jennifer Granholm running DOE.
Tammy Nemeth [00:45:54] Oh my gosh, yeah.
Stuart Turley [00:45:57] You know, she had the brain power of a potato bud. Did I say that?
Irina Slav [00:46:04] You did.
David Blackmon [00:46:06] Dude, right?
Irina Slav [00:46:08] Well, you’re not in the EU so you can’t be prosecuted.
Irina Slav [00:46:14] But, no, what was it?
David Blackmon [00:46:15] Just don’t travel, just don’t land at Heathrow anytime soon.
Irina Slav [00:46:18] Interest or something.
David Blackmon [00:46:20] There you go.
Irina Slav [00:46:22] I ran at Irina Slav on Energy, it’s up stack. I try to be funny, but I can not be funnier than reality.
Stuart Turley [00:46:35] All right, let’s get ready to rumble here. I had, uh, we’ve already covered, uh two of mine on one of mine. Let me go ahead and bring it up here. And that is why is China putting in so much oil into, uh billions into Brazil and Venezuela. We’ve got a gigantic problem coming around the corner here. And I’m wondering why it’s not showing up. Uh, there is boom when you sit back and take a look at this, there is a several billion dollars, uh, 4.818 billion across 39 different projects, uh making it a 112% increase from the previous year into Brazil. The picture, however, in this article is actually a new drilling and, um, uh, production unit going into Venezuela. Like, so China is not only, uh, California is a national security risk for the United States. Cause they’re buying 70% of the Ecuadorian, um, oil produced out of the rainforest produced by China. Thank you. I appreciate that. Thank you, wow. So China is really in South America producing oil and they’re doing energy as an exports as a service through their oil companies. And I’ve been talking about this with energy dominance around the world is energy export as a surface by using the United States companies by going out and doing drilling. China is already doing it in our own backyard. Pretty crazy. And then you can go to and you can find me on energynewsbeat.co or .com whichever one it routes you there and then also on the sub stack, theenergynewsbeat.substack.com. And I had my General Flynn interview get canceled. General Flynn and I will be talking again on the 15th, so that’ll be kind of fun.
David Blackmon [00:49:00] We just got postponed
Stuart Turley [00:49:03] He got double booked and had an overrun, so I’m going to get to visit with him looking forward to that one. I have a few other nice big guests coming on as well too.
Tammy Nemeth [00:49:16] Woo, way to go Stu.
Stuart Turley [00:49:20] At least I think I’m funny.
David Blackmon [00:49:24] You’re funny. You don’t always intend it, but you’re funny. God like me!
Stuart Turley [00:49:35] I’ll tell you what, we kind of end. Up a little early here. I’d say we’ve still got a lot of material here. The thing that you brought up, Tammy, was phenomenal about the data centers and the cost of energy is, I put up that on my sub stack a little while ago, the biggest inflationary problem in the United States for Trump administration are two things, California’s national security risk. As well as the inflationary energy prices and how those are coming around. And as we found out, I didn’t know about New Jersey, nuclear and natural gas is 80% of their power. You would think that they would be in the lower section of the price range in the United States.
David Blackmon [00:50:24] Not. They’re like California, they have so many taxes and fees and then all the, all they’ve invested in these offshore wind ventures.
Stuart Turley [00:50:33] And the 9% that they get from their wind offshore is expensive. But those government data centers are going to be costly.
Tammy Nemeth [00:50:48] Yeah and you know it’s interesting because it’s like related to that story I sent around this morning where the civil servants in England don’t want to use AI because of the net zero implications because of energy use using AI and I’m thinking so they didn’t want to use a Microsoft’s co-pilot because they were testing it out on different Elements going through emails and summarizing stuff and whatnot And the people chosen to do this trial said, wow, we have issues with the energy consumption and its impact on net zero and so on. And I was wondering, do those same people, do they then not use it for like chat GPT for other things and stuff like that? I don’t know, I found that interesting that they didn’t want the government to be using AI because of net zero.
Irina Slav [00:51:46] It’s really great how you never know when you brainwash people, you never know what the all the unforeseen consequences may be. That’s a good point. Yeah, this is it sounds like a boomerang effect. You know, they try to make everyone worry about climate change and be more considerate and you know, consume less energy. And now you get civil servants who don’t want to use an AI tool because it consumes a lot of energy and that’s bad for the planet. I find this hilarious. And that’s the government that wants to turn the UK into an AI superpower. I know. Right. Right, right. How is that going to work?
Stuart Turley [00:52:27] Um, Tammy, if I could bring this one up, there’s two points. I’d like to add while we got a few minutes here, North sea energy would help Reeves filler black hole by Katherine Porter. She is a class act and I really appreciate her stories. And let’s see if I can bring this in. It’s processing here. Um, This isn’t exactly a excellent study of what not to do as far as energy policy is concerned for the UK. Holy smokes, Batman. This was a great article.
Tammy Nemeth [00:52:58] Yeah she did an amazing job just outlining the absurdity of the windfall tax that they’ve extended out till 2030 or i don’t know something and so when labor first took over the uk government they said they said there was a 20 billion pound black hole in the finances they’re up to 50 billion now this is the new narrative that there’s a 50 billion pound black hole. And so now they’re going to have to go after people’s pensions and all these different kinds of things. And Catherine Porter’s arguing, well, you know, if you didn’t have all these stupid policies on North Sea development and the stupid windfall tax that punishes not big companies, but the small companies that have developed or taken over the oil and gas fields. And if you weren’t trying to cancel leases and stop the development of these oil and grass fields, then that revenue plug to some extent, not all of it, but some of that 50 billion pound black hole, but she does an excellent job of really clearly outlining what the policy mistakes have been and what they could do to fix the problem. And honestly, the UK and Germany are the two countries. Please learn the lessons. Don’t follow them down this net zero pathway because it’s a real lesson in how to destroy your economy and de-industrialize, as you had said earlier, Stu.
Stuart Turley [00:54:32] Yeah, I thought this was great. And it’s the smaller ones. It’s also the job loss and the loss of additional tax revenue. So they they’re over there looking at the big windfall profits tax that has been deflated because of all the extra costs that they’ve associated with it on top of it, which lowers their profits, which means they get lower. This is like my, my brain hurt. I had a Monty Python skit by myself. In the corner going, my brain hurts after reading this. This is so sad. It is sad.
David Blackmon [00:55:09] Who was a prime minister when the windfall profit tax was implemented? Who was the majority in the government?
Tammy Nemeth [00:55:15] That Rishi that was Rishi Sunak and Boris Johnson. It was the Conservatives.
David Blackmon [00:55:20] It was the conservatives who did that.
Tammy Nemeth [00:55:22] Yeah, the Uniparty.
David Blackmon [00:55:23] So I guess my question is, if you have another election and the conservatives happen to win it, are they going to do anything about that?
Tammy Nemeth [00:55:31] Well, Kemi Badenoch, she’s the new leader of the conservatives and they’ve been a little more strident in saying net zero is a problem. And she’s talked about how she would redo net zero or maybe get rid of it and open up oil and gas development again. But the thing is, unless they get rid the climate change act, unless they get rid of their net zero act. Anything they do will be litigated, which is what happened when they tried to approve new fields and new developments and have offshore auctions or whatever is Greenpeace immediately took them to court. So it’s like, okay, unless you get rid of that other stuff, unless you’re committing to do that, it’s still there. And you’re just dancing around the problem, so.
David Blackmon [00:56:22] And that all remains popular in the UK, doesn’t it? I mean, that, that concept of net zero and, uh, renewables, despite everything still remains popular with, with voters, doesn t it? So it’s going to be real hard, I think, for, for the conservatives. I mean they implemented those laws while they were the majority party. And, uh.
Tammy Nemeth [00:56:45] I don’t know. I think weird It’s popular amongst certain segments of the population. I would say and Yeah, and so I mean if you look at who who’s supporting the reform party It’s the sort of people In the middle class to lower middle class who are like You know, we can’t afford Net zero we can afford the unreliable energy and and whatever I mean, people were so frustrated with the conservatives on all of this. And if they would have taken a stand against Nintendo and against the unrestricted migration that’s happening, they would’ve won, but they didn’t.
David Blackmon [00:57:28] I saw, I remember Sunak, remember he made that major speech in August or September of 23, that was just right on point on everything, right? And I was so optimistic that, that he gets it and they’re going to move in that direction and then turned out to be just words.
Tammy Nemeth [00:57:47] Yeah, just words politicians to.
Stuart Turley [00:57:50] Yeah, Tammy, just because I’m in America, I just was trying to show everybody that I had a bald eagle go flying right by my cabin.
David Blackmon [00:57:59] Oh, is that what you were doing?
Stuart Turley [00:58:01] So let’s see, you get a moth the size of a bat and I get a bald eagle going by the cabin. So I came this close to really showing.
Tammy Nemeth [00:58:14] I need it to zoom in!
Stuart Turley [00:58:17] Glad that he didn’t come in the window though. Holy smokes, Batman.
Irina Slav [00:58:21] That’s smart.
David Blackmon [00:58:24] So we managed to kill time and we put in a full hour today.
Tammy Nemeth [00:58:29] Well done us! Well done! Oh hey, we have a special guest next week!
David Blackmon [00:58:34] Oh, we do. Yes. Megan Lapp. Yes, go ahead, Irina.
Irina Slav [00:58:38] No, you go ahead.
David Blackmon [00:58:40] Megan Lapp, a spokesperson for the Marine Fisheries Industry in the Northeast, who has been one of the most effective spokespersons for the opposition to offshore wind in the North Atlantic, will be our special guest next Monday. And we’re going to get a full and complete update on the devastation of that industry in the Trump administration.
Stuart Turley [00:59:06] And she was fantastic on the Ingram angle.
David Blackmon [00:59:09] Yes, she was. She would just, just, uh, and she’s been on Fox business several times here recently. She’s, uh she’s getting big time on us here. So, uh. She’s terrific. Uh, y’all will really enjoy that episode.
Irina Slav [00:59:23] Oh yeah, it’s going to be really interesting.
Stuart Turley [00:59:26] Everybody have a great week. Looking forward to it. All right, everybody.
Tammy Nemeth [00:59:28] Thanks, everybody.
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