Daily Standup Top Stories
UK: Nuclear Power Classified As Environmentally Sustainable In UK’s Green Taxonomy
On March 15, 2023, the UK’s Chancellor of the Exchequer, Jeremy Hunt, announced that nuclear power will be classified as “environmentally sustainable” in UK’s green taxonomy, “giving it access to the same investment incentives as renewable energy.” […]
Biden Administration Electric Car Directive Increases Pressure On US Airports
Numerous reports indicate that the United States Department of Environmental Protection (EPA) is preparing to issue new federal emissions standards for light-duty vehicles that would force the number of electric vehicles sold to increase dramatically. […]
Diamondback Seeks Buyers For Permian Assets
In a week of deal talk in the American shale patch that saw reports emerge of Exxon’s informal discussions about the potential acquisition of Pioneer Natural Resources, Diamondback energy has announced it is looking to […]
Highlights of the Podcast
00:00 – Intro
02:42 – UK nuclear power classified now as environmentally sustainable a new Green Taxonomy Code
04:59 – Biden’s administration electric car directive puts increased pressure on US car market
07:49 – Market Update
10:08 – Diamondback headline they’re exploring sale of non-core West Permian assets
11:56- Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:14] What is going on. Everybody, welcome into another edition of the Daily Energy News Beat Stand up here on this gorgeous Thursday, April 13th, 2023. [00:00:22][8.0]
Michael Tanner: [00:00:24] As always,. I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, doing a solo show. Stu is out on assignment and we will wish him well. But we are going to hold down the fort here. [00:00:36][12.5]
Michael Tanner: [00:00:36] There are still some great stories that we’re able to get pushed out on energy news. It’ll be a little bit of a quicker show, but I wanted to cover briefly a couple different menu items. [00:00:44][7.8]
Michael Tanner: [00:00:45] First up, Nuclear power classified as environmentally sustainable in UCS Green Taxonomy. In an code to our fearless leader who is out today. Nuclear is now going to be classified as green if UK’s new tax code. This is a great article that I want to cover. A few interesting nuggets. [00:01:01][16.7]
Michael Tanner: [00:01:02] Next up, Biden’s administration is set to announce electric car directive aiming to increase pressure on the U.S. car market. Basically, they’re going to increase on the amount of electric vehicles that we’re going have to purchase to. A pretty astronomical number I think is going to have a lot of long ranging effects. [00:01:17][15.7]
Michael Tanner: [00:01:18] I will briefly then cover what’s going on in the oil and gas markets. We saw oil up to about $83 today, which is absolutely insane right now. Gas still plummeting towards that $2 mark on some of the warmest weather. EIA prints a slightly a slight build in line with what the API saw so. [00:01:35][17.0]
Michael Tanner: [00:01:35] And then finally, Diamondback is exploring some non-core asset sales in the West Permian. So we’ll dive into what they’re looking to sell and maybe what they’re hoping to get pitched in and give you an idea of of of what that scenario looks like. [00:01:46][11.0]
Michael Tanner: [00:01:47] Then we’ll let you get out of here. But before we do that, guys, again, all of these articles we’re about to cover come from the world’s greatest website. EnergyNewBeat.com The best place for all of your oil and gas and energy news still does a great job of curating this website and making sure that it’s up to speed. [00:02:02][15.0]
Michael Tanner: [00:02:02] We have a great team who helps not only do this podcast, but then also keep this website alive. We appreciate everybody. This is I mean, it’s growing faster than ever. We appreciate everybody listening or viewing the website, rather. [00:02:13][10.7]
Michael Tanner: [00:02:13] I think you know what we’re doing. The numbers are big. I, it’s actually kind of crazy to think about, to be honest. On the website, Stu sends me these firewall numbers we’re like really that many hits per day but nonetheless we fight on Dashboard.EnergyNewsBeat.com. [00:02:24][11.3]
Michael Tanner: [00:02:25] The best place for all of your data and news combined. Get it while you still can. You never know where that dashboard might go, but I’m out of breath. But unfortunately, I have to start this out, so I have to take a deep breath and dive into it. [00:02:37][11.4]
Michael Tanner: [00:02:37] First one I want to talk about. Let’s let’s go to this this this UK nuclear one. So title the articles UK nuclear power classified now as environmentally sustainable. A new Green Taxonomy Code. [00:02:48][11.0]
Michael Tanner: [00:02:49] We have a march 15 UCS, Chancellor of Esquire. I don’t know what that means, but his name is Jeremy Hunt. [00:02:55][5.7]
Michael Tanner: [00:02:55] He announced that nuclear power will be classified as, quote, environmentally sustainable. And you and UK’s green taxonomy, quote, “giving an access to the same investment incentives as renewable energy”. [00:03:04][8.8]
Michael Tanner: [00:03:04] He stated that, quote,” Because the wind doesn’t always blow and the sun doesn’t always shine, we need another critical source of cheap and reliable energy, and that is nuclear“. T. [00:03:13][8.6]
Michael Tanner: [00:03:13] He inclusion of that nuclear power within the UK green taxonomy mirrors a similar move that is been included in the EU green taxonomy last year. I love the quote, he said, the quiet part out loud because the wind doesn’t always blow and the sun doesn’t always shine. [00:03:28][14.7]
Michael Tanner: [00:03:28] That’s a cogent argument about why we should probably have nuclear, because it’s, again, the baseload energy you’re talking about renewable energy you have to think about it’s dispatched, it’s not dispatchable. [00:03:39][10.7]
Michael Tanner: [00:03:39] You can’t just dispatch renewable energy or wind energy or hydro. I mean, hydro is a little bit dispatchable, but you have to be next to it. [00:03:45][6.2]
Michael Tanner: [00:03:46] Let’s talk about wind and solar that again, when the sun doesn’t shine, when the wind doesn’t blow, you don’t have energy. So you have to figure out a way to store it. [00:03:52][6.3]
Michael Tanner: [00:03:52] So if you’re really going to make do you want to talk about investments in the wind and solar, that technology is fairly solid. Invest into batteries so that we can those batteries can then become the dispatchable power they need to, because right now, clearly coal and natural gas are very you could turn a coal factory on, you can start burning more natural gas. [00:04:08][16.1]
Michael Tanner: [00:04:08] It’s very easy to increase the base of energy, hard with renewable energy. I think another interesting quote quoting here we have is on there challenges of attractive capital to fund these climate initiatives. [00:04:20][11.2]
Michael Tanner: [00:04:20] This green technical paper, Green Technical Advisors Group said. The paper argued that significant progress must be made by the UK to attract global capital commitment suggested the UK adopt the same broad concept metrology metrics as the EU taxonomy where possible. [00:04:33][13.3]
Michael Tanner: [00:04:34] The UK’s edition of Nuclear Power, the Green Taxonomy still is under consideration, follows similar steps in the EU last year. So as the EU goes, so will Britain. It’s great to see EU come around on this too, because I think Stu is, you know, he’d be pounding it. [00:04:47][12.8]
Michael Tanner: [00:04:47] I know he would love this article, so I wanted to cover it because it’s this can really help become the bridge to a much actually clean sustainable future and that’s coming from an energy guy. [00:04:58][11.4]
Michael Tanner: [00:04:59] Next up, Biden’s administration electric car directive puts increased pressure on US car market to give you guys an idea. Numerous reports indicate that the United States Environmental Protection Agency. Also known as the EPA, is preparing to issue new federal emission standards for light duty vehicles that would force a number of electric vehicles. [00:05:18][19.4]
Michael Tanner: [00:05:19] The number of electric vehicles sold to be increased absolutely dramatically. To give you guys an idea if these new rules were approved. These are just reported. But in just nine years from now, which is 2032, we would need between 64 and 67% of all new car sales would need to be electric. [00:05:35][15.9]
Michael Tanner: [00:05:35] Give you guys an idea. In 2022, we had about 6% of new car sales in the United States that were elected. So what are they saying now? It’s miracle when her Brooks gets the Jets first, gets the job and he’s sitting in that meeting with all the all the executives at USA Hockey and they say, well, what do you want to do? [00:05:51][16.0]
Michael Tanner: [00:05:52] And he says, well, we want to go and we want to beat the Russians for the Soviets. And they said, oh, a lofty goal, Herb, That’s what I went through my mind right now. It’s a lofty goal. Herb, We think we’re going to get up to 64% new car sales being electric. I absolutely doubt that. [00:06:09][17.0]
Michael Tanner: [00:06:10] I mean, that would be that would be almost six fold increase what we’re doing right now. And that I mean, to give you an idea, that means we’d have to start importing like crazy because there’s not enough car factories going around right now. But I think the other thing and why I think this article is so important is because this was a Forbes article. [00:06:27][16.5]
Michael Tanner: [00:06:27] And in this Forbes article, they point out that the problem with the EV rollout, even if we could roll out and achieve this 64 to 67% new car sales by 2032, the grid can’t sustain it. To give you guys an idea, they kind of broke down. [00:06:42][15.4]
Michael Tanner: [00:06:43] I mean, to give you an idea, I thought this was a great overview. The power grid view we screen below the grid. What the grid is is it’s really two major grids and three minor grids. So, you know, I don’t know why I’m not an expert on the grid, but, you know, and the way this article describes it, that’s the breakdown. [00:06:58][15.7]
Michael Tanner: [00:06:59] You’ve got two major grids, three minor ones there’s also another there’s also 660,000 miles of lines that are operated by about 500 different companies. Power is produced that from over 7300 power plants and connects over 145 customers. It’s kind of funny. [00:07:14][15.5]
Michael Tanner: [00:07:14] We’ve got 300 million people here, but only 145 million customers. But the other 33% do it. Yes, I know there’s kids and old people, but that seems interesting that that number is not higher. To give you guys an idea, solar only generated about 2.3% of all that electricity and wind was 8.4%. [00:07:30][15.7]
Michael Tanner: [00:07:32] Natural gas came out of 38%. I mean, we’re still the baseload energy still coming from all these places. But I find it interesting that Forbes is now even pointing out that the grid is unsustainable. And that’s I mean, Forbes is going to lean left a little bit on this on most things. So I think it’s great that they’re being called out. I’m glad we were able to pick this up today. All right. [00:07:48][15.7]
Michael Tanner: [00:07:48] Let’s let’s move over to oil prices and finance, guys. And a great day for oil. We’re up to you know, as I recorded this about 615 the night before here on Wednesday, we’re sitting about $83 right now. [00:08:00][12.7]
Michael Tanner: [00:08:01] I mean, a lot of what we saw was a smaller than or an in-line crude build. It only about 600,000 barrels. Inflation came in lower. See core CPI sitting at about 4.1%. We saw that drop today. Economists are now speculating that we’re going to see no more rate increases, which is going to believe, you know, it’s really going to help oil, you know, sustain higher oil prices. [00:08:21][20.1]
Michael Tanner: [00:08:21] We’re already factoring OPEC cuts. Dollar had a low day today, trading down about about a percent, up to a percent for the whole day on the day, about 6/10 of a percentage point spike. NASDAQ well traded down about 4/10 and 8/10 of a percentage point or above of a percentage point excuse me. [00:08:38][17.4]
Michael Tanner: [00:08:39] So overall, markets were down. You know, as I mentioned, EIA crew build, we only came in with a 600,000 barrel build. We expected about 377. So pretty much in line with expectations. You didn’t really see markets move, but we did see that and we did see product supplied inventories go up. [00:08:54][15.5]
Michael Tanner: [00:08:55] Let me pull it up here. What did we see utilization numbers at? Let me pull up utilization. I mean, we’re sitting at, you know, 89.3% utilization, which is it’s lower. It’s coming down from what it used to be, which is, again, always going to be a sign that and hopefully prices on our end are going to come down because we can ramp up. But we will see. [00:09:12][17.2]
Michael Tanner: [00:09:12] Over on the nat gas side, guys, it just it’s warm in the Midwest right now. It’s really nice. I just walking my dog before I recorded it. It’s really nice here in the Midwest, guys and that’s really what’s driving prices down. You know, the headline is near perfect. [00:09:25][12.4]
Michael Tanner: [00:09:25] Spring temperatures drive natural gas futures lower ahead of fresh air storage data. We get that. As you guys listen to this. You’ll hear this at 10 a.m. Range of expectations somewhere between a 20 to 30 Bcf build. But last year we had about an eight Bcf build. [00:09:41][15.8]
Michael Tanner: [00:09:41] So again, you’re talking about that warmer weather is definitely going to impact storage, probably will roll over and impact storage next week. So I expect to build next week as well, which is a little bit unseasonal for this type. [00:09:50][8.3]
Michael Tanner: [00:09:50] Well, I know we’re in April and when we’re moving into the summer months, but it still seems like we should be should it should be a little bit colder. But that’s just because I’ve only lived in cold places my first time living somewhere where it’s like, oh, it’s warm all the time now, sort of. It’s not even that warm in Dallas. It gets cold, I’ll admit it gets cold. I think. [00:10:06][15.7]
Michael Tanner: [00:10:06] Before we let you go, I want to quickly cover Diamondback headline they’re exploring sale of non-core West Permian assets. Diamondback Energy is looking to sell non-core assets in the Western Permian Basin as they look to cash in on the increasingly active deal market in U.S. shale. [00:10:23][16.9]
Michael Tanner: [00:10:23] The company is working with a financial advisor to seek a buyer for the assets around Pecos County, it says. I mean, it’s it’s some good stuff. It’s not Prime Midland Basin, but I mean it’s it’s definitely some some tier one B or tier two assets. You know, they it’s not really clear what they’re going to fetch. [00:10:40][17.4]
Michael Tanner: [00:10:41] You know, this article says that it’s attempting to raise its sale of non-core assets to 1 billion from 500 million. Apparently that’s what they would like to sell all of their non-core assets for. How this piece fits into that is going to be $1,000,000,000. [00:10:53][12.0]
Michael Tanner: [00:10:54] I’m not as familiar with the Pecos County stuff, but I think what they’re trying to take advantage of is oil really is going to run here a little bit. There probably will be a sweep here before things get too crazy because you can buy at 85 oil and then all of a sudden three months post-acquisition, you’re you know, oil is now at $100 or so. [00:11:09][15.2]
Michael Tanner: [00:11:09] The thesis goes, you know, invest you know, your your investor base is going to like that. And as a CEO, that looks very strategic. So I think it’ll be very interesting. I bet you Diamondback will find a buyer. [00:11:17][7.2]
Michael Tanner: [00:11:17] I bet your PE money comes in and swipes this. To be honest with you, this is definitely not like somebody is going to sweep up Diamondback, but this is somebody, you know, ICP money coming in and finding this. [00:11:25][8.3]
Michael Tanner: [00:11:26] You know, we’ve got, you know. Tim Resin Key Banc Analyst I love how now he’s saying, quote, “Diamondback is actually drilling stronger wells than its industry peers in this part of the basin”. [00:11:34][8.2]
Michael Tanner: [00:11:35] I wonder if he’s is he actually looking at tigers again? Who knows? I don’t know. Tim Rabbit says he’s been I’m sure he’s up. Key Banc Analyst above average results naturally increase the attractiveness of this acreage. [00:11:44][9.1]
Michael Tanner: [00:11:44] Yeah, I’m sure. I’m sure it does, Tim. Great analysis man. Great analysis by I mean, quick day, guys. Not much against who’s out on assignment. We wish him well. [00:11:55][10.8]
Michael Tanner: [00:11:56] Email us Questions@EnergyNewsBeat.com, There’s anything that you want to say but with that, guys, I’m allegedly out of here. Get back to work and start your day. Thanks for checking us out. I’ll see you on the other side, guys. [00:11:56][0.0]
