Daily Energy Standup Episode #130 – Power Play: Mexico’s President Sparks Tensions with Solar Energy as US Power Grid Grapples with Green Energy Risks

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Why Is Mexico’s President So Hostile To Solar Energy Investment?

Mexico is one of the best potential locations for solar energy generation in the world. It has great sun with minimal seasonal variability. On paper at least, Mexico is well-positioned to produce competitively priced solar-generated electricity. Over […]

US power grid facing elevated risk of shortages this summer amid green energy push: watchdog

The U.S. power grid is facing an elevated risk of shortages in the coming summer months amid a nationwide push to replace fossil fuel generation with green alternatives, according to the nation’s top grid watchdog. The North American […]

Renewable advocacy groups ask Congress for transmission permitting reforms

With permitting reform discussions occurring in Congress this week and debt ceiling negotiations continuing, major national renewable energy organizations sent a letter to House and Senate leadership urging the enactment of bipartisan transmission permitting legislation that builds […]

This New Middle East Pipeline Could Be A Gamechanger

The major new gas pipeline being planned will run along a 2,000-kilometre corridor via Oman and UAE through the Arabian Sea and into India. The presence of such a pipeline could also lead to vital […]

Highlights of the Podcast

00:00 – Intro
03:27 – Why Mexico’s president is so hostile to solar energy investment
07:02 – U.S. Power Grid Facing elevated risk of shortages this summer amid green energy push
10:34 – Renewable advocacy group Ask Congress for transmission permitting reforms
14:01 – This new Middle East pipeline could be a game changer
16:58 – Market Updates
19:59 – Outro

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Miichael Tanner: [00:00:15] What is going on, Everybody, Welcome into another edition of the Daily Energy News Beat Stand Up here on this gorgeous Wednesday, May 24th, 2023. As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, joined by the executive producer of the show, the purveyor of the show and the Director and Publisher of the world’s greatest website, EnergyNewsBeat,com , Stuart Turley, my man. How we doing today? [00:00:39][24.0]

Stuart Turley: [00:00:39] Is building neighborhood we got us a whale of a show! [00:00:43][3.5]

Miichael Tanner: [00:00:44] Yeah, we do have us a blue whale of a show nonetheless, big one lots of great stories. First up on the menu, Why is Mexico’s president so hostile to solar investment considering Mexico is one of the best potential locations for solar generation. It’s interesting the Mexican president stance on this so Stu will dive into what that means for both Mexico and for us and the world abroad. [00:01:09][25.7]

Miichael Tanner: [00:01:10] Next up, we have U.S. power grid facing elevated risk of shortages this summer amid green push this is via a watchdog a.k.a the North American Electric Reliability Corporation, which is a nonprofit that regularly monitors the grid and makes public recommendations they’re saying Watch out. So Stu will dive into how hot it’s going to get this summer. [00:01:31][20.9]

Miichael Tanner: [00:01:32] Next up, Renewable Advocacy Groups ask Congress for transmission permitting reforms. This is something where us and the renewable groups, I think, are aligned. I saw this story drop and I was like, I think for once they’ve got Stu on this one because he’ll dive into the details here. But considering that these renewable groups are pushing now Congress to do some sort of permitting reform, it’s something we can get on board with. [00:01:57][25.6]

Miichael Tanner: [00:01:58] Next up, This New Middle East pipeline could be a game changer there’s a 2000-kilometer pipeline that’s being considered via Oman and UAE through the Arabian Sea and on way to India. That could be an extremely vital pipeline to divert stuff away from Europe. So Stu, will dive in to what that all means for the geopolitical economy. [00:02:20][22.7]

Miichael Tanner: [00:02:21] He’ll kick it over to me, will cover actually a good day in oil prices we’re currently trading at. They were closed yesterday at 7390s. We record this about 6:15 here on the 23rd. Prices really being buoyed by a pretty large EIA crude oil drop about 667 million barrels not much on the news front. We’ll let you get out of here on a short day before I could get back to Stu to start the show. [00:02:44][22.6]

Miichael Tanner: [00:02:44] Again, all the stories you are about to hear are courtesy of the world’s greatest website www.EnergyNewsBeat.com Stu does a great job of curating that website to make sure it’s up to date with all of your relevant energy and oil and gas news hit the description below. You can see the links and timestamps to all the different articles. Our Team Does a great job of curating that. [00:03:03][18.9]

Miichael Tanner: [00:03:04] Dashboard.EnergyNewsBeat.com the best place for your data and energy news combo get it while you still can it’s definitely going behind a paywall. Much like Nat gas Intel is cutting you down to one article a day will cut your access to Dashboard.EnergyNewsBeat.com very quickly, so get it while you still can’t. Questions@EnergyNewsBeat.com I’m out of breath, though, Stu. Where do you want to begin? [00:03:23][18.9]

Stuart Turley: [00:03:24] All right. Hey, I’m going to the next show here the next one is Why Mexico’s president is so hostile to solar energy investment. Well, it’s kind of like when you get hit by a mule, you kind of don’t walk around that mule anymore. And I think there’s some interesting things in here. You just said it in the intro, Michael. Mexico’s one of the best potential locations for solar energy generation in the world. [00:03:50][26.4]

Stuart Turley: [00:03:51] Has great sun, great beaches on paper, at least over the last decade, Mexico has successfully attracted billions of dollars in new investment in solar energy, but it is stalled during the presidency of Andres Manuel Lopez Obrador oh, I even said a name almost. Right. [00:04:12][21.2]

Stuart Turley: [00:04:13] Let’s come in here Mexico has stopped issuing permits and canceled auctions for solar projects, effectively cutting off the flow of private investor money. Let me tell you about how much. In 2017, Mexico received a whopping 35% of all renewable energy investment in Latin America. [00:04:38][25.6]

Stuart Turley: [00:04:39] Today, they are only getting 7%. Mexico is going in the opposite this is a quote from Rivera. Rivera Revolt to Mexico is going in the opposite direction that the world is going in. This is a missed opportunity. Mexico has absolutely outstanding wind and solar resources. This is bringing up some really big points not the whole world is going to solar and wind anymore. [00:05:09][29.3]

Miichael Tanner: [00:05:10] And what’s interesting is of all places you would think Mexico, given its size, given its ability to actually get solar and transmit it. It seems to be easier to do that in Mexico than it would be in Alaska in the wintertime. [00:05:25][14.8]

Stuart Turley: [00:05:26] Right. [00:05:26][0.0]

Miichael Tanner: [00:05:26] You know, weather seems to be fairly good you know, again, they mentioned the minimal season viability. The fact that they’re not in on it says something. [00:05:35][8.6]

Stuart Turley: [00:05:36] It’s all it all comes down to the market, Michael the solar can not by the time you try to add it to the grid, it just makes it too expensive in rural Mexico. You know, they’ve had to federalize Petrobras in order to get them back into the… They got to make money! [00:05:55][19.4]

Miichael Tanner: [00:05:55] Yeah. So the problem is Mexico has a really high cost of production what they do do a really good job of is hedging they have been one of the world’s most successful and well-renowned hedging programs that brings in a significant amount of government revenue. Now, the problem is they’re actual it’s Pemex, not Petrobras, that’s Petrobras, that’s Brazil bad. Pemex notoriously terrible. Operator I mean, I’ll just go out and said, I’m sorry. I mean, they’re just they’re not they’re not that great. [00:06:21][25.6]

Stuart Turley: [00:06:22] No, no. Master Bajo in LA. [00:06:24][2.2]

Miichael Tanner: [00:06:26] Well, this is a it’s a high-cost operation and I, you know, I haven’t heard of I, you know, I just really haven’t heard of the eye is it someone correct me if I’m wrong though, but I don’t think they’re drilling what whoppers are wells over there in Mexico. I, I don’t even know they’re drilling in Mexico, to be honest with you. [00:06:45][18.9]

Stuart Turley: [00:06:46] I’m not sure I’m going to call them up right now let me get a hold of Hefe and WaPo and….. [00:06:52][5.8]

Miichael Tanner: [00:06:52] Give them a call and say, Why? What’s next? Let’s move on to the grid! [00:06:56][3.8]

Stuart Turley: [00:06:57] Let’s go to the grid Dude and this is part of it. U.S. grid, U.S. Power Grid Facing elevated risk of shortages this summer amid green energy push the U.S. power grid is. See, Michael, when I was growing up, I don’t remember having this many power problems. You know, we had power problems because a tornado came whizzing through . [00:07:21][24.0]

Stuart Turley: [00:07:21] But right now, the U.S. grid is facing an elevated risk of shortages in the coming summer months amid a nationwide push to replace fossil fuel generation with green alternatives. According to the top national grid watchdog, the North American Electric Reliability Corporation, the elevated risk profiles are substantial from new loads coming in. [00:07:50][28.9]

Stuart Turley: [00:07:51] And part of it is when you try in a wind farm, it takes years to get that thing tied in. When you do get it tied in, all of a sudden it has not communicated with the other parts of the grid this thing is now coming online and all of a sudden it’s like balancing authorities just want to go shoot themselves in the foot in the head, actually. [00:08:17][26.3]

Miichael Tanner: [00:08:18] Well, I think they point out a couple different things they point out that nine regional grids, all of which include New England, every state west of Ohio and Ontario Canada, are facing elevated power outage risk during this upcoming 2023 summer. [00:08:32][14.1]

Miichael Tanner: [00:08:32] This analysis specifically warned that much of that risk is driven by greater reliance on renewable energy sources, which are more favorable, which is more dependent on favorable weather. [00:08:41][8.6]

Miichael Tanner: [00:08:41] And the key is when you have hotter days, you tend to have less wind so they specifically point out that key states like Texas, the Southwest Power Pool that includes Kansas and Oklahoma and some additional 12 states between New Mexico and Iowa could not have enough dispatchable generation out from how much they’ve retired, considering the lower levels of wind that they’re predicting. So, you know, it’s I probably buy a generator is what it sounds is what this is telling me I need to buy a generator. [00:09:09][27.4]

Stuart Turley: [00:09:10] Yeah. Yeah. Yes and if you don’t have a generator, you at least always need to have a go bag in case of a tornado. You got to be ready to go anyway for that. So electricity in America, this is a quote from Daniel Turner. [00:09:24][13.8]

Stuart Turley: [00:09:25] Electricity in America is becoming increasingly intermittent, and it’s because we’re transitioning rapidly towards unreliable and untested wind and solar. Daniel Turner, founder and executive director of Power the Future, told Fox News Digital in an interview last week. [00:09:41][16.3]

Miichael Tanner: [00:09:41] Yeah it’s a yeah I it’s again we talk about dispatchable power that’s the problem with renewables it’s not dispatchable you know and you know well if you if you’re going to if you look at the article, you will notice the smokestack that sees the plume of exhaust coming out of Mitchell Power Station, which is a coal plant up there in Pennsylvania. I’m not saying we need to bring coal plants online. No, please give me some natural gas. [00:10:05][23.5]

Stuart Turley: [00:10:06] I’m all for retiring all the coal plants we can let’s do it orderly let’s do it and just like we talked about yesterday on TVA and Tennessee Valley Authority retiring a coal plant and they’re trying to put in the natural gas plant, Hey, that makes solid good sense. [00:10:24][17.3]

Miichael Tanner: [00:10:24] It’s ironic, shockingly common sense coming out of what seems to be a regulatory body. What do we got next year? And speaking of regulatory bodies, what’s next? [00:10:32][7.9]

Stuart Turley: [00:10:33] Oh, regulatory bodies, man. Renewable advocacy group Ask Congress for transmission permitting reforms. Here’s what the problem is, Michael. You know, all of a sudden, you and I, we’ve done them the help on the regulatory issues for oil and gas. Oil and gas guys are used to it. [00:10:53][20.5]

Stuart Turley: [00:10:54] The other guys, the wind and solar, are just getting hammered with these new regulations and merge research shows that we will need to double the pace of historical transmission deployment in order to maximize the carbon emission reduction benefits of this historic legislation that groups explain in the letter. These reforms are essential to realization of the 21st century transmission grid in America that needs to bolster economic competitiveness. [00:11:28][34.2]

Stuart Turley: [00:11:30] Guess what? It can’t happen the amount of money needed in order to update the grid to use renewables is about three times the amount that the Porkulus bill, the Inflation Reduction Act was. [00:11:43][13.2]

Miichael Tanner: [00:11:44] Yeah, I mean, I’m I’m going to I’m going to go halfway between you and this article and say I’m with them that we need to do permitting. [00:11:51][7.6]

Stuart Turley: [00:11:52] Absolutely we are. [00:11:54][1.7]

Miichael Tanner: [00:11:54] And that is clear that that is really I mean, you know, that’s going. [00:11:59][5.1]

Stuart Turley: [00:11:59] Nuclear Reactors takes 20 years. [00:11:59][0.0]

Miichael Tanner: [00:12:01] These groups I mean, I’ll give you an idea like I’m not I you know, we these groups are the American Council for Renewable Energy, you know, and the Solar Energy Industries Association. So we you know, we’re they’re, you know, much like the American Petroleum Institute, it’s obvious where they’re where their allegiances lie. [00:12:20][18.9]

Miichael Tanner: [00:12:21] So I you know, not that I want to agree with acre by any stretch of the imagination, but in this case, they’re realizing what we’ve all learned in the oil and gas business. Man, regulation sucks. We’ve sort of been in our business throwing our hands up and just going along with it. They’re hoping to get new grid updates to come in. I’m halfway with you we do need the grid updates. [00:12:43][22.3]

Miichael Tanner: [00:12:44] Now do we need the grid update specifically so that we can roll out more solar? Not necessarily, in my opinion. We can squabble over what the new sources that are getting plugged into the grid, but I’m going to say I’m with them we do need to spend you know, we need to spend money on fixing the grid so. [00:12:59][15.6]

Stuart Turley: [00:13:00] I agree. [00:13:00][0.2]

Miichael Tanner: [00:13:00] However, that looks like if it means I have to show up to a dinner and sit next to somebody, the Solar Energy Industries Association, which we like, well, have a great dinner. [00:13:07][7.0]

Stuart Turley: [00:13:08] Oh, I think it’d be fantastic. But here’s the thing Regulatory processes are due to the department, DOE, Department of Energy, and guess what’s going on? It’s the legislation through regulations and they’re pumping their thing on it. But when they’re pumping their views and opinions using regulatory processes, they get greedy and they even try to regulate, overregulate their wind and solar buddies. It’s just people don’t know how to do energy at the Department of Energy. [00:13:41][32.4]

Miichael Tanner: [00:13:41] Yeah, well, it’s that that’s sad the people of the Department of Energy don’t know how to do energy that is sad. All right, let’s move on. [00:13:49][7.6]

Stuart Turley: [00:13:49] Let’s go to the next one. Yeah, it’s kind of like the nuclear guy the head of the nuclear waste went shopping in airport terminals all the time. Okay, Let’s go to the next story here. This New Middle East pipeline could be a game changer. Boy, the title of this is really under stating the dynamics of this new pipeline. The new pipeline will run along 2000 kilometer kilometer corridor via Oman and UAE that you already said. [00:14:21][31.6]

Stuart Turley: [00:14:21] This pipeline sub-project to the main Middle East to India pipeline is re-energizing plans of the Iran Oman Gas and LNG project. This is stinking how you listen to these numbers the EU imported an average of over 13.4 billion cubic feet Bcf per day in gas by pipeline from Russia or around 49 trillion cubic feet for the year. [00:14:57][36.0]

Stuart Turley: [00:14:58] So where that comes into play is this pipeline will do more than that the new gas pipelines being planned will run along 2.9 trillion cubic. Feet of gas freezers pumping into that for continued gas supplies from LNG. Unbelievable amounts of gas going through this pipeline. Politically, that is nuts. [00:15:22][23.6]

Miichael Tanner: [00:15:23] Well, because it’s the first time all of these different these different governments have really worked in unison to get something put together. Right. It takes all of this gas out of the EU, pumps it down to India, who, you know, is basically saying, yes, thank you very much we will take your cheap gas all day, every day. [00:15:42][19.3]

Stuart Turley: [00:15:42] Yes and by the way, for the environment, the more we can get India on natural gas and LNG, the better for the planet and the people of India, I think is phenomenally way cool. [00:15:56][13.8]

Miichael Tanner: [00:15:57] Yeah and you know, I I’m excited in 30 years to have some random guy on substack break the news that this pipeline was bombed so we will be okay. [00:16:09][12.3]

Stuart Turley: [00:16:10] We won’t have to worry about that well, I think I may have found out who’s going to do it. Do you remember the Oklahoma City bombing? [00:16:16][5.8]

Miichael Tanner: [00:16:16] Yeah. I was not alive for that. What year was that? [00:16:19][3.1]

Stuart Turley: [00:16:20] 80 something 89 something was it was originally. [00:16:23][3.0]

Miichael Tanner: [00:16:24] In early nineties baby. [00:16:25][0.8]

Stuart Turley: [00:16:25] It was £5,000 of ammonium nitrate a freight train with a 30 ton. A shipment of ammonium nitrate disappeared from a railcar on its way to California. And so they said, Oh, oops. We don’t know. We’re 30 seconds. When £5,000 took one building down, That would happen yesterday. [00:16:52][27.2]

Miichael Tanner: [00:16:53] Yeah, that’s that’s lovely that’s lovely, Stu thanks for that what a swipper in the oil prices. Thank goodness oil was up about two percentage points today after hearing about ammonia nitrate going missing. Time stands here about 630 here on the 23rd. [00:17:06][13.4]

Miichael Tanner: [00:17:07] Oil currently trading about 7382 really off the back of what was a huge API projected draw of 6.7 million barrels that dropped here at about 2:30 today as you listen to this, on Wednesday, you will know at around 10:30 Central Time what actually happens with the EIA crude oil excuse me, 9:30 Central Time, 10:30 Eastern time on what happens with crude oil inventory reserve. That’s going to definitely help buoy prices there’s only a $1.6 million draw or million barrel draw in the SPR so a lot of that is commercial. [00:17:39][32.3]

Miichael Tanner: [00:17:40] You know, I thought this was fairly interesting, Stu. The Saudi Arabian energy minister came out today and it was quoted as saying he was talking to short sellers. He would say those betting that prices will fall will be, quote, gouging. And he told them to watch out. You know, these comments come back opec+ exploring cuts at their June 4th meeting. [00:18:07][26.9]

Miichael Tanner: [00:18:08] You know, there’s a lot of talks going around, obviously, about the debt ceiling what’s going to happen? No signs of progress. Again, we have that $31.4 trillion borrowing limit. No one really knows what’s going to happen if we do end up defaulting. Actually. I mean, it’s been it’s happened a couple of times and I think there’s a lot I think the scenarios are a lot scarier than what might actually happen. But in terms of just global financial stability, we obviously need to make sure that we keep that sort of the interesting and we will be watching that. [00:18:38][30.0]

Miichael Tanner: [00:18:38] I think everyone’s just sort of eyeing in on that OPEC decision and then obviously what Jerome Powell does next. Fairly quiet. We had an eye on the oil and gas news front. I know we had Chevron picking off PDC yesterday. [00:18:51][13.6]

Miichael Tanner: [00:18:52] So I think we’re going to continue to see some of those small time M&A deals I do think there was something larger brewing out there , you know, you know, Chevron, Exxon, Shell, Conoco, they’re not just going to be sit they’ve got huge amounts of cash right now. They’ve got to do something with it. [00:19:06][13.9]

Miichael Tanner: [00:19:06] The question is, what do they do? Especially if PDC is willing to sell out for an all stock deal? Maybe interesting what you might be able to get for a larger company can you do it all? Can you do a little half stock, half cash? Who knows? I interesting to see what some of these may be larger independents would think about doing outside of, you know, 30 tons of ammonium nitrate going missing steel. What else should we be scared about? [00:19:27][20.5]

Stuart Turley: [00:19:27] The. [00:19:27][0.0]

Miichael Tanner: [00:19:29] I don’t know. [00:19:30][0.3]

Stuart Turley: [00:19:30] Politicians yeah the politicians . [00:19:34][4.3]

Miichael Tanner: [00:19:35] That luckily we already knew that. So yeah. If you didn’t know that news flash politicians don’t have your best interests at heart. Sorry. [00:19:41][6.2]

Stuart Turley: [00:19:42] Oops. [00:19:42][0.0]

Miichael Tanner: [00:19:43] Yeah. All right, guys. Well, we’ll let you get out of here again email us Questions@EnergyNewsBeat,com We appreciate all of the feedback for Stuart Turley, I’m Michael Tanner. We’ll see you tomorrow, folks. [00:19:43][0.0]