Daily Energy Standup Episode #191 – From Geothermal Dawn to Gas Glut: Power Shifts and Blackout Risks Unveiled

At a time when reliability concerns are plaguing most regional power grids in America, it helps to remember one of the largest blackouts in the country’s history — the 2003 northeast blackout. Twenty years ago on August […]

Highlights of the Podcast

00:00 – Intro
03:00 – ADNOC Geothermal Era Begins in the Gulf region
06:48 – Russia’s Pipeline and Gas Exports to Europe Pick up
10:21 – Europe’s net gas storage is 90% full. It still may not be enough and at what cost?
11:57 – 2003 Northeast Blackout and how today’s blackouts differ
17:29 – Market Updates
17:37 – Oil rises as dollar eases, China seeks to soothe economic woes
20:10 – Outro

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

 

Michael Tanner: [00:00:07] What is going on Everybody, Welcome into another edition of the Daily Energy News Beat Stand up here on this gorgeous Monday, August 21st, 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, Publisher of the World’s Greatest Website, EnergyNewsBeat.com, Stuart Turley, my man, how are we doing today? [00:00:30][23.0]

Stuart Turley: [00:00:31] It’s Beautiful day in the Neighborhood it’s going to be a wild and crazy week lots of weird stuff going on. [00:00:35][4.1]

Michael Tanner: [00:00:35] Yeah. Are you back in Bear country? Is that what I see? [00:00:37][2.0]

Stuart Turley: [00:00:38] I’m in Bear Country, baby. [00:00:39][1.2]

Michael Tanner: [00:00:40] We love we love to see that. We appreciate everybody, We hope you have a good weekend and We appreciate on this Monday you guys checking us out, packed show today. First up on the menu, Abu Dhabi National Oil Company Geothermal era begins in the Gulf region. This is an absolutely awesome article, I’m going to let Stu tell you the punchline here but UAE got some great stuff going on in the geothermal space. [00:01:03][23.0]

Michael Tanner: [00:01:03] Next up, Russia’s Pipeline, Gas Exports to Europe Pick up, Sanctions don’t work, folks. Next up, Europe’s gas storage is at 90% Full It still might not be enough and at what cost? Yikes it doesn’t sound like what’s going on in Europe is good. Stu will break down what could be a rocky winter for the EU. [00:01:23][19.7]

Michael Tanner: [00:01:23] And then finally, The 2003 Northeast blackout and how today’s blackouts differ. So this is an opinion piece comparing really what was going on in the last typical hot period, which was around 2003, so Stu will break this piece down. He’ll chalk it over to me, will mainly cover what’s going on with oil prices, which is really a look at what’s happening over in China, which has been mainly muted what really people thought was going to be, you know, a bullish trend. [00:01:49][25.8]

Michael Tanner: [00:01:50] I think if you had asked me, I think if you rewind the tapes Stu the end of last week’s Monday show, we were bullish on oil and oil finished down about a percent and a half when you talk about a week over week shift. So but the real thing is why it’s what’s going on and what’s happened in China. So we’ll break all that down and a bag of chips for you guys. [00:02:07][17.2]

Michael Tanner: [00:02:08] But first, check us out again World’s Greatest Website www.EnergyNewsBeat.com you can listen to us on all your favorite Podcast Platforms. Subscribe to this channel on YouTube @EnergyNewsBeat we appreciate you guys checking us out there. [00:02:19][11.9]

Michael Tanner: [00:02:20] Energy News Beat Stu does a great job of curating that, making sure it stays up to speed with all of your Energy News. Dashboard.EnergyNewsBeat.com the best place for your data news combo get that while you still can. [00:02:31][10.5]

Michael Tanner: [00:02:32] We’re trying to work on a way to embed the YouTube video there, so watch out for that update coming soon. If you want to get a hold of the show Questions@EnergyNewsBeat.com, you can find Stu on LinkedIn, you can find me on LinkedIn. All the articles that we’re about to cover, you’ll be able to see on the side here and in the description below. I’m out of breath, though. Stu. Where do you want to begin? [00:02:51][19.4]

Stuart Turley: [00:02:52] I’ll tell you what I love me a good story on Geothermal. [00:02:55][2.9]

Michael Tanner: [00:02:58] Yessir! [00:02:58][0.0]

Stuart Turley: [00:03:00] ADNOC Geothermal Era Begins in the Gulf region. You know our EMP operators, they know how to drill wells, this is pretty darn cool. This is described as a “sustainable urban community” I love this idea. The UAE’s biggest oil company said it was successfully delivered a pair of geothermal wells to help deliver power cooling systems to Abu Dhabi. I love this. I mean, the national oil company, Abu Dhabi, ADNOC., this is pretty darn cool. [00:03:34][34.3]

Stuart Turley: [00:03:35] Quote out of here from Musabbeh boy, I hate butchering his name sorry for that Al Kaabi Geothermal heat is a clean and renewable source of abundant energy and is available in the UAE and capable of providing baseload electricity. However, until nine now, it’s remained an untapped source of energy By leveraging technological advances for the first time, ADNOC and Tab Reid have unlocked this clean energy source for Decarbonizing. [00:04:10][34.7]

Stuart Turley: [00:04:11] I think it’s fantastic. This project, Michael, is part of a $15 billion newly announced plan to reduce to carbon net zero by 2045. Pretty slick. This is this is a really good thing any time that you can use EMP, Oil and Gas Exploration and Drilling Technology to go to Geothermal I think this is fabulous. [00:04:37][26.0]

Michael Tanner: [00:04:38] Well, think about this so they give some pretty specific here. So the temperature of the of of of the water coming out to about 200 degrees Fahrenheit, a little below 194 flow rate. So try to wrap your mind around this to a hundred liters the second. The real question is what size casing are they running? That’s pre flown up seven inch casing think about that. 200 liters a second. [00:05:01][22.5]

Stuart Turley: [00:05:03] That’s flying at a bunch, man. [00:05:05][2.6]

Michael Tanner: [00:05:06] Oh, it’s. These are these are going to help energize cooling units at their low carbon urban project. Matador City in Abu Dhabi. What is this? Is this like some something out of James Bond where they’re trying to come like, was a what? I got to know more about this this is sustainable urban community. Well, 3000 people live there. [00:05:25][18.9]

Stuart Turley: [00:05:26] Yes. And it’s even weirder and there’s some other ones that are coming in already where it’s almost a sealed in kind of a thing, almost what you would see in a science fiction. [00:05:35][9.4]

Michael Tanner: [00:05:36] Yeah. But going on,. [00:05:38][1.7]

Stuart Turley: [00:05:38] Hey, it’s 3000 people in 2022, but that figure is expected to double by the end of this year. You build it, they will come. If it’s if it’s clean. Lots of police. Everything’s done and some freedom so that you’re not having to worry about somebody looking over your shoulder. Okay. [00:05:59][20.6]

Michael Tanner: [00:05:59] It’s really interesting to see, you know, the image to the bottom of this article that Saudi Arabia and Oman are looking to do the same thing. It’s interesting to see these these these large oil companies, these nationalized oil companies pivoting to geothermal. They clearly see that as a contiguous very. Only one step in the direction that they know how to drill wells and they know how to drill wells this is a step to now go build will wind farms per se. [00:06:25][26.0]

Stuart Turley: [00:06:26] I’ll tell you what but Geothermal. I am such a fan of Geothermal. If it’s there, take advantage of it. [00:06:36][9.1]

Michael Tanner: [00:06:36] Same with Nuclear. What’s next? [00:06:37][1.1]

Stuart Turley: [00:06:38] Okay. Russia. I always love me a good Russian. Putin called the other day. [00:06:43][5.0]

Michael Tanner: [00:06:43] Hey, how’s he doing? [00:06:44][0.7]

Stuart Turley: [00:06:44] You got some time. Russia’s Pipeline and Gas Exports to Europe Pick up. Oh, holy smokes. The gas exports continued their trend in first half of August. Combined flows via the only two gas lines. Gas lines available from Russia to Europe, excluding Turkey rose 6%. 1.3 billion cubic meters or 90 million cubic meters per day. That’s a lot of gas. [00:07:20][35.9]

Michael Tanner: [00:07:22] That is. [00:07:22][0.2]

Stuart Turley: [00:07:23] Okay. Gazprom’s prices are understood to have fallen further in August. Here’s where it gets a little funny. There are some pricing matrices that are going on when we’re paying $2.30 with gas right now? [00:07:38][15.0]

Michael Tanner: [00:07:39] 250. [00:07:39][0.0]

Stuart Turley: [00:07:41] 250. [00:07:41][0.0]

Michael Tanner: [00:07:42] We like that. Like Natural gas or Gas at the pump. [00:07:45][2.6]

Stuart Turley: [00:07:46] Natural gas. Sorry. [00:07:47][0.8]

Michael Tanner: [00:07:47] Oh, two 2.50 because I paid like 3.40 last week for taking. [00:07:51][3.5]

Stuart Turley: [00:07:52] A Comparison price of what they’re expecting is going to be around the 15 to 25. $15 to 25 difference is what they’re going to be paying. [00:08:02][10.0]

Michael Tanner: [00:08:03] Nice. Nice. [00:08:04][0.5]

Stuart Turley: [00:08:06] Hey, if you go green without a plan, you pay for it. [00:08:11][4.6]

Michael Tanner: [00:08:12] We are. And again, it shows, as you always say, I’m preaching to the choir here. Sanctions don’t work. [00:08:17][4.9]

Stuart Turley: [00:08:18] Now that Turkstream supplied more than 31 million cubic feet per day in 2021. Bulgaria receives 8.1 million. Let’s see here per day. Russia’s exports of LNG to Europe have held up well despite the war and accompanying deterioration in political relations. Michael, what this is, is people will buy energy just about no matter who the bad guy is. And well. [00:08:58][39.9]

Michael Tanner: [00:08:58] Because you need it, you you can’t not go without energy. You’re going to get it from somewhere, whether it’s coal burning wood, whether it’s $17 natural gas or however you can get it. [00:09:11][13.4]

Stuart Turley: [00:09:12] Right. But here’s here’s a couple of key lines in here. Spain, which lies well beyond the reach of Russian gas pipelines, remains one of the key importers of Russian LNG. Spain has 6 LNG import facilities there, the biggest one in the EU they can do that. [00:09:34][21.7]

Stuart Turley: [00:09:36] Turkey became a regular importer of Russian LNG, taking cargoes from Gazprom’s newly launched Portovaya LNG facility. They just had their second train come on in the Arctic train and they have now beef that one up so their Arctic coming around their one and a shot out to Patrick moore. We cover how Russia is transporting this over the ocean everything else there’s a heck of a Podcast coming out, man, thats nuts. [00:10:08][32.6]

Michael Tanner: [00:10:09] That’ll be fine. That’ll be fine. Okay, let’s okay, so let’s move to the next one because it weaves right into it, it looks like. Yeah, we’ve tried it in the next one here. [00:10:18][9.0]

Stuart Turley: [00:10:19] All right. Next one is Europe’s net gas storage is 90% full. It still may not be enough and at what cost? What has happened is Europe has done a great job of shutting down business and really tubing themselves in the foot, taking a nail gun and just putting it into their foot. They’ve run off businesses, Germany has just closed two weeks ago, their last BASF plant, that was fertilizer, which was reliant on natural gas so they got rid of fertilizer. [00:10:52][33.1]

Stuart Turley: [00:10:54] EU storage hits target more than two months ahead of plan. that’s great but there are some points in here. Gas inventories vary by country nations, including Germany, the Netherlands and Spain have already exceeded their EU target Frank. France and others are only about 84%. So you can see the curves in that second chart. Europe needs gas always rise in the winter, so even though they’re at their quotas, they’re still they’re 90% lower than their crisis peaks last year. [00:11:31][37.2]

Michael Tanner: [00:11:32] 90% lower, even though they’ve got storage of 90%? [00:11:35][2.7]

Stuart Turley: [00:11:37] So what it says, that’s not good. [00:11:38][1.4]

Michael Tanner: [00:11:39] That’s not good. [00:11:39][0.7]

Stuart Turley: [00:11:40] Now, I’m just reading it right there. All right. Well. [00:11:42][2.2]

Michael Tanner: [00:11:43] They were burning shoes last year. So what’s it going to be this year? What’s the advice this year? Clothes. [00:11:46][3.6]

Stuart Turley: [00:11:47] Mother in law. [00:11:48][0.4]

Michael Tanner: [00:11:49] Oh. [00:11:49][0.0]

Stuart Turley: [00:11:50] Just kidding. And that was. [00:11:51][1.1]

Michael Tanner: [00:11:53] All right. What’s next? [00:11:53][0.7]

Stuart Turley: [00:11:55] You know, Nevermind. Okay. 2003 Northeast Blackout and how today’s blackouts differ. Michael, do you remember the 2003 blackout? [00:12:06][11.6]

Michael Tanner: [00:12:07] No. I was eight years old. [00:12:10][2.2]

Stuart Turley: [00:12:10] You were blacked out in college? I think probably at at a time. [00:12:13][3.2]

Michael Tanner: [00:12:14] When years old. I was like ten years old. [00:12:15][1.3]

Stuart Turley: [00:12:16] Yeah. Okay. Never mind. At a time when reliable the 203 Northeast blackout 22 years ago on August 14th, this was a bad one. Unusual instance. There’s going to be a chart we may want producer to fly in here in a little bit. A series of management errors led to the escalation of events that caused the grid. And the grid over 55 million people were affected by the blackout. Some went without power for a couple of hours others suffered for weeks and days. 400,000 EP subway goers were stranded underground while the power went out. During the blackout. Water customers in Cleveland, Detroit, were placed under a three day boil advisory. [00:13:14][57.1]

Stuart Turley: [00:13:15] So this was no lightweight disaster cell service was interrupted. Total societal cost were around $10 billion. So we’re talking some serious. Mr. Producer, if you could fly in this chart when we’re talking about the 2021 ERCOT. [00:13:35][20.0]

Stuart Turley: [00:13:37] Michael, this is critical. That blackout of 2003 happened in in the left hand column you’re going to see 90% was dispatchable. Dispatchable is either nuclear gas or coal. 1% was intermittent or renewable. [00:13:58][21.1]

Michael Tanner: [00:13:59] It’s scary. [00:13:59][0.1]

Stuart Turley: [00:13:59] And so you see 9% was hydro rollover to what happened to ERCOT? ERCOT in 2021, 16% was renewables, 8% was hydro in that area and 76% was dispatchable. Know what’s happened? Coal has come down. Natural gas has really come down and renewables have come up to that. 16. What’s changed as far as the grid policies that’s going out further? Does that make sense? [00:14:38][38.8]

Michael Tanner: [00:14:39] Yeah, If what happened in 2003 was the product of poor management, right, then only what’s happened in 2021 going forward is a product of stupidity. And we’ve been continually down the path of, I mean, that chart, you know, that U.S. energy mix 23 versus just 21 says everything in my opinion about the current state of what our energy mix is. The fact that we only have 76% dispatchable percent of our total capacity is scary and we’ve actually dropped Hydro, one of your favorites. Speaking of Bear Country. [00:15:15][35.6]

Stuart Turley: [00:15:16] Yeah, I got it right over here. I love me some hydro, by the way. Hey, there’s a couple quotes in here. Bad policy favoring renewables cause the 21 2021 blackout, as Dr. Brant Bennett of the Texas Policy Foundation pointed out, based on Ercot’s own forecast, it was an inevitable that this weather event was going to cause demand to exceed supply, even if no wind or fossil fuel generators had failed due to the weather. [00:15:44][28.7]

Stuart Turley: [00:15:46] Bad policies, Dr. Bennett noted In 2021 blackout disaster was in the making directly due to policies that resulted in the grid, quote, “Relying entirely on wind and solar to meet our Texas demand growth since 2015 and has now less coal and gas generation in total than it did five years ago”. A poorly. Planned grid is waiting disaster to happen. [00:16:20][34.7]

Michael Tanner: [00:16:22] Now. It really is. We did it to ourselves. And so when this all crumbles, at some point we know who to blame us unfortunately. [00:16:29][7.8]

Stuart Turley: [00:16:32] Not me. I got generators. I got. You know,. [00:16:34][2.5]

Michael Tanner: [00:16:35] I’m the one that’s going to die here. I’m just in an apartment. [00:16:37][2.1]

Stuart Turley: [00:16:39] Yeah. [00:16:39][0.0]

Michael Tanner: [00:16:40] I’m driving up to see you. [00:16:41][0.9]

Stuart Turley: [00:16:42] They’re coming after your generators, so it’s a good thing you don’t have a generator in an apartment because they would. [00:16:46][4.3]

Michael Tanner: [00:16:48] They’re coming. Then they were coming after everything. [00:16:49][1.4]

Stuart Turley: [00:16:50] But you could see how we wove all the stories in and out on this. They all are regarding energy. The way the right way to do it is the e the the Middle Eastern company countries. I don’t agree with their social policies, but they have their energy policies right. They’re going to get to net zero, but they’re going to do it by making money, doing it right and doing it in a plan. We are not planning for nothing. [00:17:23][33.3]

Michael Tanner: [00:17:25] Moment of silence for Stu genius. All right, that’s enough. Let’s move on now to oil and gas prices suffered really on a week to week basis, mainly due to the fact that China has seen some unprecedented stimulus from their central bank on the back of what is a weakening economy in China. [00:17:45][20.7]

Michael Tanner: [00:17:46] So remember, if you again, as I mentioned, the open, but if you rewound the tapes to a week ago, you know, we were both fairly bullish on what was going to go on, what was going to happen with oil prices this week. And I think the tension between what we’re seeing home abroad. Too much demand, not enough supply, market dynamics working out there the opposite is what’s happening on in China right now. [00:18:08][22.4]

Michael Tanner: [00:18:09] Talk about cutting rates to People’s Bank of China. Okay. All hail the CCP. They have decided to cut rates. They’ve got to get some advice from Jay Powell. This is the second time in three months that they’ve cut. Give you an idea. They’re their largest property developer Country garden massive debt problems. Sound familiar? Sound familiar to what’s going on? They’re having the same problems that happened to us in 2008. [00:18:36][27.3]

Michael Tanner: [00:18:37] They’ve said, quote, Insufficient demand and challenges such as difficult business operation and high risks in hidden dangers. According to the central bank. I was what they said. They don’t cut corners. You know, Jay Powell, he’s got you know, they got the Fed speaker. They don’t they don’t cut corners over the CCP is what we’re doing and so they’re in crisis mode over there. [00:18:56][18.9]

Michael Tanner: [00:18:56] And that played a hand in where oil prices now stand at about 80, 73. When have you asked again? You asked us last week. I was very bullish. I thought we were maybe 84, $85 oil. What do you see going on in China Stu? [00:19:11][14.6]

Stuart Turley: [00:19:12] I see two things. The geopolitical situation in Taiwan they had 42 fighters come rolling over Taiwan in their space this weekend. What you and I have also talked about is that whenever there’s bad things going on at home, military government leaders get us in the water and so they got bad things going on. [00:19:39][26.5]

Stuart Turley: [00:19:40] Let me throw this squirrel at you and that is that China is looking to curb their inflation and get their economy going, doing it the right way. They’re putting in two coal plants a week. They have their power they’re trying to get all the power to the people they can. They’re buying all the oil they can they’re buying all the power. They’re only using the renewable as a facade. And then they’re selling us all the stuff to put in the renewables. [00:20:11][31.2]

Stuart Turley: [00:20:12] President Xi removed himself out of the Paris Accord two weeks ago, and he said the renewables won’t get you there. So they are in trouble the only way the U.S. can get our inflation under control is to lower the rates. Get our end energy cost in line, and we’re the only ones in the world that can get our energy cost in line. If we turn loose our natural gas. And then so short answer. China is going to do what China’s going to do and they look to be getting geared up for war. [00:20:52][40.0]

Michael Tanner: [00:20:56] Just sends a shiver down my back. I’d ask you what you’re scared of this week to finish us off, but I think you’ve just said it. [00:21:04][7.1]

Stuart Turley: [00:21:05] BRICS is meeting this week, and and so it’s going to be very interesting when you take a look at at BRICS. It is Russia is going to be going with the gold standard they’ve already said that. The quote that came out out of our Corbett Andrew Corbett shows a random guy on Substack a few days ago was very telling. The African South African leader said we don’t want to destroy the United States dollar. However, we want to focus on our own currency Alright. What’s the difference? [00:21:46][41.8]

Michael Tanner: [00:21:50] Well, now Twitter or X, now Elon Musk has really gone the other way when I thought he would go on X. Now they want to be able to scan your face to verify you. [00:21:59][9.0]

Stuart Turley: [00:22:00] On on Twitter? [00:22:01][0.8]

Michael Tanner: [00:22:02] X. [00:22:02][0.0]

Stuart Turley: [00:22:03] X. Sorry, I did not know that. [00:22:05][2.2]

Michael Tanner: [00:22:07] Now. I saw an article on it today. It’s. What do they say? It’s going to hell in a handbasket. [00:22:11][4.4]

Stuart Turley: [00:22:12] Well, guess who’s running it? Someone for me who is one of the World Economic Forum Directors. [00:22:19][6.7]

Michael Tanner: [00:22:20] Aren’t you on aren’t you nominated for the World Economic Forum this year? [00:22:22][2.4]

Stuart Turley: [00:22:23] Hell no. They would not have me on there there is no way in hell because I’d walk in and go, Is there movement to disband these not heads? They’d look at me and go, You’re out. [00:22:33][9.7]

Michael Tanner: [00:22:33] We need to get you. We need to. We need to run you on that. I to all of everybody out here, we appreciate you checking us out here on this Monday. Guys, stay strong. You only got a few meetings, and then it’ll be Tuesday and the week will almost be over, so. Appreciate sticking with us, guys. For Stuart Turley, I’m Michael Tanner. We’ll see you tomorrow for. [00:22:33][0.0]

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