Daily Standup Top Stories
Growing share of Americans favor more nuclear power
As the first new U.S. nuclear power reactor since 2016 begins operations, more Americans now say they favor expanding nuclear power in the United States than a few years ago, according to a recent Pew Research Center survey. […]
The Maui Fires Will Test Hawaii’s Electric Utility Regulatory Framework
The devastating fires on Maui in August, 2023 were horrific. Hundreds of homes and businesses lost, dozens of people killed, and an entire town, Lahaina, with a rich history, obliterated. It will likely be a […]
Hydrogen cars: Despite few buyers, California may pay $300M for fuel stations
By Alejandro Lazo | CalMatters Electric cars are rolling off production lines, and one in five new cars sold in California this year is battery-powered. “California is showing the world what’s possible,” said Gov. Gavin Newsom, […]
Highlights of the Podcast
00:00 – Intro
02:18 – Hydrogen cars: Despite few buyers, California may pay $300M for fuel stations
05:06 – The Maui Fires Will Test Hawaii’s Electric Utility Regulatory Framework
08:24 – Growing share of Americans favor more nuclear power
09:48 – Market Updates
10:21 – Crude oil settles lower as hope fades for Chinese demand
11:03 – Permian Resources acquire Earth, Stone Energy, an all stock transaction
13:34 – Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:00] What is going on Everybody, Welcome into another edition of the Daily Energy News Beat Stand up here on this gorgeous Tuesday, August 22nd, 2023. As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas. Stu has the morning off so I’m going to rock a solo show, Still have an excellent menu lined up. Stu made sure to still leave us with some great ones. [00:00:25][24.9]
Michael Tanner: [00:00:25] First up, Hydrogen Cars Despite few buyers Californians may pay 300 million for a fuel stations to our favorite state at it again. Next up, this is just sad, guys this one’s mainly around the Hawaii fires, The Maui fires will test Hawaii’s Electric Utility Regulatory Framework. There’s there’s a lot of fallout to come with this Maui fire situation great article that covers it a little bit and then finally the, Growing share of Americans favor more Nuclear Power, did still cook the books on this one? Looks like everyone’s warming up to Nuclear. [00:00:57][32.1]
Michael Tanner: [00:00:59] Ill then finished quickly talking about what happened in the oil markets and then cover a nice M&A deal that we saw today, which was Permian Resources buying Earth, Stone Energy a lot of thoughts on this deal all in all, I think it’s good, good type of consolidation. And then we will let you guys get out of here and get back to work. [00:01:16][17.5]
Michael Tanner: [00:01:16] Before I do that. Guys, as always, the Articles you’re about to hear, the Stories you are about to hear and the analysis you are about to hear, Analysis and Quotes is Courtesy World’s Greatest Website www.EnergyNewsBeat.com, the best place for all of your energy news. Stuart does a great job of curating that website, making sure it he’s up to speed with all the news. [00:01:38][21.4]
Michael Tanner: [00:01:39] Our team does a great job keeping this Podcast up to speed, keeping the description below if you want to know all of the timestamps, check us out on YouTube @EnergyNewsBeat We appreciate you guys subscribing there, trying to push the YouTube a little bit harder than normal. So give some shout out their comment that you’re listening on the YouTube we appreciate that. [00:01:58][19.3]
Michael Tanner: [00:01:59] Dashboard.EnergyNewsBeat.com the best place for all of your energy news and data combo. We’re really trying to push that V2, so team’s hard at work at that, so we appreciate you guys sticking us out. Email us at Questions@EnergyNewsBeat.com follow us. LinkedIn, Twitter, the works. [00:02:15][15.8]
Michael Tanner: [00:02:16] Let’s dive into this first story though, Hydrogen cars this is hilarious, guys. Despite few buyers, California may pay 300 million for a fuel station. So to give you guys an idea with what’s going on right now, you know, one in five new cars right now in California are actually battery powered, which is interesting. This little quote by Gavin Newsom, California is showing the world what’s possible. Could he be running for president? Only know. [00:02:39][22.6]
Michael Tanner: [00:02:39] But to give you an idea what’s going on in the Democratic State Legislator right now is they are debaiting how much money to give companies to build hydrogen fuel stations. So a lobbying group for hydrogen supporters, including Chevron, Shell, Toyota, I love it. You’ve got big oil. You’ve got big car combining to try to extract 300 million to do hydrogen, which nobody’s got. So I jumped the gun a little bit. [00:03:03][23.6]
Michael Tanner: [00:03:03] Chevron, Shell and Toyota, they’re seeking to designate 30% share of the money from the state clean transportation program, amounting to over 300 million over the next decade to roll out hydrogen fueling stations. Mind you, we don’t even electric cars in the next ten years is going to be difficult. [00:03:22][19.2]
Michael Tanner: [00:03:24] Chevron, Shell and Toyota attempted to convince us that they need 300 million who want Hydrogen farms, not Hydrogen farms, but Hydrogen fuel stations. Okay. I don’t want I’m not even really sure I’m for Nuclear. We know my stance on Nuclear i, I see Chernobyl happening. I mostly kid I think Nuclear is probably move we need to invest. My point is who wants to put Hydrogen in their car? What happens when I get hit by another car? Is that is that is that a bomb just sitting there? I mean, it’s it’s sort of what it is now. [00:03:55][31.6]
Michael Tanner: [00:03:56] I think the funny part is I say all this to say Classic California they want to do is they want to come in and say 300 million for hydrogen. Really? Really. Now I get hydrogen fuel cells they basically say, well, we believe that hydrogen fuel cells are the next step beyond electric. Seek out electric cars first you know, it’s like going from A to C well, give me B first at least give me B down before you go to C. [00:04:22][26.3]
Michael Tanner: [00:04:23] You know, the article also mentions they already spent $202 million on hydrogen fuel stations, yet they only have they’ve only sold 1700 of these cars. So you can actually go get one. You can go get a driving bomb right now if you want. But. And what is that per person? 200 million times divided by 2000? 100 K a station that’s Dope 100K a station. It’s ridiculous, guys. [00:04:50][27.6]
Michael Tanner: [00:04:51] Classic. What’s going on in California there’s only about 12,000 hydrogen cars around there, but there’s about 760,000 batteries. So we see where Californians are going continuing to dump more money into things that will never be needed. We love it. [00:05:05][13.9]
Michael Tanner: [00:05:06] Next up, Maui fires will test Hawaii’s Electric Utility Regulatory Framework. I mean, it’s extremely devastating what’s going on in Maui right now. If you’re listening to us from there or, you know, somebody’s affected, you know, our hearts and thoughts and prayers goes out to everybody affected by that. [00:05:23][17.4]
Michael Tanner: [00:05:24] Specifically, what went on in Lahaina, you know, is probably going to be over a hundred people dead. It’s everything’s obliterated. There’s some evidence that there’s some energized power lines that were basically exploded during the fire that contributed to it’s basically craziness. Well, this article mentions the lawyer bills that will add up before any liability, which is which is good. [00:05:44][19.9]
Michael Tanner: [00:05:45] One of the interesting near-term side effects that this article points out is that, Electrical bills for businesses and homes that were not destroyed are going to happen, are going to rise dramatically. And this is going to be because of Hawaii’s Electrical Rregulation Framework, which includes it’s called decoupling mechanism to separate the utility earnings from its sales volumes and and a major project interim recovery mechanism to pay for the new utility business. [00:06:09][23.8]
Michael Tanner: [00:06:10] Basically, what that means is they don’t really take profits they have to basically pass on all the savings to you, aka when prices rise, you get screwed. When prices go down, you pay less, but they also make less. So they don’t they’re really locked in at what they’re at, what their rates are. [00:06:29][19.4]
Michael Tanner: [00:06:29] And I mean, think about it of course, you’re going to have some some electrical prices are going to are going to spike in this situation because you’ve got a lot going on it’s unfortunate it’s part of this decoupling mechanism that could be out. [00:06:43][13.3]
Michael Tanner: [00:06:43] But I mean, the grid situation going on in Hawaii is is is is horrible right now and specifically Maui, to give you an idea. FEMA has reported a loss of about 2200 buildings. Maui Electric only has about 7500 customers in total, with only 3% of the customers, which is only about 3% of the customers in in in the utility. The problem is because of this decoupling, you’re going to see prices rise elsewhere. [00:07:08][25.1]
Michael Tanner: [00:07:09] There are over 12,000 customers that were without electricity for days. Oh, my goodness. I mean, it’s just bad. 90% of the customers have power today, meaning 10% don’t. I mean, give you guys 10% of the people on Maui do not have power right now. Absolutely and Crane of our insane ups, obviously tourism has been affected. [00:07:31][21.6]
Michael Tanner: [00:07:32] The element of decoupling this article is good quote down here. This element of decoupling mechanism that for fire natural disaster has affected other utility systems. You know, we also saw this happen in California. You know, it’s the Hawaii revenue balancing account mechanism. Basically, what they’re going to do is they’re going to assure that there’s eventual cost recovery down the road. But this loss in sales, therefore, means that an increase in prices to those still receiving power. [00:08:00][27.9]
Michael Tanner: [00:08:00] So, again, what’s going on in Hawaii is a disaster right now it’ll be interesting to see the fallout. What happens here? Was it a grid issue? Was it something else? And we’ll find out as we go forward. But really, it’s not getting any better out there in Maui and you’re going to see some some price increases there. [00:08:19][19.0]
Michael Tanner: [00:08:20] And then we’ll wrap up quickly here with our last article in the news portion, Growing share of Americans favor Nuclear Power. Just to kind of highlight it quickly, a majority of Americans, 57%, say they favor more nuclear power plants that generate in this country, up 43%, up from 43% who said this in 2020 it’s pretty insane, guys, to give you guys an idea. [00:08:40][19.8]
Michael Tanner: [00:08:41] Democrats actually want Nuclear Power the least U.S. adults want it in the middle or I guess so. Democrats, if you lean Democrat, 50%, if you’re just on average U.S. adults, 57% Republican, lean Republican, 67% interesting. [00:08:56][14.9]
Michael Tanner: [00:08:57] So, you know, Republicans want nuclear, which is interesting because you think Republicans would want Oil and Gas because that’s what we get labeled as, oh, you just want oil and gas because you’re a Republican No! We want nuclear and it’s actually up from 53%. [00:09:10][13.5]
Michael Tanner: [00:09:11] I mean, it’s pretty actually it’s kind of crazy, actually, to think about what’s moved the needle on that. I mean, you know, and this poll also goes out to realize that 82% and 75% people still favor Wind and Solar power or Solar and Wind power over that. So as is if I agree with that per se. [00:09:30][18.7]
Michael Tanner: [00:09:30] But this is a really great article check it out in the scripture, kind of breaking down a really nice poll of what kind of what, according to that Pew Research Center, what Americans are actually thinking about in terms of all electricity, not just nuclear. It just seems that those Nuclear numbers jumped out at me when I said that. [00:09:46][16.3]
Michael Tanner: [00:09:48] I think we’ll quickly cover oil markets. We saw some depression today, if only because that expected Chinese recovery I don’t think is really coming, or at least that’s how the sentiment has gone. Oil started the day somewhere around 81,50 we thought we got all the way up to about 81,90 and have seen a pretty steady fall since about, you know, 6:06 a.m., 6:30 a.m dropping all the way down from that 81,90 section down to 80,18 as time stands here, about 6:12 on the 21st. [00:10:18][30.2]
Michael Tanner: [00:10:19] And as I mentioned, that Chinese recovery that’s supposed to happen, it really hasn’t and this is a quote from John Kilduff. He’s a partner over at Again Capital. It seems that China’s recovery is not going to happen. It’s doubtful they’re going to be buying they bought a lot of crude for storage earlier this year. They’re sitting on a lot of crude considering all of the economy risk going on over there. they bought all this crude maybe foreseeing what’s going to happen so that they could go ahead and take this little hit from the thing. [00:10:46][27.2]
Michael Tanner: [00:10:47] But, you know, oil prices, again, I, I don’t see them going much, much anywhere this week. We settled at 80, 72, but we will see where it goes tomorrow. Interesting note on the M&A front, we saw Permian Resources acquire Earth, Stone Energy, an all stock transaction. It was trying to give out what was the 4.5 billion, which is inclusive earth stones debt, which is about a billion. So you’re talking about a $3.5 billion price tag all paid for in stock. [00:11:20][33.0]
Michael Tanner: [00:11:20] Remember, guys, Permian Resources is the combination of Colgate and Centennial, a development corporation led now by the C dev teams. They go head out there and by Earth Stone. [00:11:31][11.1]
Michael Tanner: [00:11:33] You know, pretty in my opinion, this is a synergistic acquisition this is you know, this is. How do I want to say this? This is bolt on, I think is the term everybody likes to use bolt on acreage over in Lee in Eddy County. There’s obviously Permian Resources, Southern Delaware stuff stay still. But also there’s some there’s a small Eagle Ford part of Earth stone that goes along with this. So there is some you know, there is some synergistic there. It makes them the leading Delaware by a by acreage player down there in terms of independent with over 400,000 net acres their pro forma production is about 300,000 BOE per day. [00:12:18][44.8]
Michael Tanner: [00:12:20] You know, we’d love to see this expected to achieve synergies that will drive 175 million of annual cash flow improvement. Unfortunately, somebody over is getting laid off. But considering Earth stone was a you know, private company. They were they were private equity backed by Warburg Pincus until they went ahead and took them public and have slowly been selling off shares. So they did miss their big payout at the end. [00:12:46][25.9]
Michael Tanner: [00:12:47] I think most of that Earth stone management team, you know, you’ve got CEO Robert Anderson or former CEO Robert Anderson over there. You know, it’ll be interesting to see what they decide to do going forward they will definitely be out to do something again, considering their success here. But hats off to the Earth Stone, a permeated team. [00:13:03][16.0]
Michael Tanner: [00:13:04] Again, actually a combination that we like fairly bolt on and, you know, part of this will drive their their their base dividends they’re going to be able to they’re forecasting about 20% increase in dividend. [00:13:16][12.7]
Michael Tanner: [00:13:17] So, hey, if you’re looking to get in an independent EMP that could continue to make waves, it’s not a bad idea right now. So hop on the train before it’s too late guys. I’m going to let you get out of here, though, guys we appreciate you checking it out www.EnergynewsBeat.com. Stu will be back tomorrow. We’ll see you then. [00:13:17][0.0]
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