Daily Energy Standup Episode #254 – Weekly Recap: Iran’s Oil Surge, EV Charging Challenges, and Global Dynamics Unveiled

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Explainer: Iran’s expanding oil trade with top buyer China

November 11, 2023 Allen Santos

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

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Michael Tanner: [00:00:14] What’s going on? Everybody, welcome to a special edition of the Daily Energy News beat Standup here on this gorgeous Saturday, November 18th, 2023. As always, I’m your humble correspondent, Michael Tanner, coming from an undisclosed location here in Dallas, Texas, bringing you our weekly recap. As always, I hope you guys are having a great weekend. Always love this episode. We’ve got a lot to cover this week at two solo shows. I’m from Stu and myself. I’m only had two full shows that we shot Monday, Tuesday, a lot of great segments. Guys, I’m going to leave it up to the weekly recap for the team right now. Before we do that guys, again, www.energynewsbeat.com. The best place for all of your energy news Tip of the spear when it comes to the energy business, doing the team do a great job of curating that website. Check us out again. Email the show Questions@energynewsbeat.com Subscribe Rate and Review YouTube, Apple Podcasts, Spotify, wherever you get your podcast. Appreciate you guys. I’m going to leave it up to the weekly recap. We’ll see you Monday, folks. [00:01:05][50.8]

Stuart Turley: [00:01:06] Iran’s Expanding oil Trade with top buyer China. Michael. This one has got some stats in it that I didn’t know. And the existing sanctions, we know the Bidens have not you know, they’ve they’ve not enforce them. How much Iranian oil is China Buying is a huge thing. Tehran’s October output edged up to 3.17 million barrels per day. That’s net when Trump was in power, it was less than 500,000. Now that, you know, the Bidens have ignored it and just no st no enforcement for you. 3.17 and China’s imports are 1.45 million barrels per day from Iran. That’s net it seems nice. It’s a little bit less. Now. Here’s how does Iranian oil enter China? Michael Stews Dark Fleet lives except for two cargoes. December 20, 21 and January 22. China’s customs has not recorded any direct imports from Iran since December 2020. Then turn, turn. If anybody wanted to ask about how important Stu’s dark fleet is, there you go. [00:02:33][87.9]

Michael Tanner: [00:02:34] Well, no, in in, in. That is what again, you’ve been you’ve been on this for years now, so don’t hurt yourself. Patent yourself on the back. But it really comes down to measuring. The EIA and the IAEA aren’t looking at the dark fleet. So when they go and talk to you about demand, forecast estimates are, oh, something’s new, data is dropping here that we need to cover. What they’re lacking. Lacking is an understanding of exactly what this article is talking about. Except for two cargoes. China’s customs has not recorded direct imports from Iran since December 2020. And then that’s not. [00:03:07][32.5]

Stuart Turley: [00:03:07] Oh, yeah. So, you know, the the dark Fleet. And that’s why I think the energy news beat is such a great website and resources because if you look at all of the sources across the world, you can’t just go with one source. You can’t listen to the IEA or the EIA or even Biden or Republicans. You can’t listen to any you know, you got to have multiple sources. Hey, let’s go to the next one here. We’re going to fly over to the UK now. Oil and gas, not the problem for climate, says the UK’s net zero minister. This is pretty amazing. This falls on the grounds of the Prime Minister and the head cabana. What was it a month ago when he said he’s going to delay the transition to Eve and then was now about all these heads were going nuts And then that started the whole that that to me was one of the I think the catalyst. Everybody was realizing it. Now, this guy, Graham Stewart, I like his name. Graham Stuart said fossil fuel production was not driving climate change, but demand for fossil fuel was poor. Oil and gas are not the problem, but the carbon emission arising from them are. Now this guy is. I thought it was okay. It’s a play of words. If you really care about climate change, the last country you need to worry about is the UK. We’re not the problem. It’s encouraging others. Here’s the thing. It’s the hypocrisy that this brings out, and that is everybody, all of the climate protesters that are out there, I would love to see them not film themselves using their iPhones that require oil and gas in order to produce those things. So what are they going to use? [00:05:01][113.6]

Michael Tanner: [00:05:03] Yeah, I mean, it’s it’s it would be pretty hard to protest oil and gas without using any products that come from oil and gas. So, you know, you basically stand out there naked and get a wave around a tree branch. I don’t know. [00:05:16][13.2]

Stuart Turley: [00:05:16] But it would be pretty funny. 80 countries call for the phase out at COP 27. Now they’re trying to make the same demand at COP 28 and a couple of weeks in Dubai. I can’t wait for the circus in a couple weeks. At COP 28, I mean, you got minister. You get everybody from Dubai coming in there. You got everybody from Saudi Arabia. And I know that Kerry is going to go in there and nobody’s going to want to talk to him because the U.S. has lost so much global prestige. China LNG deal comes at an environmental cost. This is kind of funny, actually, Michael, just before I get into this, think about it. LNG is gas. Liquefaction of natural gas goes to a ship. That ship then chugs around the world and then gets declassified and then put into pipes. So let’s there’s a lot of transportation going on with that natural gas. Chinese gas importers have increased long term contracts with both Qatar and the U.S. by 50% since 2020 to both contracts, 40 million tons per year. That is a lot of LNG traveling around the oceans. Here’s where it gets pretty wild. It shot up 72,000 and 800 million cubic meters. Wow. They are expected to contract LNG supply for more than 100 mtpa by 2026. That’s nuts. Let’s come in here. The CO2 emissions. This is a quote down here from a carbon brief report. China. CO2 emissions are still increasing and we have returned to record levels. Really? It’s because all them coal plants that they’re putting in. [00:07:17][120.5]

Michael Tanner: [00:07:18] Exactly. I love this. This quote by LNG analyst Rob Rozanski. He’s from the Global Energy Monitor. I mean, this guy really gets paid to dig to give quotes like this. Switching from coal to natural gas probably improves local air quality, but gas fired power still produces harmful emissions linked to health impacts and premature deaths. I swear that guy got paid a salary to say that quote, That’s unbelievable. Signed me up. [00:07:42][24.4]

Stuart Turley: [00:07:42] Still. Oh, absolutely. And then factoring in the entire LNG lifecycle with methane gas leaks through the entire cycle, LNG chain and since methane is such a powerful greenhouse gas emitter, LNG has an outsized climate impact. That was from Rozanski. I got tickled at this one. Produce locally. You don’t have to ship around the world and become energy independent. [00:08:09][26.5]

Michael Tanner: [00:08:09] China on now becoming the largest importer of LNG. Looks like they’re doing some crazy stuff with it. [00:08:15][5.5]

Stuart Turley: [00:08:16] They’re doing the old shell game on as bad Doug would. Chinese customs data. There are some big numbers in here. Michael shows that they reloaded. 617,000 metric tons of imported LNG during the nine months of this year compared with the 576,000 tons. And here’s where it gets funny. It comes down into here. We need to pull all the levers when it comes to managing market swings, says Zheng. Yogi Bless You picks up PTI, global head of LNG, told Reuters. Here it comes down into here. China’s LNG receiving capacity is expected to expand 30% to nearly 182 million tonnes annually by 2025 from £139 million this year. Now here’s where it gets a little funny, is that they’re trading gas shipments and I think that this is actually a let me find the quote numbers in here. South Korea has been taking 27% of China’s reloads and it’s even been going to Europe. I’m trying to find where that number it was buried in here. Anyway, China is getting the orders and then shipping them off somewhere else. [00:09:40][84.2]

Michael Tanner: [00:09:41] Well, because as as as Zheng Yao, the global head of LNG, pointed out, you know, this is using these financial derivatives and developing infrastructure like regasification terminals and underground storage, help offset market volatility and improve overall supplies. So they’re doing things that, quite frankly, the U.S. should be doing, which was using their massive amount of infrastructure to obtain energy security at home. So as much as I’d love to hate China for this, they’re doing it. In order to keep energy prices low at home. So. Oh, absolutely. You know, don’t hate the player. Hate the game. [00:10:16][34.3]

Stuart Turley: [00:10:16] Agony. Any files and extension to keep Diablo Canyon operational. I find it funny that this was filed when President Z from China has come in. Oh, a miss producer. Can you fly in this thing here and let me get the hour? I found this on Twitter and I found it very interesting. This is from I want to give a Chuck Cohen a shout out and it’s before Z. And this is San Francisco with the homeless. You see the normal homeless after they ran through like goons beating the homeless and cleaning them up. Just like in Princess Bride when they went, I need my goon squad to clean everything up. They did. Okay, now, this is going to be the same thing, Michael. Here they are. They have lousy energy policies. President G shows up, and they’re going to add 20 years to Diablo Canyon. When? Michael, you and I were covering it. Two years ago, they were shutting it down. All we have to do is get president z to tour the united states. Chicago would be cleaned up. New York would be cleaned up. This would be huge. I’m a G. Fan. All of a sudden, since he can get California cleaned up just by showing up. This multiyear Diablo Canyon is just unbelievable. PG And he’s committed to answering the state’s call to ensure continued operation at the facility and safely delivered affordable, reliable and clean energy, said Patty Pope in a press release. She has to be our Person of the Week. [00:12:03][106.8]

Michael Tanner: [00:12:04] Yeah, I mean, you have to remember, for all of the flaws that we are forced down our throat from Diablo Canyon. Oh, it’s so bad. It’s so bad. It’s doing 10% of the state’s electrical supply is nothing to sneeze at. [00:12:15][11.4]

Stuart Turley: [00:12:15] No, it’s not an edge. Delivering less carbon than all of the oil that’s coming in from China’s wells out of the rainforest 24 hours a day, seven days a week, 365 rain or shine. I mean, I love me and you know. [00:12:35][19.4]

Michael Tanner: [00:12:35] You love it. And we do need we just need to g to take a tour of the United States. And it had me tickled. And then did you see me not to sidetrack, but I saw a clip today of Newsom saying, well, hey, I know a lot of you think we just cleaned up the streets because President G is here and he’s like, Wow. It’s true. It’s true. But we also did it because it was just he straight up just he admitted it. [00:13:00][24.6]

Stuart Turley: [00:13:00] What did you do? You remember when Biden made his first 15 minute drive by at the at the border, the border town? It was a wreck. They did the same thing. They brought the Princess Bride goon squad through, cleaned it up. You couldn’t find an illegal immigrant to save your life around the goon squad. And President Biden walked around with his bag. It depends under his arm, looking around, going, There’s no border crisis. Oh, just bring Biden and Z on a world tour around the U.S. and we would have no problem. [00:13:37][37.0]

Michael Tanner: [00:13:38] A world tour around the U.S.. I absolutely love it. [00:13:41][3.2]

Stuart Turley: [00:13:41] So let’s go ahead and transition over to Exxon. This is an outstanding story. When we take a look at the energy transition and the demand for the lithium for the lithium batteries, this is huge. And they are projecting that they can start producing lithium, Exxon, by 2027. The U.S. oil majors are investing in the electric ification sector as governments in the United States and Europe set programs to promote wider use of electric vehicles. While in the long term, lithium is really a global opportunity, said Dan Mann, president of Exxon’s Low carbon business Unit. We are starting here because there’s an urgent need to ramp up domestic production with these critical minerals. Let’s talk about some of this is goal would require $2 billion in capital expenditures to provide 50,000 tons at a volume. It could generate $800 million in cash. That doesn’t seem like a very good 2 billion capital expenditures in order to generate 800 million in potential cash, unless there is subsidies in here and unless there is long term contracts. The other part of this article is very critical. European oil rivals BP Shell have invested in the. Charging stations is part of their transition strategy. But BP and Shell and even total energy, as we talked about, total energy is just bought enough natural gas plants or is in the process of buying them In Texas, that is equivalent of two nuclear reactors. And when you take a look at the difference of the European big oil companies, they went 100% going to beyond petroleum, as in BP’s case, instead of maintaining their balance like the U.S.. The Exxon’s of the world stayed their course and then Oxy took it to carbon capture. So now Exxon, which invented the rechargeable lithium battery in the seventies, I did not know, then stepped away from the technology, has no and plans to invest in the charging stations. I thought that was pretty critical. Stay in your lane and this is very, very important. There are 280 million vehicles in the U.S. today and fewer than 3 million are these. There’s still 99% to go, which is a huge opportunity. So the headwinds for this project, A, I applauded the headwinds are going to be is the EV market going to be sustainable without the consumers being excited about it And or are the subsidies going to have to kick in? Stay tuned. We’re going to try to get a crayon on this with Michael and be back with you on this as well. [00:16:48][186.7]

Michael Tanner: [00:16:49] I visited over 120 EV chargers. Three reasons why so many were broken. This is, again, from the Wall Street Journal. I want to try to find the author here. It was a lady she wrote it on here. Either way. Oh, Joanna Stern. Okay. So she went ahead in Los Angeles and hit up 30 fast charging locations or public electric vehicle, fast charging locations in Los Angeles County. She did that in a rivian r1t and found that 40% of them had problems. So this is in public. The Chargers clearly not working out. You know, she says it’s a Ford Mustang Mach-e driver. I’m no stranger to these frustrations. Many of you have shared your charging horror stories and me since I began my EV adventure. So let’s go ahead and dive into this. They visited 30 EV charging stations, 13 of whom had issues. Here was the first problem. Some of them were just flat out of order. So of the 126 stalls that she inspected, 27 of them were out of order. They either had a sign I’m a dead screen ordered air, a reading, a test charger unavailable. A producer can can fly that in their charger unavailable out of service. Caution. Sorry. Out of service. Not good. All of these companies told me that they have network operators currently monitoring them. 24 seven And when problems pop up, they deploy technicians to assess and fix the issues of what was wrong with these particular machines. Could be one of many things. The key is it takes a while to get that turned around. Solution. I love how they always try to put a solution here. New gear is needed, obviously better gear that works. This is my favorite problem to paint it, reject it. You get it all worked out, but you can’t swipe your credit card. Technology has been around for decades. We can’t figure out how to get it on EVs. It’s just hilarious. What’s the solution? Upgrade the apps. Genius. Genius. Finally, the third one this is interesting and I think is is one of the reasons why scaling EVs from a regulatory standpoint might be necessary is the handshake failure, which is basically the connection to you and your EV to the fast charging doesn’t quite work for whatever reason. It could be a software issue, it could be a timeout, it could be a bunch of different things. To the point is you can get it connected. You pull up, it takes your car, but boom, it’s not transferring. And I mentioned this may be where in order to push some of this stuff forward, there needs to be a little bit of I don’t want to say government regulation, but in agreement among makers, can we create a single plug and play charger? I know that they’re working on it, but some people have different combinations. There’s the combined charging system that’s integrated into most non Tesla promises. Tesla is different, but most of non Tesla EVs including the Rivian, require a quick handshake. It basically it’s this new combines and so they’re working on it. It all comes back to the point we are really far away from EV rollouts and people want to go quickly and phase out gas vehicles when 14 I promise you 14% of gas stations are not offline. I just promise you that. So this is again, people talk about EVs don’t work. Well, the problem is that there’s a lot of downstream issues when it comes to EVs. Obviously, we’ve covered extensively the grid, but really this EV charges players 120 EV chargers, 40% of them out of work. Great work. Got to love it happened. [00:16:49][0.0][982.6]

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