Daily Energy Standup Episode #277 – Energizing 2023: A Year-End Overview of Global Energy Trends, Challenges, and Resilience

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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: [00:00:15] What is going on? Everybody, welcome in to a special edition of the Daily Energy News Beat Staying Up year in Review here on this gorgeous Tuesday, December 26, 2020. As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location. You’re 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, Energy Newsweek.com, Stuart Turley. Merry Christmas. [00:00:39][24.1]

Stuart Turley: [00:00:40] Oh, man, it was I just you know, I eat a little too much, but, hey, I did, Michael. It’s a beautiful day in the neighborhood, but I want to give a shout out to all of our listeners. We have had a fantastic the staff is putting together our year in numbers. Michael Preliminary we’ve had 5.5 million article reads on our transcribed articles on energy news. MICO Unbelievable. We’ve had over a million downloads for energy news. We’ve had over 1.5 million with our other podcast with David Blackman. We’re going to be in about, I’m guessing, 7 million impressions or more for all of our band that is phenomenal that we just have. We wouldn’t be anywhere without our staff and our listeners. [00:01:35][55.7]

Michael Tanner: [00:01:37] Absolutely. I mean, it’s it’s, it’s, it’s, it’s by no fault. It’s by no goodwill between Stu and I that we do. So it’s it’s all our staff. It’s all listeners. We appreciate everybody who’s tuned in this entire year. I can’t say thank you for everybody who’s reached out said they enjoyed the show. We could sit here and list off, you know, every single one of you guys. But but but we’ll leave it to, you know, who you are. I’m going to go ahead and just leave this up to the staff to go ahead and pick out some of our top stories. We appreciate everybody. As you remember, guys, the news and analysis you’re going to hear in this year in review is brought to you by world’s greatest website. The debate on energy news become the best place for all your energy news during the team, as always and year round, do a tremendous job of keeping that website up to speed with everything you need to know to be the tip of the spear. When it comes to the energy business, you can check out the description below. Apple Podcasts, Spotify, YouTube For all links timestamps. You could jump ahead, figure out your top segments from the year. Go ahead and tell us on YouTube exactly which are your favorite segments as you listen to this and we’ll be glad to interact with you there. You can check out the email to show questions at Energy News. Become Dashboard dot Energy Use B dot com Data News Combo. It’s been a long years too. I’m going to leave it up to the year in review. Have a merry Christmas, folks. We hope it was great for you. [00:02:49][72.6]

Stuart Turley: [00:02:50] Happy New Year. The U.S. has billions for wind and solar in projects. Good luck plugging them in this pretty cool article from like a like you said, from the New York Times. There’s a couple of big things that has happened around the world, and this one is really sparking it. And there are more than 8100 energy projects. The vast majority of them are wind, solar and batteries. Our friends over there and fry battery out of Norway are coming in to take care of this as well, too. But here’s the problem. This is from our perspective, the interconnection process has become the number one project killer, said Piper Miller, vice president of market development at Pine Gate Renewables, a major solar power and battery developer. Michael, it’s a brain trust issue as well. Two things really that are in this article. The EU is having to print money to catch up because now that brain trust is like free energy coming across the pond is now taking up a lot of this dollars and they’re having to create the same thing to attract people to go to Europe. The brain trust people are fighting for these project engineers. Michael You can’t get people approved to work on all of these projects. Wind, solar, the supply chains are not there. You may have the money, you may not get it done. It’s going to I. [00:04:20][90.3]

Michael Tanner: [00:04:20] Mean, think about this. I mean, it’s just that PJM interconnection, the one that stretches all the way from Illinois, in New Jersey, that way that will actually I think we should probably cover next. Right. Because it fits right in. But think about this. They’ve announced a freeze on new applications until 2026, so we can work through the already backlog of thousands of proposals, mostly for renewable energy. So exactly the interesting part is it’s not just about, hey, can we build and spin up a wind farm, It’s where does the actual electricity tie into the grid you’ve been on for years. You don’t hurt yourself patting yourself on the back. [00:04:54][34.0]

Stuart Turley: [00:04:54] But here’s the thing. Like Merideth Angwin, who shortened the grid she brought up and David Blackman just talked about this in their podcast as well to the grid. And then I talked about it with Don Deere in my podcast. You have to add 180% when you. You bring in wind or solar for additional uptime guarantee instead of the normal 20%. So it is just nuts on this, Michael. [00:05:26][31.2]

Michael Tanner: [00:05:26] Being about this. I love halfway down the article. It is one of the bigger titles is imagine if we paid for highways this way a potentially bigger problem for solar and wind, and that is in many places around the country. The local grid is clogged, unable to absorb more power. That means that if a developer wants to build a new wind farm, it may not just have to pay for a simple connecting like, but also for or else upgrades elsewhere. Get this Duke. These costs can be unpredictable. In 2018, EPA, North American Renewable Energy proposed a 100 megawatt wind farm in southwest Minnesota. Estimated estimate would have to spend $10 million year connected to the grid. But after the grid completed its analysis, EDP learned upgrades would likely cost upwards of $80 million and it canceled the project. You know what this does do? It creates a whole new problem. When proposed energy projects drop out of the queue, the grid operator often has to redo the studies for other pending projects and ship costs to other developers, which could trigger more cancellations and delays. Dun dun dun dun. [00:06:21][54.2]

Stuart Turley: [00:06:21] Six things you said in there, Michael. There’s six things. I mean, the number one that I just said a second ago was there’s a brain trust missing from these people that can go through and analyze power, physics and everything else. That’s the number one job it used to be. It folks know is brain trust for energy, trying to get things on the grid. Hey, let’s start with our buddy pioneer Sheffield, predicting 90 to $100 oil by early summer. I love me some Sheffield. He is one of the best, coolest cats in the entire industry. And the article says Sheffield is talking to the analysts and he says we remain highly constructive on oil prices, Sheffield told analysts. I’m still very optimistic that will move back into the 90 to 100 range sometime early this summer. As we move in, get away from this 78 to 88 swing and brant prices high. [00:07:24][62.6]

Michael Tanner: [00:07:24] Now this is what everybody does though. They couch their oil price by giving me Brant, which trades at a 7 to $10 premium to West Texas Intermediate, which pioneer and most other companies that produce out of the Permian Basin get paid off that index not Brant. So I do find it hilarious that he’s talking about his oil price and he chooses the international benchmark versus the one that sits in his backyard. But I won’t get hung up there. So continue. [00:07:50][25.8]

Stuart Turley: [00:07:51] The the other piece of this is Pioneer expects to operate an average of 24 to 26 horizontal drilling rigs and that’s a lot of rig edge did that’s a lot. [00:08:03][11.8]

Michael Tanner: [00:08:04] That’s a lot of rig edge we need to make that into a T-shirt. I don’t know I’ve never heard that that one before. I mean, Pioneer is probably one of the better positioned companies with their acreage in order to drill. I mean, they have vast, you know, what is probably considered lower tier one at this point, but decent acreage that at these prices, even at $75, make very good economic sense. [00:08:26][22.6]

Stuart Turley: [00:08:27] Ask you this. Yeah. Let me ask you this, Michael. It says, citing significant capital savings on a per foot basis of lateral wells in excess of 15,000 feet. Pioneer said it expects to place more than 100 of these extra long wells on production this year. Wow. [00:08:46][19.1]

Michael Tanner: [00:08:47] Yeah. I mean, it’s that’s super interesting. And I think you’re seeing a shift of, you know, a shift into these super long laterals. And we’re talking 15,000 feet is three miles of lateral like I know in in the DGA basin. Oxy is doing some some pretty crazy wells that are getting three or four miles. I just saw a permit for a Woodford well out there in Oklahoma that was 26,000 feet of total measured depth. So I think that works out to like four miles. I mean, it’s absolutely incredible still what they’re doing. And I think part of the reason why is because you can in high oil price environments which in which wells are fairly economical and you can really turn and burn this Tier one acreage, the longer you go it it does there is a on a well by well basis some economics of scale by increase in the lateral lake, you can increase the lateral length by a thousand feet and say let’s give let’s say for example, 800,000 barrel per thousand foot. That’s a bad example. Let’s say let’s say 25,000 per thousand foot of lateral length. Well, if you go over 15,000 feet, your costs may not rise literally. They may slope off a little bit while you are continues to rise. And it these prices you can afford to be you can you know a $22 million RF which is probably what it’s going to cost to go drill one of these wells. You can swallow that because you’re going to you’re still going to be able to make your money back in 6 to 8. You know, and especially if you’re, quote unquote, highly constructive on oil prices, then there’s really only a time to go up from here because you might be able to lock in these rigs at $75 service company prices. When it gets to 100, you might there could be some savings. So if that’s your thesis, it does make sense. I do think it’d be hilarious. You know, we talked on Friday, Stu, specifically about the rumor that Pioneer was going to buy Range Resources. They had to announce a press release and say it’s going to happen. I was on Twitter today and I fell out of my seat. I got to give a shout out. This is one of the first what’s the name of this? The name of this Twitter account at insolvent Citgo. I mean, it just I’m dying. Whoever came up with brilliant. But the title goes just not checkers. And if you don’t mind throwing up the meme for everybody on YouTube, it goes chess, not checkers. So you’ve got the Winnie the Pooh meme where half the time he’s sitting there just looking scummy, and then the other half he’s in a suit, smiling for a section, grinding on a model to evaluate whether M&A adds shareholder value or not. Hard to leak rumor to Bloomberg and make that 1:30 p.m. deep dive. I’m telling you, it’s exactly what happened. It’s exactly what happened. They were like, Oh, let’s just leak the press, see what happens. Oh, stock down 4%. Bullet, Bullet. Don’t do it. Absolutely funny. So, I mean, getting back to this, this article, Stew pioneers going to be able to drill these long wells that will you know, even if they’re over AFV, they’ll be able to make money. But I do find it funny that, you know, now all of a sudden, we’ve got you know, I love how I have a hard time as an economist predicting commodity prices. I think that’s I think oil and gas companies should not be in the business of predicting oil prices. You shouldn’t be producing oil and gas for cheap as possible so that whenever the price does go down to a bad level, you’re able to continue to at least keep the lights on. And when it goes up to an extremely high level, you’re able to keep those low operated assets, invest more drilling and really ramp up production because you really make most of your money on these oil wells in the first six months of production. It’s really doesn’t matter what the price is four years out when you’re drilling these new wells because all you care about is that first six months. But here we’ve got Scott. You see, you’re one of the largest companies in the oil and gas business. He’s not predicting oil prices. So this should be fun. [00:12:32][224.9]

Stuart Turley: [00:12:32] Hey, he’s a good dude. [00:12:33][0.9]

Michael Tanner: [00:12:34] What do you got next? [00:12:34][0.4]

Stuart Turley: [00:12:35] Tesla’s Germany plan. I’m actually quite happy about this because I do like Elon and I’m very happy for the Germans with this. Might as well make it off of the American company. Tesla’s Germany plan is producing 4000 cars per week, three weeks ahead of schedule. This is pretty amazing, Michael. Tesla will be compelling $25,000 electric vehicle that is also fully autonomous. Elon said this time. Wow. After an ugly start to the 2023 campaign, Tesla shares have now more than doubled off their lows this year. It’s kind of cool. [00:13:16][40.7]

Michael Tanner: [00:13:16] Yeah, I mean, it’s pretty incredible what Elon Musk has been able to do. You know, first off, I think, you know, I don’t think the autonomous driving really it’s enough doesn’t get talked about as much as I has. I think everyone talks about the electric, they talk about the batteries they clean, right. I mean, really what’s going to make Tesla valuable is will they will they achieve what would be considered full self-driving or FSD? I don’t know. But if they do, but if they do, it’s Licensable Software that can be licensed to any other company and all you need. And they really become a software company. And I think Elon knows that. And I I’ve been I’ve listened to enough podcast with him. I’m surprised in the Lex Friedman show where he’s basically gone so far as to admit that Tesla is a software play and eventually might even be outsourcing and not even produce cars, but just produce software that goes into cars. But for now, they do make an incredible car. It’s clearly not $25,000 for it for a electric vehicle. That’s that’s a lie. I think it’s a 4550 now. It’s at least double that. [00:14:17][60.8]

Stuart Turley: [00:14:18] Oh, it’s way more than that. But the original idea for affordable Tesla was announced by Elon back in 2020. Tesla will make a compelling $25,000 electric vehicle. That’s also it was leaked from the company’s California plant. So no nice Atlantic leg to lay off some staff. And this is sad. We hate anybody getting laid off. As recent global events have been demonstrated, the LNG industry is dynamic. They shut down one of their trains, they have four trains and they are now down to three. And it’s because the limitations of the exports that are going on right now. Atlantic is one of the largest producers of LNG and is owned by the National Gas Company of Trinidad and Tobago and Shell, BP and the Chinese Investment Corp. Narration. Michael, here’s a tidbit. Guess who? Boston and New England. The story we had yesterday on New England Power. They buy from this company? Yeah. Yeah, they do. Oh, yeah. I just thought I’d share that. A little bit of laughter. Let’s go to India. Coal is back in business. Michael, we just ran this story about King Coal last week again, and now we’re running another one. King Coal is coming back with a big bang, said Anil Kumar Jha, the chairman of Jindal Power. Holy smokes. There’s no talk at all of phasing down coal at the event. Rather, the debate centered around on how just high coal’s demand will rise, with the consensus that it will jump to 1.4 billion tonnes per annum by 2030 from around 1 billion tons currently. How in the world, Michael, I want to ask you this one right now. How in the world can India make there, quote unquote, climate goals by increasing their goal from now on? [00:16:37][139.0]

Michael Tanner: [00:16:38] I think everything is a trade off. I think if they don’t increase their energy output and continue to provide low cost energy to their billion plus growing population, they’re going to find themselves in a position of very negative growth or not negative growth. But but slowing growth, I mean, they’re one of the fastest growing economies right now. I mean, you know. [00:17:00][22.4]

Stuart Turley: [00:17:01] To China in population. [00:17:02][1.0]

Michael Tanner: [00:17:03] Yup. And from an economy standpoint, they’re booming right now. And if you we’ve seen it here in the United States, what’s the easiest way to trigger a recession? Make the cost of energy skyrocket? Europe, energy prices have skyrocketed. So, you know, India’s continued to buy Russian crude. Why? Because they support the Russians. No, but they like cheap oil. They like cheap fuel. And so they’re going to lean that way as long as the incentive structure remains the way it is. I mean, you can commit anything to I’m going to commit to going on a diet starting tomorrow, but we’ll check in in two months, See, how do you know. [00:17:39][36.5]

Stuart Turley: [00:17:40] I’m holding my breath? [00:17:41][0.6]

Michael Tanner: [00:17:42] Exactly. So you that’s about as long as the diet will last. But if if you can keep it, if there’s no incentive for me to have, you know, you’re not going to pay me for one month, which you know who it may encourage me to go on a diet. But so I say all that to say they’re doing the right thing for them. Exactly. Necessarily be mad about it. What? I wish they were buying our LNG. Sure. But where were the LNG coming? We can’t export it enough to satisfy their need quite yet. They’re going to go get it from Qatar. [00:18:15][32.8]

Stuart Turley: [00:18:15] Right now, here’s the thing. Yesterday we talked about China, how much they’re building. They produce unbelievable amounts of energy. They’re coal they’re doing to weak, you know, just by that. So anyway, I just wanted to shout out I mean, you’ve always heard me say this. I love India. I love the leadership for trying to get low cost power. And I know you’re shaking your head. Yes. You’re already tired of saying financing the energy transition. Follow the money. We need a plan to provide the lowest kilowatt per hour along the path. The cost of moving the energy sector toward net zero is huge, but new research reveals that companies are increasingly prepared to invest and funding is increasingly available. Let’s find out those sectors. Michael coming around the corner, what our energy companies like, where our energy companies, our allocating capital. 42% of energy companies are investing in energy transition initiatives 11 per hour, 28% now is in returns to investors and shareholders. It used to be 11%. Oh, wow. All right. Capital investments in traditional businesses and oil and gas. Michael, this is critical. It used to be two years ago, 32%. Now it’s down to 20%. And three years, three years ago, Michael, you and I had on our show, we could pull the day. We needed trillions of dollars just to meet the decline curves if demand level just remain flat. The IAEA, The International Energy Association. Agencies said just recently, two weeks ago that energy demand will remain constant for a while. [00:20:19][124.4]

Michael Tanner: [00:20:20] The international energy crime syndicate, you mean? [00:20:22][1.8]

Stuart Turley: [00:20:23] Yeah. Okay, well, we’ll leave my true thoughts alone on that. And the EU. And the EU. I mean. Excuse me. The. [00:20:29][6.3]

Michael Tanner: [00:20:30] Yeah. [00:20:30][0.0]

Stuart Turley: [00:20:31] The IUCN. [00:20:31][0.2]

Michael Tanner: [00:20:32] Yeah, yeah, yeah. [00:20:32][0.6]

Stuart Turley: [00:20:33] Yeah. The UN. Okay. How will they fund this? How will energy companies finance their energy transition initiatives? Private equity. 40%. Existing balance sheet or. Michael. I’m assuming this would be free cash flow 32%. Equity capital markets, 29%. Dated capital markets. Debt. [00:20:59][25.8]

Michael Tanner: [00:21:00] Capital markets. [00:21:00][0.5]

Stuart Turley: [00:21:01] Debt. Oh, thank you. Thank you. Old Moses. Me friends. Bank loans, 19%. Export Credit agency 40%. Hey, I went to OSU, but that is a lot more than 100%. [00:21:13][12.8]

Michael Tanner: [00:21:15] I know what’s going on. I was asking the same thing. I was like, It seems like. [00:21:21][6.5]

Stuart Turley: [00:21:23] This printing money. I got to go see this. [00:21:25][2.3]

Michael Tanner: [00:21:26] This is this is how you start inflation. [00:21:27][1.5]

Stuart Turley: [00:21:28] This has got to be printing money. [00:21:30][1.3]

Michael Tanner: [00:21:30] I think there’s two things. Do I mean, it’s clear. I think it’s clear. I think the the the the bigger shift is this you mentioned it in the big segment where energy companies allocating capital returns to investors and shareholders up from 11 to 28% in capital investment in traditional businesses, down about the same amount, 32 to 20. So it’s just a flip. People are saying, okay, instead of spending all of this money in putting it into the ground, just give it back to me. Because think about it, the track record of oil and gas spending capital from 2012 to 20 20 to 2018 was terrible. And it’s still kind of is terrible right now. Things are tough business. You know, actually spending capital and spending it wisely is a tough business. So I’m not surprised it is flip. I think, you know, this whole 42% investing in the energy transition, are we sure about that? Like define energy transition? Like, are we talking about like. [00:22:26][55.2]

Stuart Turley: [00:22:26] I got to find out if it includes nuclear and natural gas now, because I mean, if it is these this this are. [00:22:33][7.4]

Michael Tanner: [00:22:34] These then going green? [00:22:35][0.8]

Stuart Turley: [00:22:35] Yeah. You know, so funny articles. I was like, okay, if you pull out the act coming from the bank balance sheet, that might make a little good but who knows? Okay, I got to go do some research on that article. Sorry about that. Then market rally shakeout may be bullish, maybe a bullish signal. Jp morgan Eyes First Republic after FDIC takeover. Michael this concerns me a bunch. The FDIC scene taking over first. Republic banking giants including Jp morgan Chase and PNC Financial Services are looking to buy First Republic following a government seizure, the Wall Street Journal reported Friday night, citing sources the FDIC asked for initial bids by Sunday, Bloomberg reported on Sunday after I was going to say gouging, but gauging initial interest. Bank of America is mulling it. Michael this is systemic of an overall problem in is the government keeps bailing out banks. It’s going to be an issue. What are your thoughts? [00:23:46][70.7]

Michael Tanner: [00:23:47] Well, this comes back to the issue of these larger banks. I think it’s important to note that Jp morgan would need a regulatory waiver to buy first. So they clearly think they’re going to get the waiver if they’re all spending, if they’re I mean, they got their whole team working. I mean, it’s kind of funny, as Jp morgan does, M&A for other companies. Imagine being on the M&A deal team for Jp morgan. That’s going to be an interesting deal team. I’d love to get out. I’d love to hear some stories about that. Not for Gillan, but where this is all going to lead us to get Bank of America is are mulling some of the banks buying first look. It’s much like in the oil and gas business. You’re seeing massive consolidation because of just the way the stock, the equity and debt markets are structured. It favors big versus small. I think that’s what you guys see happen in the banking industry. You’re going to you’re going to see all of these regional banks get swallowed up by, you know, much larger regional banks. And then those larger regional banks will get swallowed up eventually by JPMorgan and you’ll have, you know, 10 to 20 banks throughout the country. And is that a good thing or a bad thing? He’s probably, on average, a bad thing. There may be some good things about it you don’t need to worry about. You know, one of the advantages of having two huge banks is liquidity. You don’t have to worry about a run on deposits. The FDIC then can worry about other different things. Now, having all of you having all of your deposits in one bank can also lead to massive. You know, we already think Wall Street has too much power and too much control over our lives. Imagine if if JPMorgan had all the power. Now I like if. I think the thing to be careful of is in this case, yes, I actually, you know, if I’m going to put my my money anywhere, it’s going to be in Jp morgan. Mainly based off what Jamie Dimon has said regarding the energy transition and his stance on oil and gas. He was one of the CEOs that sat up in front of Congress and said moving and getting off oil and gas would be the road to hell. He said that they took this directly from him. Now, what happens when a new CEO takes over doesn’t believe that. What the problem with centralization is you’re counting on the people in charge. You may like the people in charge now, but do we like would we will we like them going forward? So there has to be a balance. We have to figure out a way to ride this ship. But Jp morgan may be the only company that could buy this, so I’ll be interested to see what happens. But I think that’s what’s going to happen. Consolidation among banks and will be generally worse off because of it. [00:26:02][135.1]

Stuart Turley: [00:26:03] I will give you a great, great feedback, Michael. One small thing and you kind of said, what do you think about more big banks? It would be easier for the government to control the rollout of the Hamilton project, which is the digital currency, which is the end of financial freedom for the U.S. So that to me is even more scary on that part. Sorry. [00:26:32][29.6]

Michael Tanner: [00:26:33] I know you’re good, the Hamilton Project, but I but now, obviously, first Republic they’re in trouble their stocks down. You know it’s basically down over 100% that huge Q2 quarter one deposit outflows. You know there was an attempt to do quasi rescue it by it. The FDIC came in and just said, no, we’re putting you up for bid right now. Someone will buy it. They won’t necessarily have to go into receivership. So I think that would be convenient for everybody. But we’ll see. Wouldn’t wouldn’t want to be in a regional bank right now. [00:27:04][31.3]

Stuart Turley: [00:27:05] No energy better positioned for any kind of recession. Analyst says Michael. I’m seeing this all over the place. Investors are calling and asking and they’re saying things like, What in the world do we do? It’s energy, baby. You know, it’s all about energy. And Chevron, Exxon post robust Q1 profits despite falling gas. They’re still got the profits in for the ones that are good management. Good numbers like you and I have always said, they’re good investments. There’s a couple quotes in here that are just fabulous. Roger Reed says Always a tough question to answer for the company or for us. So I think if you look at what’s typically made M&A work in this space, it’s more often occurred during a time of stress, meaning low commodity prices or other extraneous event that for reasons creates mergers, it doesn’t mean it can happen. We just would be saying watch for those moments as opposed to just waking up one day and seeing everything. You know, what this is saying is last year the Dow Occidental was number one on the Dow on their Dow exchange. So when you sit back and take a look, Oxy number one, you know, that’s only one investment. You have 50% of the AMP operators in the U.S. are privately held. They’re good investments as well. But you have real estate, Michael, coming around the corner. I was watching Maria BARTIROMO this morning and the real estate in San Francisco and New York, I think it was 48% is now vacant of commercial space. There is going to be a lot of commercial people looking to get out. So what you’re going to see is a run on minerals. You’re going to see a run on things with passive income. Anyway, I’m sorry for rolling on that, but I thought this was pretty incredible. [00:29:11][125.8]

Michael Tanner: [00:29:12] Yeah, I mean, I think he I think he accurately points out and I thought, you know, Roger, he’s a Wells Fargo analyst, so think, think what you want about about their ability to predict. But I think he poses what I think is the right way to think about an ExxonMobil from a perspective of M&A because really what they’re talking about is while all these other things are crashing, where possibly should companies be looking at in terms of energy M&A? Well, when you’re looking for an acquisition, are you looking for future drilling sites or more of a decarbonization play, which I think is key? There’s two driving forces that are going to keep energy high, obviously commodity prices, and that goes into the future drilling locations. But then also the decarbonization, all the stuff that’s going on in the Inflation Reduction Act. Who says there’s not an inflation Reduction Act, too, and all of a sudden the U.S. is thrown in there? [00:30:03][51.2]

Stuart Turley: [00:30:04] Here’s the thing. There’s absolutely zero reason to fight the clout and, you know, fighting the clout. Great. Let them do go make some money and then, you know. In the nose or squeak their nose or squeak the horn later and just go put your money where you can make money. And it’s in natural gas. Nuclear, modular, nuclear watch. All you got to do is watch out for yourself. Louisiana oil and gas still has a place in the future of energy. Michael, this is a great story. Louisiana is positioned to have opportunity to capitalize on changing global market demand and lead in the future of energy by bringing online new advancements in the industry, such as carbon capture and storage. CC US and utilization. I want to throw that in there. Bowling Green, hydrogen and renewable Diesel. Michael There’s about 16 really nice big projects going on in Louisiana and I respect the leadership because they are doing renewables, they are doing oil and gas. Louisiana is home to the Haynesville formation and lots of natural gas. You’ve got so much going into the Gulf that they have a just a huge amount of good things going on besides having tires off of. GUTFELD There I mean, GUTFELD is a rock star and. [00:31:31][87.5]

Michael Tanner: [00:31:32] His ratings are insane. I saw he’s the number one late night host. [00:31:34][2.9]

Stuart Turley: [00:31:35] Oh, absolutely. And I would like to have. GUTFELD and Tyrus and Kat on our podcast as they’re listening. [00:31:42][7.2]

Michael Tanner: [00:31:43] So I’m sure they’re listening. I’m sure they’re getting their editors on it right away. [00:31:47][4.3]

Stuart Turley: [00:31:47] Oh, absolutely. But, you know, anyway, hats off to Louisiana. Absolutely a positive article. They’ve got $18 billion in projects announced for capture, record carbon capture, renewable biofuels, blue and green production of hydrogen and ammonia while they’re doing all of the normal oil and gas in the Haynesville wonderful way to do it. [00:32:13][25.5]

Michael Tanner: [00:32:13] So, yeah, and they’re they’re taking the I mean, I think the infrastructure and investment in the U.S. really will be the bridge between the old and the new if this is where things are going regardless. I mean, if we’re going to if scope one, emissions are going away. CC US is the quickest way to do that. So I think this is smart overall in terms of a strategic play, right? [00:32:34][20.3]

Stuart Turley: [00:32:34] Hey, aren’t you proud of me? I didn’t pick a Debbie Downer or a Karen Downer story. You know, I get you one in there. Man. [00:32:41][6.9]

Michael Tanner: [00:32:42] That was great. That was great. [00:32:43][1.1]

Stuart Turley: [00:32:43] Ford loses nearly $60,000 for every electric vehicle sold. Is that a good business sustainable model? [00:32:53][9.2]

Michael Tanner: [00:32:53] No, it doesn’t add up on a dime. [00:32:55][2.0]

Stuart Turley: [00:32:56] I was like the carmaker was on a roll at the time. Let’s see here. It was planning on starting a production of their F-150 Lightning, the electric version of the iconic best selling 150. You and I have already talked about this. Let me get into the losses here. It appears that the Ford Model E recorded a loss before interest and taxes of 700 million. This is a hundred million more than fourth quarter of 2022. The margins are also in the red. The bad earnings before interest and taxes, which allows investors to assess the true cost of the activity, is -102.1%. And this is more than twice as much as fourth quarter in 2022, in which the event margin was -40%. On the revenue side, it amounted to 700 million for the first three months of the year, it’s less than half of the 1.6 billion in revenue generated by the Ford model in the last quarter of 2022. We’re seeing some real trends there, Michael. People are not wanting to buy electric. [00:34:17][80.6]

Michael Tanner: [00:34:18] Yeah, I mean, they they specifically mentioned one of the third headlines here is gas. Cars are fine. I mean, they’re not necessarily seeing a dip in sales across their non electric fleet, which I think is is interesting and probably feeds into why really the other two stories you’ve got lined up, which is specifically more and more Americans don’t want electric cars, which has been a theme of this earnings season. Remember, we’ve just gone through 158 companies released their earnings. More are coming on the way. We’re being able to dive in and really in a full year of all of these companies doing EVs, been able to sort of look behind the glass and see a little bit into their balance sheet. It’s not good. [00:34:57][39.6]

Stuart Turley: [00:34:58] No end. Siemens lost $1.7 billion in their wind farm division. Oh, okay. I think this is just my personal opinion on this. Before I go to the next story, which is. Related to this story, and that is the infrastructure bill actually, I think is cause part of the problem, Michael, from the standpoint that the Biden administration goes, okay, look, tax credits. No tax credits. No, you get you get no tax credits for you. I mean, they’re just like they’re either. [00:35:33][35.3]

Michael Tanner: [00:35:34] The infrastructure bill or the Inflation Reduction Act. [00:35:37][3.3]

Stuart Turley: [00:35:38] Both of them are porkulus. But it was. [00:35:40][1.9]

Michael Tanner: [00:35:40] Yeah, because I was guessing there was the Porkulus bill was before the Inflation Reduction Act. [00:35:44][4.4]

Stuart Turley: [00:35:45] The Inflation Reduction Act had the big tax savings in the car. [00:35:48][3.5]

Michael Tanner: [00:35:49] And was it the it wasn’t the porkulus bill’s what it was it’s dubbed now but wasn’t it called like build back better or. Oh yeah. There was some weird phrase. [00:35:57][8.3]

Stuart Turley: [00:35:58] You know, you just can’t buy this kind of entertainment. Next story here, man. More and more Americans don’t want electric cars. Battery powered cars seem like the next best thing, but growing Americans aren’t ready to give up internal conversions. We live in too big of an area. Michael, I. I travel from state to state. Top line metrics on overall EV market share availability affordability have been on a long term upward trend, the market research firm said. But beneath those headline numbers, we are starting to see some consumer behaviors that suggest a possible bifurcation of the automotive marketplace. Let me put it this way People are going to be able to have transportation in everywhere but California and New York. If you want to live and own a car, you can be anywhere in the U.S. except in those cities or even Chicago. I mean, that’s just the way that they’re planning on doing it, Michael. [00:36:59][60.8]

Michael Tanner: [00:36:59] Yeah, I think there’s there’s a few hurdles specifically on like the user acceptance side that I think this article points out. One, respondents in this survey were very concerned about their performance in extreme temperatures. I think that’s the first thing. Like, you know, no one in Colorado is. People in Colorado, yes, they have a Tesla, but they’re not taking it to the mountains. [00:37:20][21.1]

Stuart Turley: [00:37:21] No. And that’s their second car. [00:37:22][1.1]

Michael Tanner: [00:37:23] Yes, exactly. It’s like EVs or people’s second car. Then when the discussion shifts from second car to primary car, you may be have you might have me, but I that’s. But that’s a long way away is an interesting thing. Obviously, the majority of boomers and pre boomers aren’t considering EVs. That’s clear by these stats. This is interesting. 33% of Gen Z told this survey that they were either somewhat unlikely or very unlikely. [00:37:48][25.1]

Stuart Turley: [00:37:49] To. [00:37:49][0.0]

Michael Tanner: [00:37:49] Be that that’s a that’s not an insignificant portion of the population, no less. [00:37:55][5.2]

Stuart Turley: [00:37:55] I was surprised by that number. But I’ll tell you what I mean. You sit back and take a look at me. Why? Because I can buy a $15,000 used car and be just as happy. And think about the difference between that buys a lot of gas. $80,000, buys a lot of gasoline. [00:38:12][17.0]

Michael Tanner: [00:38:13] Yeah. I mean, me and you have talked about this. It would be fun to get corporate podcast Teslas, but that’s a second vehicle that goes back to your original comment. It’s a second vehicle. In most applications. There are very few applications, in my opinion. Unless you live in like a dry climate, like Cal, like Southern California and you don’t necessarily have a long commute is going to probably be you could be your primary car, the vast majority of Americans, it can happen. [00:38:38][24.9]

Stuart Turley: [00:38:39] Let’s stop at Texas first, coming around a corner. I’m sitting here in Dallas and I’ve been in West Texas for the last four months. But as we take a look at Texas, must upgrade its energy grid to accommodate the new renewable power. Some interesting stance on this. We know that ERCOT is the grid manager for Texas. Texas is the number one in wind energy. And second in solar. Wind energy alone produces 21% of all electricity in the state, according to the American Clean Power Association. This is pretty darn good. Here’s where we are still under threads in Texas for the potential of rolling blackouts. Rolling blackouts, or because the amount of stress that renewables put on the grid just a few months ago, or I believe it was two months ago, the Texas legislature, they have approved four more natural gas plants. That seems to me a very good standby power. However, they’re also looking at adding in a bunch of storage. Adding in storage brings up a couple points on me. So without expanding Ercot’s electrical transmission network and storage capacity, congestion and curtailments will rise, said the IEA. The strong projected growth in renewable energy in ERCOT over the next decade could be constrained by transmission capacity. I believe it was around 3 billion. 3.5 billion is what it took. Get the transmission lines from West Texas, where all the wind farms are coming across. That was just for commerce to get into the transmission lines to the Dallas area as well. So let’s take a look at my expectations. One of my biggest hot buttons for storage. How much does it cost? But the single most important thing to me is renewable batteries. Not many of them out there have been able to answer that. In fact, I’ve only found one battery company, one storage battery company that has been able to answer that. And that’s free battery out of Norway for I battery is awarded a 100 million EU Innovative Fund grant. I get to have a interview and I interview Jeremy on a Friday, and I’ve interviewed Tom before their CEO, and now I’m interviewing the president and they are producing a lot of new jobs and new things, you know, in the United States. So dry battery has their batteries are renewable or recyclable. So if you have big batteries and they’re not recyclable, it’s not really eco friendly, is it? So as the Tom Jensen who I interviewed, he says, we are delighted from that with the news that we have received from the U.S Innovation Fund to support Fryer’s Giga Arctic Project. This grant is a recognition that batteries represent the key catalyst of the energy transition, supporting regional energy security through faster deployment of renewable energy. Moreover, this significant financial commitment provides timely support to development of the giga Arctic Arctic. It was been under development since June 2020 and it is going to be 100% powered by 100% hydroelectricity. This to me is a phenomenal project. And when you sit back and take a look. Recyclable batteries, they’ve got new technology coming around in the battery storage. They are really looking at renewables in the hydro. I’m all in with fry battery. So well done. Cyber risk in the big picture. Brian TAPPER from a Wise Alert Electric Cisco and Information Assurance manager in 2018 pointed it out to them in an interview. More advanced the system that a larger attack service becomes service. Excuse me. Our grid’s attack surface area has been steadily getting bigger over the last two decades. Not only is this going, as he pointed out back then, it’s even extending out to anything that you have, kind of like your stove electric stoves. You know, that’s why you want to keep your gas one. And this one’s kind of interesting. Electric cars have been more potential to transform for the world for the better. I might agree with that. They provide an environmental and it advantages defense. Jury’s still out. But when you’re talking about they found everything from the possibility of hackers being able to track users with vulnerabilities that may expense expose home and corporate wide, find networks to a breach. All your car into your garage. And it may be snooping around your house for your access point and your phone. Elon, just Twitter tweeted yesterday. Phones are not secure. Missing anything that Elon puts out and is that specific worry. So anyway, and there was an article that just came out in conjunction that was actually a little ahead of this one from TechCrunch. Taking a look Hackers could remotely turn off lights mess with Tesla’s infotainment center. Almost sounds like me when I was in college. So when you take a look at how the hackers can now get in with just a Bluetooth, which is what they used to call a pan personal area network a billion years ago, those they could walk up to the car when you’re in range of Bluetooth. Here’s where it gets a little eye into this now, is that once they get in via Bluetooth, they can hop over into the underlying core of the software. Once you get into the core, it your all bets are off and what you can do. So I’m not sure that I want that much control allowed to a car. With that. Can’t wait til I can get a Tesla as my second car. Not ready to have one of the primary yet When. [00:45:20][401.3]

Michael Tanner: [00:45:20] Global oil demand to reach record high in 2023. This is out of the IEA. I’m going to read a lot here from the article because what this is, is they’re what they call, as I mentioned, their latest oil market report out of our favorite energy analysts over at the IEA. 100% credible. We we subscribe to every word they do topline numbers global oil demand will increase by 2.2 million barrels per day to reach a record high of one or 2.1 million barrels per day in 2023, courtesy of our favorite data analyst. To dive into those numbers a little bit, China is going to go ahead and account for about 70% of global gains really off the back of their petrochemical use. The quote out of the IEA says China’s widely anticipated reopening has so far failed to extend beyond travel and services, with economic recovery losing steam after a bounce back year. Yet there’s accounting for 70% of the global gains. So we let a little marketing twist there. I argue the weak right there, they do actually project some growth to slow to 1.1 million barrels per day in 2024. The quotes are saying the world oil demand is coming under pressure from challenging economic environment, not the least because of a dramatic tightening of monetary policy in many advanced developing countries over the past 12 months. Interesting, no mention of renewables. It’s all in the global financial. Interesting, interesting little pivot there. They forecast global oil production to rise by 1.6 million barrels to 101.5 million barrels per day as output from non-OPEC production nations is expected to increase by 1.9 million barrels per day. They also see global oil supply rising to 102.8. So they think fairly imbalanced with about 700,000 barrels over balance. That’s interesting because we’re seeing prices rise right now. So that’s what I find hilarious is that, you know, price is off the back of this rise when they show, well, maybe we’re oversupplied now. You know, when we see oil supply, quote unquote, outstripping oil demand. But again, I think a lot of what’s going to is we’re looking at that refined product. And I think some of the the environment that we’re seeing is the downstream capabilities observed. Global inventories rose by 19.4 million barrels to its highest level since September 2021. World oil demand. And I’m trying to just read down here a forecast for global demand, China, blah, blah, blah. We also saw this. This is a separate IEA report. Fossil fuel investment are set to rise by more than 6% to around 950 billion for 2023, based on analysis from the amount spending of planned, large and medium sized oil, gas and coal companies. So there you go again. I think you’re going to I think this is a this is not specifically for quarter four, as I mentioned in segment one. But I do think you’re going to see there is a sentiment of there was a lot of CapEx spend, maybe more than people expected on the back of world wars, higher oil prices, sort of the fleshing out of that process. So all in all, the IEA seems to be sort of bullish, sort of not. I find it funny how they think we’re oversupplied. Everybody thinks we’re going to be undersupplied. So the IEA trying to come out and and I don’t know, I think they’re using the same crayon stew uses. So we’re going to check their math on this one. [00:48:23][182.6]

Stuart Turley: [00:48:24] Kerry’s trip to China yields no breakthrough on climate. Let’s have a moment of silence for his trip. Okay. That moment of silence went way too long. Sorry about that. The United States and China failed to reach new climate agreements despite productive conversations, Special climate envoy John Kerry said Wednesday after a four day visit to Beijing, an outcome that underscores the tension between the two world’s biggest carbon polluters and economies here. [00:48:58][34.5]

Michael Tanner: [00:48:59] And I mean, I do what you want me to say. We fly carry out their private you know, we get his staff out there. You know, they’re staying at the Ritz-Carlton over there in Beijing, you know. [00:49:11][11.7]

Stuart Turley: [00:49:11] Right. He quotes here, Michael, we had a very extensive set of frank conversations and realized it was going to take a little bit more work to break the new ground, said Gary. Perfect. So we’ve agreed we’re going to meet intensively. What a When you sit back and take a look at Kerry, Kerry lied to the Congress the other day. He says, do you or does your family own a, I’ve never owned an airplane or he’s married to the Hines folks. They’ve had jets. [00:49:45][33.4]

Michael Tanner: [00:49:46] We know that. Yes. [00:49:47][0.8]

Stuart Turley: [00:49:48] So I still remember watching him testify in Congress. My dad was being shot at in Vietnam and he was a draft dodger. So I’m not a Kerry fan. We’ll just leave that one alone. Now, normal climate, you see, you do it better. Just look at climate diplomacy between the US and China is back on track. Hogwash. I’m going to call bull hockey on this one. It’s because Kerry went over there to do this. Miss Producer, can you fly in this video I’m going to show you in this next 32 second video. Sit back and take a look at this video. It is the Biden administration and in their funding of $14 million, I believe, of what John Kerry’s office is all about. He’s not even approved by the Congress. He’s not even approved anywhere in this. So this 33 second video for our podcast listeners is very important. You hear some noises, these noises, Michael, and I’ll tell you what’s going on right as we come back from this 33 second. John Kerry treating the U.S. customers. [00:51:06][78.0]

Michael Tanner: [00:51:07] I mean. [00:51:07][0.2]

Stuart Turley: [00:51:08] Stewie. Okay. [00:51:11][3.4]

Michael Tanner: [00:51:11] That hurts. That hurts. [00:51:13][1.0]

Stuart Turley: [00:51:14] You know what? What did you think of that? I mean, wasn’t it kind of like the consumers are getting hit in the nuts? [00:51:20][5.9]

Michael Tanner: [00:51:21] I think I mean, yeah, I think as always, I mean, this I mean, of all the things we’ve got to worry about China with AI, them nuking us, them cutting off Taiwan for, you know, chips, you know, then their eventual invasion of Russia, you know, all the things we have to worry about with China and we’ve got to worry about climate change. Like I hate to agree with Mitt Romney, but he’s got a great quote on this in here. He says, you know, you know, what was it? I missed it. Here, let me pull it up here. What is. [00:51:53][32.3]

Stuart Turley: [00:51:53] It? [00:51:53][0.0]

Michael Tanner: [00:51:54] Climate change is probably not our highest priority in dealing with China, But if we can get them to reduce their emissions, that would be a good thing. Senator Mitt Romney told POLITICO before the announcement. Like, that’s how I feel. [00:52:05][11.4]

Stuart Turley: [00:52:06] They’re putting an end to coal fired plants a week in. What are the get. [00:52:11][5.2]

Michael Tanner: [00:52:11] Go make coal great again. [00:52:13][1.3]

Stuart Turley: [00:52:13] Make coal great again. Hey, let’s have a little bit of fun. Boy, that almost sounded like Putin. Hey, hey, hey. Okay. Recent grid reforms might not be enough for Virginia to hit its clean energy targets, advocates say. You know, Michael, this is a common theme. And when you sit back and take a look at job creation, wind, solar capacity and the Q and then you take a look. Virginia is on track to meet short term carbon free targets laid out in the sweeping Clean Economy Act of 2020. It’s remarkable considering that 44,000 megawatts of wind in solar energy storage projects proposed across the state are still waiting in PJM CMS interconnection. Q Which is, Michael, what is that? That is a regulations from the Biden administration holding this up. Oops. Now, here’s another quote in here from Ammon. He says, Even though Virginia is in good shape for the immediate future, more proactive transmission planning would really help. Really? Yeah. Michael, you cannot put renewables on a grid without planning ahead. It does not work. You cannot do it in their 180%, 180% higher in order to get it done. [00:53:44][91.1]

Michael Tanner: [00:53:45] It’s dumb. It’s the barrel call calling the kettle black. This Ammon. Dana. Ammon. You know, you know, this is. There are policy analyst at the Natural Resources Defense Council who I’m pretty sure was involved in writing the Inflation Reduction Act. So the policy analysts didn’t think originally when they wrote the bill that maybe if we’re going to inject all of this money into the economy via clean energy, we should at least have the ability for somebody to approve the permit. They’re absolutely stupid. So this policy analyst should probably go work. It’s probably out of the state, out of the IEA, straight from oh, yeah, over here. And they’re getting hired by the Natural Resources Defense Council because clearly, if you had seen this coming, you would have addressed this in the Clean Economy Act. [00:54:31][46.3]

Stuart Turley: [00:54:32] Absolutely. The clearest. Further down here, it says 5200 megawatts of offshore wind. Wow. She is cheered by the progress, though so far. She’s faced many hurdles. Michael on 5200 megawatts. Let’s talk about what that means to the grid. 5200 megawatts may be the tag on that wind turbine for their capability as a generation. But for a grid balancing authority, being able to do that, that’s divide that by 180. You’re not going to be able to count on that wind in order to remain on. [00:55:12][40.7]

Michael Tanner: [00:55:12] All the time, and I use about 5.2 megawatts of electricity every month to power all my screens. So I don’t even buy it that much. I just think it’s hilarious. Everyone now is talking about permitting for permitting. We’re going to hear from regulations like you dummies. Think of that beforehand. Did the regulations right before you start dumping all of this money in or else it’s just a cash grab and nothing’s going to happen? [00:55:34][21.7]

Stuart Turley: [00:55:35] Personally, I think it’s a cash grab, but we’ll leave that alone. Federal judge orders the Biden administration to expand the Gulf of Mexico oil auction. I’m not sure who picked this picture, but it looks like a diaper down there. Biden is all grump down on her. So the Louisiana based judge concluded that the Interior Department probably moved wrongly at the 11th hour to yank roughly 6 million acres off the auction block. Well, ocean. The Department of the Interior, Department of Bureau of Ocean Energy Management. Boy, that sounds like a rat cave. What do you want to call that one? Bureaucracy. Yeah. [00:56:25][50.1]

Michael Tanner: [00:56:27] Yeah, it’s. Yeah, that’s good. [00:56:29][2.0]

Stuart Turley: [00:56:29] No, not. Not good. Rats get lost in there, and then they have to finally come out. Never mind. Okay. The decision is a win for Louisiana, which it argued it stood to lose as much as 2.2 million in royalties. Follow the money. Louisiana is not down, you know. [00:56:51][21.5]

Michael Tanner: [00:56:51] You. How else do these counties make money if you have oil in your county? The way I mean, there’s a reason why Midland, we could get into it for a year. We can. We could. We could go down this rabbit hole. But I think it’s it’s crazy that people don’t think of second order effects. Why do all of the people who live around oil and gas love oil and gas? I don’t know. Because of the amount of economic stability and uplift it brings to the region. I don’t know. Maybe, you know, it’s you know, it just if I was one of the people I well, most people in. [00:57:24][32.9]

Stuart Turley: [00:57:24] Need and Louisiana. [00:57:25][0.4]

Michael Tanner: [00:57:25] I’m like, I don’t know. They’re great places to live. [00:57:28][2.2]

Stuart Turley: [00:57:28] Now, Michael, you have to remember in Louisiana is also home to the Haynesville, the that oil field. I mean, the oil and gas field that we have Cheniere coming out of all of that natural gas going to Cheniere and then being exported out. You know how much money the U.S. government is making out of the Haynesville and Louisiana. [00:57:50][21.6]

Michael Tanner: [00:57:51] Now, in the grand scheme of things, $2.2 million is really not that much considering the amount of debt we’re in. The problem is this is. [00:57:59][8.2]

Stuart Turley: [00:58:00] Just. [00:58:00][0.0]

Michael Tanner: [00:58:00] The money is about the supply of oil. We’re already in a point where we are going to be under supply. What is the one few things that an American oil company can do that can move the needle realistically in terms of oil production offshore? There’s not much onshore that’s going to really move the needle. I mean, outside of ExxonMobil saying we’re going to double our Permian spending, you know, Chevron and Pioneer all coming out saying we’re all going to double our capital expenditure in the Permian. Okay. That maybe moves the needle. What does move the needle? You know, a $2 billion CapEx spend drilling 4 to 5 wells out in Louisiana, out in the offshore, that’s, you know, 100, 150,000 barrels a day. Now you start seeing the needle get moved and you start seeing that gap closing. So while, yes, $2.2 million, the counter argument is that’s not that much. And look, they’re saving the wells. We know where I stand on the whales, kill them all. But what I do stand for is if we’re if you’re actually talking about lowering oil prices, you’ve got to put more supply is basic economics. So I think this is a short term we looks good for the administration. They strike this down, but in the long run, it’s going to kill them. You know, this this judge overruled it. It’ll be interesting to see if it actually takes place. This auction is supposed to take place on the 27th. So on Wednesday, it’ll be interesting to see if that actually goes through. [00:59:24][83.8]

Stuart Turley: [00:59:24] Hey, let me do a little bit of a shout out. Even when you’re doing a you’re going to be killing the whales in the Gulf of Mexico. A It’s not a major thoroughfare for whales. B The sounding and all of the geo work that has to be done with oil and gas rigs is nothing like what has to be done in the wind and the offshore wind on the East Coast. And that’s a major contributor to the dead whales that you so aptly want to drop in and kill all the whales. And then I want to go ahead and drop them in the White House lawn. I think that would be great. [01:00:05][40.4]

Michael Tanner: [01:00:07] Oh, that’s a that’s a great way to leave it. [01:00:10][2.9]

Stuart Turley: [01:00:10] So let’s go to David Blackman. And again last week we talked about it. But he asserted himself last week, signaling the his predecessor, Boris Johnson, that last week proposing to delay and modify some of the worst of them in a major address to the nation. So he had to do that because they were about to leak. I talked to David about that. He proposed revisions to include delaying the ban on the sale of new diesel and gasoline cars from 2030 to 2035. So that’s only a five year slip. But yet did you hear the heads popping? POW, pow, pow, pow, pow. I mean, they did not like that. But when you take a look at EVs, their affordability and being able to get everything. There’s another article on energy news today that the used car EV market is just deteriorating. People can’t even afford the used EVs and the expense is between 5020 $2,000 to replace the batteries at the time they start becoming used. So I applaud the Prime Minister that the political motive, the motivation that he had for making the policy changes was to put some space between his Conservative party and the Socialist Britain, British Labor Party. As if on cue, the late Labor leaders quickly obliged him, announcing less than 24 hours after his speech. If elected to a majority in upcoming elections, their party would quickly to bat the tennis ball back over the net and restore Johnson’s unattainable goals. It’s pretty sad when the consumers are at the they’re going to get hit with the bat. And it’s not the political parties, it’s the consumers. Oil is added as high as at $150 a barrel unless the US government does more. Harold Ham I want to just give a brief outing or comment. I met Herold probably five years ago, maybe six years ago, and back then he was saying we are going to be down to 400 rigs. And we were like a thousand rigs, Michael. And everybody was sitting there kind of going, There’s no way. Sure enough. So The Man Herald knows what he’s talking about. So pay attention when he does talk. And his continental resources that he bought back is I think they’re providing 2 million barrels a day. They’re a player. So let’s talk about Harold’s crude output in the Permian will at one day peak, as it already has, and rival shale fields as the other Balkan region and North Dakota in the Eagle Ford in Texas. Continental chief executive Doug Lawler said in an interview with Bloomberg. Without exploration, you’re going to see 120 to 150, he said. I guarantee him it’s going to send a shock through the system. Now, how come? It’s because the ESG model is folding. Investors want their money back. They’re quit investing in things. We’re seeing the renewable. Nobody’s betting on wind farms now. They can’t know. [01:03:47][216.8]

Michael Tanner: [01:03:48] I’m with you. I just find it funny. The title herald him asking the US government to do more to control oil prices. Mad I would have not put that in my genie bottle of things I would have guessed would have happened two years ago. I’d see Harold Hamm at an event saying we need more government intervention to lower oil prices. It’s kind of it’s a weird twilight zone we’re living in. [01:04:10][22.5]

Stuart Turley: [01:04:11] Well, in his book I have right over here, he’s probably talking about in this Ed talent just telling by the articles. The author of the article, He definitely is. He’s referring to regulatory issues. So he he gets hammered by regulation. So I have a feeling that’s what he was targeting. [01:04:31][20.8]

Michael Tanner: [01:04:32] To say without more policies encouraging new drilling. You’re going to see more pressure. I agree with you. We should have more. I mean, I’m not against new policies. We should be you know, for every policy we enact, we should get rid of two older policies. Again, I’m just pointing out the fact that it is interesting. I didn’t see that on my bingo card when I walked in the game beginning of the year. Harold Hamm screaming for government regulation. [01:04:58][25.8]

Stuart Turley: [01:04:59] I think there’s a difference between policy and regulations. He is saying policy which says drill, baby, drill. Regulatory issues say avoid the salamander. [01:05:10][11.1]

Michael Tanner: [01:05:11] He he appointed. There’s a big old CEO as their new CEO, Doug Lawler. So we know exactly where this train’s headed. [01:05:17][6.2]

Stuart Turley: [01:05:18] Oops. How the transition push contributed to higher oil prices. This one just kind of writes itself. There’s three bullet points that the author brings up. And fossil fuel policies in the U.S. and Europe have led to lower investments and new project. Wow. We saw that one coming, Michael. $4 trillion is what we need to invest just to meet the decline curves. Oh, okay. Exxon Mobil CEO would say if we don’t maintain some level of investment in the industry, you can end up running short of supply. All right. Only lowering global energy demand may lead to a situation in which prices will remain under control. What does that mean? [01:06:06][48.8]

Michael Tanner: [01:06:07] I think what you’re what you’re seeing is I mean, that’s a fancy word of saying stop driving. Do that’s a fancy way of saying stay inside. Turn off your AC, shut down your electricity at night. I mean, it’s that coded language that they’re throwing in. There is the last a couple days ago, Bloomberg or somebody had an article about why bugs have more protein than you think. I mean, they’re trying to goad us in order to to use less energy, to eat less meat and ultimately die earlier because we’re costing us so much money. [01:06:39][31.8]

Stuart Turley: [01:06:39] Well, I want to throw this ugly squirrel instead of an ugly baby. I want to make sure I don’t upset any mothers. So unless your kid looks like a squirrel. Okay, so let’s throw this ugly squirrel into this mix. You know, Michael, when we take a look at this, Reuters reported this week citing Rystad dad, we love that over there. Rystad investment in oil and gas on a global scale would only grow moderately this year to 579 billion. That compared to an annual investment rate of 521 between 2015 and 2022. After the 2014, which stood at 887 billion. Now, if we need 4 trillion in investment, all you can see is a very big bull sitting around the corner for the oil and gas market. [01:07:34][55.2]

Michael Tanner: [01:07:35] Yeah, and I thought this was interesting. The secretary general of the African Petroleum Producers organization, Omar Farouk Ibrahim. This is still he didn’t pull any punches. We are being intimidated into running away from fossil fuel investment. [01:07:50][14.8]

Stuart Turley: [01:07:51] Mm hmm. Right. Well, here’s the thing. We have the ESG movement that is falling. We had Lego. Michael. We had Greg. Well, that had gone to oil free Lego bricks. They just came out and said that they’re going back to oil based products because the ESG movement is failing. I mean, even if you had toy manufacturers realizing that they can’t use straw to build Legos, you’re realizing that you’re going to have to make a change. So you’re going to have let’s go to the EPA’s illegal power play. Michael, can you believe the audacity of the EPA to come up with an illegal power supply? [01:08:36][45.0]

Michael Tanner: [01:08:36] Michael I didn’t see it coming. [01:08:38][1.6]

Stuart Turley: [01:08:38] I didn’t see that one coming. The US Supreme Court ruling in West Virginia versus EPA last year. Boy, everybody was just shouting around on that bad dog. A historic defeat for the EPA ruled that the 2015 Clean Power Plan by President Obama’s. That was his big time climate agenda. Do you remember that was unconstitutional and dramatically limited the EPA’s power to regulate? All right. The article is fantastic, Michael. It says you could either have two outcomes. You could either take its lumps and then go work on real regulatory issues, or it could throw everything into the boat and try to go for one last attempt to hit a home run with no bet. What do you think they’re going to do? [01:09:27][48.6]

Michael Tanner: [01:09:27] They’re going to take the home run and try to try to force their way down our throat. [01:09:31][3.7]

Stuart Turley: [01:09:31] Oh, yeah. And so what they’re going to try to do is put these through before next summer so that they can at least be in the court system as a political win for Mr. Biden under the proposed rule. This is just, Michael, what they’re saying is it’s called a new source performance standard in NSP s and they’re talking about new performance standards for the grid, natural gas and coal for retrofitting. They didn’t even make any rules because they said we’re not building any more, so we’re not going to need them at. They’re not giving the power companies any directions a larger new modified combined natural gas plants. 30% of the nation’s electricity would be required achieve close to zero carbon emissions by either implementing carbon capture and storage, which is C. S, and not the utilization and B utilization in the U.S. if they can store and sell it. [01:10:40][69.2]

Michael Tanner: [01:10:41] But you’ve got to drop the utilization because trust me, we don’t know what we don’t know how to utilize it yet. [01:10:45][3.8]

Stuart Turley: [01:10:45] There’s a lot of Diet Cokes that people are going to have to drink in order to get that. And so let’s see, what was it? O capture 90% of the carbon emissions by 2035, all by switching from natural gas to 98% green hydrogen by 2030. [01:11:04][18.8]

Michael Tanner: [01:11:05] A green hydrogen even ready. [01:11:07][1.8]

Stuart Turley: [01:11:07] Though it probably won’t be ready until 2040. I mean. Holy smoke, man. No, this is like somebody had a bad dream. They woke up and said, Hey, let’s get electric busses. We’ll cover that here in a sec. It is absolutely ludicrous. I mean, okay, I love Oklahoma and I love OSU and I love Oklahoma University, but this is so dumb. Even nobody from Oklahoma University could have had anything to do with this. This is so dumb. It’s even below them. [01:11:43][35.8]

Michael Tanner: [01:11:44] Below. See? You know it’s stupid. Again, you said it all in the beginning. It’s all for political winds. They don’t really care if it passes. They just need something for President Biden to campaign on. And unfortunately, it it it comes at the expense of forcing a lot of extra. Yeah, a lot of extra stuff going on that doesn’t need to happen in terms of, you know, all of this new looking at regulation get everybody stirred up for ultimately nothing’s going to happen. Super annoying. [01:12:12][28.0]

Stuart Turley: [01:12:12] Oh, it’s just pathetic. And what’s happening, Michael, is we’re seeing around the world this push, this gigantic it started with the prime minister of England and then it got into a shell. This one shell is now under the pressure because they’re now saying, hey, wait a minute, since the prime minister of England said, hey, we had to push it out five more years, all of a sudden, all the big boys, big oil and every energy, total energy is already said it. And Shell while Swan, that’s a funny name, has already come under pressure. In an open letter posted this month. Let’s see where is it? Quote, For a long time, this guy was Thomas Brostrom. After less than two years, he was out. He quit. He said, quote, For a long time, it has been Shell’s ambition to be a leader in the energy transition. It’s the reason we work here. The recent announcements at and after the capital markets that they deeply concern us and we can only hope the optics of the SAM the announcements are deceiving and that Shell continues its path as a leader in the energy transition, you know, how can they pay for the energy transition if there’s no profits? The taxpayers are now not bidding on offshore wind and there’s a whole money paradigm shift changing right now in in the renewables. So I thought this was pretty interesting when we you and I talked to believe two weeks ago Michael Shell, BP and all these other started following the US big oil companies and backing away from renewables. I thought this is a pretty good article. [01:14:03][110.9]

Michael Tanner: [01:14:04] Yeah, and I mean, one thing it’s it’s, it’s nice to see a company be able to take criticism from internally and turn it into a positive. And I love the quote from from the CEO. For an organization with the crux of the energy transition, there are no easy answers and no shortages of dilemmas or challenges. Ailes’s spokesperson come out said, We appreciate our staff that are engaged in a passion for the energy transition. And so then a bunch of Google he got after that. But I love that they’re standing behind this guy and these two people are not completely throwing them under the bus because he’s right. There is some you know, something’s got to go here if you’re going to lean more, You know, they say Shell keeps saying they’re going to lean more into operational efficiency. Well, you know what that means. Oil and gas projects. [01:14:46][42.0]

Stuart Turley: [01:14:47] Grow more wells. [01:14:47][0.5]

Michael Tanner: [01:14:48] Exactly right. Get more oil so we know exactly what that stands for. [01:14:48][0.0][4386.0]

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