Daily Energy Standup Episode #297 – EV Lane Fees, Turbine Explosions, and Financial Outlook

Daily Standup Top Stories

You’ll Have to Pay to Use the Highway. Blame EVs.

January 29, 2024 Stu Turley

California and Big Oil are splitting after century-long affair

January 29, 2024 Mariel Alumit

Michael Tanner: [00:00:14] What’s going on? Everybody? Welcome in to the Tuesday, January 30th, 2024 edition of the Daily Energy News Beat standup. Here are today’s top headlines. First up, you’ll have to pay to use the highway lane EV. Next up, wind turbine explodes after bursting into flames at the quiet Welsh farm, showering broken parts on the ground. We love a good little stew addition to a title there at the end. Next up over to our favorite state. California and Big Oil are splitting up after a century long affair. Next up, high electricity prices. Have Europe facing deindustrialization. Don’t let it happen here. And then finally European energy cancels wind project on offshore. Dad, Mark another nail in the coffin. For wind. And then stew will then quickly toss it over to me. I will cover what happened in the oil and gas markets today, mainly. We did see prices drop, about a percent and a half, due to a couple reasons. And we’re going to slowly start seeing earnings drop out. So we will cover all that and a bag of chips, guys. Stu, what do you got for us today? [00:01:22][68.6]

Stuart Turley: [00:01:23] Okay, let’s get ready to rumble here. Let’s start with this one. This is from Harvey, our, blaze, and he is cool. Get out of Bloomberg. You’ll have to pay to use the highway. Blame EV’s. This one is, there’s a, subheading here. If government succeed with their green plans, the fuel tax revenue they rely on will disappear. It’s time to devise an alternative system. This article, we are just absolutely does a great job going through. We’re going to go through some of the numbers here, but, insurance companies are going and no EV for you three, four times. And then, you know, the well soup Nazi of EVs now, the insurance companies. Yeah. So, and also the weight of the EVs is just unbelievable. And then they wave where through tires more. So here we go. The last five European economies, earned more than 150 billion. That’s 163 US from fuel levies, or about 2% of their total tax collection. I need to go look up, Michael. How much the U.S make in tech that off of the gas. And then you had Nikki Haley saying the other day, I will never raise the gas tax. And then she said the other day I’m going to tax gas. So they can get addicted to that, that tax thing. So how do you replace it? I don’t know, you gotta pay for the road somehow. [00:03:03][99.7]

Michael Tanner: [00:03:04] Yeah. No, you’re going to have to do it. I think it’s it’s super interesting. The the real is the real answer then is I. And this is what how the year brings up. Do you get a discount too. And what happens if you have different guesses between different cars. He brings that up where it’s like now will. The question is is the taxation based upon that? A there’s so many questions based on this. [00:03:26][22.0]

Stuart Turley: [00:03:26] And you charge, by the mile or do you charge, by the use of the road? Do you pay as you drive? [00:03:34][7.5]

Michael Tanner: [00:03:36] It’s all it’s one of the things that Uber struggled with. Remember when Uber went out? Some people might not remember this. I happened to do that because, you know, lo and behold, I was actually an Uber intern. I wasn’t an Uber driver. I actually interned at Uber one summer. They IPO and it got an interesting little look, but just they used to charge by the minute. But. Right. What happens was if you’re sitting in traffic, you’re racking up tolls and not easy. So what did they do in order to lower prices to get more people on the app, they switch to a mileage model, which lowers the price for me, the consumer. But who does it hurt? The driver. It hurts all this other stuff. If you ship that system to us and EVs and cars, you’re the one that gets, may take the drive through. [00:04:21][44.9]

Stuart Turley: [00:04:21] And then, I have here also has in here a different, line. And that is taxing electricity is another option. So if you put one of them bad, chargers in there, you’re going to be taxed a bunch. The other one, a different article I read on Sunday, said that the equivalent for charging your, charging your car $14 a gallon. So. Oops. [00:04:50][29.4]

Michael Tanner: [00:04:53] Oops. Okay. All right, let’s move to this wind farm. What’s next? [00:04:56][2.8]

Stuart Turley: [00:04:57] Miss Producer, can you bring this, picture up here? I really think the wind turbine explodes after bursting into flames on quiet Welsh farm, showering broken parts. This looks like my brother and I on. The farm when we were having potato gun fights, and we would put Emma in the, tire pumps and just blow each other up. Larry the cable guy learned from us because we bring each other up all the time. So let’s go into this, this portal thing. Nick and his wife, 61, 51, were stunned when they saw burning parts of the turbine farm more than 100ft to the ground. They’re not very friendly when they start blowing up. [00:05:41][44.1]

Michael Tanner: [00:05:41] No. And, you know, I mean, this unfortunately, is, you know, one of the it’s it there’s downsides. Everything. But having exploding, exploding engines on a farm is not good. And and I think the other issue is this is obviously catastrophic failure for the wind farm. So the question is you have to decommission the wind farm. Do you what actually then happens once these things, you know, once this thing explodes, really. Like what’s next. [00:06:12][30.6]

Stuart Turley: [00:06:13] You got to take the ones that are, er, repairable after so many years, which is anywhere between 3 and 8 years. And it’s in Texas. It’s over $480,000 just to take one down. Doesn’t include transportation, doesn’t include getting rid of stuff. That is just the cement problem. So here’s the farmers here. And the biggest problem that David Blackmon and Irina and, Tammy brought up on the podcast on Monday for the the energy realities is the fact that, you have, so many wind farms do not have the reclamation at the end in the price. So these monoliths to, the Green New Deal, nobody is going to pull them out. So, yeah. [00:07:06][53.4]

Michael Tanner: [00:07:07] No. And, it’s. [00:07:08][1.2]

Stuart Turley: [00:07:08] That’s gotten very high electricity prices have you’re facing deindustrialization. Don’t let it happen here. I didn’t write that one, Michael. I take credit for it. That’s what caught my eye on the article. So, after years of misguided energy policies, Europe’s electricity has become so expensive, the trade unions have started warning of the threat of deindustrialization. They’re a little late. And Germany has gotten rid of their oldest steel mills. They’ve gotten rid of, BASF, closed their fertilizer plant four months ago. It’s gone to China. Volkswagen. All of this is because of according to the European Commission, the industrial output in the euro area plummeted 5.8% in the 12 months preceding November 23rd. Capital goods production was down 8.7%, which is average more than a 3% GDP in wiped down in a single year by soaring imports. They it’s even worse. This this article in here is just, like, abysmal that this is happening to California right now. And New York people are bailing out of there like you wouldn’t believe. [00:08:31][82.5]

Michael Tanner: [00:08:32] Yeah. No, I mean, I think what this tells me and what this I think this shows, is that if we allow this to happen here in America, it’s only going to become more expensive. You think it’s expensive in Europe, guys, it’s going to be more expensive here due to the fact that a lot of the raw materials that we need for this come, you know, have to be shipped across seas. You know, we don’t have access to a lot of these raw minerals, you know, I mean, we know Europe shot themselves in the foot by blowing up, the Nord Stream. Excuse me. How Russia did that? Sorry. I don’t mean to me. [00:09:05][33.7]

Stuart Turley: [00:09:06] I got my own conspiracy theory on that. On I. [00:09:09][3.1]

Michael Tanner: [00:09:09] And I say that only as a joke in that we can see what happened again. The European Commission industrial output in the Europe area plummeted 5.8% in the 12 months ending November 2023. Capital goods production was down 8.7. That problem’s only going to be exacerbated here in America if we allow this to keep going. [00:09:29][19.4]

Stuart Turley: [00:09:29] Oh, absolutely. And Putin has increased his Russia’s doing actually quite well. So hey, let’s go to the last one here. European Energy Channel’s wind project. oh. I also, I skipped over the California and Big oil or splitting, but, so I’ll go back to that here and say European energy channels, wind project offshore cancel. So here we are. Let’s have a moment of silence for this wind project. Off of the coast. Okay. Thank you. They they can’t afford it. Here, where it is. We’ve tried to get the project to fly, among other things, and coexistence with nature, but we have to, note that the authorities and politicians have not much interest in this. So they’re only when they get their kick back as a politician, they don’t care if it actually gets installed. [00:10:24][54.9]

Michael Tanner: [00:10:27] They don’t. [00:10:27][0.2]

Stuart Turley: [00:10:27] Care. Listen to this one. Since our feasibility study permit has a height limit of 200m, and today’s offshore wind turbines have become 256m. It goes without saying. The project has no future. So I didn’t see how much they’ve already spent in it. But it’s a bunch. [00:10:46][18.3]

Michael Tanner: [00:10:47] Yeah, it’s I mean, it’s it’s unfortunate because if anything, offshore wind has held up the best economically relative to all of the others. And if we can’t even get a new project installed, what does that tell you about the long term. [00:11:02][14.9]

Stuart Turley: [00:11:03] Outlook of this stuff? The one that we talked about a little while ago was the one off the Great Lakes, that had for, was a 52, million, 82 million, 52 million for, for wind turbines and 27 of that, was already spent on permitting. And they never got any installed. Let’s go to California real quick. Big oil, California and Big Oil are splitting after their century long affair. I didn’t do that one either, but, let’s go here. If, Mr. Producer, if you can bring it in. California sees a four decade decline in crude production. You go to 1000 barrels per day, 1. [00:11:53][50.1]

Michael Tanner: [00:11:54] Million barrels a day. [00:11:54][0.8]

Stuart Turley: [00:11:55] 1.1 million barrels per day. And they have gone, over half. They’re now down under, 400, thousand barrels per day. Now for. [00:12:07][12.1]

Michael Tanner: [00:12:08] Hail. That’s all this time, California decreasing their crude oil production. You can’t read units. Yeah. But no. California has become as outright gone to war with the oil and gas business. And we saw this Chevron has come out written down their California assets. They did that last quarter, billions of dollars. They just wrote off because they realize they can’t do anything in the state they’ve gone. And I mean, they love this. If you showed this chart to Gavin Newsom, he’d love it. [00:12:39][30.6]

Stuart Turley: [00:12:39] Oh yeah. And here’s my prediction. And that is there are the I have talked to folks and Gavin Newsom is planning on buying his diesel and his gasoline from China. So, you know, I’m not ready to put that out there that I have it documented. But, hey, that’s a heck of a rumor, man. I’ll tell you what. So you have all. You think you’re getting $7 gas right now in in California tracks shipping in across the oceans, in China and prisons, even though he’s got cancer. You know, he’s going to be all happy. He’s also going to vote in 3 or 4 elections here. So let’s go to the I think I’ve been here. Did you. [00:13:21][42.6]

Michael Tanner: [00:13:22] Wait? Hey now though, like here in president, is the voting in the in the US election. But before we kick over and cover finance guys, we’ll go ahead and pay the bills here. The announced the news and analysis quote unquote, that you’ve just heard, is brought to you again by the world’s greatest website, energynewsbeat.com The best place for all of your energy and oil and gas news. Doing the team do a tremendous job keeping this website up to speed. Everything you need to know to be the tip of the spear when it comes to the energy business. You can hit the description below all the links to the articles. You can also check and email the show questions@EnergyNewsbeat.com. You can see that description as always for the timestamps dashboard.Energynewsbeat.com. [00:14:01][39.0]

[00:14:04] Let’s go ahead and flip over to finance. We did the S&P 500 up about three quarters of a percentage point Nasdaq up about 1.1 percentage point. 30 year yields fall about a quarter of a percentage point ten year yields fairly flat. same with that dollar index. We did see crude oil continue to tumble a little bit unfortunately after after what was a really nice Friday pop. You know, mainly the as again the the demand side of the equation specifically, what’s going on in China has has kind of flip flop. We heard on Friday that positive economic news and and when I mean positive hey they’re just going to do more stimulus. So maybe that’s not positive news but just interesting news from the fact that there’s going to be more money specifically in that Chinese economy. Well, now what we determined, what we found out today was that their property crisis, as we talked about last year, they have, you know, they’re going through their own mini version of, of 2008, but it’s really with property developers versus necessarily people getting into homes they can’t afford. The problem is Evergrande, the largest real estate holding company in, China, was ordered to liquidate certain assets today, you know. Yeah. Not good is not good. When a Hong Kong courts court ordered the liquidation of China, or of Evergrande, they, you know, they’re they’re called China Evergrande Group. They trade on the Hong Kong Stock Exchange, you know. Now what does this mean. You know it’s just a Hong Kong trading market. So it’s not necessarily this isn’t the Chinese government stepping in. [00:15:35][90.2]

Stuart Turley: [00:15:35] Hundred billion in debt. [00:15:36][1.6]

Michael Tanner: [00:15:38] It’s it’s something. Absolutely. It was crazy like. [00:15:41][3.0]

Stuart Turley: [00:15:41] Yeah bad management man. [00:15:43][1.8]

Michael Tanner: [00:15:44] Yeah. Really bad management bad. You know we always say good management good numbers bad management bad bad numbers. Summary. Most people are, fairly familiar with that. You know, we did see, you know, U.S. troops were also attacked near Jordan today, which why they’re there is another question for for all of us, but that that’s going to continue to, to teeter that geopolitical tension. But I think today really that that Evergrande sort of takes the case on that, you know really besides that to do as a as, as, as as we go look at what what happened today we are going to start seeing some earnings drop ring energy. They didn’t announce their their earnings today. mainly focused on on new production along with debt reduction. They did offer some guidance. And you. [00:16:30][46.6]

Stuart Turley: [00:16:30] Know this if they’re still on free cash flow right now. [00:16:33][2.4]

Michael Tanner: [00:16:34] Go. Yeah. Well, just to give you guys an idea, Ring Energy did about 19, thousand barrels of oil per day. About 70% of that or exceed had to BOE per day. 70% of that is oil. You know, they they went ahead and have basically added in three months of sales from their recent founders oil and gas acquisition, which was, which was awesome. And they did go ahead and reduce their debt by a whole whopping 3 million in the fourth quarter of 2023. While funding the final 11.9 final payment in December for the founders acquisition. So nothing like paying down a little bit of debt, but then taking more out to go pay down in acquisition, guidance. For for. 2024 is going to be about 18,085. 18,500 boe. About 70% oil. You know, they’re they’re they’re saying that mainly because there’s about a 2000 boe drop for about two days. For about ten days, which is was associated with that severe weather that we saw. So I think that’s the other interesting thing to point out. We’re going to have a little bit of, dip in production for a lot of these companies, mainly due to the fact that it’s been absolutely, that cold streak came and absolutely shut them down. Besides, that’s due not to terribly. Not too terribly. I’m crazy for them. They’re running about, a 37 to 42 million a quarter, mainly based on a two rig drilling program. One horizontal, one vertical. And they’re hoping to do 4 to 5 horizontals and 4 to 6 verticals within that first quarter. So a lot going on for ring. We also saw and we’re going to be seeing a lot of companies coming up. We got in. Everybody’s announcing it’s really that end of the, end of the end of February when we’re going to see the majority of all this stuff drop. So it’s just it’s going to be crazy. So, what else you got? That’s all I’ve got. [00:18:16][102.5]

Stuart Turley: [00:18:17] Oh, I heard Biden is, possibly going to be telling the Congress that we have boots on the ground over there. So, Matt, what a mess. [00:18:29][11.7]

Michael Tanner: [00:18:30] I also heard he had 187 IQ. Is that any rumors to that? I heard, Cree John Pierre, our favorite. Press secretary, when asked today about Biden’s mental fitness, said he has 178 IQ. [00:18:45][15.5]

Stuart Turley: [00:18:46] I have no idea how he could have that still, because when he look who I am, who I screen, every translated that is, where’s my diaper? [00:18:58][11.9]

Michael Tanner: [00:19:01] Wow. I’d like some ice cream. [00:19:02][1.3]

Stuart Turley: [00:19:03] Oh, I would too. I this is. [00:19:05][1.6]

Michael Tanner: [00:19:05] Let’s discuss all about it. It’s not the only thing we can chew right now. But that’s all right. Appreciate everybody for checking us out. We got it. [00:19:12][7.5]

Stuart Turley: [00:19:13] That means. See you guys tomorrow. [00:19:14][1.3]

Michael Tanner: [00:19:18] I guess there’s no better way to leave. That guy’s absolutely packed week. Thanks for checking us out here on this gorgeous. Tuesday, January 30th, 2024. Here Stuart Turley and Michael Tanner, We’ll see you tomorrow, folks. [00:19:18][0.0][1105.6]

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