Nuclear Dilemmas?

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Big Tech’s Latest Obsession Is Finding Enough Energy

March 24, 2024 Stu Turley

The Energy Transition in Retreat: Arizona Moves to Repeal Its Renewable Mandate

March 24, 2024 Stu Turley

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Michael Tanner: [00:00:14] What’s going on, everybody? Welcome into the Monday, March 25th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up, Big Tech’s latest obsession is finding enough energy. Nice little AI theme to start us off. Next up from our favorite brand David Blackmon Center Sunday’s energy absurdity quote when the best laid climate alarm plans go awry. Love this story and we love ourselves some David Blackmon. Next up, Glencore abandons coal production cap as another climate pledge fails. Gotta love it over there in Australia. Next up from the energy bad boys. We love them. Check out their Substack. This is an opinion piece from the energy transition in retreat. Arizona moves to repeal its renewable mandate. And following along that threat, wood pellet producer and Viva files for bankruptcy and plans to restructure. So Stu will cover all that, then toss it over to me. I will quickly cover what’s going on in the oil and gas markets. We will quickly touch on rig count some interesting nuggets in there. Next up, Risposte capital introduces a statement in support of Cambridge’s proposal. To go ahead and combine Silver Bow with Cambridge, Texas Gas. So there’s a little gang up going on. There’s some good quotes in this article, stu. And then finally Blackrock, pushes back after Texas withdraws its $8.5 billion investment. I think BlackRock’s painted himself into a corner here. So that’s why I wanted to cover this here. The nice statement on Friday we will cover all that and a bag of chips guys. As always, I am Michael Tanner, joined by Stuart Turley. Let’s just go ahead and kick this off. Where do you want to begin? [00:01:56][101.6]

Stuart Turley: [00:01:57] Hey, let’s start with our buddy over here with let’s go with I’ll take big tech latest obsession. Finding enough energy, behind door number two. The AI boom is an insatiable appetite for electricity. And this is actually causing one of the biggest problems in the world. Energy hypocrisy. Let’s go green. No, we need everything we can get. Oh, let’s shoot down nuclear. You’re seeing you’re already getting a sense for what’s going on in our energy thread today in the. ceraweek. We’re sitting here, Bill Vass, vice president of engineering at Amazon Web Services, said the world adds a new data center every three days. Holy cow, Batman, we’re talking some serious a heat generation. People don’t realize how much cooling data centers have to have. We’re going to build 100GW of new recyclables in a few years. You’re kind of stuck where it says we’re not going to build, 100GW of new ring out renewables. Dominion energy, in, Richmond is really trying to pick up energy demand. They are, they’ve got data centers coming out the wazoo up there. And they’ve got some serious problems. So let’s take a look. We’re putting the accelerator down on developing these clean resources. They are missing the boat. Honestly, Nuclear’s, the only way you’re going to be able to solve a I’s demand hunger, necessity. And second only to that is natural gas. That’s all you’re hearing. Those are your two choices. The others cannot be attached to the grid fast enough. Natural gas, first, nuclear, second, wind and solar are incapable physically. In order to get this done, you gotta love it. [00:04:02][125.2]

Michael Tanner: [00:04:03] It really highlights it. Very interesting conundrum that a lot of these big tech companies are coming in. Do they want to transition so much to green? But in order to power these massive data centers that can run these huge AI models. But guess what? You’re going to need power at the cheapest possible cost. Even more then just I mean, you think the data centers right now, the current today’s data centers need low cost energy. You’re only going to need more as these models get bigger and bigger and bigger and bigger. [00:04:32][29.3]

Stuart Turley: [00:04:33] And three weeks ago, Michael, you and I talked on the podcast about Amazon Web Services, bought a nuclear reactor from a university. That’s how you’re going to get data centers. You’re gonna support your, you know, instead of that, movie support your local gun, Sheriff, Sheriff, you’re going to have to go support your local universities, nuclear. And by they’re cutting back in reactor. It’s already sitting there. It’s the only way you’re going to be able to do that. [00:05:02][29.7]

Michael Tanner: [00:05:03] Yeah, it’s it’s it’s a little bit crazy. And I think that people are going to start realizing that very quickly. And you’re going to see even a quicker shift to the. Natural gas is clean crude, it’s going to become very apparent that that’s where we need to spend all of our time and spend time reducing methane. [00:05:21][18.3]

Stuart Turley: [00:05:22] Okay, one last thing. This, I’m going to go to the next article here. And just a real quick Kathryn Blunt from the Wall Street Journal wrote this story. I want to give a shout out to Kathryn. I interviewed her almost a year ago or more, and, it was pretty cool. I don’t understand, how that just happened. My camera. I knew that I was talking about Kathryn Blunt from the For our Podcast listeners. [00:05:47][24.5]

Michael Tanner: [00:05:47] It’s hey, I. [00:05:48][0.4]

Stuart Turley: [00:05:48] It’s I it just zoomed in on my nose now that we were talking about it. All right. Let’s go to the next one here. Sunday’s energy absurdity when the best laid climate plans go awry. We’re talking about Indian Point nuclear station in New York, New York. You can’t buy entertainment from three places in the world, Michael. Germany, New York and California, my three favorite places. And Michael. Guess who? What are three top places in the world that listen to our show at. [00:06:20][32.2]

Michael Tanner: [00:06:22] California, New York, New. [00:06:23][1.5]

Stuart Turley: [00:06:23] York and Germany? Unbelievably. I’m serious. I’m sitting there watching her screen half the time. This article is from David Blackman’s Energy Absurdities. New York official finally retired the Indian, Point nuclear plant, the last nuclear plant facility in state 2021. The climate. Our alarmists cheered and went yay! Here’s what’s funny. New York’s deteriorating and unloved Indian Point nuclear facility finally shut down, from a client climate change point of view. It’s a real step backwards and made it harder for New York City to decarbonize its electric, supply than it could have been. It is a cautionary tale that has left New York in a really big, challenging spot. Their CO2 emissions has gone up in New York City. Why didn’t I zoom in on my forehead then? Because I’m making a big point. New York’s net zero goals are going away. [00:07:30][67.1]

Michael Tanner: [00:07:32] Well, it’s it’s anyway the fact that we’re racing to replace nuclear with unreliable renewables, especially in a state like New York. Massive cloud cover, hard to have onshore wind. So a lot of it’s got to be offshore. But, you know, it’s a huge harbor. How are you to have, you know, you have these boats navigating around these massive wind farms. It’s it truly is an energy in, in in energy absurdity. And I love what he says. It’s a cautionary tale. And all those poor New Yorkers have been left in a really challenging spot, consisting of, well, better stability and reliably on the power grid. Thanks to the 24 over seven natural gas generation that has been chosen by them. That’s replacing the stable, reliable power they’re receiving from Indian Point. How could possibly they have? And, you know, he goes on to say, how could they possibly have a change of heart? Could it be they decided maybe it’s a good thing to have reliable power? I hope so, I hope there’s actually some people thinking over there. [00:08:25][52.3]

Stuart Turley: [00:08:25] Well, you know, it’s not too late, you know, to have a total funeral for Indian Point. And we saw this on several others. I believe it was Pennsylvania. We talked about this past month that the decommissioning company that bought the, the nuclear plant there in Pennsylvania has got the license now to re fire it up. Nuclear plants can be, brought back online. So it’s not dead yet. I have a feeling it will come back online. Hey, let’s go to the next one there. Michael. Glencore abandons coal production cap as another climate pledge fails. Can you guess what energy thread we’re having this today? Hong Kong. It’s a habit we love. Thermo King coal producer Glencore has withdrawn a promise of annual coal production below 150 million tonnes. Backpedaling from a climate pledge it made five years ago, a coal production cap made in 2019 to run down its mines into retirement rather than to sell them. They can’t do it. They’ve gotta keep going because of demand. You have to have thermal coal or what’s called coking coal in order to produce steel in order to produce cement. There are new technologies, and I’m really excited about these new technology. It means the energy transition may happen in 100 years or so, but it’s coming. Let’s get there, though. [00:09:58][93.1]

Michael Tanner: [00:09:59] I love this quote that comes out of, comes out of Glencore. Glencore is one of the largest commodity traders in the world. They’ve really been at the forefront of basically vertically integrating their stack in terms of from, you know, they, you know, things like. Glencore, Trafigura and Vitol. They’re commodities traders. But what all of these commodities traders, aka the intermediaries between the raw product and kind of the refined version of that and all of those substitutes in between. They’ve pushed more and more into the production phase. We know Vito has a decent amount of, oil and gas assets that they physically own. Glencore has really pushed hard into the metals and mining business, a.k.a. coal. It’s one of their biggest, verticals right now. About two years ago, they went ahead and acquired Canadians Teck Resources, which is, as you mentioned, which is huge coking coal. That was about a $10.5 billion deal. The point of all this is, is if they can ramp up a little bit more coal production, their CEO, Gary Nagle, says they’re going to be able to spin it out. And actually it’s going to be a new standalone coal company. We got to see what the reception. I’m sure BlackRock’s all in on investing. But we’ll come to that later. I love this interesting quote. We consider the usefulness of also maintaining the coal production cap that was introduced in 2019. We determined that the previously stated coal production gap may now only be served to cause confusion. We have therefore decided to remove the coal production cap, anticipating that our production of thermal coal should continue to decrease over time. What? That’s crease. But we don’t need the cap anymore. But. So I think it is. Again, it has a lot to do with the acquisition of this Canadian coal company, which had some assets in Australia. But it really says it’s attempting to phase out coal over time, which is interesting. They their goal is by 2020 or 2040. And there’s an interesting, you know, they’re fighting a little bit of an activist investor campaign, ironically, from the Sydney investor Tribeca, who wants to have them keep their whole division, which is ironically interesting. Glencore is expected to give its shareholders, voting capacity on this potential coal spin out, which is absolutely unbelievable. [00:12:12][132.9]

Stuart Turley: [00:12:13] And. [00:12:13][0.0]

Michael Tanner: [00:12:14] Activist investors in Australia are coming in to keep. Oh, yes. [00:12:17][3.4]

Stuart Turley: [00:12:18] And I think this is really funny because the article at the bottom of the article, Michael, it says that, we talk about the UK Prime Minister says they’re delaying the EV rollout and then it talks about in Ceraweek, the phase out of carbon intensive cars was slowed down. So we have two slowdowns there. And then BP and shell have also, said they’re slowing down. We should abandon the phase, the fantasy of phasing out oil and gas. So there’s now number three in the same article. So you actually have four, that are being stopped. And, it’s pretty amazing little article here. And it feeds right on into the next one. Michael. [00:13:03][45.2]

Michael Tanner: [00:13:04] Yep. Let’s go on. [00:13:05][0.8]

Stuart Turley: [00:13:06] Hey, I love me some energy. Bad boys. I’ll tell you. Mitch, rolling and Isaac. Or shout out to these two young men. Energy transition in retreat. Arizona moves to repeal its renewable mandate. And I tell you what, Mister producer, if you can slide in this first picture of Arizona and you see the Thelma and Louise wagon rolling off its, mister, solar panel and Mister Windmill going off the cliff like Thelma and Louise. I love their their sense of humor. Arizona moves to repeal its renewable mandate. The the whole costs were coming around. Quote I welcome utility programs that actually reduce energy consumption and meet avoided cost, but not under the threat of commission mandates that can easily, easily be hijacked by financially interested stakeholders. Who does that sound like to you? Does his name really, sound like lurch? [00:14:10][64.7]

Michael Tanner: [00:14:14] In Heinz 1978 King single. Yikes yikes. [00:14:20][6.2]

Stuart Turley: [00:14:21] Yikes. So anyway, I worry there’s another great quote in here. She says that, solar and or special groups are unhappy. Yeah. I think I worry about being the only state in the country to repeal what is already an extremely modest RFPs. Sends a wrong signal to the industry. Take your business and your jobs and your dollars somewhere else. [00:14:46][24.7]

Michael Tanner: [00:14:48] It’s it’s cool. Yeah, I love that. I love these guys. I love these guys. [00:14:51][2.9]

Stuart Turley: [00:14:52] Aren’t they fun? I just love and they they they put fun and data out there. And Michael, you and I, and, Isaac and, Matt, you’re going to have our own special live energy bad boys. And we’re going to go bad boys against the the the bad news beat boys. We’re going to have some kind of rumble. Interesting. [00:15:11][19.0]

Michael Tanner: [00:15:12] I love that picture. Mister. To see if you can throw the one up with Yoda. The grift is strong with this one. That’s just absolutely it’s absolutely unbelievable. There’s one more that threads right into this. This wood pellet producer. [00:15:24][11.9]

Stuart Turley: [00:15:25] Yeah. It is one more, wood pellet producer in in Vivier filed for bankruptcy and plans for restructure. Michael, just a real quick note on this one. Maryland based in vivir. There’s nothing ecologically good about a company that takes wood pellets from U.S. forests. Rare U.S. for forests, chops them up into wood pellets, and then ships them around the world for people to burn. There is nothing ESG about it. Let’s do a quote here. Considerably uncertainty exist regarding and Vivian’s ability to renegotiate uneconomic customer contracts entered into the fourth quarter of the 2022 fiscal year, the global credit rating agency said. Oops. [00:16:23][57.8]

Michael Tanner: [00:16:24] Yeah. I mean, it’s, it’s you would have who would have thought it would? Pellet company was going to be I mean. [00:16:29][4.7]

Stuart Turley: [00:16:29] It’s I can understand. [00:16:31][1.3]

Michael Tanner: [00:16:31] Of debt for a wood for a wood wood shipping company. Guys. [00:16:34][3.1]

Stuart Turley: [00:16:35] Come on with a woodchuck Chuck. Chuck wood. Yeah. I can’t even say it. [00:16:39][4.4]

Michael Tanner: [00:16:39] Normally a woodchuck chuck if wood cut chuck or whatever it’s called. What I love is they also owned 350 million to a German energy company. That was a great investment by them elsewhere. Bank, Delaware Bank, they owned 780 million of the debt. Good luck. Yeah. [00:16:55][15.5]

Stuart Turley: [00:16:57] Oh, yeah. So, hey, after, you know. [00:16:58][1.5]

Michael Tanner: [00:16:59] Yeah. Well, we’ll go ahead and, and flip over to the finance guys. But before we do that, as always, we got to pay the bills around here. Thanks for checking us out. At EnergyNewsBeat.com all the news and analysis, that you’re here and we’re about to hear is brought to you by said website. Steering the team. Do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy and oil and gas business. Hit the description below in all podcast platforms for, timestamps, links to those articles, and other interesting stuff. Take our survey hit dashboard.energynewsbeat.com. We’ve got some great partnerships we’re working on that we are really excited to, to be talking about hopefully here in the next couple weeks. [00:17:41][42.3]

Michael Tanner: [00:17:41] So let’s get some more stuff finalized before I go ahead and spring the boat on it. But as always guys, energy news beat that. You know, first let’s just do a quick, oil and gas update here. From the financial side, oil prices on Friday mainly were held fairly flat due to the possibility of a above, ceasefire in Gaza. You know, unfortunately, you know, we’re going to hear a lot of that stuff left and right. We don’t quite know what’s happening. With some of those, negotiations, a tier. One day it’s here. The other, John Kidd. Cliff, partner again. You know, partner over at Again capital. I love that again capital again. It happened again. Everyone is watching what will, for the weekend, what we’ll bring to Gaza. It looks like things will open up, you know, about 15, $0.20 higher. With with the close sitting there at 80, 63. Looks to open some more about 8082 here in a bit. You know, our favorite U.S. secretary of state, Anthony Blinken, said that he believes, that there could be an a ceasefire this weekend. We haven’t heard anything as of right now. So obviously we didn’t know. We didn’t quite see what happens there. We did see the U.S. dollar have kind of the second week of broad gains against another basket of currencies. You know, the the other real impact was it was a drop in rig counts. You can see right there, an overall five count drop on U.S. rigs, one oil rig for gas rigs. So oil rigs down to 509 gas rigs down to 112. I mean, that what I don’t see is why we’re shedding oil rigs. I think that’s the interesting thing to note here. As we’ve popped above 80, the reaction from the industry is what we’re dropping rigs still, which is again, an interesting note as some of these wells continue or some of these, you know, and is that because we’re opting for more frack rigs, that frack count spread continues, to hold steady there. We’ll see an update on that later the week. Yeah. I found two article. Super interesting stuff that I wanted to bring up Riposte capital. They go ahead and issue a statement in support of Kim Rogers proposal for the merger between Silver Bow and, Silver Bow and, Kim Ridge, Texas Gas, which is their internal kind of gas company. This is an absolutely. Where’s the quote in here? Stew is is pretty unbelievable, you know. Yeah. Let me let me find here they they do a pretty good job of just ripping them repeatedly. This is the quote out of the released stew. Repeatedly ignoring shareholders interest has become some. What standard practice for silver bow as management and the board has pursued their own agenda at the expense of the shareholders. Again, guys, this is rip Stone capital. They’re one of the larger shareholders in Silver Bow, only about 9.9%. They’re in favor. So Cambridge obviously they’ve got somebody on their train right now. It’s rip shot capital. Excuse me, not rip Stone, but it just sounds cooler. If it was, everyone’s got a stone in their name. What they bring up, which is just absolutely like, hey, we’re not against it over here. I love that stuff. They’re they’re going after them right now. What they claim is that, you know, this combination is going to further consolidate. They believe that the 2025 EBITDA of the combined company is going to be in line to peers. You know, what I think is, is going on here is I think what’s going on here is a is a battle of managers. Okay. So obviously Kim Ridge, right. Stone. They’re not necessarily a fans of what’s going on with Silver Bulls management right now. Now you always wonder one of the problems that oil and gas companies have had for a while is management has owned very little of the actual equity of the underlying company. So what does that mean? If you have no equity in a company that you’re running well, who cares about profitability? I’m getting my I’m getting my plan. I’m getting my compensation, you know, for a salary. I’m getting my benefits. But I have nothing tied to the success of the company. It’s almost the anti of what Elon did with Tesla where said, I’m literally just going to put my entire compensation plan relative to, you know, these different financial benchmarks. That’s not what’s happening in the oil and gas business. You’d be shocked to find out how little management teams, presumably, of public companies, actually own of the underlying. Which means there’s a slight misalign of incentives here. If I owned 0% of a company, but yet I’m in charge of its financial decision making. Well, I’m going to do everything I can to increase my compensation. Yeah, I, I, I don’t have to share. And I don’t mean I would just, you know, bump my salary, but I but I’m not financially incentivized in order to do the work of the shareholders, which is what the CEO of a company is designed to do. It’s designed to watch out for the shareholders of the company. So I think what they’re calling out is a is a fact that is not unique to Silver Bow, but it’s now that they’ve got somebody trying to do a merger that clearly Silver Bow doesn’t want. Now all of a sudden they’re getting behind it because guess what. Half Cambridge comes over. They do this merger Cambridge is in charge now. So guess what. Their management team is gone now. They’re not bought immediately but they’re gone within six months. It’s a slow death. It’s a profitable death for them. They’re getting their change of control packages I’m sure are great. I’d love to have one of those change of control million dollar packages in there. But it doesn’t. It doesn’t mean that they’re going to go, that they’re going to go softly. But I do love that big one of the largest shareholders residing with Cambridge. It’s going to get spicy here. It’s going to get spicy. [00:23:10][328.1]

Stuart Turley: [00:23:11] Oh yeah. [00:23:11][0.2]

Michael Tanner: [00:23:11] Next up. And finally I love this one. Blackrock issued a statement pushes back after Texas public investment or whatever the what is it the permanent school from the Texas permanent School Fund. They withdraw 8.5 billion. So this happened earlier this week. We we heard the announcement that the Texas pension, or school pension is going to pull out of Blackrock due to their boycott of energy companies. Well, Blackrock on Friday went ahead and made a statement. Blackrock vice chairman Mark McComb responded to the letter that said they were dismayed by the announcement and that the decision puts, quote, short term politics over your long term fiduciary responsibility. We urge you to reconsider your decision to prioritize Texas schools and families who have benefited from BlackRock’s consistent long term investment outperformance merely go. Going to note that since the partnership began in 2006, they’ve generated in excess of 250 million in profits, inclusive of fees. He also says that, we fully comply with Texas law and fundamentally disagree with your assessment based upon BlackRock’s performance. Muh wait. We fully comply with the law. Why are they pulling out of this in the first place? Well, because they’re boycotting oil and gas companies. So if they’re pulling out money because you boycott oil and gas companies and Blackrock says no, no, no, we’re actually complying with the law. Does that mean Blackrock is in explicitly just told us that they’re investing in oil and gas companies? [00:24:37][85.7]

Stuart Turley: [00:24:38] They are. [00:24:38][0.1]

Michael Tanner: [00:24:39] Well, I know they are. But now they’re at least admitting it with their they’re they’re putting out press releases that say that. Yes. [00:24:45][5.5]

Stuart Turley: [00:24:45] And so what’s a they’re being penalized for over. You’re going telling their base their left wing green green New Deal anti cow fart going we don’t invest in fossil fuels. While you and I covered the fact buried last year in there. Things were pipelines in the Middle East. Oh, so they’ve been doing it a long time. Yes they were. Doing it. I applaud Texas. Go, Texas! Oh, absolutely. Stand up for. Close the border. Closing. [00:25:21][35.5]

Michael Tanner: [00:25:22] You know. [00:25:23][0.2]

Stuart Turley: [00:25:23] Go get them. [00:25:23][0.3]

Michael Tanner: [00:25:23] Here. I’ll take that. 8.5 billion. We’ll go drill some dry holes. I’ll show them what oil and gas is all about. I saw this great tweet last night. We’ll have to. We need to bring it up here. [00:25:33][9.3]

Stuart Turley: [00:25:33] It’s like I just pulled a Scooby for our podcast listeners. [00:25:37][4.2]

Michael Tanner: [00:25:38] Oh, God. This is. We gotta finish the show with this. Andy, can you pull this tweet up? This tweet up for me? Let me go ahead and find it here. Let me find it on mine. It was one of the funniest things I’ve ever seen. This is from, one of my favorite guys. Rock underscore boffin. I’m now asking all fast food cashiers if they want to round down in order to support my next dry haul on time. Oh. [00:26:04][25.6]

Stuart Turley: [00:26:05] He’s even is the, I our guy, the wheat cat team captain? [00:26:10][4.9]

Michael Tanner: [00:26:11] I our guy of the week right there. Starting off the week strong, underscore rock bottom. And we absolutely love it. I will support your next drive. [00:26:19][8.1]

Stuart Turley: [00:26:20] Absolutely. [00:26:20][0.0]

Michael Tanner: [00:26:20] Some of this 8.5 billion. And we’ll go drill some dry holes ourselves. So what else you got to do? It’s going to be a busy week. [00:26:25][4.9]

Stuart Turley: [00:26:26] It’s going to be a wildly crazy busy week. We’re going to have a great week. [00:26:30][4.3]

Michael Tanner: [00:26:31] All right guys with that one. [00:26:32][1.0]

Stuart Turley: [00:26:32] Real quick I just want to give a shout out to all of the fantastic feedback we are getting from around the world on our conversations. Thank you to each and one of everybody around the world. I truly appreciate all the great feedback we want to get to all of your questions. Thank you all very much. [00:26:50][18.1]

Michael Tanner: [00:26:51] Yeah, well, I mean, I know a lot of the feedback is how do we get Stu off the show? We’re we’re diligently to find, a co-host, a new co-host. But it may take longer than you think, so I’m just kidding, guys. We absolutely love it. Again, really appreciate the feedback. Subscribe everywhere, wherever you can find us. We appreciate it. With that, guys, we’ll let you get out of here. Get back to work. Thanks for checking us out. Energy news Beat podcast. We’ll see you tomorrow. [00:26:51][0.0][1553.4]

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