Our thoughts and Prayers go out to the people in Turkey with the gigantic earthquake disaster. We pray for support and strength through this crisis.
Wild conversation with Michael and Stu – Everywhere from Michael not going to jail on the bachelor party (Hangover type adventure) through why Sanctions Did not work on Russia, and the US grid is exposed. The Neo-Nazi couple demonstrated that small strategic strikes could paralyze sections of the grid and country.
Most importantly – Many people do not think the China spy balloon was a big deal. Well, the technology on the balloon can pinpoint grid weaknesses, critical pipeline junctions, and cell and radio critical infrastructure. All of this would make a tactical crippling strike against the United States possible. Just feed more of this intel to groups like the Neo-Nazis, and a very small amount of people could do more damage than 911.
Highlights of the Podcast
00:00 – Intro
04:12 – The U.S. authorities enforce evacuations over train derails in Ohio
07:04 – Everybody loves oil Again
08:09 – Russian fiscal budget shows 35% decline for January
12:39 – Wind power makers suffer huge losses want to abandon a major project
14:11 – Neo-Nazi couple arrested for alleged plot to, quote, completely destroy the Baltimore energy grid at risk
27:47 – Outro
Neo-Nazi Couple Arrested For Alleged Plot To ‘Completely Destroy’ Baltimore – Energy Grid at risk
US authorities enforce evacuations after train derails in Ohio
Russian Fiscal Budget Shows 35% Decline For January
Everybody Loves Oil Again
Wind power makers suffer huge losses, want to abandon major project
Sponsorships are available or get your own corporate brand produced by Sandstone Media.
David Blackmon LinkedIn
The Crude Truth with Rey Trevino
Rey Trevino LinkedIn
Energy Transition Weekly Conversation
David Blackmon LinkedIn
Irina Slav LinkedIn
Armando Cavanha LinkedIn
Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner [00:00:07] What is going on, everybody? Welcome to another edition of the Daily Beat Stand Up. Here on this gorgeous Tuesday, February 7th, 2023. As always, humble, humble correspondent Michael Taylor coming from an undisclosed location, fresh off assignment from Napa Valley.
Michael Tanner [00:00:26] I smell of grapes and the finer things in life. I appreciate that little vacation. I apologize that you were stuck with Stu and I’d like to welcome back all of the listeners who have abandoned us since my last show on Thursday.
Michael Tanner [00:00:40] As you mentioned, guys, I’m joined by the executive editor of the show Prevention at Record, publisher of the world’s greatest website, ENERGYNEWSBEAT.COM. Stuart Turley. I am just kidding, Stu, how you doing today?
Stuart Turley [00:00:51] It’s beautiful day in the neighborhood. And by the way, I am glad we’re on Zoom. We are going to live here before too long and you would smell like a y’know, So I am so glad I’m not having to hang with you. I was really afraid, Michael. I was going to have to do like the oh, what was it, The hangover. And I was going to have to come pull you out after seeing Mike Tyson’s Tiger. So I’m glad I didn’t have to go do that.
Michael Tanner [00:01:15] You know, you I was able to I made it out alive. I was able to stuffed myself into an airplane about 1:00 yesterday.
Stuart Turley [00:01:21] Bailing bailing you out of jail is a habit that I just do not get into.
Michael Tanner [00:01:29] Well, guys, with that, we have an excellent show lined up. There’s a lot happened. I Stu covered a tremendous amount while I was gone. So I do appreciate that. So if I go back and maybe pick some stories from the back, I will do that. But for today’s show, we’ve got a couple lined up. First, U.S. authorities enforce evacuations after train derails in Ohio. Starting off the new week. All right. Holy smokes. That’s horrible.
Michael Tanner [00:01:59] Next article we’ve got is everybody loves oil again, but followed by Russian fiscal budget shows 35% decline for January. That’s interesting. Do sanctions may do work? We’ll see what that’s all about.
Michael Tanner [00:02:12] Wind power makers suffer huge losses want to abandon a major project in a move that nobody saw coming? Just kidding.
Michael Tanner [00:02:22] And finally, Neo-Nazi couple arrested for alleged plot to, quote, completely destroy the Baltimore energy grid. This is pretty insane. So I’m going to let’s do cover that.
Michael Tanner [00:02:35] And the final story we have is Timeline, the world’s deadliest earthquake since 2020 excuse me, 2008. As you guys might have known, there was a magnitude 7.8 earthquake that shook Turkey and Syria today. And right now, the death toll is at about 1000 people. But I think Stu’s going to tell us it’s probably going to continue to climb harder.
Michael Tanner [00:02:55] What does that mean for energy prices and abroad? Stu will cover that. He will then kick it over to me, will cover what happened to crude oil markets today. We did see a little bit of a bounce, currently trading about 74, 70 natural gas, a little bit of hope we’re at $2.49, but the stock market did have a good day.
Michael Tanner [00:03:12] There’s a couple of interesting finance things. First, the latest and the newest IPO for an oil and gas company, Teck, Texas Energy Partners, which is actually a master limited partnership. They announced the closing of an oversubscribed IPO will cover what that means. ConocoPhillips dropped their fourth quarter 2022 results are returning 11 billion of cash. We declare a quarterly dividend and announce share buyback program along with Shell. So I think we’re seeing a theme here among some of the major oil companies. Share buybacks will cover.
Stuart Turley [00:03:47] All.
Michael Tanner [00:03:47] That and the bag of chips, guys. But first check us out on the world’s greatest website WW dot introduced become dashboard dot energy news become the best place for all of your data and news combined into one platform. We are hard at work at V2 and we’re looking forward to coming out with those updates very soon enough. The pleasantries. Stu, where would you like to begin?
Stuart Turley [00:04:08] Well, hey, let’s start with the a couple tragedies here. The U.S. authorities enforce evacuations over train derails in Ohio. Michael, this is absolutely catastrophic. 500 train, 50 train cars derailed on Friday night in East Palestine, Ohio. Here’s part of the problem with that, Michael, is the fact that 20 of those 50 are hazmat designated.
Stuart Turley [00:04:42] What that means is there are downstream chemicals in those things and it’s horrific. The the reason that we need to be praying for the folks, but it’s also a I’m only really bringing this up for people’s attention for for the fact that New York City has the highest natural gas prices right now over the weekend. And it’s because they have to bring in their natural gas via LNG through the Boston import regasification off of the international.
Stuart Turley [00:05:16] How that’s applicable is pipelines save disasters. Let’s get all this kind of crap off rail and put them in pipelines, which is safer. So with that, our thoughts and prayers go out to all of the folks out in Ohio. And let’s go to the next story.
Michael Tanner [00:05:35] It’s well, I mean, I just want to say, first of all, it’s a miracle nobody was injured or killed in this derailment, not even anybody who was who was living around, but also the crew working on that rail. That’s exactly right. This is the reason why pipelines are safer, because if there is a quote unquote, disaster in a pipeline, it’s just a leak.
Michael Tanner [00:05:57] And I don’t want to compare a leak. I don’t want to start comparing oil leaks to other things. But in this scenario, I would much rather an oil leak and that much easily detectable than a massive derailment to the fact where if you read law in the article, do they had to turn the school into a shelter? I’m going to take the option that doesn’t turn the school into the shelter, whatever that option is. I go with that.
Stuart Turley [00:06:19] Let’s take ESG real quick. Will take it will derail here for a second. Good pun. But here’s the thing. Carbon capture and carbon detection. I’m on a roll tonight, Michael.
Michael Tanner [00:06:32] So good to great Wednesday.
Stuart Turley [00:06:36] And so when you sit back and think. Carbon capture, carbon detection, methane detection is all coming through satellite now. Yeah, it was it was put out there that the the Biden regulations is good in detecting these things. Leaks are detectable and can be shut down before it’s a disaster. So thanks for letting me derail that.
Stuart Turley [00:07:02] Okay. Coming around the corner here, everybody loves oil Again, it’s almost like that show, Everybody Loves Raymond. I used to really love that show. Reopening of the Chinese economy. Michael, you and I have been talking about this for a long time, can really help the world avoid a recession. And then the bulk of the purchases in crude oil futures.
Michael Tanner [00:07:29] Yeah, but a lot there’s a lot of crude ah, bullish crude buying based upon this Chinese demand sentiment which is that.
Stuart Turley [00:07:38] It is and when you drop down lower in the article 25 basis point is likely baked into the current oil future prices. So the market will be looking out for Fed comments. So it’s integrated.
Michael Tanner [00:07:51] In these numbers. So it’s because we’re going beyond 25 basis points. We’re probably going to have to. We may even be a fool point. So, yeah, watch out.
Stuart Turley [00:08:02] Buckle up and hold on to your boxes.
Michael Tanner [00:08:06] All right.
Stuart Turley [00:08:07] I’m going to go to the next one here, Michael. Russian fiscal budget shows 35% decline for January. Let me explain this. And as everybody knows, I’ve been very bullish on my comments that sanctions don’t work. And let’s go through some of the numbers here. Sanctions don’t work. However, when you take a look at this article.
Stuart Turley [00:08:36] That’s the pricing metrics. They actually produced 2% more but what happened was the slide between the Brant price and what they were selling outside of the Brant price to contracts outside. So it really was not a revenue issue on sanctions. It really is a distinction of how the new currency is going to be pulling off of the dollar. Ah, so if you read that really sanctions didn’t work. Russia still has a lot of money and it’s because the oil price was cut in half compared to where it was the previous budget cycle.
Michael Tanner [00:09:26] Makes sense. Absolutely right. The headline makes it easy to make fun of you, but when you actually read the meat and potatoes, you’re right. It’s a lot to do with just the decline in oil prices versus the sanctions are working. It’s just fun to tease you because I think.
Stuart Turley [00:09:42] We just put out a story.
Michael Tanner [00:09:44] Say on it.
Stuart Turley [00:09:45] We just put a story out a few minutes ago that Russia and Iran are actually binding together. Okay. Iran is the one that learned and taught Russia how to avoid sanctions. Russia said, hey, I’m Putin. I’m going to go ahead and do one better. I’m going to you know, there’s my. Was it. You know, my bad. Putin imitation.
Stuart Turley [00:10:11] So now you have the two worlds sanctions, avoiding companies, countries working together. Holy smokes. We’re going to see sanction avoidance like you wouldn’t believe. All right. Let’s go to the next.
Stuart Turley [00:10:26] Okay. This Michael, since you were out traveling around the world, avoiding being hanging over material or arrested, however you want to say this, when power was absolutely nerdy story that broke broke loose. Arena Slav, we love Irene, a slob. She broke another story that we’ll talk about here in a sec.
Stuart Turley [00:10:51] This article says When power makers suffer huge losses and won a major and abandoned major project, this article is stuffed with a bunch of other stuff that we had talked about as well. Bernard Looney said last last week that he was now no longer investing heavily in renewables because they were no longer profitable.
Stuart Turley [00:11:15] Try this one on the greenies dream of clean, except for millions of dead birds and whales. We ran that story which went bonkers about the dead whales in New England because of the wind farms, poor economies, tax subsidies. The big players in constructing wind turbines are facing massive losses. Siemens out of Germany lost a bet the billion last quarter.
Stuart Turley [00:11:43] What’s a billion between friends and losses, Michael? Yeah. So let’s go. Let’s go through this one. Translation Further government action is in is is increasing subsidies beyond those already offered in the misnamed inflation readout NEC.
Stuart Turley [00:12:01] So people are now saying wind farms are not profitable. We need more tax money, so we need more tax money so that we can print money and then make more inflation happen so that the Fed can raise the rates and run the economy more. This is a never ending squirrel that’s about to happen.
Michael Tanner [00:12:21] So I’d love to six I’d love to stick Sandy on that squirrel. I mean that Sandy, you got to get on that score problem.
Stuart Turley [00:12:27] Oh, it’s a huge squirrel. And the rest of this article is really critical when you sit back and take a look at. It’s beyond the time to end subsidies for wind power. Not only is the atmospheric CO2 risen without serious consequences, it is the dooms saying models proven consistently wrong, but the financial thumb on the scale via subsidies has encouraged development of a technology that’s still immature.
Stuart Turley [00:12:59] This is following along to other things. The only way to really scale wind energy is to go higher. We are now finding that those huge wind turbines are falling over. Much like a politician in a after this discovery that he’s been cheating, you know, he falls over and then he gets B bounces up. Well, guess what? This is a really bad bounce. These things are falling off and wind turbines are only lasting eight years instead of the 30 everybody promises. So stay tuned.
Michael Tanner [00:13:38] Okay. Take this to sum this Oracle, at best, we do it the way Ernest slogged it to finish with wind power. Kenny Rogers song provides wise advice. You got to know when to hold them, know when to fold them, and know when it’s time to walk away from wind power subsidies.
Stuart Turley [00:13:54] I love Irene. Absolutely. A class act. That woman is classy. This next one, Michael is really not about neo-Nazis. And if you saw the pictures in here, I swear. For our podcast listeners, go look at the article.
Stuart Turley [00:14:10] It is Neo-Nazi couple arrested for alleged plot to completely destroy Baltimore’s energy grid at risk. Here’s the thing, Michael. Look at that picture. That dude, doesn’t he look like who is the actor? Charlie Sheen? Doesn’t he look like a young Charlie Sheen? I mean, tell me that. Wouldn’t he? Looks like his cousin.
Michael Tanner [00:14:37] I don’t know if I get Charlie Sheen vibes. I definitely get neo-Nazi vibes. So. Okay, this makes total sense. But you just I mean, the crazy part is it’ll be interesting to see how far and what their plan entailed because, you know, we talk at length and ad nauseam on this show about the one one little slip up and one little neo-Nazi getting through and throwing a grenade. It keeps completely opposite chain reaction. It could go crazy. So I hope we’re taking this as a warning that we need to bless our security.
Stuart Turley [00:15:14] Now, here’s here, everybody. Michael, while you were out in California having a glass of wine or two or three, the balloon was going bonkers. Yeah, you had four in the balloon going across the know the.
Michael Tanner [00:15:32] Chinese balloon I saw. I just saw bits and pieces of that floating around the Internet. All of it tapped in.
Stuart Turley [00:15:37] Oh, it was absolutely a hoot. Now, when you sit back and take a look, the knuckleheads around the world, around the the left wing, I got trolled all the time on Twitter. I thoroughly enjoyed my weekend throwing things out there and trolls trying to come back and get me. I’m like, Bring it on, guys.
Stuart Turley [00:15:58] They were all saying, Oh, a balloon goes across the United States and it wasn’t shot down until after President Biden checked with the Chinese to make sure it was okay. And now that it was on the East Coast, okay, that is just horrible. Now, why would they not shoot it down in Montana or Alaska?
Stuart Turley [00:16:22] My dad, my dad 50 years ago was scrambled. Tomcat was scrambled to shoot them things down in the past and he and I were talking about this is the dumbest thing on the planet. And everybody’s saying, well, why are we worried about it? Because satellites are wrong, the technology is there.
Stuart Turley [00:16:45] So the new cameras that come in on that thing can get within an inch. Why is that important? Because let’s say the energy in the grid that this story’s bringing up, once you find out where the radio transmissions are, you find the frequencies, you find all of the things that things picking up communications. It’s not picking up phone calls from President Biden when he’s calling me to go, What should I do about the energy? I’m like, get and get get somebody else in? There is energy secretary.
Stuart Turley [00:17:19] This is huge. China have put on their wind platform radios on an air right outside an Air Force base and had all that sitting on that wind farm going in there. That balloon was critical information. Then it came out and said that, Oh, Trump let three of them go by. Guess what? Trump didn’t know about it, and it came out that they had it from him. He would have shut them down. So you have a bunch of lying rat commie folks that are like running this whole thing into the ground and saying it’s not a big deal. Bo Hockey It’s a big deal. All right, I’m all done.
Michael Tanner [00:18:07] We got to we have we have to just we’ll take a deep breath after that. We have done that. That feel good? Did that feel good? I do feel good. Real. I bet that felt good. It’s good to read. That was.
Stuart Turley [00:18:19] Great. And that.
Michael Tanner [00:18:20] Was good.
Stuart Turley [00:18:21] That’s all I got to say.
Michael Tanner [00:18:23] That’s all you. All you’ve got for today. Whoa, whoa, whoa. We’ll. We’ll kick it over to finance. I’ve only got really a couple of things. Think. I think from an overall standpoint. The market was a little choppy. We saw 6/10 of a point get chopped off. The S&P 500, we were down about 8/10 of a point on the Nasdaq. Crude oil slightly up 7439.
Michael Tanner [00:18:43] Currently, as we record this, about 645 on February 6 and you know, mainly what we’re you know, the IEA came out and dropped a report today is do mention that that really sees China as the driver for demand. Again, a lot of these crude oil people are only pricing in 25 degree or 25 basis points increase, which I think is fascinating considering I would probably peg it at 50 to 75 basis points.
Michael Tanner [00:19:10] So I think that crude oil curve is possibly flatter if not, you know, or is too flat in end. It maybe need to be a little steeper. So it’ll be fascinating to see how the strip plays out on the natural gas side, guys. Really, we’re just eyeing the storage report to give you an idea, the range of expectations is anywhere this Thursday from 145 Bcf to 215 Bcf. Last year we had a draw of about 228.
Michael Tanner [00:19:37] So we’re back into the possible the 100 to 200 Bcf draws, which should help because we’re trading at about $4 and at 96 are $4 or $2.49. Excuse me, we’re actually up about four for $0.04 since we started recording this about 10 minutes ago. So that’s really good to see. So this has seen a green pop on on gas.
Michael Tanner [00:19:59] And we were dealing with I know everyone who’s listening to the show yesterday, You know, Haynesville was down less than $2 in terms of actual realized pricing. We saw everything up in Appalachia was down like 150 equities considering I’m sure they’re talking about specific are regional shutdowns. It’ll be very interesting to see how everything.
Michael Tanner [00:20:22] But I know if you’re sitting in natural gas producer right now, you guys are having a lot of interesting decisions or if you’re looking if you are in the process or are in the process of buying a gas deal, holy smokes. As everything but thrown into chaos right now. So they don’t call it the Widowmaker for nothing.
Stuart Turley [00:20:39] Wow.
Michael Tanner [00:20:41] I think I’ve got two quick stories. First, Conoco, ConocoPhillips, they did report fourth quarter earnings. I think we should cover that. I’ll read you a couple of their air highlights. So again, take all of these with a grain of salt. But they did generate cash provided by operating activities of $28.3 billion or what’s known as cash flow from operations of 28.5 billion and ended year the year with 9.5 billion of cash and short term investments.
Michael Tanner [00:21:09] They distributed 15 billion through a three tiered framework to shareholders, including 5.7 billion in cash to ordinary dividends and variable return of cash and 9.3 to share repurchases, which was 50% of the cash flow from operations but back into share repurchases. Oh, interesting. More share buybacks from oil and gas.
Michael Tanner [00:21:29] They didn’t go out and make an air stated. They didn’t go out and they buried this in line two and they buried it within a sentence. Within a sentence. Who who’s the air guy? Who’s the IRS?
Stuart Turley [00:21:40] Oh,. hahaha
Michael Tanner [00:21:41] No, no, no. This is great. No, no, no. This is Price Dennis News. No, that’s not it. I don’t know who it is. I think. Dennis News. No, that’s the contact guy, whoever their air guy is. Honestly, it’s smart. They’re avoiding a lot of smoke. Think about it. Chevron comes out and does a press release that is saying we’re going to do share buybacks. They get flak on flak on flat, flat from the government.
Michael Tanner [00:22:05] Conoco Phillips, ironically, is probably the second biggest oil producer in the country. I mean, you obviously Chevron in that’s they’re going to be one they’re sneakily number three after acquiring Concho they’ve they’ve got a lot on the line here. What do they do? They take the opposite approach. They talk about distribution to shareholders and flip it into the last half of a sentence buried in the thing tells you some that that they pour these over.
Michael Tanner [00:22:32] They didn’t just come up. With this press release yesterday there. You know, unlike some companies, they put a lot into things that they did. So bu right there. Right, we got buried. That’s very interesting because we’re about to have another story. Shell’s got a whole new press release on dividends or on share buyback.
Michael Tanner [00:22:50] So interesting. We’ve got you’ve got Chevron and Shell on one hand and you’ve got ConocoPhillips on the other. But I digress. They did expand their global LNG business. They developed a four year record production of one point or 1.7 million B, D or excuse me, 1000 738,000 barrels. So, yeah, it’s like 170,000 barrels a day of bogey and record lower 48 production.
Michael Tanner [00:23:20] They finally have finished integrating their lower 48 assets again, that was that Concho. What else did they do to blah, blah, blah. I mean, we there’s so much in this press release, but I think the most interesting part, obviously, they blew out expectations, 176% preliminary reserve replacement ratio. That’s insane. You know, adjusted earnings of 3 billion. You know, full earnings were $18.70 or $14 per share. Whoop, whoop. A lot of money.
Michael Tanner [00:23:54] But I think it’s interesting, in the contrast to the style, Concho seems to bury their share repurchase program within the second bullet point shell comes out with their own press release. Shell, we’ve got this. Shell Announces Commencement of Share Buyback program. I mean, it’s only $4 billion, so it’s not huge. It’s not 75 billion like Chevron. But still, they choose to go their own press release, which I think is interesting because they’re a European company they’re arriving at war of the crosshairs, the estates companies. Yet they come out with a press release.
Stuart Turley [00:24:30] Wow.
Michael Tanner [00:24:31] The clash of styles. And what’s interesting is, you see, you know, I wasn’t here to cover, but BP, Bernard Looney, you know, looks like they’re out. He finally saw some economics. He was like, oh, wait, when doesn’t make any money should probably pivot elsewhere somewhat. Finally got that slide deck slipped into his email.
Stuart Turley [00:24:47] Oh, yeah.
Michael Tanner [00:24:49] And then second, you know, you’ve got everybody trying to now pivot back into oil. It’s hilarious how these oil majors just flow in. You think they I mean, Exxon’s the only one in Chevron rules that are steady. I like the fact Chevron came out and was basically like, yo, double middle finger, 75 billion share stock buy. I think it’s cool, but it’s a very interesting strategy, which is about putting yourself in the crosshairs versus not.
Stuart Turley [00:25:13] Right. Yeah, absolutely. I mean, it’s that whole paradigm shift is amazing. And ConocoPhillips is an interesting B, Our germ mercury is on their board. And I did a nice interview with him. He is a sharp cookie. They got some good peoples over there.
Michael Tanner [00:25:38] They I’m a big fan of ConocoPhillips. I think their air team is brilliant because this is avoiding unnecessary flack.
Stuart Turley [00:25:47] Right.
Michael Tanner [00:25:47] By just saying, know, we’re going to just put this in here. You know, we’re going to put this in here versus where Shell’s coming out, you know, So that’s just that’s the only thing I’ve got on this. I really like it. Glad for ConocoPhillips. We love to see it. Love to see anything with record production in it. Yeah. You’ll never convince me. Record oil production is not great.
Stuart Turley [00:26:08] And I get to interview Nick Julius tomorrow. He’s the CEO of CNN X. They’re a 2 billion market cap, folks.
Michael Tanner [00:26:19] Tomorrow there are gas out of there. A gas player out in Appalachia. He’s flying. I heard he’s flying economy tomorrow. Just kidding. Just kidding.
Stuart Turley [00:26:32] Harsh, dude. Very good company.
Michael Tanner [00:26:36] They’re a great company. They’re right up there. I think that the second largest gas player up in up in Appalachia. So that is great. We’ll look forward to the release of that stew. Is there anything else you want these fine people to know about?
Stuart Turley [00:26:48] I just really appreciate all of our fans. Our shows are going off the crude truth, the energy question, the energy transition, all of our shows that we produce at the Sandstone Media Group, we have another one blowing up and Michael, I got a bet with you. I think within a couple months we are a little old. Sandstone media is praying to be proven out, 500,000 downloads a month, I guarantee you.
Michael Tanner [00:27:18] Yeah, I got to update the bots to keep pounding the downloads. So once I cranked them up a little bit, we crank whatever number. We appreciate everybody.
Stuart Turley [00:27:26] We don’t play no bots around here.
Michael Tanner [00:27:30] We appreciate everybody who is tuning in and listened and, you know, maybe woo, you know, in another world we’d spend the next 20 minutes expounding on how great you guys are. But in this one, we’re going to let you go and get out of here, get back to work again. We appreciate you checking out for Stuart Turley. I’m Michael Tanner. We’ll see you tomorrow, guys.
