Armando Cavanha is a global thought energy thought leader with years of experience with Big Oil and is now a professor with international reach. Please follow Armando on his LinkedIn here: https://www.linkedin.com/in/cavanha/
Some of the unintended consequences of the weaponization of the U.S. Dollar are critically hindering the move to net zero and nullifying any effort from the Biden administration’s efforts to make a difference in Net Zero and their Climate Agenda. – Stu Turley
00:02 – How do sanctions destroy the environment – Transporting crude/refined products getting around sanctions
00:45 – The U.S. imposes economic sanctions – and weaponizes the dollar, causing its demise early.
01:42 – Russia is becoming the new growth center – Their Revenues, and their GDP is up 3.1%
05:16 – The Dark Fleet came around because the US weaponization of the US Dollar impacted Iran, Venezuela, and Russia.
10:46 – The United States and the EU are the primary ones
13:35 – The US imports 7 million barrels
16:29 – The US is getting better
21:00 – The Sherwood Forest was trying to tax everybody
22:16 – The poor folks in Pakistan need a stable grid
27:16 – The case of Nord Stream that was exploded
30:15 – The last three nuclear plants
Armando Cavanha [00:00:02] How do sanctions destroy the environment? It’s a pleasure having. Stuart Turley is the CEO and president of Sandstone Group and Energy Data and Finance Consultancy. Good afternoon, Stuart Turley.
Stuart Turley [00:00:18] Oh, hey, Good afternoon, Armando. How are you?
Armando Cavanha [00:00:23] Fantastic. We were waiting for our present. And sorry, because of the link. I forgot to send the link before.
Stuart Turley [00:00:31] I was pulling my hair out. So you know
Armando Cavanha [00:00:32] Oh my god, Stuart, please let me start with for me a very impressive point that, the U.S. has imposed economic sanctions on more than 20 countries since 1998 in more than a thousand cases of different types of sanctions promote democracy and war. This certainly has all types of consequences. What do you think about this?
Stuart Turley [00:01:08] I’ll tell you what. I have to give a shout-out to Irine Slav, whose quote, I’ve been using everywhere. Sanctions don’t work as intended. -Irina Slav
Today, Putin, I believe it was yesterday when he called the article, he just put out that Russia’s economy is I believe it’s up to 3.5. I’m running right now, Putin says, where are you? There it is. Russia is becoming the new growth center as the West rests on its laurels. It’s unbelievable. Russia has done extremely well, even with the weaponization of sanctions from the EU and the U.S. for them to be able to say. Moscow says their gross domestic product was set to grow at 3.5, rebounding from a 2.1. For somebody that’s at or in being sanctioned. Those are incredible numbers for GDP growth. Now, Ballpark, I have to fact check this. Energy export is about, I think, around the 35% of Russia’s GDP. We have to remember that Gazprom, the cost for Gazprom to get natural gas out is about $0.13. It’s not bad. So you can sit back and think how much profit is in their natural gas. So you can also look at how much profit is in their oil. They know how to deliver oil cheaper. So when we sit back and say, Do sanctions work? Armando The sanctions started with Iran. When I ran started getting their sanctions, they started figuring out ways around it. This goes in line with the Dark Fleet. When Trump was president, they were doing 400,000 barrels per day. Under the Biden administration with the sanctions that are on them, they’re now they’re going to be up I believe it’s 3.1. That’s 3.2 million barrels per day now. Sanctions don’t work.
Armando Cavanha [00:03:45] Work.
Stuart Turley [00:03:46] They have a.
Armando Cavanha [00:03:48] Technical problem. We have a little noise in the background.
Stuart Turley [00:03:54] In my comments.
Armando Cavanha [00:03:55] Yes, probably
Stuart Turley [00:03:58] In mind. Let’s take a look here.
Armando Cavanha [00:04:02] Oh, yeah. It’s better than. I’m not hearing you.
Stuart Turley [00:04:11] How about now? Can you hear me now?
Armando Cavanha [00:04:14] Yeah, but the noise is more substantial. It sometimes happened.
Stuart Turley [00:04:21] Okay, let me check my speakers. Audio. Okay. Is this any better?
Armando Cavanha [00:04:40] It is not yet all of the same.
Stuart Turley [00:04:44] Okay. Is this any better? Still the same?
Armando Cavanha [00:04:48] Still the same.
Stuart Turley [00:04:53] Okay. Is this any
Armando Cavanha [00:04:55] Yeah. Yeah. No, it’s perfect. Now it’s good. It’s good. But you’ll mention iron. That’s producing 3 million barrels a day. It’s impressive is a
Stuart Turley [00:05:05] In. And here’s where it gets into the goofy part between these two—Venezuela, as well as several others. The Dark Fleet came around because Iran was in Russia. We’re really starting to get into the sanctions. So there are 500 to 600 Dark Fleet ships out there, these dark fleets. I put out there the other day, there’s a line out of an old movie, Armando, that’s called, you know, I believe it’s up periscope in the red. The rust on this old submarine is so bad, that this guy walks up and goes, I’m going to need a tetanus shot just by looking at this rust bucket. Okay. That’s how bad these tankers are. They’re old tankers that need to be retired. They turn their transponders off. They meet either outside of Greece. There are another two or three places around the world. And they offshore ring out from a legitimate and they go from their tanker to a legitimate tanker from somewhere else, and they make the transfer. So then the transfer is also going into rubles, is now very well established. India is buying all the oil they can from Russia, in rubles. Now, here’s where it gets funny. So you have all the oil going down to India is just one of the spots. Then India is increasing their refining capacity by an estimated million barrels per day. For refining, the customer is going back to the EU. And so that estimate for the EU, China has just increased. There are another million barrels a day I’m not sure when that’s coming on. I’m trying to find out when that’s coming online. California has just shut down. Governor Newsom is canceling all of the oil and downstream refining capabilities in California. California has been talking to China to buy refined products from China to bring it over to the United States working on that story. So when you sit back and take a look, why did Governor Newsom clean up the city for President Z coming in last time? And so now you’re seeing this mix that Russia, Venezuela, anybody else that has been sanctioned is sending it to another tanker. That other tanker is then turning around and sending it over here, and then it’s being transported back. All of that CO2 is out. Let’s say there are 1800 tankers around the world, whatever the number is, a good 30% of the fleet is out,.
Armando Cavanha [00:08:47] Unnecessary,.
Stuart Turley [00:08:48] Unnecessary. And they’re older tankers that need to be shut down. Now, this is impacting the environment.
Armando Cavanha [00:08:58] Environment.
Stuart Turley [00:08:59] It is because LNG is so much less. Do you think a tanker that is not insured is going to use the better lower-sulfur diesel that they’re supposed to? I don’t think so.
Armando Cavanha [00:09:20] And sometimes dark fleets? No.
Stuart Turley [00:09:23] Yep. In oh eight 30% of the oil in this throws in another world. And I want to hear feedback from everybody. How do we price oil anymore when you have this much that’s now coming out?
Armando Cavanha [00:09:40] Sure.
Stuart Turley [00:09:41] You have China in Russia exchanging gold currency so they can sell more to each other. Oh, look at this map. Oh, Armando, you’re just one look at this.
Armando Cavanha [00:09:56] This is impressive how they exchange materials and products and everything around the world. Results sense. No sense.
Stuart Turley [00:10:05] No knows. And here’s what I was just off the phone. I am not kidding. Off the phone with some oil traders. They were looking for how to move things around, and they were wanting to, they wanted product, and they were telling me about how weird this whole thing is. So I’m I’m serious. It is an unbelievable mess that’s going on in that map is only a fraction.
Armando Cavanha [00:10:32] Yeah,.
Stuart Turley [00:10:33]: That map is cool.
Armando Cavanha [00:10:36] Yeah, but this chart of the other countries that you know, in the world that apply sanctions like the United States are all the United States are playing.
Stuart Turley [00:10:46] The United States in the EU are the primary ones. And in you know Putin sanctioned some people in our government, you know, who cares? But, you know, when you sit back and think. The sanctions our previous administration put in and the United States did good. The weaponization that this current administration has put on is damaging the entire fiscal ability of the United States to survive. What that means is that who’s going to buy the U.S. debt at $33 trillion right now? Soon to be 35 at $40 trillion seems to be the magic number I’m hearing out here that we will not be able to it will be the interest rate alone will be more than our Department of Defense. I’ve been interviewing several folks and I’ve got other pretty big interviews coming up. And George McMillan has been pointing this out about how all of the geopolitical stuff plays into energy. But it’s not only the geopolitical stuff, it’s the actual trading and physicality that is also a problem. We can take a look at the geopolitical, but we have to take a look at how OPEC’s in OPEC+ you worked at Petrobras before.
Armando Cavanha [00:12:29] Yeah.
Stuart Turley [00:12:33] Thank you very much. I mean, you know what’s going on out there. And and when you take a look at Petrobras, the new CEO is happy that Brazil joined BRICS plus that Armando, wasn’t it funny that he said, I don’t care what my quota is, I’m going to produce everything I can.
Armando Cavanha [00:12:53] But this is a very important point for us because, see, this map and this map was just two arrows. The black one’s see. See the rationale? It makes sense. The U.S. has a difficult relationship with Mexico. This is not sometimes good, sometimes not close. The Keystone XL project from Canada.
Stuart Turley [00:13:18] Yep.
Armando Cavanha [00:13:19] Imposed heavy sanctions to Venezuela, you know. No help was made. Blister for we are now in this situation. Do not consider Brazil as a partner. But sometimes I understand why Brazil is not simple. The US imports 7 million barrels per day with a 20 million consumption from a world of 100 million. So why not use the America All America Consortium for Oil Production and Consumption or not?
Stuart Turley [00:13:52] You’re asking a brilliant question, almighty, Armando. Here’s why. So when you sit back and take a look at this, if the United States, Canada, Mexico, and South America, especially Venezuela and Brazil, if we banded together, we would not need, OPEC the land, the brand. See, part of the problem is the blend. When you take a look at our refineries, they’re geared up. They’re not geared up for the heavy Russian oil, and they’re not geared up for straight. You have to blend them down into what the United States refineries are designed for. So we have to get our oil, even though we’re producing more oil now than, you know, we’re the largest oil producer in the world. But it’s the Permian sweet light that is the most. And our refineries are not geared for that. We have to blend it with other countries’ oil. Now, other countries can use our oil. And so it makes for a great trading partner in the sense that OPEC would quite honestly lose all credibility around the world if we. Hold up our big boy pants. In North in South America. And absolutely traded with each other for the betterment of humanity. Think about how many tankers you would not be traveling around.
Armando Cavanha [00:15:34] How much CO2 it can avoid emitting with this operation.
Stuart Turley [00:15:40] And, you know, Tammy loves Canada, and can I love Tammy? Such just a great, great person in Canada. If you had that pipeline, it was going to be at about 800,000 barrels per day on that 800,000 barrels per day as it was coming in. Think about how much in rail and diesel that would save on those rails. So you have again, right now that oil is coming down from oil sands. What people don’t realize is the Canadians have done a fabulous job with their regulatory issues in the sense that their reclamation projects for their oil are fantastic. The US is getting better. I have to say, though, that we’re cleaner than Saudi Arabia, Iran, and all these other places around the world. Now I have to applaud Saudi Aramco in in Saudi Arabia for taking care of Saudi first. They are taking and using all their oil and gas reserves in their make. They’re putting billions into hydrogen. They’re putting billions into renewable resources. And so they’re taking it. And guess what, Armando? They’re not printing money to go renewable. That’s part of the environmental statements that the U.S. is failing. The U.S. has reduced its carbon footprint by 22%. The EIA put out there that we did that by 22% by replacing coal plants with natural gas. They don’t want to admit that now is now politically bad for them to admit it. They said we’re better now. China, as you talked about with the Great and the Wonder, is David Blackmon. China is Korea is is got 400 more coal plants per minute. The U.S. can’t get any that we can’t even get our windmills applied, you know, permitted anymore. So, this paradigm shift is going negative against the environment because of the way green energy is trying to be shoved into the market. The environment, the wind, the solar would actually have a better chance of reducing their carbon footprint if they work with oil and gas companies like Saudi Arabia. And I think we saw that Armando in COP, we were talking about COP and how all the oil guys showed up.
Armando Cavanha [00:18:53] Yes, that’s right. That’s right. There is another point that piqued my attention is OPEC opec+, BRICS, BRICS. Plus, they have a strong position in opposition to the petrodollar. So,.
Stuart Turley [00:19:09] Oh Yes,.
Armando Cavanha [00:19:10] Long term can be complicated. No stuart.
Stuart Turley [00:19:14] Short term. I think the petrodollar was going to be challenged. I think the current administration killed the petrodollar. I think the petrodollar is going to have a demise within the next 2 to 3 years of a significant volume of people going away. I think the demise of the government is going to be it’s a fallacy to think that we can print money to go green. It’s a fallacy to think that people are going to buy the US debt. And this is all because of sanctions and the environment. We are not taking care of the environment. We’ve weaponized the dollar, and it’s backfiring on the renewable folks. And if people understand I’m a humanitarian, let’s give the lowest cost kilowatt per hour to everyone on the planet to elevate everyone out of poverty. Okay. The entire discussion is on the table.
Armando Cavanha [00:20:24] That’s right. That’s right. You mentioned 35 to $40 trillion in the U.S., but is it payable?
Stuart Turley [00:20:35] Oh, yes. There’s a significant chunk coming due next year. And so it’s going to get tough cash flow in the U.S. Why do you think they were trying to get 87,000 more IRS agents? It’s so that they could go like, do you remember Robin Hood in there trying to rob Rob.
Armando Cavanha [00:20:58] Rich?
Stuart Turley [00:20:59] Yeah. Sherwood Forest was trying to tax everybody. You know, the sheriff of Nottingham was going around taxing everybody. That’s what they’re trying to do. So you can only tax people so much before they quit work.
Armando Cavanha [00:21:16] We were talking about the CO2 and the environmental problems, but we, we have something very strange in to boost oil refining capacity.
Stuart Turley [00:21:30] Yeah, we just talked about that.
Armando Cavanha [00:21:32] Yes. 1 million barrels per day a year until 2008. So a few countries are investing in refineries. What’s the what’s the reason they are doing this?
Stuart Turley [00:21:45] Well, it’s because the EVs we are not going to go to EVs. And I like the concept of the electronic vehicle. I like the concept of wind. I like the concept of solar. But India has such a population that they need power. They need all forms of power.
Armando Cavanha [00:22:07] They need 1.5 billion people. Yeah.
Stuart Turley [00:22:10] They are. They are going to need Pakistan’s needs. Needs all of the power. The poor folks in Pakistan need a stable grid. And I guarantee you that when you sit back and look at China, India and any of those countries are doing the best they can to get the lowest kilowatt per hour to their people. Again, with coal. KING Coal is back and coal is not your friend for the environment. My the great in wonder is David Blackmon was on the podcast this morning. I believe he recorded a podcast with Hugo Kruger, his name out of South Africa. And South Africa has enough coal in order to supply the world with coal for 600 years. So coal is cheap. Mark McMillan, who is on my podcast, is discussing the geopolitical. If you can’t provide or protect low-cost energy, you’re that country is not going to be your ally. So what is the U.S. doing? They are ruining the lives of people around the world by sanctioning oil and increasing prices.
Armando Cavanha [00:23:39] But, Stuart, if India and China attack them, are investing in refining capacity, and the West is not doing the same. Very soon, they will be exporting diesel gasoline from them their countries to poorer countries. Is it true?
Stuart Turley [00:23:58] You are dead on? Right. Contracts are probably already being done. And I’m trying to get some more details on that now and a lot of that. But I can guarantee you California is already using set way. They are using 70% of the crude oil that is done in the rainforest. I believe you have heard of this thing in the rainforest. All of the Chinese drilling that is going on in the rainforest, whichever the environmentalist really would like to protect, the rainforest needs to be protected. So, let’s get the drilling out of the rainforest. But California is so hypocritical in its energy usage that they are destroying the rainforest. So there’s another piece of your puzzle on the hip hypocrisy that’s going on.
Armando Cavanha [00:25:02] What could be done to reduce CO2 in terms of logistics and crude crude movements?
Stuart Turley [00:25:09] Pipelines could eliminate heat. We wouldn’t have to worry about renewable energy. We could do more for the environment if we invested in pipelines. Trillions have been invested in renewable energy to the detriment of the environment. And if anybody, Armando, reaches out to you, my offer is I want them on my podcast. If you have any numbers, if you are a world leader, if you are a world, if you care about the environment, if you care about saving humanity, I want to talk to you. If you think that oil and gas is the only way to go, I want to talk to you. If you think that wind and solar are important, nuclear is important. But Armando, the number one way that we can help people is to quit printing money. Number two, get all the pipelines you can in as an example, in the United States, the pipelines. New York will not allow pipelines. They want to do carbon capture. They need 7000 miles of pipeline in order to do carbon capture for the requirements that the Biden administration released on their last 3:00 right before COP started. These are the dumbest regulatory requirements I have ever seen. I’m still going through them. They are. They are not going to allow them. And so what they’re going to do is make the coal electricity so expensive that the United States is going to have blackouts, rolling blackouts like Pakistan.
Armando Cavanha [00:27:13]: You mentioned pipelines. This is the case of Nord Stream, which exploded. And instead of that, we use 50 ship cargoes every week from the United States to Europe. Was that CO2 emissions something big? Huge.
Stuart Turley [00:27:32] Oh, it is. I was looking at that before the show. Let me see if I’ve got it right here. I’ve got it right here in. And millions of metric tons of oil tankers in 2020. Wow. 210 million metric tons in 2020. That’s the boarded tankers. Uh, the dirt fleet is out there. That is low by how much? I’m going to throw a rock at it and say it’s probably 25% low.
Armando Cavanha [00:28:16] Yeah.
Stuart Turley [00:28:18] Now, China just laid keel on a nuclear cargo ship. I applaud China for that. How cool is that? A cargo ship that’s nuclear, that’s about as carbon neutral as you get.
Armando Cavanha [00:28:38] And how about Nords Stream? So we should repair this pipeline to to pump from Russia.
Stuart Turley [00:28:45] If you’re an environmentalist. Yes.
Armando Cavanha [00:28:48] Oh, good, good, good. Good answer.
Stuart Turley [00:28:51] If you even. There’s even one still working. Still, there’s one. There were four nurseries, one at Nord Stream, two had four pipelines, and I went to Oklahoma State University, and so three of them were blown up. That leaves one that still could be used. That would be better than what they have now. Now. Germany has failed as a country, and their GDP is failing. They have been to for many, many years. They have killed their industrial complex, and it’s because of the loss of cheap Russian natural gas. So where the German economy goes in the EU, so goes the EU. My prediction is that we will see hard times next year in the EU to the point where there are going to be enough people who are not happy with the EU. Brexit may be the first. I believe that there will be more. And I think you’re tired of the EU.
Armando Cavanha [00:30:10] Yeah, and Germany closed the last three. The last three nuclear plants returned to coal, importing nuclear energy and electricity from France. Yes. Is these north-south decisions?
Stuart Turley [00:30:27] No. You remember the wind farm where Greta was being carried out in the photo shoot.
Armando Cavanha [00:30:38] Yeah,.
Stuart Turley [00:30:38] She was in Germany, and they were taking pictures of that because they were going to close. They wanted to close the coal mine that coal to to build the wind farm. That wind farm is being taken down so they can continue their open strip mine. Strip mining was about the worst thing you can do. I am. And coal is needed to elevate energy, just like Alex Epstein has always said. It’s about energy to reduce our people’s population. And when you sit back Chris Wright, the CEO of Liberty Frack, is also a gigantic champion of the humanitarian aspect of energy. And I mean it those two are have been the inspiration for me over the last several years is my passion for elevating humanity and being the best you can to the environment. Chris Wright stood up in front of the video on YouTube and he drank his fluid with his staff. You have, as a CEO, drinking your frack fluid and saying, I am not destroying the earth with my getting the oil out of the ground. I have all the respect in the world for that man.
Armando Cavanha [00:32:11] On Monday, next Monday, we have a new podcast with Stuart Turley, Tammy Nemeth, and David Blackmon and myself, and we are discussing the return of After SEAL COP28. But do you believe that COP 28 discussed the unnecessary logistics that are being used with so big CO2 emissions that they do not know about these issues?
Stuart Turley [00:32:38] The Kerrys of the world. The all of the climate. Fear-mongering people. Our part of the wealth transfer they’re trying to take from the rich and they’re trying to give to the rich. Know you’re trying to stab the consumers around the world in the back and they’re doing it in the name of climate change. If they were true humanitarians, they would be putting in water. We would be putting in clean water stations around the world. We would be putting pipelines so we wouldn’t have to ship these things in here. We would be helping Africa build nuclear plants. We would be training people on how to do these things. Grace Stanke, The Miss America ad of U.S.. I got to interview her while she was in Dubai. What a class act going around championing humanity through low-cost energy of nuclear. Well, we can save the world. We can get to net zero. We can do it. But it’s going to take two parties.
Armando Cavanha [00:34:06] Yes.
Stuart Turley [00:34:07] Their side doesn’t want to listen. They don’t want even to hear facts and they do not want to pay for it. They think that they have the right to demand payment.
Armando Cavanha [00:34:19] Yeah, that’s right.
Stuart Turley [00:34:20] You’re mad
Armando Cavanha [00:34:21] Stuart is going to the conclusions. Please give me many necessary logistics that could save CO2 emissions. How much is in terms of 100%. So, unnecessary logist that we could cut could be 20%, 30% or different.
Stuart Turley [00:34:43] I think if you and I were running the oil and we would be up there with the OpEx and everything else, I guarantee you we could cut 10%. The first year I’m going to throw a number out that I know that we could go to 20% or 30% total in two years if we had the authority to change things. I guarantee you. So not only could we get rid of 200 million metric tons, but we would also whittle that away and have more impact. You and I would have more impact on the world’s pollution than anyone else. I feel that strongly about it.
Armando Cavanha [00:35:28] Yeah, well,
Stuart Turley [00:35:29] I’m an ego into super maniac.
Armando Cavanha [00:35:31] Fantastic Fantastic, it was a great, great pleasure to to talk to you, Every thought saids always, always
Stuart Turley [00:35:40] Thank you Armando I do appreciate you.
Armando Cavanha [00:35:41] You are fantastic
Armando Cavanha [00:35:43] Yeah.
Stuart Turley [00:35:43] So thank you very much.
Armando Cavanha [00:35:45] Thank you. And the Monday, we will be again together to talk.
Stuart Turley [00:35:50] Absolutely.
Stuart Turley [00:35:51] We’ll see you then.
Armando Cavanha [00:35:52] Great big great weekend to.
