Is Germany About to Tax Your Sun Use? – ENB Weekly Recap

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

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Michael Tanner: [00:00:00] Is Germany about to tax your sun use? That and much more next on the Energy Newsbeat weekly recap. [00:00:07][7.5]

Stuart Turley: [00:00:15] Germany’s net zero plans, including taxing the sun and closing stable power plants, you can’t buy this kind of wild fun in a bizarre twist of environmental policy, Germany’s push to net zero emissions is involved into what critics are calling tax. On the sun. This comes amid the country’s aggressive shutdown of reliable energy, including nuclear and now coal plants under the banner of green energy. Michael, you can’t buy this kind of stupid. I embedded in this article a X-post, and this lady is just absolutely beside herself with the amount of money that was thrown at people to put solar panels on their roofs. Now they want to tax you for having them on your roof. And it’s called the sun tax. And now you’re sitting there looking at why is China has increased electricity production by 70% while production in Germany has declined by 10%. Net zero equals deindustrialization. Financial collapse is what that actually equals. You cannot buy this. We’re going to tax the sun. Unbelievable, dude. [00:01:35][79.2]

Stuart Turley: [00:01:36] UK doubles down on net zero, restricting North Sea oil production. Michael, this is their last hope for any kind of problem going on here in a bold yet controversial move. I call it stupid. The UK under Prime Minister Keir Starmer is intensifying its commitment to net zero emissions by clamping down on North Sea Oil production. Through a combined elevated taxes, stringent environmental regulations, and deliberate shift toward wind and solar energy. This is unbelievable. To discourage further investment, the tax rate on oil and gas extraction profits has been hiked to 78%, Michael. I’ll tell you what, that is stifling oil and gas investment. And the second order of effects, Norway is one of their biggest suppliers of electricity and natural gas, and they’re wanting to shut the UK off. What is the UK going to do when Norway shuts them off next year? This is absolutely unbelievable. Coal has been phased out, the reliance on gas exposes the nation’s global volatility as seen in the post-war. This is unbelievable. These two go hand in hand, skipping down the road of stupid. [00:03:03][87.6]

Michael Tanner: [00:03:04] Yeah. I mean, here, here’s, I think the, the interesting part here. So it’s a tax rate on it on oil and gas profits at 78%. Now me, the finance guy says, well, okay, well we’re just going to do some sweet accounting tricks to make it look like we don’t have any profits. You reinvest into R and D, you capitalize things at a higher rate. So I’ll be hard pressed to see if anybody actually pays those rates. BP I’m sure has great accounting staff that will be able to figure out how to weasel their way around this. I think what this does signify, and you wrote this in the article, is the fact that now all these oil and gas companies, this is probably gonna be in the nail in the coffin for them to eventually leave. We already know BP hired as their new chairman of the board, a new chairman who has experienced moving companies to the New York Stock Exchange, which has resulted in an over a doubling of the valuation, okay? So the chairman, Alfred Manifold, okay, the company CRH changed their listing from the London Stock Exchange, the LSE, to the New York Stock Exchange and the market capitalization doubled. If there was ever a final, in my opinion, nail in the coffin to get this done, it’s this. And candidly, I’m writing a little bit of a, I’m in the middle of finishing up a article for our Substack that will drop later this week. This could be the final step before BP finally puts itself up for sale and there could be an buyer in the market here, which we will cover. It’s currently extremely undervalued. I’ll be shocked if Shell also doesn’t consider this. I mean, it’s the problem with central planning. You’re always going to incentivize something leads to a negative effect somewhere else. [00:04:41][97.8]

Stuart Turley: [00:04:42] Exactly. I found these two stories quite entertaining to write this morning. [00:04:46][4.6]

Stuart Turley: [00:04:47] The Jones Act still has a stranglehold on energy dominance and new shipbuilding rules to derail U.S. LNG exports. Michael, today there’s only about 95 Jones Act compliant vessels in operation. They’re expensive, they’re old. Guess how many LNG carriers the United States has flag under the Jones Act. [00:05:13][26.1]

Michael Tanner: [00:05:14] I don’t even want to guess, I’m sure it’s low. [00:05:16][1.9]

Stuart Turley: [00:05:16] One. And I think it holds a coffee cup full of LNG. It is small. It was built in the 80s. The US exported a total of 101,396 LNG cargoes last year. At the same time, the global LNG vessel fleet has 792 operating tankers per data in the CLNG trade association. And of these, only one is flagged a U.S. Ship. But it’s half the capacity of a modern LNG carrier and primarily use services delivering to Puerto Rico. Holy smokes, Batman. The shipbuilding requirements that are in the trade plans that the Trump administration has are very restrictive, and we need a minimum of six to seven within the next five years. Now, there are, it’s being built in the United States, not just flagged. That is the key difference, Michael. [00:06:17][61.0]

Michael Tanner: [00:06:17] Well, and I also think that, you know, let’s, I mean, we’re just talking about energy. I mean let’s not even talk about the ship building from a military and a defense standpoint. I mean if you really think that China’s this next great boogeyman and the monster, you think we’re going to help defend Taiwan with aircraft carriers? Probably not. We’re probably going to need something a little bit more dynamic, something that’s a little bit more crazy. And so from this, from that, listen, throw that out of the window. Let’s just talk about energy. I mean, California still purchases Middle Eastern oil. Why we can’t get our own U S oil to them because it requires one of these 95 ships. Don’t even get us started about Hawaii. We all know how much, how bad Hawaii is when it comes to importing foreign fuels because of the Jones act. So, I mean I think this six is, is low. I means it does say it’s at least I mean, I would say that number needs to be at least in the 15 to 20. [00:07:10][52.8]

Stuart Turley: [00:07:10] Oh, I agree. And I think there is something that needs to be done in flagged versus built. And I that should allow the United States to buy 50 tankers, 100 tankers and get us started with buy us some [00:07:26][15.2]

Michael Tanner: [00:07:26] buffer. So I got a question for you, because to me, this seems like an easy bipartisan bill to get behind. What, in your opinion, is holding up Congress from moving on the Jones Act? [00:07:37][11.2]

Stuart Turley: [00:07:37] 212 jobs by a union. So it’s 200, really, that’s all it is? That’s all. It is. It’s a union that has a grip on a bunch of different politicians that have greased the skids in political graft and corruption. [00:07:51][13.4]

Michael Tanner: [00:07:51] Yeah. I mean, is it the longshoreman? Is that what it is? [00:07:54][2.8]

Stuart Turley: [00:07:54] But I got to go dig my numbers out and all those papers and research, but it is basically 212 jobs, and that’s it. [00:08:01][6.9]

Michael Tanner: [00:08:02] And this is where we have to be honest about capitalism. I mean, one of the first things that you learn in college, if you decide to study economics, which I happen to do, you learned about this idea of creative destructionism, that there are always periods of capitalism where old industries are destroyed and new industries are pop-up. And those jobs that were destroyed, you end up finding new jobs somewhere else. And I think there is a little bit more of a nuanced discussion, specifically when we talk about what’s going on with AI, But if we’re really, uh, if the Jones act is really just supporting 212 jobs, that is truest form of regulation gone wrong. [00:08:40][38.4]

Stuart Turley: [00:08:40] It is 100% gone wrong and it was built out of the 1920s to trying to help actually keep shipbuilding here. But all the regulatory processes, we’re down to four shipyards that are basically supporting the military. We have about two or three others that are coming back online. The shipyard in Philly has been bought by South Korea and that does count and is coming back online. So the, the Trump administration is making some headway, but they are not going to hit these self-imposed barriers that they’ve got going on here. And it is a gigantic problem for energy dominance. Because LNG growth is going to be handicapped dramatically in two years. [00:09:28][47.3]

Michael Tanner: [00:09:28] No, absolutely. We will be right back to the show guys, but I quickly, quickly need to pay the bills. As always guys, all the news and analysis you’ve heard throughout this show is brought to you by the world’s greatest website, dot energy newsbeat dot com.the best place for all your energy and oil and gas news. Stu and the team do an incredible 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 the oil and gas business. Go ahead and hit the description below for all links to the timestamps, links to the articles. You can also subscribe to the show via our sub stack, TheEnergyNewsBee.substack.com, a great, great place to support the show. You could do that by either signing up for a free or a paid subscription. And it really truly is just the best way to get a daily brief of what’s going on in the oil and gas business due to the great job of compiling stuff. I’ve got some research that we’re hopefully going to be dropping next week, guys. Highly recommend subscribe to our substack, The Energy NewsBeat substack.com. We’d also like to shout out friends of the show. Reese Energy Consulting, we really appreciate them helping make this show possible. Guys, if you need help in the midstream space, if we were at all wondering what’s going on with the mid-stream side of your business, you need to help with your first purchase or contracts. You’re in the mainstream business and just need a project taken off your plate, guys. Reese Energy consulting are the quintessential experts in this business, guys, they have clients that range from two people in a garage all the way up to the largest publicly traded companies. So if you’re wondering if you are right fit for them, the answer is you are, guys. Check them out, Reseenergyconsulting.com. And finally, guys, it is never too early to start thinking about your 2025 tax burden. We have a great new tax calculator, investmentoil.energynewsbeat.com If you are considering investing in the oil and gas business and considering doing it because of your, first and foremost, your tax liability, oil and gasses is a great way to lower that. It’s probably, in my opinion, one of the most tax-efficient investments you can do. Highly recommend go to investinoil.energynewsbeat.com, fill out that portfolio survey and tax calculator. We will get you a bunch of information and if you qualify, we will point you in the right direction. But let’s get back to the weekly recap. Thanks guys. [00:11:34][125.5]

Stuart Turley: [00:11:34] The global struggle to meet renewable energy goals? Is this a shift back to oil and gas, Michael? This is also, how will this impact net zero? This story I had fun writing on the Energy Newsbeat substack. It is about three main points. The total failure of wind and solar and hydrogen to be sustainable. And what I mean by that is by the simple fact that they need subsidies to survive. Number two, the lack of funding going into oil and gas exploration has now changed. And after reviewing big oil companies and forward statements, after reviewing their Q2 earnings, we are seeing a change in the second half of 2025. Also, in the third part of this article, economies based on net zero energy policies are failing at a dramatically steep incline. The first part of this story, Michael, was Orsted’s financial woes. Holy cow, Batman, they lost almost $8.7 billion, what they need to shore up their finances and their stock absolutely went south for the winter. In the US delays and increased expenses like the sunrise wind led to a $1.7-billion impairment was one of their excuses, but yet here’s the biggest problem with Orsted. They have never designed their projects to be designed without subsidies. They’ve always relied on that. Now, on the day after that, that Orsted Michael TPI Composites has voluntarily filed for chapter 11 bankruptcy in the US and they’re the number one blade manufacturer. Oops. Now let’s take a look at the counter side of this or where this argument is coming from. BP stood up their earnings call this past week represents a $5 billion cut in green energy budgets from BP, but they’re talking about the slastich planned investment into renewables between $1.5 billion and $2 billion down from previous forecasts. Then you take a look at next decade. Next decade got $1.8 billion injection for LNG project. Michael, this is huge because guess who’s investing in it? You’ve got Total Energy, ADNOC, and a few others investing into next decade. And I have reached out to next decade to interview their CEO. Now, here’s where I took this story. I took a comparison of oil and gas investment of their Q2 earnings versus Q2 earnings for renewables. And you take a look at how much money was given back to investors in oil and gas versus what was given back into the renewables and Michael, it was like nothing in renewables, so why would you want to invest in renewals? There is no money in renewibles. Here’s the bottom line. Net zero will be the redefined in the next six months. Into the next money grab because it is no longer working and they’re recalibrating it right now. [00:14:53][198.0]

Michael Tanner: [00:14:53] I think it’s really fascinating that, you know, people always ask, well, where are all these companies going? What’s all, where’s it headed? It’s all in their earnings report. Now what they do is they just throw it on page 20 of a 25 page report. So it’s, really now only with like tools like AI, which can summarize things and pull things out that we’re actually able to dig in and find all this stuff. And I think, it’s real interesting. I mean, I find it hilarious that private equity is losing their shorts on all these renewable investments. Now, losing their shorts or are they in it for the tax deductions, because again, there were great credits available for renewables and there still are if you get the project sputted, that’s an oil and gas term, if you move a little bit of dirt, by what, end of [00:15:35][42.4]

Stuart Turley: [00:15:36] Some by 2027, I have to go check the numbers, but it’s still bad because the profitability won’t be there for return. So why put any money into it? [00:15:46][9.8]

Michael Tanner: [00:15:46] I mean, we’ll talk a little bit about this in my segment, but the oil and gas had pretty robust Q2 earnings relative to what’s happening on the renewable side. So I don’t think it’s any shock that we’re seeing this. [00:15:56][9.9]

Stuart Turley: [00:15:56] Oh no. Next decade gets a $1.8 billion injection for an LNG project. We kind of talked a little bit about this. I wanted to go into this just a little bit deeper on this. The chairman, Matt Schatzman, chairman and CEO, I reached out to him this morning to try to get him on the podcast. And the reason this is important is because the other ones that are investing in this are Total Energes and GIP. This is very important as we try to build out our LNG export facility. This is actually pretty cool. The stock has surged 57% pushing the company’s market cap above the 3 billion. That’s huge. [00:16:39][42.3]

Michael Tanner: [00:16:39] No, it is huge. I think LNG, as we’ve talked again at Nausium on this show, is going to become ever more important. Export facilities are even going to be even more important and players like Next Decade, Total, and all the other partners they have on this project are only going to be better. I mean, this Rio Grande facility, like you said, located near Brownsville, Texas, it’s going to even just in phase one, one of the largest export terminals, which I think is absolutely insane. It’s approximately 5.4 MTPA of capacity. I mean, that’s a megaton, literally. And this total project costs somewhere between $6 and $6.2 billion. Total is going to toss in $300 million for a 10% equity stake. GIP will commit $1.5 billion for a 50% stake, which could theoretically decrease to a 30% stake. If specific return on investment milestones are achieved, next decade is going to go ahead and contribute 1.2 billion, securing a 40% interest that could rise up to 60% if certain KPIs are hit. So we also know that Abu Dhabi’s national oil company, ADNOC is going to hold a 12% stake in the overall project and assigned a 20 year offtake agreement for LNG from that train four, which really solidifies its commercial viability. So, I mean, they’ve, they’re got everything lined up from a, from finance and structure standpoint. I would be very interested in and again we’re going to be following this very closely. [00:18:02][83.4]

Stuart Turley: [00:18:03] Oh, you bet. Soaring electric bills in New Jersey, policy failures, energy mix insights and national cost comparisons. The crisis unfolding in New jersey. Residents like Rebecca from Highland Park are emblematic of the problem. Her monthly bill jumped from an average of three hundred to over one thousand dollars despite no changes in household usage. Quote, I don’t know how we’re expected to absorb these new bills. She lamented on social media. Michael, natural gas is 49.6% of the New Jersey power. Nuclear is 45%. Solar is 2.9%. My head exploded. Why are their prices expanding? It’s the distribution costs that are going through the roof and the net zero fees. This is nuts. This is absolute net-zero bull hockey at its finest. [00:19:03][60.1]

Michael Tanner: [00:19:03] Bills are up, Stu. I mean, it’s kind of crazy. I mean that it is the problem with, you know, when you have super hot summers, electric bills do skyrocket. Now, a lot of this has to do with their oil and gas and the mix of renewables. I mean you look at this, they’re saying from Highland Park, they’re seeing that their bill jumped from an average of $300 to $1,000 a month, despite no changes in household usage. That’s the key. As I mentioned, usually in summer you use more energy. I’m running my AC all the time. You know, of course it’s gonna cost me a little bit more, but there’s been no change in household uses. You know we know property taxes are up. We know all this stuff is up. I mean, it’s unbelievable. It’s, and this is interesting. So to give you guys an idea, most of the power that comes from New Jersey is actually natural gas and nuclear, which is really interesting from a baseload energy standpoint. Now remember, New Jersey aims for 50% renewable by 2030 and 100% carbon by 2050. They won’t hit that. But, it does go to show you, you are vulnerable to price increases from natural gas if prices do go up. If you’re allowing that price to float, it is what it is. So, you know, when people say, oh, well, natural gas, all the grid, prices are going to be low. Yeah, they’ll be low, but you are still giving yourself the ability to get hurt as prices for the end refined natural gas product rise. Now, speaking of that, prices for natural gas have absolutely tumbled in the last two months. So, might get to the point where those numbers come down. [00:20:30][86.9]

Stuart Turley: [00:20:31] Well, if the governor actually would allow pipelines and since they’re up in that area, it would actually go down. [00:20:38][7.4]

Michael Tanner: [00:20:38] Yep. And you bring up a great point. Some of it’s not just how much the energy mix. Some is how is that energy getting imported? And if you’re having to do all of these crazy import methods like New Jersey, it doesn’t matter if you are totally reliant on natural gas and nuclear, if you can’t get any of it into your state, you’re going to be paying definitely higher bucks for it. That’s right. [00:20:38][0.0][1219.3]