Michael Tanner and Stu Turley cover several significant developments in the energy industry.
First, they discuss New York’s new “Cap and Invest” program, which will ration and tax fossil fuels. We do not see this as being ineffective and costly for consumers. This will do nothing but drive more people out of New York and reduce taxable income as money leaves the state. There is a reason JP Morgan has moved its gold trading unit out of New York.
Next, we examine the increasing isolation of Venezuela as its allies Russia and China step back amid heightened U.S. pressure. This has implications for Venezuela’s significant oil reserves.
We then cover ExxonMobil’s interest in acquiring a Russian firm’s stake in an Iraqi oil field, as U.S. sanctions impact the global energy landscape.
The discussion shifts to the automotive industry, noting a pivot away from aggressive EV adoption towards more profitable hybrid vehicles in the U.S.
Analyst Josh Young’s insights on OPEC’s production increases and the implications for spare capacity and oil market dynamics are also covered. Stu will be discussing this article with David Blackmon, Josh Young, and Wasif Latif next week on the Energy Impacts and Energy News Beat podcasts live on X, LinkedIn and YouTube.
Finally, we lament the collapse of California’s oil and gas industry due to stringent policies and permitting challenges, and we criticize the state’s governor. Governor Newsom has pushed the oil and gas markets to a breaking point.
Key Time Stamps:
03:21 Venezuela is suddenly alone
06:20 ExxonMobil looking over LukOil in Iraq
08:57 Shift to hybrid cars will lower gasoline demand
10:23 OPEC* Production
13:17 Has California’s Oil and Gas industry hit the point of no return?
Stu will be interviewing Mike Umbro, and Katy Grimes, Editor in Chief of the California Globe, are live on LinkedIn, X, and YouTube to talk about the California story. “Has California’s Oil and Gas Industry Hit the Point of No Return? – California Globe“
Here is the live link for tomorrow’s show on YouTube:
Stories we covered today:
1.New York’s climate law will ration fossil fuels and tax the rations – David Wojick on CFACT
2.Venezuela is Suddenly Alone: Allies Step Back Amid Escalating U.S. Pressure
4.The Shift to Hybrid Cars is Moving in the US
5.OPEC+ Production Increases and Spare Capacity Audit – Oil Market Implications
6.Has California’s Oil and Gas Industry Hit the Point of No Return? – California Globe
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Full Transcript:
Michael Tanner, ENB Co-Host [00:00:01] New York to ration fossil fuels. Oh, that’ll work well. Next on the energy newsbeat stand-up.
Stu Turley, ENB Co Host [00:00:17] Hey, thanks, Michael. I’ll tell you what, you can’t beat a good Kathy Hokel for our first story out of the block. New York’s climate law will ration fossil fuels and tax the rations. David Woljack on CFAC writes a wonderful article. And I’ve reached out to him to get him on the podcast, Michael. New York Governor Hochel says the emission reduction regulations required by the Climate Act are infeasible and ruinously expensive. She has yet to explain this. So here’s his assessment. The regulatory program has two different mechanisms. First, they ration your fossil fuels. Oh, let me think. How much natural gas does new New York use? A lot. And then they tax you heavenly on the rations that you do get. So not only do you use them, they’re gonna tax them when you do use them. The program is called Cap and Invest, which sounds good. Note the missing word tax. You should need to tax the money to invest, and an honest name is Cap Tax and Spend. So cap tax and spend is really a cool little marketing slogan for the Democrats when they’re trying to say we’re reducing energy prices. Bull hockey, the environmental environmental conservation, the DEC and New York State Energy Research Development Authority, the NYSRDA are designing a program that sets an annual cap on the amount of greenhouse admissions. And let me add this one here. Here’s the story on Energy Newsbeat as I roll through this. The the they are adding the gas cap on the amount of greenhouse pollution that is permitted in New York. Under the program, large scale greenhouse emissions sources and distributors of heating and transportation fuels will be required to purchase or obtain allowance for emissions associated with their activities. The cap is on the ration, the allowances are on the ration tickets that have to be bought. Holy smokes, Batman. This is absolutely a recipe for let me think fraudulent use of tax dollars.
Michael Tanner, ENB Co-Host [00:02:42] Yeah, I mean this is this will only end with one thing, and that’s shortages and higher prices. Whoever came up with this is is is not terribly swift. It it you know and and the funny part is it’s already expensive to have energy in New York. So now you’re going to layer on cap and invest. I mean, that those words don’t even really make sense. They’re just they’re they’re they’re using a bunch of buzzwords. Like you said, Stu, this will go absolutely false. Hopefully, nobody runs out of energy in December. I mean, they won’t, but you’re you’re going to be paying a big, big amount for it. It’s pretty unbelievable.
Stu Turley, ENB Co Host [00:03:21] Oh, you can’t buy this kind of thing. And you know what? I want to give a shout out to all of our listeners that are in New York and California. We have huge this morning, Michael. When I started work at 5 a.m. Starting to write stories, we had 76,000 people already on energy newsbeat.co. And I mean, it was rolling. Guess where most of them were? California and New York. Why are they there? Because they want to know the real truth about energy. Shout out to New York and California. Let’s go to the next story. Venezuela is suddenly alone. Allies step back amid escalating U.S. Pressure. I kind of like this little thing here. You got to look at this story and Donald Trump holding up a gasoline nozzle to Maduro’s head. It’s kind of actually funny. In a dramatic shift for global energy geopolitics Venezuela finds itself, Michael, increasingly isolated as its two primary allies, Russia and China, did dial back their support for President Nicholas Maduro’s regime. This is a highlighted LinkedIn analysis by Jack Prendelli. I’m gonna be interviewing him real soon. He is a cool cat out of Switzerland. Comes at a US time when US pressure is intensifying and raising questions. The retreat, Russia, a long support Maduro is retreating. China is now stepping back and going, Oh, not today. That sounded like Putin. I don’t know. I can’t do a Chinese imitation, and I sure can’t do a Putin imitation. The backdrop of this isolation is heightened by US sanctions under the Trump administration. What does this mean for the moil? You and I have already talked about this and the other show that we did. I’m not going to go into it. Venezuela currently does not make that much oil. However, they have the largest reserves on the planet, and they could if they had actual leadership involved in Venezuela.
Michael Tanner, ENB Co-Host [00:05:30] Yeah, and it is interesting because you know, outside of Chevron, who was basically the supporter of and the big joint venture partner with Petavesa in their oil fields, they they argued that as the US sort of ordered them to step back come April of 2025. Their their argument was, well, China and Russia are now going to come in more and have a much bigger influence over the oil field. And what’s interesting is we’re seeing this retreat. Very interesting to see this. I I would have I I would have guessed that with the US heightening aggression against Venezuela, specifically the Maduro administration, I would have bet that Russia and China would have come to Venezuelans, I don’t want to say defense, but have shown would be showing more public support. So it is very interesting to see see what what’s going on there.
Stu Turley, ENB Co Host [00:06:20] You bet. Hey, let’s go to the next story, Michael. ExxonMobil looks over Luke Oil’s Iraqi oil field as U.S. Sanctions finally hit home. What does this mean for investors? I tell you what, this is kind of cool. This is called energy dominance as an export as a service. Now, this is sanctions don’t work as intended. This time they may actually have worked and a significant development for the global energy sector, the U.S. Giant ExxonMobil has expressed interest in acquiring Russian firm Luke Oil’s majority stake in Iraq’s premier oil fields. This is kind of interesting. The move by ExxonMobil, I got an ExxonMobil in there twice. I got to get that corrected. Has approached Iraq’s oil ministry to discuss purchasing Luke Oil’s 75% in the West Kerna II oil field, according to the sources. But there are also several other bidders in there for this as well. The key is getting the Luke Oil to survive and getting them to sell their assets. It’s gonna be pretty interesting.
Michael Tanner, ENB Co-Host [00:07:33] Yeah, and it’s it is interesting that Iraq’s government is inviting US firms to bid on this. I mean, considering a lot of the tension we’ve had with them and with Exxon, as you mentioned, emergencing at the front runner. This this could be very interesting because, you know, Exxon was in the Iraq oil field, they left, and now they’re back more of an about phase. You know, to give you guys an idea, Luke oil has been a pretty major player in Iraq’s oil sector since really the early 2010s, operating under what’s sort of known as a service contract, which allows these foreign firms to develop oil fields in exchange for basically fees on a per barrel produced. You know, that big asset out there is the West Kernet 2 oil field, which is located in in Iraq’s southern Barassa province. They hold a 25% operating stake, and the final 25% is actually owned by Iraq’s state-run North Oil Company. It’s it’s pretty interesting. There’s also Block 10, which is some offshore stuff located in the Urdu oil field. That was discovered in 2017. It’s in the early development phase, but it does hold some promise. It’s it’s gonna be interesting. You know, there’s a lot of oil down there, Stu. And I think, you know, you you you asked about here, you know, if you can get production up to 800,000 barrels a day, you know, that that, you know, estimates are saying that’s five to ten billion dollars of capital. So I mean it’s it’s it’s gonna be it’s gonna be a lot.
Stu Turley, ENB Co Host [00:08:57] You bet. All right, let’s go to the next one here. Shift in hybrid cars is moving in the U.S., Michael. You and I have talked about this for a long time. And I you gotta love a good story that hey, I was actually right for once on the show. The involving landscape of American automotive manufacturing and a notable pivot is underway from aggressive adoption of EVs toward hybrids. Michael, can you imagine what Ford’s gonna look like to investors if they don’t have to lose $60,000 ballpark for a car for each car EV that they make to go to actually a profitable hybrid, which is only the only way we’re going to reduce demand and stop fossil fuels is to reduce demand. Oh, hybrids would do that.
Michael Tanner, ENB Co-Host [00:09:53] Yeah. No, I mean we’ve been on this for a while. I think hybrids are the best blend of you do get some, I don’t want to say emissions reduction, but you get the upside of being able to maybe go farther while also being able to to fill up your tank very quickly when you need it. Obviously, the Ford Lightning has been an absolute disaster. It’ll very it’ll be very interesting to see if they come out with a Ford hybrid. But yes, Stu, it’s nice to kind of give ourselves a pack on the back, paddle the back on this one. We definitely saw this one coming.
Stu Turley, ENB Co Host [00:10:23] Absolutely. Let’s go to OPEC plus production. This is from our good friend of the show, Josh Young. OPEC production increases spare capacity oil mark implications. I’ll tell you what, this is great. I love Josh Young. He is a cool cat over there at Bison Interest. And you take a look for our podcast listeners, there is OPEC production cuts chart. Look at this chart. OPEC announces production cuts. He’s got it all mapped out. OPEC begins announcing production increases and it continues to go down. This is one of the best ways I’ve been able to look at visually and saying, do they actually have spare capacity? And Josh outlines that beautifully in this article. And when he actually went to he went to OPEC leadership to hear their presentation on a new study. He has some great insights in this article, and we highly recommend going to Bison Insights on his sub stack, and the link is in there in the show notes. And you take a look at it, they ope’s kind of maxed out. They’re not, they they they are not actually capable of having a lot of extra. This brings up the glut versus market versus supply demand and market sediment. Michael, you said that the other day. It’s all about the market sediment and it’s about whether or not people believe that there is actually a glut. I believe that there is not a GLUT. And this is actually proving it when you take a look at the new pricing matrices from OPEC is about how much can we produce. And then you match that to supply to demand. Oh, wait a minute. Going back to basics, says OPEC. This is kind of cool.
Michael Tanner, ENB Co-Host [00:12:21] Yeah, no, it’s it’s really interesting. I I wanna, you know, put your stop right there on this the distribution of inflaced and adjusted oil prices over the last fifteen years, where it talks about supply destruction and demand destruction. So I think this is key right here. Yeah, right there. So what this is showing is that there are there are price levels at which there’s supply destruction and price levels at which there are demand destruction. And this chart clearly, clearly shows this. And where’s that dotted line right now? Supply destruction. So sure, yes, OPEC has said they’re going to increase production. Now the question is, will they be able to? I think Josh Lun Young, what he lays out here is I don’t think they will be able to. They’ll continue to fall short. And then at these prices, supply will continue to be destructive and we will be eventually back on that flywheel in increasing prices. When does that when’s that going to happen? Oh, I don’t know, but we know it’s coming.
Stu Turley, ENB Co Host [00:13:17] You bet. Again, a hat tip to Josh Young over there. And I’m interviewing Josh Young and David Blackman coming up here real soon. And we’ve also got Wassif Latif next week, I believe, on the show. So we’ve got Wassif, Josh Young, and David Blackman. That is a great markets update. Let’s go to this last story. I absolutely love, like I said, we started the show with New York. We’re gonna end the show with California, our two favorite states. Has California’s oil and gas industry hit the point of no return? The California Globe. This is actually a fantastic story by Katie Grimes. She is the editor in chief of the California Globe. And I have a podcast with her and Mike Umbro live at one o’clock Central and 11 o’clock Pacific with her to cover this story. This story is spot on because she is actually covering did they go too far? You and I have been on this story, and our our podcast has gone nuts over this for the whole year. But the difference is she is actually bringing up other points in here. California governor is presiding over the largest energy c policy collapse of the oil industry. She is calling it like she is saying. The Philip quote, the Phillips 66 refinery in Wilmington shut down on October 17th, is taking 140,000 barrels per day of crude oil of refining offline. Originally, the Valero and Balencia was slated to shut down in April of 2026. However, given the fact they’ve canceled their crude oil contracts over six weeks ago, it looks like they will be shutting down no later than January of 2026, four months ahead of schedule. There’s a lot of high-hitting notes in this bad dog. Arizona said when the refinery shut down, more Californians will leave the state. California’s oil and gas industry provides five hundred and thirty-six thousand seven hundred and seventy-seven seven seventy jobs in California and a hundred and forty-eight thousand Californians are directly employed as its individual companies. Michael, the slow walk of death of what’s happened to what they’ve done to the permitting, they’ve had, I believe, three to five permits this year, whatever the number is. It’s it’s under single digits. They are now by law supposed to permit in Kern County 2,000 permits, Michael. Do you think they’re gonna do this the Baghdad Bob slow walk of death down this this thing? So we’re gonna call Governor Newsom. Climate Bob as a shortcut or a nickname ’cause Climate Bob is gonna slow walk these things in here. And it’s absolutely gonna be despicable.
Michael Tanner, ENB Co-Host [00:16:20] Yeah, good old oil slick himself. I mean, this is this is pretty unbelievable. It’s gonna be a great live bit podcast that you’ve got on Friday with Mike and and and Kat.
Stu Turley, ENB Co Host [00:16:29] Oh yeah, absolutely, dude. I’ll tell you what, this is absolutely nuts. Again, we love all of our listeners in California and all of our fans on the of the show in New York. And when the rich leave the states, they look for tax deductions. And I’m gonna say this about tax deductions. When Hillary Clinton was visiting with President Trump, he said, I don’t she goes, You don’t pay any taxes. And he goes, ‘Cause I follow your your laws and your legislation. I know how to look for ’em. People who know the laws don’t pay taxes. So now
Michael Tanner, ENB Co-Host [00:17:06] Absolutely. Well, let’s let’s jump over and quickly cover oil prices before we do that. Stu, let’s quickly pay the bills. As always, guys, check us out, energy newsbeat.com. Thank you again to Reese Energy Consulting for supporting the show. Guys, check them out, Reese Energy Consulting.com. All of your midstream needs, they can help you out with everything, whether you’re an upstream company that needs help with with your first purchase or contract, whether you’re a midstream company that just needs to take a load off your busy team. They work with clients all of the down the value chain, Reese Energy Consulting.com. We really, really, really appreciate you and them supporting the show. And then finally, guys, invest in oil.energynewsbeat.com is a great place to learn how to legally pay less of taxes, guys. That’s energy or invest in oil.energynewsbeat dot com. Prices though, Stu, pretty stable today. You know, we’re sitting at about 59, 26, prices up about 26 percentage points for the day. Brent Oil’s dropped a little bit, natural gas about four dollars and ninety-eight cents. So pretty unbelievable from where we are at. We did see EIA crude oil inventories come and and it was a fairly modest. It was about a 600,000 barrel build, which haven’t done much to the markets from that standpoint. Only other interesting thing I saw, Stu, is that Blackstone Minerals and Qataris, who used to be Kimbridge Texas Gas, announced a new development. Agreement which will develop 220,000 gross acres and handsville expansion. Basically, what they’re doing is is Blackstone Minerals is basically they own all the minerals and they’re coming up with an agreement with Qatarist Energy to go drill all of this out. It’s pretty unbelievable. Obviously, this is big for Qatars and Kimmeridge specifically who owns guitars because they are specifically wanting to feed all of their gas into their new LNG terminal. And so this gives them a great, great value chain to shove that in. So really interesting there. Really, really interesting there. But it, you know, we’re gonna see how this plays out. Outside of that, Stu, that’s really all I’ve got. I haven’t really seen anything else. You we got some great podcasts coming up. Oh yeah, it’ll be great.
Stu Turley, ENB Co Host [00:19:17] You bet. We just released Nathan Lord out this morning and it is phenomenal. It’s already, I’ve already seen it. It’s got a huge run already after just a few hours. So it’s kind of cool when you sit back and actually have great guests. Wow, what’s up with that?
Michael Tanner, ENB Co-Host [00:19:35] It’s great. I don’t know what that means about me, but I really appreciate you letting me come on here. But with that, guys, we’re gonna let you get out of here, get back to work, and finish up with your week. As always, guys, we appreciate you sticking with us for Stuart Trolling. I’m Michael Tanner. We’ll see you tomorrow, guys.
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