Daily Standup Top Stories
Tech Industry Wants to Lock Up Nuclear Power for AI
Largest tech companies are looking to buy nuclear power directly from plants, which could sap the grid of critical resources Tech companies scouring the country for electricity supplies have zeroed in on a key target: […]
Will Evil Google’s AI Demands Exact A High Price from New Yorkers Who Foolishly Went for Solar and Wind? Could Be!
I received a very interesting email yesterday from a reader. It suggested Google, which already has roughly 40 data centers around the world, may be planning another in the vicinity of Spring City, Chester County, Pennsylvania […]
CNOOC launches China’s largest LNG storage base
China National Offshore Oil Company (CNOOC) has launched what it says is China’s largest LNG storage base at its Binhai LNG import terminal in Jiangsu. According to a statement by CNOOC Gas & Power, six […]
Chinese coal terminals ‘bursting at the seams’
High rainfall, increased hydropower, and preparation for the hot summer months are all contributing to very full coal terminals up and down the Chinese coastline. “Port storage is bursting at the seams, and it appears […]
Oil prices rise 2% on summer demand hopes, supply worries
July 1 (Reuters) – Oil prices climbed about 2% on Monday on hopes of rising demand during the Northern Hemisphere’s peak summer driving season and worries that OPEC+ production cuts could result in supply deficits […]
Court Hearing on Citgo Auction Could Be Delayed Until September
The court officer who oversees the auction of Venezuela’s PDV Holding, the parent company of refiner Citgo Petroleum, has asked a Delaware court to postpone the hearing on the winning bids by two months until […]
Highlights of the Podcast
00:00 – Intro
01:26 – Tech Industry Wants to Lock Up Nuclear Power for AI
04:12 – Will Evil Google’s AI Demands Exact A High Price from New Yorkers Who Foolishly Went for Solar and Wind? Could Be!
05:15 – CNOOC launches China’s largest LNG storage base
06:37 – Chinese coal terminals ‘bursting at the seams’
09:25 – Markets Update
13:26 – Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:14] What’s going on, everybody? Welcome into the Tuesday, July 2nd, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up, in a news that shocks nobody, tech industry wants to lock up nuclear power for ai. Yeah I’m sure they do. Next up will eval. Google’s AI demands exact a high price from New Yorkers who could be foolish went for solar and wind. Could be very interesting opinion piece that we’re going to bring you. We love a good AI story. Next up CNOOC launches China’s largest LNG storage base. China at it again. At this time, it will stay over in China as Chinese coal terminals bursting at the seams. Stu will then toss over to me. I will quickly cover what happened in the oil and gas market today. A huge 2% rise, mainly off a lot of shift in sentiment on the fundamental side. So I’ll cover that. And then finally, court hearing on Citgo auction could be delayed until September amid low bids. But they’ll tell you it’s a competitive process. So I will cover, you guys, that’s always I am Michael Tanner, joined by Stuart Turley. Where do you want to begin? [00:01:26][71.4]
Stuart Turley: [00:01:26] Hey, let’s start with our buddies over there in a tech industry, want to lock up nuclear power for a mile? This one is got Amazon. And then the next one is Google. So you can’t beat an Amazon Google tag team on our stories here. The owners of roughly a third of the U.S. nuclear power plants are in talks with tech companies to provide electricity for new data centers needed to meet the demands of artificial intelligence. Boom! Amazon. This is amazing. Constellation energy at 2.91 increase. Upcoming triangle Amazon. It’s unbelievable. They in a subsidiary purchased a nuclear power plant in Pennsylvania. We covered for 650 million bucks. And when you sit back and take a look at it, the AI demand is looking at between these two articles. I’ll go into the other one here and it’s pushing out renewables, and they’re going to be putting in contracts for nuclear power and then buying only the renewable when they need the credits. That’s going to destroy the grid for the consumer. [00:02:34][67.6]
Michael Tanner: [00:02:35] Oh yeah. The grid for that’s the first thing. I thought it was like, we’re in trouble than it is. [00:02:39][4.1]
Stuart Turley: [00:02:40] And NC you’re getting this is the new interest in nuclear is just unbelievable in this Maryland nuclear power plan. It’s pretty amazing. Share. Let’s see here. The customer has to come to us with many of the industry says I’ll need as much as power as you can make available. Said this, this energy chief. [00:02:59][19.1]
Michael Tanner: [00:02:59] He is going to take over the grid. You’re seeing this. I mean, Amazon wants as much capacity. Just wait till they start buying old rundown. When does a tech company buy Diablo Canyon? Oh, if it’s going to be decommissioned, why would you not buy it as a tech company? Are you allowed to? [00:03:14][14.7]
Stuart Turley: [00:03:15] Well, you know, that’s a whole nother animal, because if it becomes decommissioned, I think we’re going to see the decommissioned start being recommissioned. [00:03:26][11.6]
Michael Tanner: [00:03:27] Oh, yeah. Yeah, I don’t think it would actually happen. Just an interesting just an interesting thing. But yes, they’re all big tech. They’re they’re coming for the power and they’re going to get it at all costs. So what’s funny is now we’ll actually see, you know, if if Amazon needs upgrades to the grid well guess what. Amazon’s probably going to get upgrades to the grid. So it could right. It could be a great thing overall. [00:03:47][19.3]
Stuart Turley: [00:03:47] But they’re only going to get them into microgrids that they can afford for the right thing. And so let me throw this at you here. The Federal Regulatory Commission also Amazon’s deal in Pennsylvania, as much as $140 million in additional costs for the grid could go to the consumers. The consumers are getting that. [00:04:08][21.3]
Michael Tanner: [00:04:09] Wow. All right, what’s next here? Let’s go to Google. [00:04:11][2.3]
Stuart Turley: [00:04:12] Let’s go to Google. Will you will Google’s AI demands extract a high price from New Yorkers who foolishly went for solar and wind? See, this one is really bringing it out. And when when we go through, assuming this is more or less true, what are the implications? The PJM grid is in better position to deal with the rising energy needs. However, all electricity from the PJM grid includes lime Rock plant and go through this. So what it is, what they’re basically saying is we will only take the wind and solar when it’s at its cheapest, and only if we have enough credits. This is unbelievable. If we need the credits that’s in there. So they’re going to want the credits. [00:04:58][46.2]
Michael Tanner: [00:04:59] Of course they’re going to want the credits. [00:05:00][1.0]
Stuart Turley: [00:05:00] But at what price? [00:05:01][0.8]
Michael Tanner: [00:05:02] It’s a good point. It really is a good point. If anybody knows the answer no. [00:05:06][3.6]
Stuart Turley: [00:05:06] And New York is just dumb enough to go okay. [00:05:09][2.5]
Michael Tanner: [00:05:09] They’re they’re they’re they’re just as brilliant as our friends over on the West Coast. [00:05:13][3.4]
Stuart Turley: [00:05:14] Oh, yeah. Okay. Hey, let’s go to China. Here. Now, there’s a couple things about this one. This is an amazing story on LNG. CNOOC China launches China’s largest LNG storage base. This is some amazing numbers. These are the world’s largest onshore LNG storage tanks. Two point 5,000,000m³ can satisfy gas consumption of 10 million households for eight months. Holy smokes, Batman! That’s a lot of houses. [00:05:48][34.6]
Michael Tanner: [00:05:49] It is. Wow. And China’s doing everything. We’ll see you in the next story. When we’ve known they’ve gone into coal heavily. They’re now stocking up on LNG. They just want to be energy independent or have multiple streams of energy coming in their way. So they’re not as dependent on one stream when they eventually decide to bomb Taiwan. I mean, it’s obvious doesn’t take a genius to figure out what’s going on here. [00:06:09][19.5]
Stuart Turley: [00:06:09] You’re bringing up one of my stealer lines here, and that is when company. When countries stockpile energy, they go to war. Germany lost World War two because of the lack of petrol. [00:06:24][14.8]
Michael Tanner: [00:06:24] Interesting, interesting. [00:06:25][0.9]
Stuart Turley: [00:06:27] The battle of the bulge was lost because no diesel. Germans walked around with siphon hoses. And that’s not going to happen to any of these guys. No. Let’s go to coal. I’ll tell you what. Chinese coal terminals bursting at the seams. This import storage is bursting at the seams. And it appears unlikely that seaborne arrivals will be absorbed unless end users begin directing coal inland. Part of this is because they had more rain than they expected, so their hydro was able to pick in. But they’re still stockpiling oil, natural gas, LNG, everything that they can. And they’ve now got several new pipelines that they are working out with. The Russians. At China’s top three sources for coal this year, Indonesia, Australia and the Russian Federation are where they are importing from. [00:07:21][54.2]
Michael Tanner: [00:07:21] Yeah. No, it’s I mean, they’re there. They love their energy. They’ll get it in any form that they want. Yes. [00:07:27][5.7]
Stuart Turley: [00:07:28] Now here’s the funny part, Michael. China is pushing electric cars on its population in tremendous rate, he said, noting how taxes had been skewed to favor cars that do not rely on imported oil only. This turns Bush’s demand for coal fired by higher powered electric usage. [00:07:45][17.4]
Michael Tanner: [00:07:46] Hey, it’ll be interesting to see they’re going to be smart, you know, and this is going to come up with another issue. If Trump does win in November, there’s going to be a big tariff on China. It’ll be interesting to see if that EV market bleeds into ours. And people are expecting the price of electric vehicles to go down tremendously as China begins to import. But Biden slapped a tariff on it. And if if Trump wins, you’re going to see a whole nother round of tariffs on. [00:08:09][22.5]
Stuart Turley: [00:08:09] I want to give a shout out to Vance again. He was a Trump economist and I interviewed him. That should be coming out tomorrow, the next day. One of the key things that he said is he don’t look for all these Trump tariffs to kick in nearly as easily. They’re not as easy as he is, say. And he helped do the first ones. So I don’t think we’re going to be terrifying any time soon. [00:08:30][21.5]
Michael Tanner: [00:08:31] No I don’t I don’t think so either. All right. We’ll go ahead and pop over and cover this crazy oil price rise today. But before we do that guys, we got to pay the bills. Thanks for checking us out on the world’s greatest website. www.Energynewsbeat.com. The best place for all your energy and oil and gas news. Doing the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear. When it comes to the energy and the oil and gas business. You can hit the description below for all the links and timestamps to all of the articles that we are covering here. If you want to move forward and move back, we appreciate and also all the links to the articles via the world’s greatest website energynewsbeat.com. You can also check us out the energynewsbeat.substack.com where we record these in the afternoons, release them in them at that following morning. So guys, if you want to get early access to the stories that you hear in this podcast, go check us out on Substack. You can find that in the description below and subscribe to tomorrow’s news today. [00:09:24][53.4]
Michael Tanner: [00:09:25] But in the spirit of oil prices still, we were up 2% today, mainly off the back of a fundamental shift of how people are feeling sentiment wise. Before we dive into that though, S&P 500 having a little bit of a day so far. It was up big early in the session, traded down, but still finds itself 6/10 of a 10th of a percentage point. Nasdaq up about 5/10 of a percentage point or about half a percentage point two year yields 0.3 percentage points. Ten year yield actually 1.8 percentage points on the upside dollar index. Relatively flat Bitcoin up 1.2 percentage points. Crude oil up 2.27 percentage points. Currently trading 8340. As we record this in the afternoon on the first. Absolutely unbelievable. And nothing’s really happened other than a shift in sentiment. So we have seen natural gas drop price a little bit $2.40. But going back. The oil prices, you know, I mean, I mean, mainly people are are just now figuring out that we may or may not be in a supply crunch, depending on what happens with oil cut versus increased, you know, hotter weather or sustained hotter weather, which is kind of funny. Natural gas prices fell. Usually that’s a proxy for prices. But now we’re looking at, you know, more longer, stretch hot, not necessarily where natural gas trades in a more of a short term short term swing per se. So very interesting there. We also will today later in the afternoon, you guys will hear us Fed Reserve Chair Jerome Powell who will then basically he’ll give a statement based upon the central bank’s latest policy meeting, which will occur Wednesday. And we will also hear U.S. non-farm payrolls on Friday. Kind of interesting some July 3rd work that we’re going hard over the Federal Reserve trying to keep rates high. Pretty unbelievable there a little quote from JPMorgan. They their analyst dropped it this morning. Demand indicators look solid, especially in the all important U.S. market. In peak refinery demand for crude is now firmly in place. You should last through August. So JP turns a little bit bullish on that. So we’d love to see it. The only other thing Stu that I saw is PDVSA. So Venezuela obviously they own Citgo Petroleum. They go ahead. And our bankruptcy and the court trial the article court hearing on Citgo auction could be delayed until September. So they went bankrupt last year, mainly for the fact that they’re, along with Venezuela, about 20 to $24 billion of liabilities. There’s a couple companies that are on that creditor list. I was trying to pull it up here. I think it’s, one of them’s ConocoPhillips. We know that there’s also a grain company in Canada and another pension fund here in the United States that that kind of round out the top three debt holders here. So they’re running a not a blind auction, but kind of a blind auction. And it’s been delayed, but only because the bids haven’t been great. Now, what’s funny is the quote out of the, you know, the quote the court appointed special master to oversee the case seeks more time to evaluate competitive offers, among which multiple bids were actionable, the court wrote in a motion. Yet here’s the interesting part it was valued somewhere between 11 and $13 billion. And yet, Reuters reported that after the first round, the highest bid was only 7.3 billion. And there’s 24 billion of outstanding creditors. It’s unbelievable. So you’re going to get, what, 30 $0.40 on the dollar. And that’s really all they’re trying to do right here. But that’s unbelievable. Wow. If second round bids do not come close. This is also in the report from Reuters. I mean, if he doesn’t come close to $10 billion, Venezuela could seek a third round of bidding, which okay, so no one buys it for seven. Hopefully someone buys it for ten. I don’t know, it usually not how auctions work. Right? [00:12:52][207.1]
Stuart Turley: [00:12:53] Right. Yeah. You don’t want to walk by and just go hey, how are you doing? Sold. You do not want to be. [00:13:00][7.5]
Michael Tanner: [00:13:00] The interesting part is, do these debt holders still then keep you know, how does the post closure what does the cap table look like? Is the real question. If you’re paying $0.30 on the dollar for them to liquidate and go away, that’s different than if you’re just assuming now whatever’s the leftover debt, right. [00:13:16][15.2]
Stuart Turley: [00:13:16] Super liabilities. [00:13:16][0.5]
Michael Tanner: [00:13:17] Short. It’s kind of a short week. We’ll be with you every day, will record a show. We’ll have one out Wednesday, and then we’ll have one out Thursday as well. But have a happy July 4th. What should people be worried about this week? [00:13:27][10.1]
Stuart Turley: [00:13:28] Oh, just buckle up. And we are in the political season around the world right now. It’s already starting in Europe. Look for it rolling around the protests approaching your local neighborhood soon. [00:13:40][12.8]
Michael Tanner: [00:13:41] Yeah, absolutely. So all right guys, well, we’ll let you get out of here with that. We appreciate you guys checking us out. World greatest podcast energy news Beat .Com Stuart Turley I’m Michael Tanner. We’ll see you tomorrow folks. [00:13:41][0.0][786.7]
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