This is a National Security issue for the United States
Gavin Newsom should be proud. Has absolutely devastated the oil and gas industry in California, and single-handedly wiped out the future development of oil and gas. Even with studies showing that the formations in California need to be drilled to reduce methane due to their constant leaking. By Gavin Newsom trying to run for President, he is now opening up Kern County to try to save California’s oil industry.
Here is the catch. Kern County alone will not keep the main oil pipeline in California open. It is barely staying open as the oil thickens and then hardens if the volume in the pipeline becomes too low. Without drilling in other counties, the main oil artery running across the state is threatened with shutdown. This would force the oil to be transported by truck and rail, or even import more by sea. It would further drive the prices up.
I am currently working on the specifics for an article this week on the Energy News Beat Substack.
Can you imagine if Governor Gavin Newsom became the President of the United States? He would absolutely ruin any hope for the Energy Dominance possibility. Even just as Governor of California, he has threatened the National Security of the United States, and this needs to be addressed significantly by the Department of Energy and the full weight of the Trump Administration.
The fire in the Chevron refinery just highlights California’s fragile nature energy infrastructure security.
Daily Standup Top Stories
Update on the Chevron Refinery in California – A national security disaster just got worse as a possible drone strike
Net-Zero Banking Alliance Folds After Mass Exodus by Members
In a stunning blow to global climate finance efforts, the Net-Zero Banking Alliance (NZBA), once hailed as a cornerstone for the banking sector’s push toward carbon emission reductions, has voted to cease operations effective immediately. […]
Berkshire Hathaway Inc. to Acquire OxyChem: A Strategic Move in Energy and Chemicals
In a significant development shaking up the energy and petrochemical sectors, Warren Buffett’s Berkshire Hathaway Inc. is reportedly on the verge of acquiring OxyChem, the petrochemical division of Occidental Petroleum Corp., for approximately $10 billion. […]
Highlights of the Podcast
00:00 – Intro
00:15 – Update on the Chevron Refinery in California – A national security disaster just got worse as a possible drone strike
04:07 – BlackRock’s GIP Wins Approval of $6 Billion Allete Deal – How investors look at the deal
07:20 – AI Computing Demand: An Additional 55 GW of Power Capacity Required Globally by 2030
12:41 – AI Demand and Grid Upgrades Drive Fresh Copper Boom – What companies are potential good investments?
14:54 – Net-Zero Banking Alliance Folds After Mass Exodus by Members
20:52 – Markets Update
21:15 – OPEC+: Reuters Leaks on Oil Plans Again – But can they deliver?
22:29 – Exclusive: Chevron puts $2 billion Colorado pipeline assets for sale, sources say
23:28 – Berkshire Hathaway Inc. to Acquire OxyChem: A Strategic Move in Energy and Chemicals
32:29 – Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:00] A possible drone strike on the Chevron refinery in Los Angeles, California? We’ll find out next on the Energy News Beat stand up. [00:00:07][7.4]
Stuart Turley: [00:00:15] Update on the Chevron refinery in California. A national security disaster just got worse as a possible drone strike. This is crazy. El Segundo refinery by Chevron just located outside of Los Angeles experienced a significant fire on October 2nd, drawing widespread attention due to its role in supplying critical fuels to Southern California. Michael, this is nuts. They supply about 40 percent of the jet fuel in the southern part of the state. And this is huge. Flames were visible from across the South Bay, prompting emergency responses from Chevron’s onsite fire brigade, local agencies, including teams from El Segundo and Manhattan Beach. The blaze produced large plumes of smoke. And I tell you what, this one caught my eye. A fire at the Chevron El Segund refinery. Most widely circulated theory today is that it was a strike by Venezuelan drones. Michael, this is a rumor. It is unverified. But what a mess. I’m not doing this for click bait. I’m going, what if Gavin Newsom has destroyed California with its 20 percent of its refinery capacity already coming offline because of his overregulation and wanting to just get rid of fossil fuels? He did it. And the fossil fuel companies are leaving the state in a national security problem. This is like, holy smokes, Batman. And if it is a drone strike, this is, are there drone strikes going to be in other parts of the country? This is a big deal. [00:01:58][103.2]
Michael Tanner: [00:01:58] No. So a couple of things. One, I have, you know, El Segundo is close to my heart. That’s where I was actually born. My dad got a work for Hughes Aircraft before he ended up moving to Denver when we recommuted there. So I’m very, I was young, but my family very familiar with that. El Segund area. Manhattan Beach is beautiful. I’m going to go out of limb here and say, I think there’s a better chance Gavin Newsom flew a drone into this refinery than Venezuela did. I’m just going to have a hard time grasping at that straw. This is pretty interesting, though, from the fact that this is one of the few refineries that is still working and supplying both jet fuel and other types of distillate fuel oil to California. So the fact, that now this goes down on top of stuff we covered multiple weeks ago with the Valero refinery shutting down and all the other energy related infrastructure that’s being closed down in California solely to shift to some crazy wind energy, apology. You know, it doesn’t allow you for these emergencies. It’s pretty crazy though, to think about how much was activated here. We’re praying for everybody who is involved with this right now. Do we know if anybody was injured or dead with this? No, I have not seen. [00:03:05][66.4]
Stuart Turley: [00:03:05] Any deaths, which is fantastic, but the gasoline, the yield is 45% gasoline at a daily, 110,000 barrels per day, 20% of Southern cow. Jet fuel and diesel combined is 41% of it, 100,000 barrel per day which is 40% of southern cows jet. So yeah, that gasoline. [00:03:28][23.2]
Michael Tanner: [00:03:29] 20% of the gasoline in SoCal, California. You want to have any idea what prices are gonna be there? [00:03:34][4.8]
Stuart Turley: [00:03:35] I’m trying to find out Michael, anything I possibly can and it is weirdly quiet. I mean, it is weird trying to find out things on this. [00:03:46][10.4]
Michael Tanner: [00:03:46] And so analysts are expecting prices right now, average gallon of gasoline in California, $4.64 as of October. That could rise somewhere between 15 to 30 cents depending on the damage. And I think that number’s low. I think it’s gonna be between 50 and 75. And I wouldn’t be shocked if we see $6 gas in the next couple, for the next couple of days in certain parts of Southern California. [00:04:05][19.8]
Stuart Turley: [00:04:06] Absolutely. Hey, let’s go to the next story here, Michael. BlackRock’s GIP wins approval of 6 billion elite deal. How investors look at the deal. This is a significant development for the energy. BlackRock Global Infrastructure Partners, GIP has secured regulatory approval over its $6 billion acquisition of Elite Inc, a utility provider based in Duluth, Minnesota. Michael, there is a lot to this story. Let’s unpack it here. Elite private underscores the investor interest in utilities and electricity demand from data centers. But when you take a look at this, the Minnesota Public Utilities Commission, the MPUC, if you’re gonna play hockey up in Minnesota, you might as well name your utility MPUC. Played a pivotal role in synchronizing and scrutinizing the deal and ultimately granting unanimous decision on October 3rd. The state’s regulatory overseed utilities evaluated with a transition served the public interest focusing on customer impacts. We’re bringing real value to Minnesota power customers while there is a perception data centers will bring more harm to the rate payers, which they have across the United States in other areas, but potentially it might mitigate the risk that we have. So Michael, I went out and I took a look at who’s doing the investing and then put the charts in here so people can go take a look at it. But also let’s take a looked at Minnesota’s electricity cost in context. I rank the top 10, Hawaii, California, Mass, Rhode Island, Connecticut, Alaska, New York, New Hampshire, Vermont, and Maine are the top ten. Minnesota ranks 20 to 25th nationally because they’re the lower cost. So this has the potential of not impacting consumers nearly as bad as it is in other areas. Pretty cool. [00:06:06][120.4]
Michael Tanner: [00:06:07] Yeah, I am generally obviously as a free market capitalist, anyone is allowed to buy anything. I don’t like necessarily getting into this game of who can buy what, but there are certain things that just caused me to cringe a little bit and that’s private equity buying into utility companies or fully taking over utility companies. Why? Because their incentive structure is to lower costs, which usually means stripping out unneeded things, lower costs not necessarily to lower the price that you receive at the meter, but so they can increase their profit margin. So I do think, yes, this is probably a win for the consumer. I wouldn’t be shocked if they don’t, if the overall kilowatt hour price doesn’t actually go down and all they’re doing is just basically stripping out all the profitable parts of this. If there’s one state that’s run poorly that will probably mess this up, number one is California. Number two, Minnesota is gonna be up there. They don’t necessarily have the greatest track record with all this stuff. It is interesting that they do rank so low considering the fact that they’re kind of a cold weather state. [00:07:07][60.4]
Stuart Turley: [00:07:08] I was very, very surprised when I was running these numbers, dude. I absolutely did not expect it. A, I don’t trust BlackRock, but B, Minnesota is one of the most poorly run corrupt states out there. So we’ll just move on to the next one here. Okay, AI computing demand, an additional 55 gigawatts of power capacity required globally by 2030. I think that number’s low, Michael. The rapid expansion of our artificial intelligence and in the words of Kamala Harris, AI is reshaping global energy landscapes with data center at the epicenter of transformation. According to the recent estimates from CTI, the Surgeon AI computing demand will necessitate an additional 55 gigawatts of power capacity worldwide. I wanna go out on a limb right here and say that it cannot be wind and solar because I’m seeing so many analysis out there that were maxed out on wind and solar due to the amount of cycles and amount of uptime and downtime and all this other kind of stuff. So this is a big one. Here comes a question. The question arises, will this 55 gigawatts additional fuel a 1.5 trillion wave of AI computing expenditure in the United States alone? The answer is that while the US will see substantial investments, the 1.5 trillion most closely reflects a global AI spending trends rather than the US specific. And I’ll tell you what, you can almost sit back and say, if we never installed another wind farm, we would have absolutely all the wind that we could possibly do. Now, I did also go back and stay, what is the best list of companies to take as an investor? What am I gonna look at? And guess who piled in in the top? Williams company, a major national gas operator. Williams stands to gain from increased gas transports as a midstream. And I’ve got them listed in there with their charts. So I’ve also got a list of all the other folks in here. I talked a little bit about small reactors, but Michael, SMR and nuclear. Nuclear is on a fast track. Hats off to secretary Chris Wright to try to get it done. None of the math is math enough that we’re gonna have an impact of substantial gigawatt globally in the next 10 years in nuke. I don’t see it happening. It’s all coal or natural gas. [00:09:41][153.6]
Michael Tanner: [00:09:42] No, absolutely. And I think that 1.5 trillion number, that’s just cloud infrastructure software and data center expansions. You also have to point out that McKinsey estimates that worldwide data center investments that include energy systems to meet these compute demands could add up to they say 6.7 trillion. That’s with a trillion where they’re, and where data centers in that scenario are expected to consume 9% of electricity by 2030. And again, most of that is driven by AI driven CapEx. It’s pretty unbelievable. I think on the AI side, you mentioned from an, you didn’t quite mention, I think, on the Ai side, where’s the best places to invest. I personally think obviously it’s hard as a private investor to invest in non-public companies unless you’re getting some sort of allocation to open AI. Probably none of us are getting access to that. So if you’re looking at some of the public companies like Microsoft and Google and Meta, I would probably put Microsoft and Google at the top, put Meta somewhere down here. I mean, I think what they’re attempting to do is use AI to help with the social media part of it. And I do think with AI, the gains are gonna be a lot more on where Microsoft and google are heading, which is on the redistribution of search, gathering all that compute. So if you had to ask me from an AI perspective, I would say Google and Microsoft are probably most likely to take off. And obviously I think companies like Tesla who are going to use AI to make their products better, they’ve obviously, I mean, have you seen some of the stuff, not to do as little tangent here, but have you see Optimus, some of those videos that are coming out? Do you see him doing Kung Fu yesterday? That was, it’s kind of crazy. Here’s my question, Stu. Are you gonna have an Optimus in your house? [00:11:23][101.7]
Stuart Turley: [00:11:24] No, because I’m a black belt, but I also know my limitations. And I do not want to have anybody in the house that can beat me up. So I have a feeling anybody could beat me out. And I am not gonna have anybody in there that A, I don’t trust Bill Gates, B, if it has anything to do with getting to the internet, Bill Gates would find a way to hack it and then beat me because he did not like the fact that I insulted him, so. [00:11:48][24.1]
Michael Tanner: [00:11:48] Wait, wait, wait. You have a personal history with Bill Gates? I’ve never heard that story before. [00:11:52][3.9]
Stuart Turley: [00:11:53] The only time I’ve ever met the man, I shook his hand. I said, would you like to walk in and see how a real operating system works? And he got so mad. [00:12:01][8.3]
Michael Tanner: [00:12:02] That’s a joke. I think the podcast has heard that story about 20 times. Optimus is an Elon Musk thing. So no, I’m just throwing it off there. It was funny to watch him do a bunch of that stuff. And I agree with you. I think on the energy side, you’ve got companies like Williams, I think EQT and a lot of these natural gas specific focused companies. I think you’re gonna see a lot of natural gas companies come into flavor here in a little bit from an AI standpoint. I’m gonna go out on a limb and say, I wouldn’t be shocked if Elon Musk buys a natural gas company at some point. If he buys an Athon Energy, if he comes in here and buys a large Haynesville natural gas producer, mainly so that he can access to some of this natural gas, pipe it right up to Colossus. So I think extremely interesting. Speaking of AI demand, let’s move to the next one. [00:12:43][40.9]
Stuart Turley: [00:12:43] AI demand and grid updates drive fresh copper boom. What companies are potential good investments? I like this story. Copper futures. Michael have risen over 10,500 a ton reaching their highest point since May of 2024. Holy smokes, Batman. Rising demand from AI data centers, essential grid infrastructure upgrades and converging with these supply issues, leading analysts to forecast continued upward movement. Copper futures on the London market exchange rose over the 10,500, the highest since May of 2024. I’ve got some other stuff in here. You got Freeport on the New York Stock Exchange. They are FCX. And I’ve gotten some numbers in here from the Fool. Southern Copper Corporation, got some numbers in there. Ivanhoe Electric Mueller Industries. And so I wanted to make sure, and I got this article from Zero Edge. Want to just give them, Tyler over there a shout out. They always do a great job. But I added in who’s making the investments in there to his article. Let’s go to the next one here, unless you’ve got a thought. [00:13:51][67.6]
Michael Tanner: [00:13:51] No, copper is always near to my heart. I had a great, great time trading copper futures in college during grad school. We made a lot of money for our futures commodity trading team. We took about, we took ninth out of 600 schools trading copper features way back all the way in 2022. So that was really fun. So copper’s always near and dear to my hear. It’s a real tough commodity to price because the supply and demand changes so much. It’s one of the reasons why copper has never really stuck around over the history of money as really become money. Gold has become money for the reason that, one, it looks cool, but also the supply doesn’t change that much. There’s this intrinsic value inflate. It’s a deinflationary. It’s considered a hard money. Copper is not. It actually rusts after about a year. So it doesn’t have that nice gold look after a while and it wildly fluctuate. So yes, copper’s up huge. It’ll probably fall here at some point. So, you know. [00:14:44][53.0]
Stuart Turley: [00:14:44] Silver is a little different. Silver is also used in computers and motherboards and everything else. So silver is not copper. Nope, it is not. Let’s go to the last story, Michael. Net Zero Banking Alliance folds after mass exodus by members. Michael, I have a funny feeling this is as a result of Trump week at the UN. You and I have laughed about this last week in a stunning blow to global finance effort the Net Zero Banking Alliance, the Nazimba once hailed a cornerstone of the banking empire’s push toward carbon emissions as voted to cease operations effective immediately. Michael, let’s hold a moment of silence from the Energy Newsbeat team. Okay, established in 1921 under the UN umbrella, the Alliance aimed to align banking portfolios with net zero emissions by 2050. However, political pressures, particularly from US lawmakers alleging antitrust violations. I love this. I had an absolute blast with this article. Net Zero Policies, which encompass the shift to renewable energy, electrification and emissions reductions have been already incurred massive expenditures globally and we’re talking trillions with future estimates of painting even a more daunting picture. While historical costs are pinpoint due to varying methodologies, high scale, according to McKinsey, Michael, the total spending on physical assets for the transition could reach approximately 275 trillion. [00:16:21][96.0]
Michael Tanner: [00:16:21] And that’s what the folks, and I think what’s interesting is that one, this has only been around since 2021. So hats off to these countries pushing back, hats off everybody realizing this is a terrible idea. There was really, and part of the reason why it went down was there’s this mass exodus of key members, specifically one, the United States. But you have this great chart here where you go through the estimated price increases specifically due to net zero policies, United States, 10 to 20%, China, not really, because they’re going heavily into coal. We know that Germany, 20 to 30%, Japan, 15 to 25%, India, five to 15, get this, United Kingdom, 50 to 60% of their industrial price versus the Piers France, 10 to 15%, Italy, 20 25%, Brazil, five 10%, and Canada, 10 20%. [00:17:08][46.8]
Stuart Turley: [00:17:09] Michael, do you know why, do, [00:17:10][1.1]
Michael Tanner: [00:17:11] United Kingdom is 50 to 60? I don’t think we have enough time to go through all the reasons, but what’s the top reason? No, I’m just going, [00:17:16][5.7]
Stuart Turley: [00:17:16] if everybody of our podcast listeners, I’m going to do a Wallace and Gromit imitation of Ed Miliband. I’m holding my hands up, shaking them like a Wallace and Grommet character. That Muppet has absolutely destroyed the energy in the North Slope and absolutely eviscerated the energy in the UK. [00:17:36][19.5]
Michael Tanner: [00:17:36] And I think what you’ve accurately then point out at the bottom of this article is how does this then fit into the global energy markets where we currently are at a little bit of a trough right now when it comes to oil prices. And the question is all of this, with this elimination of this I think you’re going to see spending revert back. And I what you’re gonna see is a whip stock of prices come back. And you mentioned here, there could be a stabilization next year and into 2027 of 70 to 80. But in the short term, prices are going to get hammered because of this recent OPEC news, which we’re going to cover on the other side. But first, let’s take a quick break and pay the bills. [00:18:10][33.8]
[00:18:10] AAs always guys, the news and analysis you just heard. Is brought to you by world’s greatest website, www.energynewsbeat.com. Stu and 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. Go ahead and hit the links in the description below for all links to the timestamps, links to articles, and specifically subscribe to the show on YouTube, subscribe to this show on Apple iTunes. Give us a follow there. Subscribe to our show on Spotify. Please leave comments there and subscribe to our sub stack, www.energynewsbeat.substack.com. That’s probably the best place to support the show. Stu does a great job of releasing two to three articles a week that really encompass the big themes that are going on. We also drop all of our podcasts there, which give a little bit of a breakdown. We just had a great, great podcast. So I highly, highly recommend everybody subscribe to the energy newsbeat.sub stack.com We’d also like to thank friends of the show Reese Energy Consulting for supporting the show guys. Reese Energy Consulting is the foremost midstream expert. Guys, if you had at all. Are dealing with issues in the midstream space, whether you’re an upstream company and need help with your first purchaser’s contract or renegotiating your gas contracts or figuring out where you’re gonna tie in your next pad because you’ve got multiple different options and you’re trying to break it all down. Reese Energy Consulting can help. If you’re in the mainstream space, I need an extra pair of hands, need some permitting or regulation help, or need some red team analysis on a final investment decision, guys. They have the team that can help you check out ReeseEnergyConsulting.com They have clients everywhere and all throughout the country from two people in a garage all the way up to the largest publicly traded companies in the world. So if you’re wondering, are you a good fit for them? The answer is yes. ReeseEnergyConsulting.com And finally guys, investinoil.energynewsbeat.com We are coming up on the end of the year. And I promise you guys, you do not wanna be paying money to Uncle Sam. You wanna keep as much money in your pocket. You wanna diversify your portfolio a little bit and you want to get some dividends. You can do that by investing in oil and gas. Check out investinoil.energynewsbeat.com Fill out our portfolio survey and our tax calculator. And guess what, you guys, you guys are gonna get and get a nice ebook that tells you here’s what you should look for when you invest in oil and gas. And also figure out what your tax burden is and figure out how much you might save relative to your tax burn if you did invest in Oil and Gas, guys. We practice what we preach here, guys, we do this stuff ourselves. Investin oil.energy newsbeat .com Don’t give your money to Uncle Sam. Figure out and find out if oil and gas investing is for you. Depending on if you qualify, we will, again, send you all that information and we may or may not point you in the right direction. Again, investin oil.energynewsbeat.com. [00:20:50][160.0]
[00:20:52] Alright it’s prices are gonna get slammed here a little bit Stu as we talk about what’s on deck for prices. But first we’ll quickly chat what happened Friday. Friday, it was about three to four days really. Our last show was Thursday that came out. We really had kind of two full days kind of suppressed pricing. We were up over $62. We since dropped, we’re trading about 60, 69 mainly off the back of the rumor that OPEC was going to increase production by 137,000 barrels per day. More than, I mean, they’ve already, there’s multiple tranches in which they’ve decided to add that it was the 433,000 a day that was spread out over six months. This is an extra sweetener on top. What’s interesting Stu is there’s reports out that there was two different sides. Russia didn’t want this. Russia did not want this, Saudi Arabia did, which is interesting. And the funny part is this comes two weeks after the big hoot brouhaha was, there is no spare capacity. And so I think what we’re realizing is Saudi is probably the only one with enough spare capacity to do anything. And this gives them the ability to add their barrels to the market. They know that everyone else can’t add their bills to the market. So prices won’t be as impacted as they could if it was the full, full addition, but Saudi gets to add its extra bills to market and make some revenues. I think there’s a little bit of gamesmanship going on, a little of a shell game of over here, over here. We also did see rig counts and frat count spreads get dropped. Big goose egg for both of them. After three straight weeks of increases for both rig counts and frats counts, both come out and do a flat goose egg. We did see internationally about eight rigs get added. But the two stories that really happened over the last two days last week was first Chevron puts up $2 billion Colorado pipeline assets for sale according to sources that are good friends over at Reuters. Most of these assets were acquired in the 2020 acquisition of Noble. And these are located in the Denver Julesburg or what’s known as the DJ Basin for all of you non-Colorado folks. They’re trying to fetch about $2 million for this. They’re claiming in reports that are being circulated via Bank of America that they generated about $200 million a year of EBITDA. So I mean, you’re looking at about a five, a 10X on EBITTA, which I think is a little steep. I’m gonna have a hard time thinking they’re going to get that. I do think this is primed for private equity to come in. And part of the reason I think why Chevron is doing this is one, they’ve got a lot of debt hanging over their head with their $5 billion acquisition of Hess that came in after a huge legal battle. And they also did mention 20% of their global workforce is getting shedded. So they’re looking to cut costs wherever they can. Mike Worth, who’s the CEO over there, did tell analysts on August 1st that it would challenge itself to quote, divest assets that take money away from its more profitable prospects. The other deal we saw, and this was rumored and it ended up happening, Berkshire Hathaway went ahead and acquired Oxychem. And the structure of the deal was a little bit different. When originally, when the rumor was dropped, it was going to be a sale for a dollar to Berkshire Hathaway in so far as it would then cancel the preferred shares that Berksire Hathway has. Remember, they own about 28.2% of Oxy, but some of that is in what are called preferred stock holdings, which are generating about 8% yield per year, which is obviously a lot higher than what Occidental is barely yielding. It’s about 10 billion of that, 28%, or about 10 million in preferred stock, which was basically used to finance the acquisition with also, there was a bunch of other warrants for shares. But this is mainly just a straight up cash deal where Berkshire Hathaway purchases this for $10 billion in cash, woohoo! Using some of that 344 billion of cash reserves. They’ve got, this is basically the largest acquisition since 2022. They made a purchase, $11.6 billion purchase of Allegheny, which is interesting. And I think what this does is really, this just cements Warren Buffett and Berkshire Hathaway to more in bed with Oxy. I think it’s more of a bet on Oxy than it is a, hey, let’s go out and try to generate some alpha somewhere else. I think this, what they’re saying is you can sell this to us. You can keep a lot of the infrastructure in place. Nothing can really change. It allows you to pay down some debt. It brings in another revenue stream for us. We still get to keep our preferred shares. I think that they were trying to get rid of those preferred shares. I think Warren Buffett said, no, no, you’re gonna keep sending me those interest payments every single year. And so I think the real next question is, okay, this is a debt reduction play. The real question is then what’s next for Oxy? And I think big 20 pound gorilla in the room is Colorado. And I you accurately pointed this out, what are they gonna do with Colorado? Oxy is one of the larger and probably has the largest acreage position in Colorado relative to some of its other peers. Chevron has a big acreage position there. We all know Civitas, and along with a rising up and comer Prairie Operating. But Oxy is a big, big, big player there. The problem is, and I think what’s holding up a sale of this is the regulatory environment there. It’s not easy working with the Colorado Oil and Gas Commission and specifically the EMCC, which is the Environmental Management Commission Control. I think it’s basically the air, the air permitting and all that. And I think, what it’s holding it up is you’ve got Chevron might be the only company that can afford to buy these assets. They’re not in on it. Obviously they’re trying to, they’re selling their midstream assets for $2 billion. They’re are not necessarily interested in picking up this acreage. I don’t think there’s any other really player in Colorado that’s already there right now that can offer these assets, so it’s almost like you’re at the dance, but you don’t necessarily have a dance partner, but you can’t leave the dance because your mom and your dad left and are now going up to Black Hawk to do a little bit of gambling and they’re not back till 10 o’clock. So you’re just stuck there hanging out, having a little bit of juice, not quite sure what to do because no one is willing to buy. That’s a extremely good analogy. I think of what’s happening right here. What say you about Oxy in Colorado, Stu? [00:26:56][364.1]
Stuart Turley: [00:26:56] I think Vicki Holub is a very, very sharp cat. I think she is, if the government subsidies for net zero were to continue, she would have been holding out as brilliant, but because carbon capture is going the way of net zero in the United States, it is a cost, an additional cost to consumers and she may be revered as now not on the front runner. It is Colorado that is Oxy’s problem. It is absolutely, Colorado is a second only to California in horrific places to drill for oil and they’re doing a great job. If Coloradans could understand what Gavin Newsom has done to California, they’re do it to Colorado and so they’ve turned all of that to absolute disaster. [00:27:54][57.9]
Michael Tanner: [00:27:55] Yeah, I think what Colorado has done is just, I don’t think they’ve stopped drilling. What they’ve done is they’ve just made it to where only the large, large companies can do business in Colorado. You can’t be a startup and work and drill oil wells in Colorado, you can’t do that, but if you’re Oxy, you can. If you’re Chevron, you you can because you have these expansive, it’s one of the things, people think regulations stop people from doing these. No, no, no. What regulations do is stop the small companies. Big companies love regulations. Let’s be very clear about that. Large organizations love regulations, why? Because it keeps new entrants out. It keeps new people from coming in and taking over their market share. So what you’ve done, Colorado, what they’ve tried to do is say, we’re gonna help the little guy. We’re gonna make sure that it’s easy to, we’re going to make sure that the rules are fair. We’re going make sure it’s really hard to get permits and well, guess what? The rate of permits necessarily hasn’t slowed down. It’s become harder but you’ve disproportionately given them all to the big companies, which is probably exactly what they didn’t want to have. [00:28:57][62.4]
Stuart Turley: [00:28:58] I’m gonna disagree with you and I’ll tell you why. Let’s go to California. California used to permit 4,000 to 3,000 wells a year. They went down to 12. So when you can regulate everybody out, they have done that. And let me go check real quick, let me check how many permits did that wells issue? Because when you and were doing DI work for a couple of the DJ and working in the DJ and had our thing, we went from a thousand or more permits to almost nothing. And I guarantee you, if we checked it, they have shot the drilling process and did not drilling. [00:29:36][38.3]
Michael Tanner: [00:29:36] Here’s the difference between Colorado and California. Even if California, you could permit in California, it’s not really some, there’s not enough oil reserves for people to get excited about. Colorado actually has oil reserves. And so I think the difference in your feedback is if California you, yes, you can regulate something to zero. Obviously, that’s not what I’m saying but I’m seeing what’s rolled out in Colorado is not that because the amount of permits is not zero. Trust me where we’ve got multiple clients too that pay us good money to evaluate deals. There’s a lot of drilling going on in Colorado, a lot a drilling going in Colorado. But what I’m saying is it’s all the big boys. It’s all big boys, it’s theoretically the people. If you are worried about big oil coming in and swooping up everything, well, guess what? When you regulate stuff where only big oil is the only game in town, you sometimes are, and so I’m just using it as a thing. People think regulations are good, but it really, yes, regulations can be good but it disproportionately affects the small guy and the startups. And I look out for the startups. I think it’s great and I disagree. So we’re gonna have some fun. We’re gonna some great fun. Luckily, I’ve won this battle so we’ll end it here. My favorite time of the week though, Stu, what are you worried about this week? Besides drone strikes from Venezuela, what are worried about the week? [00:30:51][74.2]
Stuart Turley: [00:30:51] I’m really, the good guys are in charge. I am not worried about a thing. I know my beliefs and I think we’re gonna turn the corner. I think the world, as long as we can keep Lindsey Graham tied up on a park bench where he cannot vote or talk to anybody, we will not have World War III. And as long we don’t have World war III, life is gonna be good. [00:31:14][23.1]
Michael Tanner: [00:31:14] That’s funny. [00:31:15][0.5]
Stuart Turley: [00:31:15] It looks like there were 533. I don’t know how that was. Only 50 permits were done in Colorado. [00:31:21][6.2]
Michael Tanner: [00:31:22] Yeah, I think that there’s a difference. Yes, and we can get into that. What you’re talking about is those 50, what are called CAPs, C-A-P’s, comprehensive area plans. But on those comprehensive area plants, you could drill 60 wells. So one permit gives you access to drill 60 Wells. So yes, I’m not saying it’s become more, it’s becoming more difficult to drill in Colorado, but you’ve disproportionately allowed big oil to do it. And sure, I am not against big oil, but the funny part is the Democrats who run Colorado don’t like big oil. But guess what? They’ve written a law that actually benefits big oil. So I’m just talking about the hypocrisy of when you regulate something, you generally sometimes impact the people you don’t wanna impact and help the people you don’t wanna help. That’s what I’m saying. And we should, do we have, this is the fifth time we’ve got General Flynn coming on the podcast, maybe. [00:32:12][49.9]
Stuart Turley: [00:32:12] Right now I’m confirmed to visit with him and it is a go. And so we’re gonna see how it goes. I’ve got a lot of questions for him. [00:32:21][9.2]
Michael Tanner: [00:32:21] A lot of questions. Hopefully we keep it somewhat focused on energy, but we’ll make sure post, we’ll have a field day with, field day, with everything. It’ll be great. But with that, guys, we appreciate you starting your week with Energy Newsbeat, guys. Really, really, really helpful. Thank you to everybody who has reached out. I mean, we’ve been getting some great feedback on the show, guys please subscribe on YouTube, subscribe on Substack and check us out, theenergynewsbeat.com. For Stuart Turley, I’m Michael Tanner. We’ll see you soon, folks. [00:32:21][0.0][1917.8]