A tale of two states, Alaska versus California, and the race for energy security – ENB Weekly Recap

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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 tale of two states, Alaska versus California, and the race for energy security. Next, on the Daily Energy Newsbeat weekly recap. [00:00:08][8.4]

Stuart Turley: [00:00:17] How big is the Alaska LNG project? Glenn Farn says there’s more than 50 firms interested in the Alaska LNG project. This is huge. I love Alaska and if you’ve listened to the podcast you know that my grandfather was one of the founding geologists on the North Slope. I’ve loved all my trips to Alaska, love all the fun folks up in Alaska, and it is a great thing. Hats off to Secretary Burgum and Secretary Wright. This is a great story. The Alaska LNG project is an integrated natural gas infrastructure endeavor comprising three main components. Gas treatment plant located in Prudhoe Bay. This facility will process natural gas from the north slope fields, removing impurities, preparing it for transport designed to handle approximately, excuse me. Three billion cubic feet bcf of gas per day with carbon dioxide captured and injected to reduce emissions that’s huge number two at 807 mile pipeline a 42 inch diameter pipeline will transport gas from the North Slope to an LNG liquefaction facility in Niski. On Alaska’s Kenai Peninsula. The pipeline on a daily capacity of 3.3 BCF includes multiple compressor stations and interconnection points for in-state distribution. Huge. And then a LNG export terminal. The Niski facility will liquefy up to 20 million metric tons. MTPA of LNG equivalent to 25 BCF of gas per 2.5 BCF per day. That is absolutely huge and there’s customers already lining up on this bed and I think it’s absolutely wonderful. In this article on energynewsbeat.co we have Secretary Wright doing an interview while he’s there in Alaska on the North Slope. Been there, it’s a kind of cool place. When you sit back and take a look at the recent development firms there are some big economic and tough jobs ahead. When I was lucky enough to meet with the Aliesca pipeline folks when that was going on there is a lot of environmental concerns there’s going to be environmental lawfare over this and it’s absolutely horrific that they’re going to see all that but you love oil and gas. And we love them as well, too. Why hasn’t Trump hit Russia with more sanctions? Well, because it would have handed midterm elections to the Democrats is one good reason. Michael, I’ve been seeing this all over the place. This is critical. A push for peace talks over punitive measures at the heart of Trump’s approach, his stated desire to broker a ceasefire deal in Ukraine. Reports indicate that the president is wary of imposing new sanctions. Fearing they could derail Delegate in negotiations with President Vladimir Putin, Trump has repeatedly emphasized the sanctions might harden Putin’s stance. This is not all true. Here’s where it is really true, and that is, if the sanctions are put in place, I’m going to go through two main scenarios. If the sanctions are put on China’s refineries and India’s refinery for secondary sanctions, that will have an economic boomerang. If President Trump ignores that and kind of goes along and gets to get this done, that’s the real winner right here. The domestic problem that we’re going to see, Michael. Is the fact that energy prices and the OPEC announcement you just alluded to are going to be very impactful on the oil and gas. If President Trump puts in the tariffs, we have this real problem. Here’s where it gets ugly. If Congress tries to step up and force sanctions on President Putin. They’re gonna muddle in this and really make it ugly and there’s rumors it’s about to happen. This is bad. [00:04:41][264.5]

Michael Tanner: [00:04:42] Yeah, I think you bring up a good point that sanctions don’t always lead to the desired outcome, their second, third, fourth order effects. I mean, we’ve seen we’ve had now sanctions on Russia going back since the invasion. They haven’t quite seemed to work. And so really, as you bring I think accurately, what is actually going to cause an end to this war? And what is going to bring some sort of lasting peace? I think Trump is on it. Now I don’t think. Personally, I don’t think Putin is negotiating in what I would say fair terms or he’s negotiating in good faith Because on one hand he’s saying yes, I want peace on the other hand He seems to be amassing more troops left right up and down on the border Ukraine is now responding not to what Putin is saying but what he’s doing and so there begins to be this intellect I mean still we we deal with this all the time when we’re negotiating oil and gas deals Somebody says one thing, but their actions say something else. And it’s up to people in the middle of the negotiations to figure out how to bridge the gap and really thread that needle. So it’s no different than I think what Trump is dealing with when it comes to Russia. But I overall agree with your consideration that sanctions won’t work. My real question to you though is, if these sanctions don’t happen, what effects is that gonna have on the oil markets? Because obviously Russia is still able to get a lot of their oil out via the dark fleet. These sanctions would, I assume, come in to try to cut and choke that supply up. We just saw your favorite Senator Lindsey Graham in Ukraine saying that they’re going after China on a 500% tariff for buying Russian oil. I mean, is that what’s next? Where do you see? [00:06:26][104.8]

Stuart Turley: [00:06:27] Yes. And that will win the Democrats, the House and the Senate. If Lindsey Graham gets his ways. Honestly, that is absolute, that man needs to be primaried and run out of town. And my, that is absolutely pathetic. That man does not need to be a Senator. My bully in the backyard called me up just as we were starting this podcast. And he goes, mu mu mu. As I said the other day, Stu, Hey, it’s still a bull. And, and the OPEC has lost an OPEX plus has lost the ability to really control the market. They’re an ineffective cartel. And it is because Russia, Venezuela, Iran, Iraq, and several others. Have gone through and they are able to print money by printing oil by drilling for oil and gas that is their revenue source and the dark fleet is well over 1500 tankers right now you can sanction them they just cripple a few others bring them in and Panama is even trying to stop this. Norway now has a whole new group of folks lining up on there that Russia’s running up on Norway’s border. This is ugly and president Trump does not have all the information and we got to keep old warmonger what’s his name out of negotiating this stuff. Cause all he’s going to do is muck it up. [00:07:57][89.9]

Michael Tanner: [00:07:57] Yeah. No, no kidding. [00:07:58][0.9]

Stuart Turley: [00:07:59] We’re out on Lindsey Graham. 30% of the electrical generation, but at what cost. This shift is driven from demand from electric vehicles, data centers, and industrial electrification from projects of 4% annual growth through 2030. That number is low. Electrical utilities are investing heavily in grid monitorization and electrical storage. The grid, Michael, is now changing to a decentralized way. And my new series on AI and the generation, AI and data centers, and AI and energy is going to be critical because we’re gonna be watching data energy management systems changing at worldwide speeds like you’ve never seen before. Now this opens up investment listen to this utilities are responding with record capital expenditures expected to reach 174 billion by the year 2024 with 42 percent allocated to transmission distribution lines according to Deloitte but now why invest now diversify there are utilities are some of the best ones on the market right now Michael I don’t give But I’m just telling you what is out there but you can also invest in oil and gas because they’re giving back to their stockholders. And then I also talk in here, just real briefly, what’s the difference between investing in a public company and a private oil and guess company? What’s that difference, Michael? [00:09:56][117.5]

Michael Tanner: [00:09:57] Well, the big difference is your relationship to oil price appreciation. If you are an oil and gas bull, if you’re Stuart Turley and believe Goldman Sachs is wrong in which prices are going to go down, Stu believes prices are gonna go up, you should attempt to find an investment strategy that ties you specifically to the price of oil. Now, obviously you don’t wanna gamble on crude oil futures. It’s really hard to actually. Gamble on the price of oil and I say gamble for a reason because nobody should necessarily be trading crude oil futures. I mean you should, you can but you also shouldn’t. I don’t give investment advice. But what then you should do if over the next six months your thesis is prices will go up, finding an investment strategy that allows you to participate in the appreciation of oil and gas prices like investing in private oil and gas companies. Whose revenue are not associated with how the capital markets feel about them but directly which how much revenue they create which is a function of how much oil and gas production they have and the price of oil. [00:11:05][68.2]

Stuart Turley: [00:11:05] Well said, Michael. In fact, you must have read the article. Well done. [00:11:09][3.3]

Michael Tanner: [00:11:09] Yeah, it’s almost like we’ve been saying that now for five years. And we, we will lightly touch on what OPEC decided yesterday, but we also did see rig counts dropped by three. Interestingly enough, Stu, we did see the frac count spread increased by four, which means there were some frac rigs added back to the market, which I, you know, is, is the first time really in, in a month, we’ve seen that. And a little bit different than I think what people are expecting. I mean, with rigs dropping and frac, rigs coming back online. To me what that signaling is that there’s either, to me, what that signals is this is most likely the big oil companies negotiating massive discounts with their frack providers. I mean, I think there’s very little reason to believe that smaller oil and gas companies who are buying what are called spec frack rigs, which they’re just not speculating, but they’re called spec rigs from the standpoint of, they’re going out and fracking one well at a time and sending that. And releasing that rig somewhere else versus these larger companies where they’re negotiating, hey, we’re gonna go buy Liberty Crew 4 and we’re going to get them for 10 different, the next 10 wells we’re to frack and they’re renegotiating discounts. So I have a good sense, talking to my industry connections, Stu, you’re not the only one with connections in this business that that’s more the case relative to why the frack. Count spread has increased, but nonetheless, great to see, you know, as on Friday, the market was reacting to what OPEC was going to do yesterday. We did find out in, in fact, OPEX is going to increase oil production by another 411,000 barrels per day as they begin to continue to unwind cuts. You know, what everyone is saying, Stu, and this is where I have a little bit of beef with the overall media and have a bit of a beef with just kind of your fly by night. Analysts people who haven’t necessarily been in this business for that long reporters or people who just you know cover the surface level is There’s the same old quotes that are being thrown out there. Oh OPEC’s Increasing because they want market share OPEX increasing because they’re trying to hurt other nations I think possibly number two is more correct I don’t believe OPEc is worried about market share at all in this point what I believe and I think what the tea leaves are reading is that OPEC is doing this to appease America and appease Trump. If they can give Trump his $55 oil, Trump then in turn, and this is not a quid pro quo, but more an unspoken, hey, OPECs has the ability to drop prices as low as they want. Their drop prices to Trump’s stated goal, friend of the show, Chris Wright, stated goal of $55 of oil, then in term, it makes it a lot easier for these Gulf states to do business in the United States. What have we seen in the last two weeks? You know, trillions of dollars of investment now in our energy infrastructure, which I’m saying I’m not actually theoretically very much into because we talk about energy security and now all of a sudden, we’re letting all of these foreign countries own our national security infrastructure. If we truly believe energy is national security, we probably should be worried about that. But I’ve complained about that enough where I think that the reason why OPEC is increasing production is because they want to throw a bone to America and really a bone to President Trump so that somewhere down the road, whether it’s they can get access to more arms in terms of military technology, whether they and whether the Abraham Accords come back, but for some, but give Trump a bone so that later on down the line, they get something in return. And I don’t think has much to do with oil specifically as it does to do with appeasement on their end, what’s they used to? [00:14:53][223.6]

Stuart Turley: [00:14:53] I can see your point, but I also think that they do not have control over their producers. I’m going to go a little bit more simply that whatever they do, Russia, Iran, Iraq, Venezuela will pump as much as they possibly can in order to fill their coffers whatever they need. And so I think… That there have been a lot of talking heads out there that have said OPEC may be gone as a cartel. So I think I agree. I like that you’re where your thought process is going, but I think it’s simply, they don’t have control. [00:15:31][38.0]

Michael Tanner: [00:15:32] Well, and that’s more reasonable than they’re trying to put U.S. Shale out of business. I, if I, I, anybody who says that, which is if you read our, our friends over at Reuters, you go read oil price.com, you know, that’s what they are great. That’s level one. That’s the level one of just, oh, that’s what they said in 2016. Well, it’s not 2016 anymore. It’s 2025. We’ve moved on now 10 years down the road. Now we got to come up with a new shtick and I think the shticks yes, there’s overproduction, but let’s not mistake. OPEC is Saudi Arabia, Saudi Arabia is OPEc. I mean, there’s really, if OPECs, if Saudi Arabia doesn’t want OPEcs to exist, then OPECS doesn’t really exist. So I think Saudi Arabia wants to curry favor with the Trump administration. And in doing so, if they can help drive oil prices to Trump’s stated goal of 55, they believe it’ll help them down in the future. We’ll slightly disagree on that, but that’s where. [00:16:24][52.3]

Stuart Turley: [00:16:24] Can I throw this as a thing? Saudi Arabia is, Saudi Aramco is looking at bringing on debt so that they can pay their portion of the kingdom’s money right now. So as Saudi Arramco is taking on debt, the only way the Saudi leadership would allow that to happen is if they firmly believe oil prices are going up. And that’s one of the key reasons that I think that my bully in the backyards going look at Saudi Arabia They may be borrowing money to pay their their kingdom price. Oh, well, do they do anything for that? No, that’s a short-term pain and they know oil is going up [00:17:04][39.6]

Michael Tanner: [00:17:04] Well, absolutely. And I think that would accurately play into my thesis that they’re not doing this for market share. They’re not going this for any other reason than currying favor with the Trump administration. But that’s definitely something, Stu, we need to be watching and paying attention. Russia, the failure of the… [00:17:21][17.1]

Stuart Turley: [00:17:21] Peace talks, needless to say, Russia-Ukraine talks stall, will Congress ramp up sanctions to pressure on Moscow. This is a huge story as we sit back and say, this has been clear for six months that President Trump does not have the information he needs to end the war, and we’re watching peace slip through his fingers, which has horrible implications for the global markets in the United States midterm elections. I’ve been discussing this with problem on my podcast and we’ve explored potential solutions where most people don’t understand the relevance to energy in this discussion. Russia has well had over 4% GDP growth while all the rest of the sanctions that the Biden administration, whoever was running the country, was hitting Russian with it did nothing but do anything but weaken the U.S. Dollar. This morning the Istanbul meeting hit a wall. The mediated under pressure from President Donald Trump lasted less than two hours and produced no breakthrough. Ukraine, led by President Vladimir Zelensky, re-aided its readiness for a 30-day unconditional ceasefire, but insisted on seeing a clear Russian proposal. Moscow meanwhile presented terms described by a Ukrainian source as non-starters. I can go through the rest of the details. Let’s just say that the president Putin is over here, president Zelensky is over there, and they really could care less what’s going on right now. The only way president Trump is going to get Vladimir Putin to the table is through understanding What is important to President Putin? And that is business. Everything else is just secondary. President Putin wants to do business and he wants peace to go forward. We are not negotiating from a position of strength. So Trump’s balancing act, who has pushed for a swift resolution for the war now faces Delegate Balancing Act. And it is not going to be there unless there is a path forward. The new trading blocs, President Putin has got his new trading blocks. And they are in Asia. They are in anything but the EU. We may see the EU dissolve. This is a gigantic story. Anyway, I’ll keep you posted on it. And we’ve been telling you all along for the last six months. That President Trump’s team do not have the correct information or what motivates President Trump. You cannot be there to broker a deal if you don’t know what President Putin is thinking. [00:20:21][179.9]

[00:20:22] Why Goldman Sachs expects OPEC Plus output hikes to end in August and implications for the oil market and the U.S. Investors. Goldman Sachs anticipates that OPEC Plus will raise oil output by approximately 0.41 million barrels per day in August, continuing a trend of incremental production increases over recent months. Here are some key factors. Balancing supply and demand. Goldman analysis highlights a delicate balance. Rising non-OPEC supply. Non-Opec producers, particularly in the US and Canada, are increasing output which reduces the need for sustained OPEC plus hikes. Goldman notes that this growing supply combined with resilient global demand could lead to surpluses and in fact that kind of counters what some of the other things that Goldman has put out in the past. What we’ve seen is Ristad also came out and we’ve written this about this in this article is that Ristat is saying very good demand numbers. And you’ve heard it here on the podcast, if India’s increased demand can outstretch the shortening of China’s market, we are going to see very good markets for a rise in oil prices. And what does that mean for oil investors? Means more money. The UK North Sea oil and gas jobs at risk cost skyrocketing in the anti-fossil fuel push. Michael, this could be thousands and thousands of jobs. And if you take a look at it over the next several years it’s going to average of 400 jobs a week lost. By 2020-30, UK offshore energy workforce requirement for oil and gas renewal between 125,000 and 163,000 jobs compared to today’s 154,000. This is huge because the push in the UK is to get rid of all fossil fuels. I have some bad news for the UK, Michael. They’re going to need fossil fuels. They have a energy mix problem. They still rely a lot on natural gas. So they’re not going to make it. And I found this very interesting when I tried to make an analyzation of this and say, wait a minute, if you’re going to go 100% renewable, how much tax revenue are you going to lose as well too? There is just absolutely no way the UK is going to it. [00:23:07][164.3]

Michael Tanner: [00:23:07] No. And I think you accurately put it, they have an energy mix problem. And that’s the big problem with not just the UK, but all of these countries, you know, Hawaii, California included, who have this energy mix, problem where the cost for to provide energy to them is artificially inflated because they are trying to artificially determine what is what goes into their energy mix now. In hawaii it’s a little bit different because they don’t have any they have to import all their energy and they’re subjugated to the jones act which means we have to use american ships there’s not enough ships to come in so there is an interesting part when it comes that but but from the uk i mean it’s it’s pretty unbelievable i mean you accurately point out in this article you know that the uk has received about 350 billion pounds of production taxes since the 1970 there’s about 200,000 jobs including direct, indirect. And what are known as induced rules. And the crazy part is they are able to meet 82% of their domestic oil and 38% of their domestic gas demand through drilling just in the North Sea. And yet they want to shut it all down and move to offshore wind. [00:24:20][72.5]

Stuart Turley: [00:24:20] Unbelievable. It does not make any sense. And the more I wrote this story, the more my head hurt. Honestly, this was absolutely horrific when you start considering stupidity. The great decline of California’s energy sector. Can the United States be energy dominant with California dragging the U.S. Down? This is a critical story. And when you sit back and take a look, Nathan Hammer provided some very good research material. And prompted me to write this story. I had just interviewed a Ronald Stein as well as Mike Umbro. I believe it was last week and I included the link in the article. It was an excellent podcast. And then Ronald Stein reached out and said, Newsom remains oblivious to the fact that we are a materialistic society dependent on more than 6,000 products made from fossil fuels. Newsom continues to believe that the elimination of gasoline is just one of the 6,000 products with his upcoming ban on new ICE vehicles in the upcoming year will clean up California unable to stop society’s demand from the other 5,999 products. His war on fossil fuel has set up California for the fourth largest economy in the world as a national security risk for America. This is extremely huge and there are three graphics on this article that you have got to just take a look and see 1980 the oil and then you take a look at 2024 you take look at this big old graph and it’s going wow he has decimated the oil production california used to be an energy independent state. Then you take a look at the natural gas. That took a little bit of a dive and then they went back a little bit and now right on back down. Nuclear, they barely kept the Diablo Canyon open. I’m glad that they did. But when we take a look at this, there’s a chart in here provided by Sandstone Capital Asset Group. And that is you take a of the average cost of California electricity, it is twice what the United States average is or near twice and it is disgusting what his energy policies have done by blaming it. But then Nathan Hammer’s graph in here is absolutely the most important one when you take a look at it. Maybe not the most important but pretty darn important. There’s a lot of red on this foreign import for the supply mix for California. California is an energy import black hole of energy and it is absolutely disgusting. Hats off to Nathan Hammer, Mike Umbro, as well as Ronald Stein for helping get the information that I needed for this story. This is a huge story and I would like to reach out to the Trump administration and quite honestly ask them and say what are you going to do when the worth larges. The economy in the world is on this kind of a crash course with a fiscal calamity and it is not going to allow the United States to be energy dominant when you have a energy dunce running California. You have the biggest state sitting there being a black hole of energy and it’s not good. Way to go Governor Newsom. I hope you have a great day. [00:28:01][220.6]

Michael Tanner: [00:28:01] As always guys, thank you to Energy Newsbeat for providing all the news and analysis. Stu and the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be at the tip of the spear. Hit that link in the description below for all links to the timestamps, links to the articles. Thank you to all of our Substack subscribers. We just reached a thousand subs on Substack, so we really appreciate all the support there. Guys, if you haven’t had a to check us out there. Please do that. Theenergynewsbeat.substack.com A great way to support the show is sign up for a paid subscription. It really helps us keep, keep all of this great content coming. Also guys, thank you to Reese energy consulting for supporting the show guys. If you need anything at all in the midstream space, hit up Reese energy, consulting.com. They’re the mid-stream experts work from everybody, from two guys in a garage to the largest publicly traded companies. So they have what it means to solve your problem. And finally guys, if you’re an investor looking to dip your toe into the energy market, we have a great energy portfolio analyzer, which will allow you to fill out a quick form and it will tell us whether or not you are a fit to invest in the energy space. And if so, we can provide you with a bunch of resources on how to get educated and point you in a few directions and where you might want to look for your energy diversification guys. That’s invest in oil dot energy newsbeat.com invest in oil that energy news beat.com. Thanks for it guys, we’re off tomorrow. We’ll see you Monday. [00:28:01][0.0][1665.4]

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