Energy News Beat

JP Morgan, BlackRock drop out of climate banker cabal, and admit the Net Zero transition is “delayed”

In February three of the four largest financial houses in the world, left the giant financial cabal called“Climate 100+” (the fourth one left a year ago). BlackRock, JP Morgan and State Street all parted ways with the billionaire-club of philanthropists trying to bully the world into buying their own renewables.  In the two months since then, two of their CEO’s have put out “letters to shareholders” predicting how the transition is going to be slower and harder and how we still need fossil fuels.

Suddenly everyone sounds like an energy skeptic.

There are lots of reasons for this shift:

1: US Republican States are pointing the “AntiTrust” gun at the billionaire banker club because it looks exactly like a monopolistic cabal doing its best to collude to reduce competition. The States are also firing up the fiduciary duty canon.  Hence the bankers not only want to back away from the cabal, they want to sound like bankers that care about investing their clients funds.

2. The renewables bubble is deflating  fast, and the CEO’s can see what’s coming. Think of their renewable energy passion a few years ago as a pump-n-dump scheme and it all makes more sense. Right now smart bankers are smoothing the exit ramp out of the bubble they created and hoping no one notices how wrong all their previous statements were.

3. Maybe there’s a point where smart banker billionaires realize they don’t want their own homeland to hit the skids. They’ve all made a fortune in the last four years, but who wants that fifth private jet if there is no homeland to come home too? Jamie Dimon astonished people when came out in January saying Trump’s policies were “kinda right”. Billionaires might want to visit China, but they don’t want to live there. And as I said at the time, maybe the wake up call was when the paratroopers-of-death dropped into a democracy and the Ivy league started cheering them on.

4. And besides, Trump might even win.

How times have changed

A year ago the CEO of the JP Morgan was calling for forced property seizure in a climate emergency:

Wall Street titan Jamie Dimon says seize private land for wind and solar builds

6 April 2023 10:29 GMT, Recharge

This year we need a reality check:

JP Morgan Warns of Delay to Global Energy Transition

By Irina Slav, OilPrice, April 19th, 2024

Inflation, interest rates, and wars may well delay the energy transition by quite a long time, JP Morgan has warned in a call for “a reality check” on its shift from hydrocarbons to alternatives.

…the bank’s head of global energy strategy, Christyan Malek, … forecasts that governments will dial down the push to transition from oil and gas to wind and solar as their financial resources dwindle.

Jamie Dimon’s Letter to Shareholders in 2024, is a 30,000 word 70 page letter. Despite being a small book it mentions “climate” just 13 times. He’s now more concerned about China (18 mentions) and uses the word military 24 times. He criticizes the Inflation Reduction Act because it angered all the allies of the US and he argues the US should dig up gas and sell it for political gain as well as the money:

Trade is realpolitik, and the recent cancellation of future liquified natural gas (LNG) projects is a good example of this fact. The projects were delayed mainly for political reasons — to pacify those who believe that gas is bad and that oil and gas projects should simply be stopped. This is not only wrong but also enormously naïve. One of the best ways to reduce CO2 for the next few decades is to use gas to replace coal. When oil and gas prices skyrocketed last winter, nations around the world — wealthy and very climate-conscious nations like France, Germany and the Netherlands, as well as lower-income nations like Indonesia, the Philippines and Vietnam that could not afford the higher cost — started to turn back to their coal plants. This highlights the importance of safe, secure and affordable energy. Second, the export of LNG is a great economic boon for the United States. But most important is the realpolitik goal: Our allied nations that need secure and affordable energy resources, including critical nations like Japan, Korea and most of our European allies, would like to be able to depend on the United States for energy. This now puts them in a difficult position — they may have to look elsewhere for such supplies, turning to Iran, Qatar, the United Arab Emirates or maybe even Russia. We need to minimize anything that can tear at our economic bonds with our allies.

The strength of our domestic production of energy gives us a “power advantage” — cheaper and more reliable energy, which creates economic and geopolitical advantages.

Meanwhile Larry Fink, CEO of BlackRock, the largest asset fund in the world, has undergone a very similar transformation. In 2021, he was raving how the existential crisis and how this was the beginning of a long and rapidly accelerating transition:

Larry Fink’s letter to CEO’s 2021

I believe that the pandemic has presented such an existential crisis – such a stark reminder of our fragility – that it has driven us to confront the global threat of climate change more forcefully and to consider how, like the pandemic, it will alter our lives. It has reminded us how the biggest crises, whether medical or environmental, demand a global and ambitious response.

…I believe that this is the beginning of a long but rapidly accelerating transition – one that will unfold over many years and reshape asset prices of every type. We know that climate risk is investment risk.

But now, after the bubble came and went, now he’s telling us energy security is just as important as the climate crisis:

Oil, gas needed for years: BlackRock’s Larry Fink says in annual [2024] letter

By Eric Johnston, March 27, 2024, The Australian Business Review

One of the world’s most influential investors has said the switch is on to “energy pragmatism” that recognises energy security is just as important in the move to net zero. Larry Fink of the $US10 trillion ($15.3 trillion) BlackRock has acknowledged the world will need to rely on oil and gas “for years to come” through the uneven energy transition.

… his letter … which runs to almost 30 pages, only mentions climate change in passing and the discussion is limited to strategies under way in the energy transition.

Larry Fink’s letter to investors in 2024 didn’t even mention ESG.

These are the levers of power you see shifting. BlackRock manages $10 trillion dollars in assets, and according to Jamie Dimon’s letter,  JP Morgan was managing assets of $7.6 trillion. When these men write long letters, Wall Street studies them.

A lot of people have suddenly started to say in April that “we always knew the transition would be expensive” — the phase change is following the bankers.

Source: Joannenova.com.au

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In 2018, everyone laughed at Donald Trump—German politicians actually laughed in his face—when he suggested that Germany would “become totally dependent on Russian energy if it does not immediately change course” at a UN conference. Just four years later, Russia rolled into Ukraine and the German government had to do something it had spent a decade avoiding: ask itself hard questions about its energy policy.

Since 2011, in the aftermath of the Fukushima Daichi meltdown, Germany threw its shoulder into phasing out its nuclear fleet. And this had indeed led to a deeper reliance on Russia, with imports comprising “up to 55 percent of gas and 34 percent of oil supplies.” But in the following years, Germany had become vulnerable to an energy crunch because of an over-investment in renewables and underinvestment in fossil fuels that collided with wind droughts and depleted fossil fuel reserves. The outbreak of the Ukraine War only tipped the country over the edge.

Now that the geopolitical deck had been re-shuffled, did Germany really want to continue its nuclear closures? In a piece out from German magazine Cicero, journalist Daniel Gräber exposes how members of the Green Party, including Minister Robert Habeck, colluded to mislead the German public, claiming that nuclear was too expensive and too dangerous to keep, despite the government’s internal analysis that nuclear was both cheap and safe to continue operating.1 So, they lied. And closed the plants anyway.

“Their aim from the outset was to prevent an exit from the phase-out. No matter what the cost,” writes Gräber.

No matter the cost indeed. In 2022, the German government shelled out 200 billion euros in subsidies to ease the pain of the energy crunch. Nuclear wouldn’t have abated all of that, but closing the plants didn’t help. And now, some of the greatest nuclear plants the world has ever seen lie cold and dead on German soil. What a tragic state of affairs.

But here’s a potential silver lining: support for nuclear energy in Germany has grown. In 2021, half the country endorsed keeping the plants on line. In the wake of the revelations from Cicero, a vital opportunity has arrived for the other half of the population to change their minds. If the scales fall from any anti-nuke’s eyes, that’s a boon. Who can blame many of them for misjudging the situation? Energy and electricity confound even the most seasoned of experts—they’re complex topics. Besides, the Green Party abused the authority of the state to deceive the country into an energy crunch while hobbling the country’s industrial base. If some anti-nukes can be won over, their new course could make it politically possible to restart some of those plants—so long as it’s also technically feasible.

Source: Nuclearbarbarians.substack.com

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China’s dominance of supply chains for solar panels, electric vehicles and lithium-ion batteries is rippling through the U.S. energy sector and drawing political fire on Capitol Hill.

Now, another industry may be added to the list of concerns: “green” hydrogen.

China leads the world in producing the essential technology for green hydrogen made from renewables: electrolyzers. The machines use electricity to make hydrogen fuel from water. The Biden administration has prioritized domestic electrolyzer manufacturing as part of its goal of producing 10 million metric tons of “clean” hydrogen annually by 2030.

Industry experts say the administration’s hopes for a domestic supply chain hinge on final regulations for the 2022 Inflation Reduction Act’s hydrogen tax subsidies known as 45V.

“The 45V tax credits will be important in determining the future of electrolyzer manufacturing in the US,” said Payal Kaur, a hydrogen analyst for BloombergNEF, in an email. “If the final guidance is not well received it may impact the pace of growth in the market.”

The Treasury Department proposed initial guidance for 45V in December, which said that green hydrogen producers receiving tax credits must use newly installed clean energy sources.

Companies are divided over whether the tax credits will jump-start U.S. industry and curb China’s influence.

In one view, the proposed 45V rules will cede electrolyzer leadership to China by restricting the development of U.S. green hydrogen projects altogether. In another view, the rules will push hydrogen companies to buy technologically advanced Western electrolyzers better suited for variable renewable energy.

The outcome of final 45V regulations would inform a raging political debate on the role of China in energy policy. Republicans have hammered the Biden administration for promoting clean energy technologies whose supply chains are dominated by China like solar and EVs. The administration says it’s building up U.S. clean energy manufacturing through climate spending, a necessary imperative to combat China’s energy supply chain dominance and achieve emissions reductions.

“The future trajectory of the [electrolyzer] industry might align with the solar model, where a single dominant player — perhaps China — spearheads global [electrolyzer] technology, or the wind model, [characterized] by a more balanced competition between major players globally,” wrote Nicolas Groues, a Wood Mackenzie managing consultant for emissions and low-carbon fuels, in a November opinion piece.

The Biden administration says its efforts are meant to help ensure electrolyzers will be made in America even as the country faces stiff competition from China.

In March, the Department of Energy announced hundreds of millions of dollars from the 2021 bipartisan infrastructure law was allocated toward electrolyzer research and development.

DOE said the funds would enable 10 gigawatts’ worth of U.S. electrolyzers, enough to produce 1.3 million metric tons of clean fuel. The announcement included $316 million to enhance electrolyzer performance, $81 million to develop a U.S. electrolyzer supply chain and $72 million for next-generation machines.

DOE still has to distribute another $750 million in infrastructure law funds for electrolyzers and other parts of the hydrogen supply chain.

In March and April, DOE separately announced Nel Hydrogen, Electric Hydrogen, Topsoe and John Cockerill received millions of dollars from the manufacturing tax credit known as 48C to finance U.S. electrolyzer factories.

When Treasury announced initial 45V guidance, a coalition of companies — including Air Products, Electric Hydrogen and Hy Stor Energy — said it could unlock 50 GW worth of green hydrogen projects, which would stimulate demand for electrolyzers.

Today, the U.S. has enough factories to produce 4.5 GW worth of electrolyzers, according to the Clean Investment Monitor, which tracks American investments in low-carbon technologies and manufacturing. John Cockerill, a Belgian engineering company, is expected to start producing electrolyzers this summer in Houston, adding another gigawatt of capacity to the U.S. total.

Hydrogen companies broadly have announced U.S. factories to increase electrolyzer production capacity by 9.5 GW, the Clean Investment Monitor says, though it’s unclear how many of them will become reality.

Despite emerging U.S. manufacturing, China today has enough production capacity to make 13 GW, or about 61 percent of global electrolyzer manufacturing capacity, according to research firm Clean Energy Associates. China’s market share is expected to decline to just under 50 percent by 2027 as new manufacturing comes online in both Europe and the U.S. in the next few years, the firm adds.

Chinese electrolyzer plants already have a higher production capacity than what the world demands, according to 2024 BloombergNEF data. Analysts found that China is overproducing the device — the same issue Washington lawmakers have said is stifling U.S. solar, EV and lithium-ion battery manufacturing.

The White House, DOE and Treasury did not respond to multiple requests for comment about U.S. electrolyzer manufacturing or China’s involvement in the hydrogen industry.

President Joe Biden has previously touted U.S. electrolyzer manufacturing. He attributed manufacturer Cummins’ decision to produce electrolyzers in the U.S. to the Inflation Reduction Act during a speech at a factory visit in April 2023.

“Instead of relying on equipment made overseas in places like China, the supply chains will be again made in America,” Biden said at the factory.

Market showdown

Some industry stakeholders argue initial 45V rules could spur domestic electrolyzer manufacturing because they incentivize hydrogen producers to buy advanced U.S. machines.

Chinese manufacturers almost exclusively make the cheaper alkaline version of electrolyzers, accounting for roughly 90 percent of production, according to 2023 Citigroup data and Clean Energy Associates. U.S. and European manufacturers, meanwhile, have the lead when it comes to the more expensive proton exchange membrane (PEM) kind of electrolyzers, the firms say.

PEM electrolyzers, however, are better suited to operate with intermittent wind and solar electricity than alkaline machines, according to a 2023 World Economic Forum white paper. That’s because PEM electrolyzers can function under a wide range of electricity and take only five minutes to get up to full operating speed. In contrast, alkaline machines — especially the unpressurized variant — need a stable source of power and take 50 minutes to get up to full speed.

Hydrogen producers may increase their demand for U.S. PEM electrolyzers if Treasury adopts “hourly matching” requirements in final 45V regulations, argued Paul Wilkins, vice president for policy and government engagement for electrolyzer manufacturer Electric Hydrogen, in an interview.

Hourly matching requires hydrogen producers to make hydrogen during the same hour new and intermittent clean energy like solar is powering the grid.

Experts say the provision will force electrolyzers to ramp up and down production at certain times, such as when the sun isn’t shining. PEM electrolyzers — because of their flexible operating range and ability to quickly ramp up production — are suited for this reality, Wilkins said.

“Driving the market towards hourly matching is better for U.S. manufacturers,” Wilkins said in an interview. “It’s a better emissions outcome and a better competitiveness outcome.”

Wilkins said that Chinese alkaline electrolyzers at a large green hydrogen plant have been unreliable, requiring a higher minimum level of electricity to make fuel than advertised.

Electric Hydrogen supports phasing in hourly matching around 2028 and allowing some of the first green hydrogen projects to not need to meet strict 45V requirements. The company plans to produce PEM machines at a 1.2-GW gigafactory it is constructing in Devens, Massachusetts.

Other U.S. electrolyzer manufacturers say their non-PEM machines can also help green hydrogen producers meet hourly matching requirements. Verdagy, for example, says it will make advanced alkaline machines early next year in Newark, California, that are suitable for variable electricity. Engineers for Topsoe, a Danish firm with an electrolyzer facility planned in Virginia, similarly found that the company’s solid oxide electrolyzer cell product could also handle intermittent energy without degrading the machine.

The Environmental Resources Management, a sustainability consulting firm, prepared a 45V analysis for the Environmental Defense Fund this year that also makes the case that hourly time matching would tip the scale for advanced U.S. electrolyzers. Technological advancements will continue to bring the cost of “flexible,” hourly match-compatible electrolyzers down over time, the firm said.

Electrolyzer economics

Still, companies like Cummins and Nel Hydrogen argue initial 45V rules will depress U.S. electrolyzer manufacturing and give China more of an upper hand.

“Complex US rules will drive developers to lower-cost equipment to reduce capital expenditures, reducing demand for US equipment,” said Alex Savelli, managing director of electrolyzers for Cummins’ zero-emissions business Accelera, in a statement.

U.S. and European electrolyzers are roughly four times as expensive to install on average compared to Chinese machines today, according to 2024 BloombergNEF data.

Cummins said that turning machines on and off under hourly matching would cause “wear-and-tear on an expensive asset,” which would be factored into warranties and lead to higher prices in its 45V letter.

Savelli added that 45V rules need to advance green hydrogen projects in the first place to create demand for U.S. electrolyzers. Cummins itself has said it needs to see green hydrogen producers tap into 45V credits before it expands a PEM electrolyzer facility in Fridley, Minnesota. The plant has enough capacity to make 500 megawatts’ worth of electrolyzers annually but could double to 1 GW, according to the company’s 45V letter.

Nel Hydrogen — an electrolyzer manufacturer with a factory in Connecticut and one planned in Michigan — also argued that 45V needs to unlock green hydrogen projects in their letter.

Production scale “is essential to our ability to provide the market with low-cost, high-reliability electrolyzers that can both compete with emerging international competition and support the requisite production economics of emerging low carbon industries,” the company said.

The company added that the current 45V rules will increase the upfront cost of green hydrogen projects because hydrogen producers must use new clean energy sources to make low-carbon fuel. Hydrogen producers, therefore, could look to cut back on their high costs by buying cheap Chinese electrolyzers. That would depress demand for U.S. electrolyzers.

“This single handedly cedes manufacturing of electrolyzers to other countries who are likely to use less responsible supply chains and foreign labor,” the company warned.

Both Cummins and Nel Hydrogen called on Treasury to implement hourly matching later than 2028 and allow the first hydrogen producers not to have to meet stringent requirements whenever they are implemented in their letters.

Christian Roselund, a senior policy analyst for Clean Energy Associates, agreed that 45V’s hourly matching provisions would increase the cost of green hydrogen production and reduce electrolyzer demand in the short term.

He noted, however, that 45V rules are primarily meant to ensure hydrogen production is clean and “may be necessary for social acceptance to support industry growth in the short and medium term” in an email.

Critical minerals

The Biden administration has taken steps to help the U.S. obtain electrolyzer components without depending on foreign markets.

China has a complete and mature supply chain for alkaline electrolyzers, according to BloombergNEF. The East Asian nation has ready access to the critical minerals it needs for Alkaline machines such as nickel and aluminum.

U.S. manufacturers, on the other hand, are dependent on South Africa for the platinum and iridium minerals PEM machines require.

South Africa extracts 74 percent of all platinum and 83 percent of all iridium in the world, according to 2023 data aggregated by FP Analytics, the research and advisory division for Foreign Policy magazine. The U.S. imports roughly half of its platinum and iridium from South Africa.

Platinum mining in South Africa is expected to decline in the years to come, FP Analytics said in its report. That drop would also harm iridium production because the rare metal is found in small quantities as a byproduct of platinum mining.

Aaron Feaver, executive director of the Joint Center for Deployment and Research in Earth Abundant Materials, said the U.S. can alleviate foreign supply chain concerns by researching ways to reduce iridium needs and recycling electrolyzer components.

“A lot of that work we need to encourage and move forward,” Feaver said.

DOE’s $750 million announcement for electrolyzers and fuel cells included funding to address critical mineral issues.

For example, DOE allocated $50 million to a consortium led by the American Institute of Chemical Engineers that will develop recycling technology for hydrogen fuel cells and electrolyzers. The department also awarded $10 million to Mott to develop PEM electrolyzer coatings not made with platinum or iridium.

Source: Eenews.net

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Despite us constantly being told that solar and wind are now the cheapest forms of electricity, governments around the world needed to spend $1.8 trillion on the green transition last year.

“Wind and solar are already significantly cheaper than coal and oil” is how President Biden conveniently justifies spending hundreds of billions of dollars on green subsidies.

Indeed, arguing that wind and solar are the cheapest is a meme employed by green lobbyists, activists and politicians around the world.

The typical way to measure the cost of solar simply ignores its unreliability. The same is true for wind energy.

Biden’s Energy Information Administration puts solar at 3.6¢ per kilowatt hour, just ahead of natural gas at 3.8¢. But if you reasonably include the cost of reliability, the real costs explode — one peer-reviewed study shows an increase of 11 to 42 times, making solar by far the most expensive source of electricity, followed by wind.

The enormous additional cost comes from the need for storage. Electricity is required even when the sun is not shining and the wind is not blowing, yet our battery capacity is woefully inadequate.

Research shows that every winter, when solar contributes very little, Germany has a “wind drought” of five days when wind turbines also deliver almost nothing. That suggests batteries will be needed for a minimum of 120 hours — although the actual need will be much longer since droughts sometimes last much longer and recur before storage can be filled.

A new study looking at the United States shows that to achieve 100% solar or wind electricity with sufficient backup, the US would need to be able to store almost three months’ worth of annual electricity. It currently has seven minutes of battery storage.

Just to pay for the batteries would cost the US five times its current GDP. And it would have to repurchase the batteries when they expire after just 15 years.

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The findings from national lab and university researchers upend assumptions about how turbines interact with each other.

The post ‘Wake effect’ could drain 38% of offshore wind power, study says appeared first on E&E News by POLITICO.

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Republicans will try again to pass legislation on mining and against Department of Energy efficiency mandates.

The post House sets vote on energy efficiency, mining bills appeared first on E&E News by POLITICO.

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National Grid‘s Viking Link interconnector has been officially recognized by GUINNESS WORLD RECORDS as the longest land and subsea HVDC interconnector.

Spanning 757 kilometres between rural Lincolnshire and Revsing in Denmark, the project received its title at the Lincolnshire converter station.

Jointly owned and operated by National Grid and Energinet, the interconnector has been operational since 29th December, transporting over 1,800GWh of power.

Construction began in 2019, involving a specially commissioned vessel and over four million working hours.

National Grid Construction Director Gareth Burden said: “Viking Link is an incredible feat of engineering, bringing cleaner, greener and more affordable energy to consumers as well as increasing energy security for both countries.

“In its first year alone, Viking Link is expected to save 600,000 tonnes of carbon emissions – equal to taking 280,000 cars off UK roads and is already playing a vital role in the green energy transition.”

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The government is set to make a significant announcement this Friday, granting permission for fossil fuel companies to explore for oil and gas beneath offshore wind-power sites.

The move, disclosed by the North Sea Transition Authority (NSTA), responsible for regulating North Sea oil and gas production, will issue licences to approximately 30 companies for hydrocarbon exploration within areas designated for future offshore wind farms.

The NSTA said: “The North Sea is an important resource for energy security and net zero delivery, so it’s vital that sectors collaborate to ensure those systems can co-exist.
Following discussions with our partners in The Crown Estate and Crown Estate
Scotland, we have introduced a new clause for overlapping oil and gas licences and
wind leases for the first time.

“This will be the main commercial mechanism for these licences to resolve spatial overlaps and to support co-existence of these important industries.”

This decision has ignited debate among environmental campaigners, who argue it signals a departure from the climate agenda by government officials.

A Department for Energy Security and Net Zero spokesperson told Energy Live News: “To strengthen our energy security and grow the economy, we want to maximise the huge energy potential of the North Sea.

“Co-location of offshore wind and oil and gas projects already co-exist successfully and the NSTA have introduced a new clause which requires an agreed co-location between oil and gas licensees and offshore wind developers before activity can take place.

“We will continue to need oil and gas over the coming decades as we increase our share of renewables; that’s why we welcome the work by the NSTA and the Crown Estates to facilitate the co-location of wind and oil and gas projects as the offshore space gets busier.”

RenewableUK’s Chief Executive Dan McGrail said: “Whilst we respect that the North Sea is a shared space, with the natural environment and other industries to consider, the government should be crystal clear that their priority is renewables over oil and gas.

“Offshore wind is going to be the backbone of our future system, not fossil fuels. Prioritising offshore wind over oil and gas isn’t just the right choice for the planet, but given renewables are the lowest cost means of generating power, we should be doing this for billpayers.”

A NSTA spokesperson told Energy Live News: “The granting of an exploration licence does not eliminate the use of that area for offshore wind, and we wholly support the use of offshore wind as a means of power generation.

“The NSTA has worked closely to manage any potential overlaps and for the first time have agreed a new co-location clause which means that for any activity to take place oil and gas operators will have to come to an agreement with wind lease holder on how to proceed before further permission for activity is granted.

“This will be the main mechanism for these licences to resolving spatial overlaps and to support co-existence of these important industries.

“It is possible for different activities to take place in the same areas through early engagement and coordination, careful sequencing of activities, and deployment of specific technology.”

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Daily Standup Top Stories

Tesla battery material supplier tops list of human rights abuses for second year in a row

Highlights of the Podcast

00:00 – Intro

01:45 -Tesla battery material supplier tops list of human rights abuses for second year in a row

07:15 – AI could drive a natural gas boom as power companies face surging electricity demand

11:18 – G7 Agrees To End Coal Use But Can It?

13:56 – Environmentalists ignore renewables’ waste

16:57 – Ban on Russian uranium helps US build nuclear fuel capacity, official says

21:02 – Markets Update

24:36 – Exxon to Close Pioneer Deal as FTC Forces Out Sheffield

39:09 – Outro

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– Get in Contact With The Show –

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

Michael Tanner: [00:00:15] What’s going on, everybody? Welcome into the Monday, May 6th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up, Tesla battery materials supplier tops list of human rights abuses for second year in a row. Unbelievable. Next up energy. AI could drive a natural gas boom as power companies face surging electrical demand. We’ll go over to/We’ll find out from that one. Next up, environmentalist ignore renewables waste. And finally, in our news segment, a ban on Russian uranium could help us build nuclear fuel capacity, according to officials. I’d like to know who those officials are. We’ll then pop over and cover some stuff in the finance segment. Oil settles down on some weak U.S. job data. Actually about lowest it’s been in three weeks. Natural gas sees a little bit of a spike. We did see rig counts continue just to get hammered. I will then spend the majority of my segment talking about Exxon, closing the pioneer deal, mainly as the FTC forces out Sheffield. You know, as I’ll say, he got conned in this one. We’ll cover all of that. For many angles, and then we’ll finish quickly looking at EOG earnings, which again find some interesting nuggets there. We will cover all that in a bag of chips guys as always. I’m Michael Tanner joined by Stuart Turley. Where do you want to begin. [00:01:44][88.9]

Stuart Turley: [00:01:45] Hey let’s start with our buddies over there at Tesla. You know, Michael, when you’re, you’re a manufacturer and you’ve got some suppliers that are, like, using child labor in the Congo. I don’t think that’s a good list to be on. Tesla battery materials supplier tops list of human rights abuses for second year in a row. Here’s some quotes in here. The global push for, clean energy depends on materials used from solar panels, wind turbines, electric vehicles and batteries. Unless companies take us as stamp out to abuse, quote, we expect large companies like Tesla to use their leverage. This is one of the Congo mining companies saying this year we expect Tesla to do it. You’re the one hiring them. [00:02:32][47.2]

Michael Tanner: [00:02:33] I it’s it. I there’s so much that goes into this. I’ll let you I’ll let you read a little bit more than I’ll give my take. [00:02:39][6.9]

Stuart Turley: [00:02:41] I’ll tell you, there’s more than 500 allegations of abuse going back in 2010. Here’s another quote. We see the risk of abuse is increasing as pressure to mine for new materials is also intensifying, says Carolyn Avalon, the center for Natural Resources Research. Obviously, we expect large companies like Tesla to use their leverage to influence the sector as a whole, and not only, but as we require that their suppliers are not committing human rights abuses. There’s this brings up a whole can of worms, Michael. Is it because the world is being forced to go this way because they’re trying to kill Ice engines so that we abuse kids? I mean, which way do you think on this? [00:03:25][44.5]

Michael Tanner: [00:03:26] Well, I think the I mean, this article does an interesting job of trying to shift blame from Tesla, who is the one buying the cobalt to Glencore, who’s kind of the main and the main company who they’re targeting in this article talking about those 500 individual abuses. Glencore, as we know, is one of the world’s largest kind of energy trading companies. They’ve shifted really away from that energy trading side and are really a producer. They have huge, huge coal manufacturing and coal plants where they actually go mined coal. We know they’re they’re thinking about in London. They’re they’re considering spinning that off and trying to see if they could maybe take that coal business and make it part of the United States stock exchange. We’ll see where that goes. I think this brings up an interesting question is who is liable? Obviously, Glencore needs to be providing the requisite work. You know, they’re talking mainly that there’s no water there in Zambia here or what it it’s. Sorry. Give me a second. Where’s the, what country is this in? This is in some country where they’re basically saying, hey, we’re not even. They’re not even giving us water. You’re they’re forcing us to work 12 hour days and we don’t even have water, which is pretty interesting. This is in Congo, Peru and Colombia. Specifically in the Democratic Republic of Congo. Workers there. And I’m reading now in the article workers, they’re reported to have little water or food while working long hours in sweltering heat, according to a Glencore, spokesperson. The workers had access to as much water as they need from water stations, communal areas and emphasized the company’s commitment to worker health and safety. Again, whose job is it? It’s everybody’s job, and I think that’s where people swing it. Miss. They try to say Tesla will say, well, it’s Glencore job. Glencore would say, well it’s the job of the people who are on. We’re a little bit removed. We’re maybe a passive investor. The answer is. Everybody is is responsible to make sure that if you’re going to if you’re going to hire workers and you’re going to use workers, you’re going to make sure that they have a, a decent working environment. I think the if I had to put my finger on, I blame Tesla a little bit more than I blame Glencore, because Tesla is incentivized to have Glencore give them cobalt, which is known as the blood diamonds of batteries, as cheap as possible. The cheaper they can get cobalt, the cheaper they can sell their batteries and their cars, and the more they’ll be able to compete with some of the Chinese companies who we know don’t care about human rights. So if if you’ve got to peg it one way or the other, I feel like Tesla pushing it off to Glencore is a little bit of, let’s just say convenient for them so they don’t have to necessarily. It’s like Apple. We know Apple is is involved with human rights abuses up and down their value chain. But what do they continue to do. Just push it off. Just push it off. Tim Cook. Elon Musk they’re never going to Congo to look at this stuff. They’re going to read a report and say oh we need to do better. But it’s Glencore. It’s like, okay, maybe it is Glencore fault, but Glencore is only responding to the incentives that you put in place. Remember, in a free market society, incentives matter. [00:06:26][179.8]

Stuart Turley: [00:06:27] I agree, and here’s where I think it’s despicable is because our law, makers and our congresspeople are going after the, scope one, scope two, scope three emissions for oil and gas companies, but yet they won’t go to the, go the other way for human rights and child abuse. I think it’s despicable. So. [00:06:48][21.6]

Michael Tanner: [00:06:49] Yeah. Now, you know, while Glencore hasn’t necessarily been charged with human rights abuses, we do know that they agreed to pay 1.1 billion in fines in 2022, mainly on the fact of foreign bribery and market manipulation charges. So clearly, there’s something, you know, where there’s smoke, there’s fire. [00:07:08][18.5]

Stuart Turley: [00:07:08] Yeah. And where there is, a politician in Ukraine, there is kickback. So let’s go to the next one here. AI could drive a natural gas boom as power companies face surging electrical demand. This article was actually from CNBC and I thought it was an outstanding article. There is a 3.5 minute video in there, where they’re interviewing Toby over it. He cute. He is an animal. I absolutely love Toby. He is, a really, really cool cat. Here’s where I think he brought up some fantastic, points. That is, this in order for she was asked by he was asked by one of the, people interviewing and they said, well, what is driving next year’s growth in natural gas? He said the strip pricing for 20, 25 is going to be a dollar more than it is right now. Why? Because the amount of electricity that I think campuses and data centers are going to need is natural gas. Guess how much, Michael? 15 BCF a day is what they’re going to be needing. That’s this pain. Excuse me. That’s 13 New York City the size of those cities. Amount of power. Wow. That’s a lot of natural gas demand just in data center. [00:08:41][92.6]

Michael Tanner: [00:08:42] It is. And I mean we know for the past ten or so years we’ve had fairly flat power growth in the United States. Wells Fargo according to this article, has come out and said electricity demand forecast is expected to grow by up to 20% by 2030, mainly due to the fact that these data centers need AI. [00:08:59][17.3]

Stuart Turley: [00:09:00] Absolutely. And so I thought, Toby was very well articulated in there, and I was very pleased to see that it didn’t come out on CNBC. [00:09:08][8.6]

Michael Tanner: [00:09:10] So question for you. Yeah. So your your Amazon, your Google, your Microsoft. You’re meta you’re you’re in those strategy meeting. At what point do you get into the natural gas business yourself. [00:09:20][10.3]

Stuart Turley: [00:09:22] that is an outstanding question. And I am now trying to articulate a point because we, we just saw that Japan has been buying all the way through the value chain. We see that, Total Energy is buying all the way through the, value chain. So countries, through their, companies that they own and are going through are buying all the way back through. Why wouldn’t it make sense? Well, we do see Amazon buying nuclear reactors. It would make sense. Total Energy bought all those natural gas power plants in Texas. It does make sense to do that. And I think you bring up an a fantastic point from the standpoint, Michael, they’re going to have to protect their low cost power otherwise data sets. Aren’t going to be able to grow. [00:10:16][53.8]

Michael Tanner: [00:10:16] Especially if you think prices are going to be drastically higher for natural gas in 3 to 5 years. Does it make sense to go out now as we’re going to cover in a little bit? The FTC might have something to say about that, but I wouldn’t be surprised if a company specifically like Amazon decided to maybe go scoop up a small natural gas producer that allows them to have unlimited access, quote unquote, to cheaper power, because now they’re only paying for transportation costs. I think it’s interesting. And and I wouldn’t be shocked if there’s if we hear some rumblings of some possible M&A activity, specifically between some of these big data center players Amazon, Google, Microsoft, Facebook and some specific natural gas players, you know, depending on location. So I think it’s super interesting. But the shift of where of the balance of power is happening. [00:11:07][50.6]

Stuart Turley: [00:11:08] I couldn’t agree more with you. And people have to protect their supply lines because supply line, link breaking has happened and will continue. Hey, let’s go to the next one. G7 agrees to go to coal in coal, but cannot. This is from Irina Slav,, the great Irina Slav. And it was on oil price, if I remember right. Yes. This was on Irina Slav at oil price. Big thing here. The United States, UK, Italy, France, Japan, Germany and Canada struck the deal to end use of coal for power generation by 2035. Holy smokes. Here’s some big numbers. Michael. Coal as a power source in the G7 is 15% of the energy mix. Wow, this. Now listen to this. When we come in here, the G7, the bottom line. So let me read the just flat out read her last, paragraph here. So it’s uncertain whether the G7 would give up coal completely. Even the UK, which only generates a small portion of its electricity from coal and to reopen a plant during a period of low wind power generation. But even if they do, however high in the cost, this leaves the rest of the world, which would start using more coal, not least because it would become cheaper. The net effect of the G7 coal phaseout, if it ever materializes, may and truly add to global emissions. Wow, what a great point to make on this. There is no realistic way that wind, solar, and nuclear could ever completely replace oil and gas and coal. [00:12:56][107.9]

Michael Tanner: [00:12:56] And China will always purchase the cheapest form of energy, whether it’s natural gas, whether it’s wind, whether it’s solar or whether it’s cold, they’re going to produce and buy the cheapest energy. So if we phase coal out to move to higher cost stuff, driving down the cost of coal, India, China, there’s going to buy more of it because they understand that cheap energy means great things for their for their people, specifically in India. We know they’re we know they’ve been we they’ve been called out a bunch for continuing to buy Russian. They’re just doing exactly what they should be doing for their people. [00:13:28][31.8]

Stuart Turley: [00:13:29] Exactly. And and let me ask you this. Do you think that if the price is there and, you think coal mining is, clean from the standpoint of, no emissions, I have a feeling that they will still take Pennsylvania coal all over the world. I bet they’ll still be exporting. [00:13:48][19.4]

Michael Tanner: [00:13:49] No. Absolutely. [00:13:49][0.3]

Stuart Turley: [00:13:50] So now, all right, let’s wander into the next one. A shout out to, Irina. And she did a great job on that one. Here’s this one’s near and dear to my heart, Michael. Environmentalists ignore renewables. Waste this one that drives me nuts. The farmland and landowners are getting it in the drive through all the time. And this is just making it nuts. This was actually out of, Midland Odessa newspaper. And here’s a couple really good quotes in here. It’s noteworthy that so many environmental activists failed to account for the waste streams associated with wind and solar power generation, overlooking the whole listicle and environmental impact of their overall technology, said Landgraf, Odessa Republican who chairs that Texas House Environmental Regulation Committee in Austin. Hey, I’d love to visit with you on the podcast there. They fail to recognize embracing renewable energy also necessitates confronting, accompanying waste challenges ahead on a however, from a hindrance, these challenges can offer a fertile ground for innovation. I couldn’t agree more. Let’s figure out how to get these things renewable. But it’s the reclamation land reclamation that nobody is talking about. And the landowners are getting screwed. [00:15:16][85.6]

Michael Tanner: [00:15:17] Yeah. In in the mining business in the United States, I’m not going to speak for a broad in the mining business. We figured out reclamation, and it’s one of the reasons why permitting and getting in and getting mines approved in the United States takes a lot of money and a lot of time, because a lot of that money goes towards reclamation. A lot of the permitting required is, how are you going to clean this site up when it’s done? If there’s only a ten year mine life cycle, what are you going to do for the next that’s missing? [00:15:41][24.7]

Stuart Turley: [00:15:42] You’re in the wind industry, Michael. What that is missing in the wind industry. [00:15:46][4.2]

Michael Tanner: [00:15:47] Oh, it’s missing everywhere. So what I’m saying is this needs to come. Ever. We figured it out in the mining business. Why can’t we figure it out elsewhere? [00:15:53][6.8]

Stuart Turley: [00:15:55] I agree, because now these all this farmland that we’re going to need ain’t going to be farming. [00:16:00][5.2]

Michael Tanner: [00:16:01] No. Well, and, you know, I love the the the the pic, the cover art here. You’ve got a drilling rig in a wind farm right next to each other. Again, we figured out a lot of this stuff with mining and oil and gas. It’s going to be interesting how it works. I love this quote. Here in the article, the oil and gas industry’s adaptability serves as evidence of this potential, as it has effectively converted waste into a profitable income stream to fulfill market needs. That’s according to, our friend. What’s his name? Doo doo doo doo doo. State Representative Brooks Land, who is kind of spearheading, as you said, this discharge again, it’s clear wind and solar are being backed by people who don’t necessarily care about the environment. What they care about is the taking back. What they see is control from the greedy oil and gas companies. [00:16:48][47.8]

Stuart Turley: [00:16:49] Exactly. And I, I personally, it’s all about electrification and, everything else. So I hey, let’s run on to ban on Russian uranium. Helps build nuclear fuel capacity. Official says when do you what do you think my my official opinion of our U.S. officials ability to get anything done correctly is mile slim to none. Absolutely. The US passed legislation on Tuesday that bans the import from Russia, the latest move to disrupt Putin’s ability to pay for the full scale invasion. They are dopes. The reality is, the last few years have been a threat to the real and present possibility that Russia could stop abruptly sending enriched uranium to the United States. We get, I believe, 20%, of our, enriched uranium from them. Whole tech got 1.5 billion d.o.e. alone in March. We’ll have to refurbish their plan and get approval from us. Related, regulators, Huff says. I fully expect it will operate better than new operating once they get completed on those refurbishment, Haltech spokesperson Patrick O’Brien said, which still needs a Re-authorization will undergo thorough inspections before any restart. I have absolutely zero confidence in this getting done. [00:18:21][91.8]

Michael Tanner: [00:18:22] Well and it shows you how interconnected the world is. Even in the midst of this war with Ukraine, we’re still importing, you know, 24% of our enriched uranium used by reactors in the United States from Russia. So. [00:18:35][13.0]

Stuart Turley: [00:18:36] Absolutely. And I, I, it is absolutely despicable, Michael, because it’s, LNG Russia has figured out how to get around the US sanctions on oil. What is happening now is they are arranging for new, there is a glut or a, a opening. Michael, you’re you’re going to flip out when you hear this one. I know you’re about to yawn because you’re, like, going, oh, no, this is terrible. The Dart fleet for LNG tankers is now started. You’re going, oh, no, another dark fleet for Stuart to talk about. Guess what? LNG is now going to be available to be bypassing sanctions. What else is going to be able to be bypassed and sanctions. [00:19:24][48.0]

Michael Tanner: [00:19:25] Well everything I mean hey, I, you would be proud. On one of my solo shows last week, I talked about it was a Pacific article covering the dark. There’s about 500 vessels out there that are floating around. So you you’d be proud. I mean, you you’ve beaten me down on that. Enough. It all comes back to the world is so much more interconnected than we think. We say one thing over here with our hands, and then we have our other hand up here saying something different. So I’m with you. I have little to no faith that this execution will be good. The only good thing that could come out of this is investment into the nuclear business. They in the U.S., you regular business, they say, would unlock about 10.2. [00:19:58][33.3]

Stuart Turley: [00:19:58] Absolutely. [00:19:58][0.0]

Michael Tanner: [00:19:59] Billion in nuclear funding. If this happens that I’m for I’m. [00:20:04][4.4]

Stuart Turley: [00:20:04] All in on that. But you know what the regulatory process for holding up, nuclear facilities and everything else is still. Burrow can. [00:20:15][11.3]

Michael Tanner: [00:20:16] Absolutely, absolutely. [00:20:17][0.7]

Stuart Turley: [00:20:18] Cool off to you now, man. [00:20:19][1.0]

Michael Tanner: [00:20:20] All right, well, before we jump to the finance segment, guys will pay the bills here. As always, thanks for checking out the world’s greatest website energy news beat.com. All the news and analysis you heard and are about to hear is brought to you by that website. You can also check us out, in the description below for all the links to the articles, timestamps, everything you need to know. To keep up to speed with the oil and gas business, you can check us out. Dashboard.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 at the tip of the spear when it comes to the energy and the oil and gas business again. www,energynewsbeat.com. [00:20:59][39.7]

[00:21:02] You know pretty pretty interesting. You know I would take it on Friday. I think everybody saw oil was down to about $78. We’re currently sitting at at 78. 11 is markets are about to open here. Well and we’ll probably open down. It looks like we’ll open down a little bit below 77 or a little bit below $78 at 7790. So you’ll hear that as you guys are listening to this, on your commute Monday morning. We did see overall markets though on Friday. Jump 1.26 percentage points Nasdaq up 1.9 percentage points. It very interesting. You know week job numbers. Market goes up because maybe they expect maybe a rate cut coming up. The problem is we had bad we had higher than expected inflation which means rates may not go anywhere. A little bit interesting to see where the market is kind of pegging all this. But we do know that specifically when we look at where, the, you know, with this slowdown in what the U. In what this data is showing is a possible slowdown in the U.S. economy, which means rate cuts either are in women or not. But what that does mean is that demand for energy products could slightly be lower than expected. That’s mainly what’s causing oil to settle here. I mean, we’re down now, you know, our steepest weekly loss in three months. Again, mainly off that U.S. jobs data, as I said, 7811 for crude oil. Brant oil’s 8317. We also see natural gas up about 5.26 percentage point $2 and 40 and $0.14, which is actually, the first time it’s been above $2 in, you know, at it’s been above $2 for a couple days now, but really it has we haven’t seen $2 really this year, which is absolutely great. Natural gas spiked mainly due to the fact that, we saw, a reduction in storage surplus based upon the five year average, which we saw come out on Thursday. And we also, you know, weather as things get hotter this summer, we will see an increase in oil and gas prices as we move from, injection to drawing another another thing we saw. And we can go ahead and throw this graphic up here. U.S. rig counts drop eight rigs week over week. Canada increased to internationally. We increased seven US, though still down 143 rigs relative to where we were last year. This is pretty unbelievable. I mean, I I’ve been of the mindset that as oil prices, I mean, where we fallen over the past three weeks. But as we hover around that 75 to $85 mark, rigs are going to die. It was my assumption that rigs were going to eventually go up. People are going to respond to incentives. Higher oil prices means rig counts should go up. We haven’t seen that. This is four straight weeks of rig count lot losses. And I’m having a hard time, you know, hedging the reason for that. I think a lot of it is the pessimism among the long term cyclical cycle, the oil field. And, you know, not to say that this is a forecasting of, you know, there’s no there’s no there’s no oil left to drill. That’s that’s a lie. The problem is it’s a question of where do investors and where do companies see growth coming from? Do they see growth from coming from new investments in drilling, or do they see investments in mergers and acquisitions as a way to grow their company? And that’s a little bit of a tip to what Exxon and Pioneer, happened. But I it’s it’s a little confusing. And I don’t want to pretend, you know, I just want to sit up here and blow about why I think, you know, why I think this is the case again. Rig counts being down. There’s only a there’s only a couple answers, though. And you know what? What that is. Who knows? Let’s let’s let’s talk about Exxon closing its pioneer deal. But but mainly it’s the FTC forcing Sheffield not to be on the board. So let’s go ahead and read the top headline here. I’m reading from the article. The US Federal Trade Commission declined to challenge Exxon Mobil $60 billion purchase of Pioneer natural Resources. But in allowing that to go through, asserted that Scott Sheffield, pioneer CEO and co-founder, must not take a seat on the super majors board. Interesting the issue. The decision, which was announced Thursday, quote unquote, will ease concern that the Biden administration will seek to block a series of oil and gas mega mergers, but it came at a hefty price. Here’s the. Quote from Deputy Director of the FTC Bureau of Competition Kyle Mok. He said Mr. Sheffield has conducted makes it crystal clear that he should be nowhere near Exxon’s boardroom. American consumers. Should it pay unfair prices at the pump simply to pad corporate executives pocketbooks? Unbelievable. So what’s the FTC claiming here and blocking scotch if we’re going to get into this in a little bit? Because this has got me fired. [00:25:37][275.3]

Stuart Turley: [00:25:38] Up about this one, I said. [00:25:39][1.1]

Michael Tanner: [00:25:40] The FTC says it will, or the order will prevent Sheffield from engaging in, quote, collusive activity that could drive up crude oil prices and force US consumers to pay higher fuel prices. The agency said he exchanged hundreds of text messages with OPEC representatives and officials about the oil markets. Wait a second. The CEO of a major oil company is exchanging text messages with other CEOs and heads of major oil and gas companies. Color me shocked. Yeah. Absolutely unbelievable. We’re going to move over here to, you know, Linda Connor. Unbelievable. She’s the head of the FTC here. She has a Twitter thread that I want to read a little bit about. So she she’s got six points here. We’ll list this in the in the description below. But but she says the FTC’s investigation into the Exxon pioneer deal revealed an elaborate campaign by pioneer CEO Scott Sheffield to collude with OPEC officials and inflate oil prices. The same guy who was saying the same guy who was in charge when oil prices were negative, $37. Just just remember that. Just remember that. Tweet number two. Global oil production has long been dominated by the cartel still dominated by the OPEC cartel. If OPEC cuts production, America’s can get hit with high gas prices. Just a fundamental misunderstanding of how gas prices work. But that’s okay. U.S. production in the Permian Basin has emerged as a potential check on OPEC, but Sheffield has been trying to collude with OPEC rather than compete. Now this is where it gets interesting okay. They’re going to they’re going to pop up some of these images of Sheffield has routinely made public comments public which I love find that hilarious. But we’re not holding public comments against him, signaling to rival that they should, quote, stay in line and reduce output over text messages and private dinners. And now we’re looking at text messages in terms of mergers and acquisitions, but over text messages and private dinners. He is also staying in close contact with top officials from OPEC to coordinate on cutting back production. Ftx’s orders bans Sheffield from serving on the Exxon board or serving in any advisory capacity. Listen to this. This is what I think the absolute motion is. The order also prohibits Exxon for five years from nominating or designating any pioneer employees or directors, to the Exxon board, with limited exceptions. And this all goes back to, again, some private text messages that Sheffield sent a temp, you know, in which they’re trying to garner the idea that he is trying to lower oil and gas production in order to raise prices at the pump. Wait, wait, lowering oil and gas production actually does lower profits a little bit. How do you make money? You make money by selling oil and gas. This completely swings it. Miss, this is. This is a lawyer attempting to spin what the underlying is assumption. And let’s go back. Why was Scott Sheffield from 2016 early 2017 through his purchase the his selling to pioneer? Why was he screaming at the top of his lungs, both publicly and privately. So you can’t say he’s he’s talking in one mouth and saying something over here. He’s saying everything in the same period over. He’s saying everything in public and private. Why is it why is he talking about lowering oil production? It’s all about investors. Go back to what we talk about the incentives okay. So you know, they have like over 40 different points they put in this FTC thing. Point number 27 gave one move in Sheffield’s playbook has involved publicly threatening U.S. shale producers who might deviate from a coordinated reduction scheme, for example, in 2021. Okay, this is when oil was like, what, 30 bucks, 40 bucks, Sheffield said. Everyone’s going to be disciplined regardless of whether it’s 75, 80 or 180. All shareholders that I’ve talked to say that if anybody goes back to growth, they will punish those companies. Is that threatening, stew? Is that a threat? [00:29:34][234.0]

Stuart Turley: [00:29:35] No. He was leading the cartel back in charge for following up and saying, I’m going to give money back to the shareholders. He’s being a great CEO. [00:29:47][11.9]

Michael Tanner: [00:29:48] Well, again, what is the what is the 30,000 foot overhang from this from his comment, he was part of the 22,008 to 2016 mode, where there was no regard for oil prices. There was that drill, baby drill, invest capital produces much oil as possible to what raised oil prices was was that what he was doing in those eight years prior to this? No. What happened? Was there was an absolute value destruction of oil and gas valuations because of that. Nobody made money in the oil and gas prices investors pulled out. So what is he saying? Pioneer is going to be okay regardless. And he said this multiple times. That pioneer is going to be okay regardless of whether or not oil prices go. What he’s saying is if you run an oil company and you are not focused on and you’re shareholders, which the whims of shareholders change all the time. It used to be growth. Now it’s cash flow. Which business? Amazon was able to run negative profit margins for years and get rewarded by that. Why? Because it’s what the shareholders wanted. Then all of a sudden they move to profit. And guess what? Shareholders realized they wanted profit. So it’s unbelievable okay. It’s unbelievable. He again he also says you know they say quote 30. In fact, as recently as April 16th, 2024, Mr. Sheffield said in a conference even if oil goes to 200 a bell, independent producers are going to be dismal. Yeah, because they like they need access to capital markets. They need access to capital markets. They also go on to say that he had these secret dinners with OPEC where they were, you know, attempting to collude. It’s unbelievable. This is this is a way and a political. I’m throwing my pens because I’m so mad. This is a political witch hunt. In order to hey, we know we can’t find legal grounds to block this merger, but all we can do is signal to our base that we are attempting to help with oil prices. Wait. I thought the U.S. government couldn’t do anything about gas prices. I thought the government couldn’t do any. I thought, hey, I thought, no. [00:31:48][119.5]

Stuart Turley: [00:31:48] Can’t do things with this price. So why they can raise the PR? They raid the PR. [00:31:53][4.8]

Michael Tanner: [00:31:54] Oh, this gets me fired up. This is unbelievable. And you know who gets hurt or hurts the worst on this. And this is more inside baseball pioneer employees get hurt by this. They only want this. They only had one person looking out for them on the Exxon board. And that was going to be Scott Sheffield. Now all of a sudden they’re going to be integrated to the Exxon machine. And you know what? They’re going to be seen as disposable in a few years. And that’s just there’s no one to back them up on the board because guess what. You the FTC blocked any representation for five years of pioneer employees or original pioneer employees on the board. This is unbelievable. Sheffield has got con shame on the FTC, shame on Linda con in order for making this happen, for being motivated by political points rather than actual public and not public, but actual strong facts. It’s unbelievable. What do you think? [00:32:44][49.9]

Stuart Turley: [00:32:44] Do I want an attorney to reach out and get a hold of the Sheffield and go after this person? Legally, this is defamation at the highest level as far as I’m concerned. This is despicable. Yeah, it I have other things, but I don’t want to get thrown off of Google for something like that. [00:33:10][25.2]

Michael Tanner: [00:33:11] Well, I think you should take a vote again. I think what they, what they, what they gambled was that Scott Sheffield’s made his money. Scott Sheffield is independently wealthy that if this this theoretical you know this not proxy move but this this signaling that we’re going to stop this, we’re going to stop somebody who’s colluding for low oil prices and keep him off. The Exxon board is somehow going to, you know, satisfy our political base. But actually allowing these mergers to go through, which is it’s it’s it’s like what they did for Obama. Oh, well, you know, it’s the sleight of hand where I remember the Obamacare debate when Chief Justice Roberts eventually okayed it by saying, well, it’s technically a tax and Congress has a right to tax. So sure, it’s through. Well, that’s just a hand waving, an attempt to satisfy both parties. And again, this is what this is where politicians get themselves in trouble. They try to thread the needle so that everybody likes them. And guess what? Nobody likes them. Democrats on the other side said, why would you let this go through? You know, Republicans and people in the oil and gas business are like, you’re an absolute idiot if you actually believe that. You think, Scott Sheffield, what if he was in control of hundred dollar oil? He was also in control of -$37 oil. So you’re going to thank him then? Are you going to thank him for that? Unbelievable. I, I mean, you got any more on this do I. Like I said we’re going to you know, we’re going to. [00:34:33][82.9]

Stuart Turley: [00:34:34] We’re going to go ahead and and curtail this. But I guarantee you I hope it comes out and I hope that person loses their job as a political hack. [00:34:43][9.1]

Michael Tanner: [00:34:44] Yeah. It’s it’s this this was tough. This was tough. I, you know, it’s well, we’ll move on. But, you know, Sheffield, he got conned for sure. Let’s just finish up with with EOG. We had a lot of earnings that happened last week, a lot of earnings. They’re going to come up this week. You know again we’re only going to and you know you can go to energy use beat.com. We’ll have all of the earnings releases I just like to pick out 1 or 2 that I think show some interesting stuff. And you know to go back to our rig count recounts. Are down year over year, even though we’ve seen oil prices increase year over year. While things I like to look at are large companies, CapEx versus crude oil production increase because theoretically, if capital is being spent, we should see production increases, right? Okay. So it’s one of the things I like to look at. But but but let’s first look at the first quarter highlights. EOG earned an adjusted net income of about $1.6 billion, or about $2.82 per share, generated about $1.2 billion of free cash flow. Declared a regular quarterly dividend of about $0.91 a share if paid now in 2020. On the first quarter, they paid about 525 million in regular dividends and repurchased about 750 million shares during the first quarter. volumes and total cash operating costs better than guidance midpoints wellhead volumes. in Q1 of 2024 was about 487,000 barrels of crude oil per day. Natural gas liquids were up about we’re up about 4000 barrels per day and natural gas up about 50. But for that for a 1000 barrels a day increase. Okay. Or, excuse me, a 2000 barrel increase per day. Still CapEx expenditures of $1.7 billion. Oh oh. Okay. Go back to wire rig count slower. If anything is a signal of why rig counts are lower, in my opinion, this is an example of 2000 barrels a day and you get 1.7 billion. Still, I’d like that, but I know we said this last quarter about EOG. I would like that budget. I would really like that budget. Going back to 2023, they’ve only increased it. You know, what is it, four, five, 5000 barrels a day. They spent like four ish billion dollars on CapEx. Now, a lot of that is long tail. A lot of that is doesn’t necessarily wrap itself up, but it goes to show you that we’re going to continue to spend CapEx dollars. And the amount of oil we’re making per dollar invested is actually going down. And that could be the signal within the noise of what’s going on with oil prices or, excuse me, rig count specifically. And there’s just not enough efficient barrels to go get. And unless we see 100, 150, $200 oil, then we see those big explosions of production. But pretty, pretty fascinating. From EOG, they, you know, of course, they’re going to have a great quote, Ezra Yacob, who’s the chairman and CEO. You know, EOG is off to a great start this year, delivering strong first quarter results. Production exceeded targets and total per unit operating costs were lower than planned. You know, again, they’re doing a lot of exploration specifically in the Utica. You know, they’re one of the better oil and gas companies when it comes to exploration. They’re one of the few companies that actually do old school traditional exploration. But it goes to show you $1.7 billion of CapEx gives you about 2000 barrels a day if you’re EOG. Pretty crazy stew. Yeah. So, what else? What do we forget to do? [00:38:26][221.9]

Stuart Turley: [00:38:26] Well, the earnings, one of the earnings, on news B is from vest is share fall after posting earnings loss revenues decline. This is another one just manufacturers all through the world. Vestas first quarter, adjusted EBITDA came in at a negative €68 million, their 5.2 below the 2.3 billion reported. So you sit back and take a look. All them wind farm folks and solar panel folks are just taking a in the drive through because subsidies are running out. [00:39:05][39.2]

Michael Tanner: [00:39:06] Yeah, we know we could have figured that, which we’ll be worried about this week. [00:39:10][3.9]

Stuart Turley: [00:39:12] Don’t go to college. Yeah. [00:39:17][5.6]

Michael Tanner: [00:39:17] I just I want to erase that. Columbia. If you got Columbia on your resume, you might want to. [00:39:22][4.4]

Stuart Turley: [00:39:22] Scratch that off. Oh, no. What a bunch of chatter heads. I do have to give a shout out. I. I thoroughly enjoyed this free, podcasters walk into a bar. We had, doctor, Stanley Ridgely on there, and it was, we talked about it. You got to have a fun podcast. [00:39:40][17.9]

Michael Tanner: [00:39:41] Yeah, absolutely. Well, with that, guys, we’ll let you get out of here. Start your day. Appreciate you guys checking us out. World greatest podcast energy news beat check us out online again www.energynewsbeat.com For Stuart Turley I’m Michael Tanner. We’ll see you tomorrow folks. [00:39:41][0.0][2323.8]

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