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Analysis: Why extending the Israel-Hamas truce won’t be easy

Energy News Beat

With hours left of the agreed pause in Gaza fighting, Israel, Hamas and the intermediaries negotiating between them were on Wednesday again in a frenzy of activity.

The original truce was to have lasted until Monday, but Hamas decided to accept the Israeli offer to extend the ceasefire by a day for each group of 10 captives released. As the original deadline loomed an extension was proclaimed, but of just two days.

list of 4 items

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‘We’re not here to beg’: Gaza residents’ anger over steep rise in prices

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‘Serious doubt’ Israel complying with international law: Spain’s Sanchez

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Photos: Gaza families return to homes in ruins

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Palestinian activist Ahed Tamimi freed under Israel-Hamas truce

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Two is still better than nothing, and the two extra days bought the Qatari and Egyptian mediators extra time to work out how to convince both sides to prolong the truce even further or turn it into a permanent ceasefire.

It has not been easy. While negotiations through intermediaries have been difficult, long and often tedious, they did finally produce some results and an agreement in principle that led to the initial four-day truce and indirectly to the two-day extension. During initial negotiations, Israel unilaterally declared that the pause could be made longer by the release of additional captives, so not much had to be additionally negotiated. Yet, as more time passed, talks through Qatari and Egyptian intermediaries seemed to be dragging, and lists of detainees to be released kept being agreed upon and accepted later and later each day; at one point Hamas even threatened to stop the process and let the truce collapse.

Now, on Wednesday evening, the situation appears to be more complicated than ever. Hamas announced that it is seeking a further four-day extension, and even hinted at being ready to negotiate the release of all captives it is holding, in exchange for a more lasting cessation of hostilities. At the same time, Israel said it welcomes the possible release of additional captives, but sent mixed messages about the continuation of the pause.

In such an atmosphere of uncertainty mixed with anxiety and hope, international mediators are trying harder than ever. For the past two days, they have been joined in Qatar by the highest officials from the US, Israeli and Egyptian intelligence services.

No announcement has been made of the presence of their Hamas counterparts, but it is very hard to imagine that the Palestinian side would not be represented in such an intelligence summit.

One would expect that, with the experience of two rounds of negotiations, it would be easier to reach agreements on the continuation and expansion of the deals. Yet, there are many signs to suggest that the situation is getting more complicated with talks possibly getting bogged down.

How is it possible that from overwhelming optimism that marked the weekend mass celebrations of former captives rejoining their communities, the talks are now on the verge of failure with the real prospect of fighting resuming on Thursday?

There are several reasons for the apparent reluctance of both Israel and Hamas to prolong the truce by exchanging more captives.

First, tactical and strategic military reasons, mostly on the Israeli side. Over the past few days, several representatives of the Israeli military indicated that they would prefer the current two-day extension of the pause to be the last. Generals told the political leadership that the military believes that fighting should be resumed on Thursday morning.

From the very beginning of the armed intervention, the Israeli army was wary of having to go to war without clearly defined strategic goals. I warned that soldiers detest “open-ended” tasks. Prime Minister Benjamin Netanyahu repeated several times that his goal was to win the war by destroying Hamas, but he obviously never translated that into clear and measurable orders and tasks. Generals prefer to be told: “Go there and do that, if and when you achieve it your job is done”. Their eagerness to resume fighting is by no means an indication that they are bloodthirsty; on the contrary, it tells those who want to listen that they are realists.

Following the 7 October attacks, the Israeli military mobilised 360,000 reservists, deploying them alongside the standing army of 150,000 soldiers. While the fighting went on, each reservist and each unit, whether in Gaza or along the northern front facing Hezbollah, knew exactly what his or her task and purpose was. They were focused, in a military mindset, not overtly influenced by the atmosphere among civilians.

But as they stopped for four days, then for two more, many went home for short rest and were exposed to the doubts, uncertainties, fears and hopes of their families and relatives. For a couple of days, they lived almost as civilians, but, as the original pause was to expire on Monday, they would have had to return to units by Sunday afternoon – the time when the extension was announced. Military bureaucracy then had to decide whether to give them an extra day or two at home or rotate soldiers, with the eventual new group being granted just two days off and so on.

Another extension would further complicate the logistics of leave and rotation, but prolonged semi-civilian life could also damage the determination to fight.

After October 7, Israeli national adrenaline ran high and everyone was ready to fight. Now, seeing that the country’s politics is a mess; the leadership is in poorly hidden disarray and the prime minister is clearly troubled, shaken and insincere, soldiers may start to vacillate.

Aware of potential problems with morale and determination, generals obviously prefer to get the fighting over with, rather than endure more of the stop-go-stop-go orders that in all wars prove detrimental to the fighting capabilities of an army.

Mediators are locked in hectic parleys to extend the pause in fighting, but it’s becoming harder for Israel to agree.

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Over 20% Of The EU’s Russian LNG Imports Are Resold Abroad

Energy News Beat

By Tsvetana Paraskova of OilPrice.com,

Around 21% of Russia’s LNG volumes bound for the European Union are trans-shipments, which are not included in official import figures and thus ignored by EU policymakers, the Institute for Energy Economics and Financial Analysis (IEEFA) said in an analysis on Wednesday.

Over the past year and a half, the EU has boosted imports of Russian LNG, as the bloc is now buying significantly more Russian LNG than it did before the invasion of Ukraine.

Unlike Russian oil, Russian gas is not banned or under sanctions in Europe. But while pipeline gas supply from Russia has slowed to a trickle, Europe has raised imports of LNG, including LNG from Russia.

The EU, however, has a target to be independent of Russian fossil fuel imports by 2027, as envisioned in the REPowerEU plan.

EU Energy Commissioner Kadri Simson said in September that the European Union should phase out imports of LNG from Russia.

Data analyzed by IEEFA shows that of all the Russian LNG that was received by Belgium and France between January and September 2023, as much as 37% was transshipped, of which the majority went to non-EU markets.

“The transshipped cargoes arriving at LNG terminals in Europe are often not included in official import figures and thus ignored by policymakers,” Ana Maria Jaller-Makarewicz, the Lead Energy Analyst for IEEFA’s Europe team, wrote in the analysis.

Spain, Belgium, and France are the biggest importers of Russian LNG, but a part of the cargoes is being transshipped from the ice-class breakers to LNG vessels and later shipped on to other markets, including in Asia.

For example, IEEFA’s analysis showed that in the first nine months of 2023, the volume of LNG from Russia’s Yamal LNG export facility that arrived at Belgium’s Zeebrugge terminal was almost double the volume of Yamal LNG imports to the terminal. That’s because Zeebrugge still allows transshipment of Yamal LNG, unlike the Netherlands, which has stopped offering transshipment services for Russian LNG, and the UK, which has banned Russian imports of the fuel altogether, IEEFA notes.

Belgium is looking into ways to tackle the transshipment issue without putting European supply security at risk, a spokesperson for the Belgian energy ministry told the Financial Times.

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Interview: GTT’s boss expects more than 450 LNG carrier orders in next 10 years

Energy News Beat

French LNG containment giant GTT is expecting that there will be more than 450 orders for large LNG carriers over the next ten years, GTT’s chief Philippe Berterottière told LNG Prime on Thursday.

Earlier this year, Berterottière said that GTT was expecting up to 450 orders for large LNG carriers over the 2023-2032 period due to a strong LNG demand outlook and more stringent environmental regulations, which will force owners to replace older tonnage.

The CEO told LNG Prime at the sidelines of DMG’s 23rd World LNG Summit & Awards currently taking place in Athens the company is now expecting “higher figures” for LNG carrier orders.

Berterottière said that the company now expects more the 450 LNG carrier orders but GTT will give a precise update on the number of vessels in February 2024.

GTT received record 162 orders for LNG carriers and one FSRU in 2022.

The LNG carrier orders rose by 138 percent compared to the 68 orders in 2021.

During the first nine months of this year, GTT booked orders for 52 large LNG carriers, one FLNG, and 15 LNG-powered containerships.

“We are now at about 65 orders for LNG carriers up to date,” Berterottière said.

For the next year, GTT expects a “pretty good year” and not “far away from 70 LNG carriers”, he said.

Regarding LNG as fuel, Berterottière said that “companies are discovering that methanol will not be available any time soon and some companies are switching from methanol to LNG.”

“We expect more orders for LNG as fuel in 2024,” he said, adding that GTT is not just targeting containerships but also VLCCs and Suezmax tankers.

Asked about does he see any real competition for GTT in the LNG tank market in the future, he said “competition is existing, and there are many competitors in the market.”

“We are under constant pressure as other companies are trying to improve their solutions. In a certain way I would like to thank our competitors for that because it keeps us all the time awake, imaginative, and innovative,” he said.

“We will keep on improving our solutions and that is the only right thing to do,” he added.

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New Hampshire seeks IRA grant to help low-income residents tap the benefits of solar 

Energy News Beat

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New Hampshire’s Department of Energy has requested a $70 million federal grant to expand community solar programs for low-income residents, an infusion of funds that supporters said could lower energy bills, accelerate decarbonization, and perhaps even catalyze the development of much-needed affordable housing.

“It’s just going to be life-changing for the communities we do this with,” said Jeannie Oliver, a senior director at the New Hampshire Community Loan Fund, which partnered with the state on the proposal.

The request is part of the Environmental Protection Agency’s Solar for All competitive grant program, created under the umbrella of the 2022 Inflation Reduction Act. The goal of the $7 billion program is to increase access to solar for people living in low-income and disadvantaged communities. Up to 60 grants will be awarded.

Community solar is a model in which energy consumers own a stake in or subscribe to a share of output from a solar development. They then receive credits for a portion of the power sold back to the grid, offsetting their utility bill. Community solar is often considered an option for consumers who can’t or don’t want to install solar on their own home, but who still want to participate in the environmental or financial benefits of renewable energy.

New Hampshire authorized community solar in 2013, but it hasn’t gotten much traction. In the state, larger, non-municipal solar projects are only credited for generation on projects up to 1 megawatt in capacity. At that size, however, the finances just don’t work for developers, said Sam Evans-Brown, executive director of the nonprofit Clean Energy New Hampshire. It’s not until an array reaches around 3 megawatts – with net metering – that the economics start to make sense.

Reaching lower-income residents with community solar is even trickier. There are no easily available lists of what households qualify as low or moderate income, so acquiring customers can be prohibitively difficult.

An influx of federal money could change that equation. The grant money would be used to expand the existing program and to create new ones targeting affordable housing and resident-owned manufactured housing communities. The proposal calls for funding to be split between the state energy department, the New Hampshire Community Loan Fund, and New Hampshire Housing.

If the grant is awarded, these partnerships will be key to maximizing the impact the funds can have on low- and moderate-income residents, said Joshua Elliott, director of the division of policy and programs at the New Hampshire Department of Energy.

“It made sense to leverage existing relationships,” he said. “We thought meeting people where they are rather than having them come to us whenever possible would make for an attractive proposal.”

The portion of the money going to the state energy department would be used to expand the existing program for low-to-moderate-income community solar. The program will fund some of the project if a majority of the power generated benefits low-income households and up to 100% of a new development if at least 80% of the participating households qualify as low-income.

The state program has awarded $1 million each of the last two years. Last year, it funded four developments with a total of 61 households participating. More money could help both by funding more projects, and making it easier for potential developers to plan, Elliott said.

“Having additional funding available consistently helps these organizations as they are trying to sketch out a project and figure out if it works,” Elliott said.

The Community Loan Fund’s portion would be used to help resident-owned manufactured home communities build solar arrays to service residents. A resident-owned community is a manufactured home park in which the residents have come together as in a cooperative to buy the land on which their homes sit, creating for themselves a more stable housing future.

The community loan fund has been working on developing community solar with these groups since 2018 when it led the creation of an array in the western New Hampshire city of Lebanon. Today, they have four projects either in operation or under construction.

“The reason that has been slow is that the financial barriers to low income solar are pretty immense,” said Oliver, who leads the organization’s resident-owned communities program. “What the Solar for All program would do is really help us scale up.”

The remaining money would flow through New Hampshire Housing, a public corporation that promotes housing affordability and access throughout the state. It already works closely with the state’s 18 public housing authorities, so it has relationships and experience with the low-income population the funded programs would be targeting.

Much of the New Hampshire Housing money would be used to connect renters in multifamily buildings with community solar.

Traditionally, bringing solar to renters has been difficult because of what is often called the split incentive – if tenants pay their own electricity bills, landlords have little motivation to spend money on solar panels when the renters will reap the financial benefits. The grant proposal would encourage landlords to take over tenants’ utility bills, and roll the cost into the rent, reflecting the discounts community solar would create.

“The Solar for All proposal takes a huge step in moving things in a more positive direction,” Evans-Brown said. “It’s giving landlords a carrot to figure this out.”

The EPA should be announcing the grant recipients in March 2024 and distributing the funds in July, Evans-Brown said. Solar projects using the money should start popping up by 2025.

If New Hampshire receives the grant, it could be transformative, supporters said, by both accelerating the state’s decarbonization efforts and making a significant difference for financially struggling households. In concert with other federal programs pouring money into home electrification and energy efficiency, the Solar for All funds could jumpstart significant and much-needed growth in green housing development, Evans-Brown said.

“The thing I am excited about is this influx of money is going to result in a large amount of multifamily, sustainable housing getting built that’s going to be really affordable,” Evans-Brown said. “I am really optimistic.”

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Oil gains ahead of OPEC+ meeting as Black Sea shutdowns provide support

Energy News Beat

Yahoo Finance

LONDON – Oil prices rose on Wednesday as investors turned their attention to an OPEC+ meeting to decide on output policy, while supply disruption caused by a storm in the Black Sea combined with lower U.S. inventories to drive buying.

Source: Reuters

Brent crude futures were up 61 cents, or 0.8%, to $82.29 a barrel at 1447 GMT. U.S. West Texas Intermediate (WTI) crude futures gained 75 cents, or 1%, at $77.16 a barrel.

Both benchmarks rose about 2% on Tuesday as the market anticipated that OPEC+, made up of the Organization of the Petroleum Exporting Countries and allies such as Russia, would extend or deepen supply cuts.

OPEC+ on Wednesday continued talks, which sources had described as difficult. A meeting to decide on next year’s output policy on Thursday was, however, expected to go ahead on schedule, sources said on Wednesday.

“If they (OPEC+) fail to come to a preliminary deal, we cannot rule out the risk that the meeting is further delayed, which would likely put some downward pressure on oil prices,” ING analysts Warren Patterson and Ewa Manthey said in a note to clients.

A severe storm in the Black Sea region has disrupted up to 2 million barrels per day (bpd) of oil exports from Kazakhstan and Russia, according to state officials and port agent data, raising the prospect of short-term supply tightness.

Kazakhstan’s largest oilfields are cutting combined daily oil output by 56% from Nov. 27, the Kazakh energy ministry said.

The oil market also found support from a drop in U.S. crude inventories, which fell by 817,000 barrels last week, according to market sources who cited American Petroleum Institute figures.

Eight analysts polled by Reuters estimated on average that crude inventories fell by about 900,000 barrels in the week to Nov. 24. Weekly U.S. government data on stockpiles is due on Wednesday.

Meanwhile, U.S. Commerce Department data showed the U.S. economy grew faster than initially thought in the third quarter, but momentum appears to have since waned as higher borrowing costs curb hiring and spending.

The data showed gross domestic product increased at a 5.2% annualised rate last quarter, revised up from the previously reported 4.9% pace, its fastest pace of expansion since the fourth quarter of 2021.

(Additional reporting by Yuka Obayashi in Tokyo and Muyu Xu in Singapore; Editing by Barbara Lewis and Paul Simao)

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COP28 president denies reports of plans to use climate Summit to push oil deals

Energy News Beat

Oil Price

COP28 President Sultan Al Jaber, who is also group CEO of the Abu Dhabi National Oil Company (ADNOC), denied on Wednesday reports of plans to use the climate summit in Dubai for pushing oil deals.

Source: Reuters

Al Jaber’s presidency of COP28 has stirred controversy in recent months. He is the first CEO designated to be president of any climate summit so far. But he is also the chief executive of the national oil company of OPEC’s third-largest producer, the United Arab Emirates (UAE).

Earlier this week, the BBC and many other news outlets reported that the UAE planned to use its role as the host of climate talks to forge new oil and gas deals. The BBC cited leaked briefing documents obtained by independent journalists at the Centre for Climate Reporting working alongside the BBC. Those documents were purportedly prepared by the UAE’s COP28 team for meetings with at least 27 foreign governments during the climate summit which Dubai will host from November 30 to December 12.

COP28 UAE said on Wednesday “We are aware of a number of press releases purporting to be issued by COP28 and other entities, relating to the COP President’s leadership roles, which have been posted on some digital accounts and issued to members of the media.”

“This press release was not issued by the COP28 team, has no basis in truth, and must be entirely disregarded as fake news,” COP28 UAE added.

“As the COP President said in today’s press conference, “It is an attempt to undermine the work of the COP28 Presidency.”

Speaking at a press conference on the eve of the climate summit, Al Jaber told reporters, as carried by CNN,

“These allegations are false, not true, incorrect, and not accurate.”

“I promise you, never ever did I see these talking points that they refer (to), or that I ever even used such talking points in my discussions,” said Jaber.

By Charles Kennedy for Oilprice.com

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Daily Energy Standup Episode #260 – Copper Supply Concerns, LNG Cruise Ships, and Geopolitical Shifts in the Oil Trade

Energy News Beat

Daily Standup Top Stories

Dwindling copper supply from Panama and Peru could wipe out global surplus in 2024

November 29, 2023 Mariel Alumit

Reduced supply from major copper producers Panama and Peru may flip the global copper market into a deficit from surplus in 2024 or at least tighten oversupply if the disruptions are not resolved in coming […]

Cold weather prompts National Grid to activate energy blackout scheme

November 29, 2023 Mariel Alumit

The National Grid is to pay some households to cut their energy use after activating its blackout prevention scheme during the current cold snap. Eligible properties with smart meters will be offered cash and other […]

Royal Caribbean takes delivery of LNG-powered giant in Finland

November 29, 2023 Mariel Alumit

Royal Caribbean International, a unit of Royal Caribbean, has taken delivery of its LNG-powered Icon of the Seas from Finland’s Meyer Turku. After 900 days of design and construction by thousands of experts, Royal Caribbean […]

UAE officially stops using dollar for oil trades

November 29, 2023 Mariel Alumit

The global financial landscape is witnessing a seismic shift as the United Arab Emirates (UAE) boldly moves away from the US dollar in its oil trade dealings. This strategic pivot aligns with the broader ambitions of the […]

Venezuela prepares for vote on border dispute with Guyana over oil-rich territory

November 29, 2023 Stu Turley

‘We support a diplomatic solution’: Guyana defense spokesperson  356,513 soldiers, 120,000 officers to be deployed during voting   The Venezuelan government is fine-tuning the details, including the deployment of military personnel, to carry out a […]

Highlights of the Podcast

00:00 – Intro
02:42 – Dwindling copper supply from Panama and Peru could wipe out global surplus in 2024
05:12 – Cold weather prompts National Grid to activate energy blackout scheme
06:53 – Royal Caribbean Takes delivery of LNG power plant in power giant in Finland
09:35 – UAE officially stops using dollar for oil trades
13:24 – Markets Update
15:43 – Venezuela prepares for vote on border dispute with Guyana over oil-rich territory
18:20 – Outro

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Follow Michael On LinkedIn and Twitter

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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 is going on, everybody? Welcome to another edition of the Daily Energy News Beat Stand up here on this gorgeous Thursday, November 30th, 2023. As always. I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, joined by the executive producer of the show that prepared the show and the director and publisher of the world’s greatest website energynewsbeat.com. Stuart Turley, my man, how are we doing today? [00:00:38][23.1]

Stuart Turley: [00:00:38] You know, it’s a beautiful day in the neighborhood and I am exhausted being nice to investors, asking about our deal. You know, the deal of the spotlight. Spotlight deal. Oh, my goodness. It’s been crazy. [00:00:51][12.6]

Michael Tanner: [00:00:51] It’s it’s tiring doing your job. The world. Who would have who would have thought? So I appreciate Stu you nonetheless putting together a crazy and good lineup for us today. First up on the menu, dwindling copper supply from Panama and Peru could wipe out global surplus in 2024. This next one, This creeps me out. Cold Weather Prompts National Grid to Activate Energy Blackout scheme. Oh, that’s nice. This next one. This will just make you laugh. Royal Caribbean takes delivery of LNG powered giant in Finland. I’ve got a lot to say about this one. And then finally, probably the spookiest of all the stories. UAE officially stops using the dollar for oil trade. Not good, stupid. Dive into what’s going on over there. He’ll toss it over to me. How quickly cover what happened in the oil and gas finance space cover what’s going on in Venezuela. An interesting little border dispute there with Guyana, which I think has some long term effects on supply and then always will touch on what the EIA said, the crude oil inventory numbers were, and then we’ll let you get on out of here and start your day before we do all that. Guys, remember, as always, the stories and analysis you are about to hear is brought to you by the world’s greatest website, www.energynewsbeat.com has become the best place for all your energy news Stu in the team do a tremendous job of making sure that website stays up to speed with everything you need to know to be the tip of the spear. When it comes to the energy business. You can check out the description below. See all of the timestamps and links to all of the articles. You can also email the show [email protected] Connect with Stu and I on LinkedIn. Follow the show, Apple Podcasts, Spotify wherever you get your podcast, energy news beat on YouTube. Great way to support the show there. You can also check out dashboard.energynewsbeat.com the best place for all your data and news combo we really work at. You’re going to push that product early 2024 I’m out of breath though. Stu where do you want to begin? [00:02:39][108.1]

Stuart Turley: [00:02:40] Hey, let’s start down in South America. Dwindling copper supply from Panama and Peru could wipe out global surplus in 2024. Michael if you think Biden is worried about his next meal, he or his next ice cream cone, he’s going to be really worried if he’s trying to do anything about his EVs, because copper, you got to have copper and you got to have a lot of copper for the grid and getting those updates. Okay, Here it is. Reduced supply from major producers in Panama and Peru may just totally wipe out the market. Panama’s top court Tuesday ruled that the Canadian miner first Quantum’s contract to operate Cobra Panama Mine is unconstitutional retro. While a union representing half the workers at Peru’s Las Bombas mine went on strike. This is nuts. If the Cobra Pantami mine were to be permanently shut, the market could move into deficit in 2024. Listen to these numbers right now in Panama’s if it’s out of production until May, when the president election goes on in May of 2024, 40,000 tons of copper this year and 160,000 tons next year. It’s nuts. [00:04:06][86.1]

Michael Tanner: [00:04:07] It’s an absolute it’s a lot. Now, I do think and the article does go on to say that if that does happen where it’s only out of operation until May of 2024, it would only result in a small deficit this year, but the market would be able to absorb that loss next year and we’d be in a slight small surplus. So this could again, this is just going to support prices. We saw benchmark copper on the the CME, which the London Metal Exchange that was up about 1.5 percentage points to at $8,480 per metric tonne. And that forecast that’s on a forecasted oversupply of 302,000 tons of copper in 2024. So as that number shrinks, as that forecast oversupply shrinks, then we’re going to see that price rise. So could be interesting again, when we when we talk about the grid, we need to think it second order effects. What’s all the stuff that goes into the grid in order to keep it operational? We need to make sure those things are up. So not good for the the overall electricity market. Considering this next story we’re about to cover, Stu, National Grid is going to start burning shoes. [00:05:08][61.1]

Stuart Turley: [00:05:08] Oh yeah. And eating them just because we you know, never mind cold weather prompts. No. National Grid to activate energy blackout scheme. National grids in the UK. And I think that this is absolutely hilarious from the standpoint our forecasts show electricity supply margins are expected to be tighter than normal on Wednesday evening. It does not mean electric electricity supplies are at risk and people should not be worried. Ry precautionary measures to maintain the buffer of spare capacity. Why do they have problems? More than 1.6 million households and businesses have been involved in this because of Europe’s gas squeeze. And then all of the wind farm wind farm problems that they have had the scheme. Instead, they’re urged to shut down their appliances and wash machines. And the scheme is to save more than 3000MW of electricity across 22 activations. [00:06:12][63.6]

Michael Tanner: [00:06:14] Yeah, I’m sure they’re not going to Kensington Palace and asking the Queen to turn down her or turn off some of her lights. You mean the king? King? Whatever. Who who gets King Queen? It might as well be used to. Well, now I’m too. I don’t think you want to be the king. I think he’s invited. He’s got some stuff up his sleeve. [00:06:31][17.7]

Stuart Turley: [00:06:32] Oh, yeah. No. [00:06:33][0.7]

Michael Tanner: [00:06:34] Not Andrew. Right? Yeah. Who was the guy who’s affiliated with Epstein? [00:06:37][3.6]

Stuart Turley: [00:06:38] Oh, no, that’s actually somebody else. [00:06:41][2.5]

Michael Tanner: [00:06:41] But we’ll just live for one. I’m sorry. [00:06:42][1.3]

Stuart Turley: [00:06:43] Yeah, well, we’ll leave the royals. He’s. He’s just as creepy, but we’ll leave the Royals alone. Speaking of Royal. [00:06:48][4.9]

Michael Tanner: [00:06:48] Asking him to turn off the lights, though. [00:06:50][1.6]

Stuart Turley: [00:06:50] Oh, no. Speaking of royals, let’s go to Royal Caribbean. Takes delivery of LNG power plant in power giant in Finland. Michael, you were kind of funny when we were chit chatting about the show ahead of time. A unit of Royal Caribbean. This is Royal Caribbean International. I just did my podcast with Sean Strawbridge and we were talking about the LNG, gigantic cargo ships that are being rolled out from China and they’re already bought. These things were bigger than the Empire State Building. Now, this is van tastic news because it is less carbon footprint than just about anything else they can. This is 365m long. Icon of the seas. It is just amazing. The first cruise line that can be powered by LNG. Now, I did not know this, Michael. You’re limited on where you can fill these bad dogs up. You just don’t drive up and go ding, ding, you know, across the little air line on the floor on a gas station, used to have the guys run out and fill, you know, nobody’s going to be in a monkey suit standing there to fill you up on this thing. You got to go to where there’s LNG. And Sean Strawbridge was really apt to say, hey, we’re years away from this. So this could be limiting in the ports of call that you could go to with this bad dog. [00:08:21][90.5]

Michael Tanner: [00:08:21] Well, two things. One, I hate cruises, so I’m going to be completely skewered on this. I think people that takes cruises or bumps, to be honest with you, and I apologize if you do take cruises, but not a fan of cruises. Second of all, I do find it hilarious. Royal Caribbean, the place where probably the most amount of admission, the amount of food that gets eaten on a cruise is disgusting. You walk by all those buffets. It’s just seven day old hot dogs. The nice part is now that it’s LNG powered and we’re quote unquote net zero, you actually eat those hot dogs and it won’t cause an uptick in carbon. So thank you, Royal Caribbean, for keeping us net zero by allowing us to take on more of your disgusting hot dogs. I, I have I hate cruises still, so I will not be trying this new LNG powered icon of the seas. I forget I went on a it was a Royal Caribbean cruise. I went and I think it was it was tradition of the seas. It was one of the of the seas brand horrible. I hate it. [00:09:15][53.6]

Stuart Turley: [00:09:15] I guarantee you went on the Disney Royal Caribbean they trust. [00:09:19][3.8]

Michael Tanner: [00:09:19] If it was a Disney cruise, I wouldn’t have come back because it would have jumped off. And you. You just left me at sea? Oh, yeah. [00:09:24][4.4]

Stuart Turley: [00:09:24] Because I could see the kids running up to you and going, Mickey. [00:09:27][2.8]

Michael Tanner: [00:09:28] You think Mickey was making me pancake? Ooh. [00:09:30][2.5]

Stuart Turley: [00:09:31] Oh, wait. Let’s go to the UAE. UAE stops buying using the petrodollar. The U.S. dollar for oil trades. This is about as big as it gets, you know. [00:09:45][13.9]

Michael Tanner: [00:09:46] Disastrous. [00:09:46][0.0]

Stuart Turley: [00:09:46] It is. You and I have been on the story for BRICs for a long time, and the UAE just gave the double barrel finger to the Biden administration with this move, the BRICs, which is Brazil, Russia, India, China and South Africa. They expanded it to the UAE, Saudi Arabia, Egypt, Ethiopia, Iran and Argentina. And you’re going to see a major. Rise of the U.S. dollar. Who’s going to buy our debt when the US petrodollar is not being used? You just had Michael we covered on the podcast last week. Russia and China also shifting and exchanging $3 billion worth of their gold currency in order to make more trades. Wow. Okay. This gets even uglier coming down into here. The new era in global oil trade. This is just absolutely this isn’t about diversifying trade. It’s about making a statement on the global stage. That’s exactly what the quote out of the article was. And they are dead on, right. The UAE and Saudi Arabia have every right to give the United States the devil finger the way we treated them. [00:11:05][78.9]

Michael Tanner: [00:11:06] It’s it’s true. I don’t want to be a shill for for Saudi Arabia or the UAE, but they’re doing what’s in the best interests of their country. So you can’t knock. I mean, if I was if I was, you know, running UAE or running Saudi, I’d be doing the same thing. So I can’t sit here and and blame them if the United States this is it. Good. As you mentioned, this is going to cause a huge strain financially on us long term. This is what we call long. And I’m listening to a book on the 2008 financial crisis. This guy named Thomas Horney, who was one of the few guys that dissented all the rate increases from 2008 to 2016 from a few people that said we should raise rates and not keep rates low because why? The effects? Financial effects have long and variable lags. He said that thousands of times in the speeches of the Fed. And I love that phrase long, invariable acts. Something like this. We don’t know the outcome. We’re not going to see the effects of them switching to a currency today. All of a sudden tomorrow, we’re not going to see it. But in ten, 15, 20 years, what are those long and variable effects? It’s another way of thinking of when I talk about second order, third order effects, it’s the same thing. And this is that second, third order effect. When in ten years when nobody’s using the dollar to trade oil, that puts us in a huge strategic disadvantage around the rest of the world. As you mentioned, our debt back a lot by oil and gas. [00:12:26][80.1]

Stuart Turley: [00:12:26] I’ll tell you what, Michael, I think you’re right in many ways, but I’m going to disagree with you, which I think that makes the show kind of fun, is that you’re always smarter and better looking than I am. But I’m going to disagree with you. Yeah, we get that feedback all the time. I’m the homely guy with a big hump, you know, for our podcast listeners. So when you sit back and take a look, this is really a problem and it’s not going to be ten years, Michael, that we feel this. You alluded to it. It’s going to be a year. We have lost the stage for diplomacy in the world. And diplomacy is alarmed around energy. [00:13:03][37.3]

Michael Tanner: [00:13:04] We’ll call it an even five years. And I don’t think it’s going to be a year. It may not be ten long. And variable effects. [00:13:10][5.8]

Stuart Turley: [00:13:11] I’m going to go short variable. I’ll see your long end variable and raise you a short and variable. [00:13:19][7.9]

Michael Tanner: [00:13:21] Enough. [00:13:21][0.0]

Stuart Turley: [00:13:21] All right. No, that’s all I got. Dude, back to you. [00:13:23][1.9]

Michael Tanner: [00:13:24] I will pop over to finance now, guys. S&P 500 dropped about a 10th of a percentage point. Nasdaq about 50 or about five. I can’t say my name today, guys. 15, not 15 percentage point. 15 percentage points. That’s on the Nasdaq, really all over the place in terms of a trading day, guys. Specifically in a move down to oil and gas, oil after the EIA drops their numbers, which we’ll cover shortly, drops all the way just below $76 after opening right above 76, 50 was up to 77. EIA news drops down to below 76 at then currently trading as we stand here about 525 Central time 7772 mainly again off the back of two things that wild price swing. First off was the fact that the EIA crude oil inventories coming out a 1.6 million barrel bill. We were expecting the 800,000 barrel draw. We got an 81. 6 million barrel bill. So that could tank the markets. As I said, we were about 77, 71 when that news dropped that at 9:30 a.m. Central Time drove us all the way down below 76 to about 7580. Then again, this as we get closer to this OPEC virtual meeting, which will be taking place today. As you’re listening to this, deeper cuts are coming, or at least that’s what the market thinks. They’re reading routers. They would tell you that, you know, oil rose more than one dollars a barrel on Wednesday as investors focus their attention on an expectation of fresh supply cuts from OPEC. And look past the jump in crude gasoline and diesel stockpiles. Word out point is there is the sentiment out there that we believe that OPEC is going to cut a little bit. How much are they going to cut? I don’t know. How big of a effect is it going to have? I don’t know. It remains to be seen. Now, what is interesting, Stuart, we did see Brant oil jump today. That crack spread between crude oil and Brant has now increased crude oil down today. Brant oil was actually up about 1.6 percentage points. What does that tell you? It tells you that cuts could be in coming that. Is a signal in my mind, at least when we’re seeing the markets open right now. Because remember, Brent’s open already for Thursday, Our Thursday markets just open. As we record this as we record this on Wednesday. So that spread tells me that difference of a Brant going up, crude oil staying the same. That means there’s an expectation and there should be. Our people are sensing some cuts. So it’ll be interesting to see what OPEC does decide. As always, we will cover it. But they’ll be meeting virtually tomorrow. I thought this was interesting, Stu, just before we go. Venezuela is currently preparing for a vote on border dispute with Guyana over oil rich territory. This drop late in the afternoon will get this run on Newsbeat. But this is crazy, Stu. Guyana is is is the discovery out there that that that could be doing upwards of 2 million barrels of oil a day once fully developed Exxon, Chevron, Hess all in on it. And now Venezuela wants to go to war with that. So the conflict between Venezuelan Guyana has been rekindled since international companies such as Exxon announced the exploitation of oil deposits in maritime areas that get this do have not yet been delineated between country. How stupid can we be? You’re talking here and this is what boggles my mind. Exxon Mobil, they pay hundreds of millions of dollars a year to risk management people. [00:16:28][184.1]

Stuart Turley: [00:16:29] Oh, yeah, yeah, yeah, yeah, yeah. [00:16:30][1.3]

Michael Tanner: [00:16:30] They didn’t think to ask, Well, is this in Guyana or Venezuela? So say. [00:16:35][4.6]

Stuart Turley: [00:16:35] So. Salesman What’s the deal? Some salesman wanted the deal and just rush the paperwork through. [00:16:42][6.4]

Michael Tanner: [00:16:42] Or they’re just saying, Hey, there’s, there’s, there’s no way they’re ever going to take this from us, so screw it. We’re just going to. We’ll drill. And if it if Venezuela rules, it’s theirs. Well, so be it. Which is hilarious considering Exxon and Chevron were two of the companies trying to help Venezuela produce oil. It’s really interesting. Wow. You know, obviously, you know, the US came out, said we support a diplomatic solution while the international court justice process continues. But get this in Guyana, all defense, corporations and capable building activities are with U.S. military personnel. So we know what we’re coming in. We know where we stand. I yes, Gary, centuries. [00:17:17][35.1]

Stuart Turley: [00:17:18] Go to. [00:17:18][0.1]

Michael Tanner: [00:17:18] War. We don’t know. We were going to a border dispute over one of the largest oil fine and probably one of the few things that could actually theoretically move world oil production. Insane to me that we didn’t think about. [00:17:29][11.4]

Stuart Turley: [00:17:30] I just said countries go to war over energy. [00:17:33][2.6]

Michael Tanner: [00:17:34] And they’re trying to to to confirm the legal validity and binding effect of the award relating the boundaries between the colony of British Guiana and the United States and Venezuela, dated October 3rd, 1899. Sweet. So the agreement we’re referencing was written on cowhide one. [00:17:52][18.2]

Stuart Turley: [00:17:54] On. [00:17:54][0.0]

Michael Tanner: [00:17:55] Or I mean, you were around then, so maybe you could just call back. It was memory bank. You were you were what, 55 around that time? [00:18:02][6.7]

Stuart Turley: [00:18:02] Oh, no, I was younger than that. But it was actually a papyrus when I came over on the rock from Egypt. It was actually then. [00:18:11][8.8]

Michael Tanner: [00:18:12] So thank goodness you made it over on the Mayflower. We would have never had any of this. [00:18:16][4.1]

Stuart Turley: [00:18:16] I went back on the Mayflower the first time, so. [00:18:18][2.2]

Michael Tanner: [00:18:18] There and back. We got to love it. Anything else do? I’m done for the day. [00:18:21][2.6]

Stuart Turley: [00:18:21] Oh, no. It’s just a wildly crazy news story. We got more coming. We got cop 28 stories coming out. I’m hearing some wild rumblings around the world. Dude, it’s crazy. [00:18:32][10.1]

Michael Tanner: [00:18:32] Who’s the interview? People here Friday. We got Friday. We drop in. What interview do we have? [00:18:37][5.0]

Stuart Turley: [00:18:38] It’s going to be George McMillan. We finally have that one rolling. And I mean, that’s a two hour mind boggling CIA World energy. Geopolitical. Oh, hey, don’t. Don’t you me doing me that way. Here you are. I’m an old dog. I finally get to talk to somebody that knows something and you’re over there. Give me this kind of flak for our podcast listeners. He’s holding his hands up, going, Is it just like a little millennial? Oh, my gosh. Just came on good today, dude. [00:19:10][32.2]

Michael Tanner: [00:19:10] Unfortunately I am. But no, that’ll be great. Saturday we’ll have the weekly recap will take Sunday off and we will see you guys back in early Monday here in December. But with that, guys, we’re going to go and get here for Stuart Turley. I’m Michael Tanner. Folks, we’ll see you tomorrow. Have a great weekend. [00:19:10][0.0][1105.7]

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A $30 Billion Meltdown in Clean Energy Puts Biden’s Climate Goals at Risk

Energy News Beat

No one expected the transition from fossil fuels to be easy. But a year after President Joe Biden’s landmark climate law promised billions of dollars for America’s switch to clean energy, some of the nation’s most ambitious renewable power projects have been shelved, electric car sales are missing targets and investors are fleeing the sector in droves.

The result is a $30 billion collapse in US clean energy stocks in the last six months—a market many investors expected to flourish in the aftermath of the law’s passage.

BidenPhotographer: Helen H. Richardson/MediaNews Group/The Denver Post/Getty Images

Few industries have been unscathed by soaring interest rates, but perhaps none has been harder hit than renewable energy. For a sector that builds big, expensive facilities such as solar plants and wind farms, high rates cut profit margins enough to sink projects and bankrupt companies. The giddy enthusiasm that followed the Inflation Reduction Act’s passage evaporated, wiping out a quarter of the market value of US companies in the S&P Global Clean Energy Index in the six months ended Nov. 27.

It’s a meltdown that underscores the obstacles standing in the way of Biden’s ambitious climate goals.

Along with sky-high financing costs, clean energy companies face the problems of winning over potential neighbors for their projects, securing government permits and plugging into a creaky power grid unable to handle all the renewable power that’s planned. Oil and gas producers, meanwhile, are doubling down on plans to keep pumping.

The warnings are clear: America’s road to achieving a zero-carbon electricity grid by 2035 is getting rockier by the day.

“We’re in the moment of realization now where some of the euphoria has worn off and we’re starting to realize it’s still not going to be easy,” says Eric Scheriff, senior managing director at Capstone, a Washington, DC-based consulting firm.

The specter of bankruptcies now haunts the sector. Electric bus maker Proterra Inc. filed for Chapter 11 protection earlier this year, with solar financing firm Sunlight Financial Holdings Inc. following soon after. Deals are falling apart: Private equity-backed Ares Acquisition Corp. abandoned its planned merger with nuclear power technology company X-Energy Reactor Co. in October.

And projects have been canceled: Utility owner Avangrid Inc. shelved wind projects in Connecticut and Massachusetts this year, while NuScale Power Corp. abruptly terminated its plans for the first small modular reactor in the US—a technology seen as key to the sector’s potential revival.

For anyone who remembers the last cleantech bust more than a decade ago, it’s easy to fear a repeat.

“In the final analysis, green investing has to be based on economic realities,” says Jerome Dodson, the now-retired founder of Parnassus Investments, one of the world’s largest sustainable investment firms, with $42 billion in assets. He sold his stake in the business in 2021—at the “top of the market,” as he puts it—and predicts that wind and solar stocks could fall an additional 15% to 20% in the next six to eight months.

It was only two years ago that Wall Street investors and bankers headed to Scotland for a global climate meeting, waxing lyrical about net-zero emissions goals and the profits to be made from the shift to cleaner energy. That’s a stark contrast to the current mood as the world convenes again for climate talks at the COP28 summit this week in Dubai.

American clean energy companies aren’t the only ones struggling. China’s biggest solar and wind turbine manufacturers recently reported shrinking profits. A fault in thousands of wind turbines forced Siemens Energy AG to seek a €15 billion ($16.2 billion) backstop led by the German government. And Danish wind developer Orsted A/S is fighting to recover from a $4 billion writedown stemming from two abandoned US wind projects.

In many ways, though, the problems are most surprising in the US.

Biden’s sweeping climate law offers at least $374 billion in tax credits and other incentives to spur the energy transition. Many saw it as a grand experiment to test whether subsidies, rather than top-down government mandates, would be enough to accelerate a change the planet desperately needs.

Electric bus maker Proterra filed for Chapter 11 protection earlier this year.Photographer: Joe Raedle/Getty Images

Instead, the US remains far off track for reaching Biden’s goal of a net-zero economy by 2050. Researchers at BloombergNEF estimate the IRA will get the country only halfway there, cutting annual greenhouse gas emissions from 5.3 gigatons to 2.3 gigatons by midcentury.

Most analysts don’t expect clean energy’s current difficulties to completely derail the transition. Lawmakers remain committed to the shift, even if the results of their actions to date have fallen far short of their goals. Corporations are also lining up clean energy supplies for their offices and data centers.

But missing targets will still have major implications for the planet and the global economy, as the extreme weather events that are propelled and magnified by climate change continue to cause enormous damage.

The US is the biggest carbon emitter of all time, responsible for about a quarter of historical greenhouse gases, and it holds the No. 2 spot for today’s levels. It has also been seen as one of the biggest offenders in rich nations’ failure to collectively marshal funds to the developing countries that often experience climate change’s worst impacts.

While Bank of America Corp. analysts estimate the global cost for confronting climate destruction will be roughly $75 trillion—or $2.7 trillion a year—between now and 2050, the price tag for inaction is much higher. Doing nothing to address extreme heat, disasters and rising sea levels brings an expense of $178 trillion, the analysts wrote in a recent report.

“My nervousness is that we have high interest rates for a long time, and that slows the transition,” says Chat Reynders, co-founder of Reynders, McVeigh Capital Management, which oversees $3.5 billion in Boston.

While the International Energy Agency recently predicted for the first time that global demand for oil will peak this decade, it also said that “an undulating plateau lasting for many years” will follow, with emissions remaining too high to limit global warming to 1.5C, a critical tipping point for averting more extreme consequences of global warming.

For its part, the Organization of the Petroleum Exporting Countries predicts oil demand will keep growing for decades. Exxon Mobil Corp. and Chevron Corp. just spent more than $110 billion combined on two megadeals to secure future oil production.

“The timeline we have to get to net-zero is quite short,” says Garvin Jabusch, chief investment officer at Green Alpha Advisors, which oversees about $400 million. “Everything that’s invested in new exploration, new discovery, new extraction, new burning, new internal combustion engines, new fossil-fired electricity plants—all these long-life assets—puts us much further away from any climate goals.”

Nowhere are the problems facing clean energy more apparent than in the offshore wind industry. Biden’s climate plans call for building enough wind farms along the nation’s coasts in the next six years to generate 30 gigawatts of electricity, roughly the output of 30 nuclear reactors. But wind developers have seen their component costs rise as inflation ripples through their supply chains. High interest rates compound the problem.

Over the next decade, surging costs threaten to add about $280 billion in capital expenditures for the global offshore wind sector, according to researchers at consulting firm EY. Both BloombergNEF and S&P Global Commodity Insights have lowered their projections on how much wind can be added to the grid by 2030.

There are also hurdles in the switch to electric transportation. Higher borrowing costs have made electric vehicles even more expensive, dampening sales. Tesla Inc. has seen its stock price tumble about 20% from its 52-week high in July. The companies that deploy EV chargers, such as Blink Charging Co. and ChargePoint Holdings Inc., are nearing penny-stock status. ChargePoint shares plummeted in November after posting a preliminary revenue miss and replacing its longtime chief executive officer.

Biden has grand plans for hydrogen, meanwhile, casting it as a clean-burning fuel that can decarbonize heavy industries such as steel and shipping. Companies such as Plug Power Inc. are building hydrogen production plants, but potential users have been slow to sign supply deals, since switching from natural gas to hydrogen usually means installing expensive new equipment. In mid-November, Plug Power issued a going-concern warning, an accounting term that means the business may be illiquid within 12 months.

An electrolyzer stack at Plug Power’s facility in Concord, Massachusetts.Photographer: Adam Glanzman/Bloomberg

There are some bright spots, including large-scale solar. Panel costs have been dropping, which squeezes margins for equipment makers but can help increase the speed of installations. Researchers at BNEF estimate that installed capacity jumped more than 50% this year to a new record. Falling panel costs will also help drive growth for home installations, according to the researchers.

Funding for climate tech rose to the highest rate in almost two years in the third quarter, according to BNEF. And BlackRock Inc. CEO Larry Fink, who’s been a vocal proponent of embedding environmental objectives in investment decisions, is attending climate talks in Dubai after sitting them out last year, as green investing faced backlash from Republican lawmakers.

“The trends remain in favor of clean energy, even if we’re seeing some minor growing pains at the moment,” says Sonia Aggarwal, CEO of consulting firm Energy Innovation, who helped develop the IRA while serving as a special assistant to President Biden.

Nevertheless, even with federal support and expectations that interest rates will fall next year, big obstacles remain. Take, for example, the US grid.

The energy transition requires vast changes to the interconnected networks of generating plants, transmission lines and substations that make up the grid, which is still designed largely for fossil fuel generation. BNEF estimates the global cost of adapting and expanding grids to meet net-zero needs at around $21.4 trillion.

And there’s a massive bottleneck when it comes to the process for approving additions of power to grids. In August more than 1,700GW of wind and solar power projects were stuck in approval queues across the US, according to a federal estimate.

“You need all of the ingredients to make the cake,” Capstone’s Scheriff says. “We gained a few ingredients we needed with the IRA, but we’ve still got to get the others.”

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Venezuela prepares for vote on border dispute with Guyana over oil-rich territory

Energy News Beat

‘We support a diplomatic solution’: Guyana defense spokesperson  356,513 soldiers, 120,000 officers to be deployed during voting

 

The Venezuelan government is fine-tuning the details, including the deployment of military personnel, to carry out a Dec. 3 referendum on its dispute with Guyana over the oil-rich Essequibo territory.

General Domingo Hernández Lárez, commander of strategic operations of Venezuela’s Bolivarian Armed Forces, said Nov. 29 that 356,513 soldiers will be deployed for security during the referendum, according to statements published in local media.

Also, the minister of the interior, justice and peace, Remigio Ceballos, said more than 120,000 police officers will be deployed, in statements broadcast by Venezolana de Televisión, the state channel.

The referendum, in which Venezuelan voters will be asked five questions concerning the dispute, will give the government a path to decisions in view of the intervention of the International Court of Justice in the resolution of the territorial dispute over more than 159 square kilometers (61 square miles) claimed by Venezuela for more than a century.

The court is expected to rule on the dispute Dec. 1.

Oil deposits

The conflict between Venezuela and Guyana has been rekindled since international companies such as ExxonMobil announced the exploitation of oil deposits in maritime areas that have not yet been delineated between the countries.

In recent weeks the conflict has escalated, after the president of Guyana, Mohamed Irfaan Ali, had his country’s flag raised in Sierra de Pacaraima, in the Essequibo territory, close to the de facto border. Venezuelan President Nicolas Maduro labeled that action a provocation.

Guyana also raised the possibility of establishing military bases with foreign support in the Essequibo territory and has said visits by US Department of Defense officials were planned, according to local media.

“The Department of Defense has a strong defense partnership with the Guyana Defense Force focused on areas of mutual interest, including countering transnational criminal organizations, maritime security, disaster preparedness, humanitarian assistance and human rights,” a Guyana defense spokesperson said Nov. 29.

“In Guyana, all defense cooperation and capacity-building activities with US military personnel are hosted by the GDF, at GDF facilities, sites or installations,” he said.

In regard to the border dispute, he added, “We support a diplomatic solution while the International Court of Justice process continues.”

Venezuela rejects court’s role

Maduro has repeatedly stated that Venezuela does not accept the interference of third parties, such as the International Court of Justice, in the territorial conflict. Maduro instead has adhered to the provisions of the 1966 Geneva Agreement that obliges the parties to seek a negotiated and satisfactory solution between both countries.

On Dec. 1, the ICJ will issue its order on the request by Guyana to prevent the referendum in Venezuela.

Guyana submitted a request to the ICJ to initiate proceedings against Venezuela in early 2018. In its request, Guyana asked the court “to confirm the legal validity and binding effect of the award relating to the boundaries between the colony of British Guiana and the United States of Venezuela, dated October 3, 1899.”

Venezuela disputes the validity of the 1899 award.

An escalation of belligerent actions, both by Venezuela and Guyana, could affect ongoing processes such as the relaxation of US sanctions on Venezuela, Venezuela’s electoral process scheduled for 2024 and even talks between Venezuela and Trinidad to produce and export natural gas.

 

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Thousands of car dealers have a potent warning for electric vehicle enthusiasts

Energy News Beat

In a public letter to President Biden, 3,882 car dealers spread across the country are asking that his administration slow down its proposed regulations mandating the production and distribution of electric vehicles.

The letter comes after the Biden Administration in April proposed a set of stringent climate regulations that could require two-thirds of all new U.S. passenger cars to be all-electric as soon as 2032.

The Environmental Protection Agency’s (EPA) proposal would not technically impose a limit on the number of internal combustion engine (ICE) vehicles a given company could sell; rather, the EPA through this proposal would limit the pollution created each automaker’s fleet.

In order to meet the proposed pollution requirements, carmakers would need to electrify the bulk of their fleets, and quickly, a feat they have lately been struggling with.

The dealers, in their letter, noted that there is currently a wide variety of good EV options on the market.

Despite this, “electric vehicle demand today is not keeping up with the large influx of BEVs arriving at our dealerships prompted by the current regulations. BEVs are stacking up on our lots.”

The enthusiasm of the early EV adopters, the letter says, has petered out. And not even the combination of price cuts, manufacturer incentives and government incentives are encouraging the masses to make the switch to electric.

“Today’s current technology is not adequate to support the needs of the majority of our consumers,” the letter reads.

Customers, according to the letter, remain concerned about price, and range, especially issues with range loss due to factors including temperature changes. Many customers, according to the coalition of dealers, have neither garages nor access to public charging stations, making a transition to electric difficult, at the very least.

These challenges, the letter argues, can and will be solved in time. But consumer sentiment won’t change in time for either dealers or manufacturers to be in line with the proposed regulations.

“This is the voice of the consumer,” Celebrity Motor Car owner Tom Maoli told CNBC, saying that unsold EVs are stacking up on dealers’ lots. “We’re now backed-up up to 12 months with EVs. Consumers don’t want them; they’re not buying them.”

Manufacturer rebates and government incentives, Maoli said, have done little to help EVs roll off the lots.

The consumer, he said, is in “fear over the infrastructure.”

“The White House got way out over its skis on this mandate, and the consumer has to buy into it and they’re not,” he said.

Automakers recently have been adjusting to the same consumer reality that Maoli pointed out — General Motors  (GM) – Get Free Report pushed back its EV targets and postponed a new EV lineup in an effort to preserve profitability; Ford  (F) – Get Free Report postponed around $12 billion in planned EV investments; Toyota  (TM) – Get Free Report remains convinced of the value of hybrids and even Tesla  (TSLA) – Get Free Report remains locked in a price war to entice wary consumers.

Still, the data shows that EV adoption is steadily increasing, even as consumer sentiment wanes.

Tesla delivered 435,000 vehicles in the third-quarter, below Street estimates of 455,000.

EV sales made up a record 7.9% of total global car sales in the third quarter, while S&P Global Mobility recently reported a significant dip in the percentage of people open to purchasing an EV, compared to 2021 numbers.

“Buyers may want to wait for the next technological advance, or have concerns about charging time and charger availability, but in the end, consumer finances – not engineering – lead the current buying resistance to EVs,” S&P wrote in its report.

Source: Thestreet.com

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Current and prospective investors, please call our Pecos Country Operating offices at (817) 581-3877.

Pecos Country Operating, LLC is a privately owned oil and gas exploration and production company headquartered in Fort Worth. We own and operate wells across the South Central United States with our predominant means of production coming out of West and North Texas.

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