World Trade Concerns as Red Sea Shipping Slows

Energy News Beat

Shipping giant Maersk announced they would implement a shipping freeze in their trade routes in the Red Sea due to a high seas attack from Yemen-based Houthi militants. Despite the best efforts in the volatile Red Sea, the Israeli-Hamas conflict has spilled over to impact global trade, inflation, and oil.

Many transportation companies had already abandoned the shorter, cheaper routes through the Red Sea in exchange for more expensive pathways. Now, Maersk joins the other shipping companies, citing safety concerns for their cargo and crew. Unfortunately, the Middle Eastern conflict has profoundly affected the global economy and doesn’t seem to be getting much better. The ripple effects of Maersk’s announcement will hit world trade like a brick in the face.

The Deadly Attack on a Maersk Ship

The Maersk container ship found itself at the epicenter of a sea-based attack from four Houthi boats on Sunday, December 31st. The attack initially came from an unknown aircraft, then quickly evolved into a naval battle with the Iran-backed Houthi boats firing on the cargo vessel.

Fortunately, the US military was quick to respond and engage the attackers from a US Navy helicopter. Naval officers sank three of the four fighting vessels, killing ten Houthi militants. Despite the high stakes of the sea battle, no Maersk personnel were seriously injured. Still, this event marks the first time the US military has returned fire on the Iran-backed Houthi.

The naval attack comes in a series of militant aggression from Houthi forces towards shipping vessels. Due to the rise in tension from the Israeli-Hamas conflict, the US military and other factions Initiated Operation Prosperity Guardian to help mitigate the security risk around the Red Sea. However, the recent uptick in hostilities had shipping companies more than concerned about escalation should they continue transporting through the Red Sea route.

The Importance of the Red Sea Trading Route

The Red Sea route represents a pivotal route for trade and oil companies, as it dramatically shortens the journey from Middle-Eastern oil refineries and global shipping lines. Bridging the gap between Northern Africa and the Arabian peninsula, this critical waterway connects the Mediterranean Sea to the Indian Ocean.

With much of the world’s trade in oil and goods passing through this maritime passage, commerce, inflation, and shipping costs heavily rely on the viability of the Red Sea. In ancient days, this route represented the connection between major world powers, including Egypt, Greece, and Rome.

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Because of the Red Sea’s centrality to world trade, any disruption or cessation of its waters can impact the global economy, devastate trade, and increase oil prices. Maersk was one of the few companies that opted to continue operations in the Red Sea, hoping the area would become more secure as time progressed. Unfortunately, hostilities have only increased, leading to global questions of security and trade ramifications.

“A Clear Impact on World Prices”

Oil companies, like BP, were forced to change routes to a much longer and more costly shipping pathway. With the only alternative being sailing through potentially dangerous waterways, most shipping companies and oil transporters opted to take the longer option and stick to safer transport.

While there are alternate routes, none are as lucrative or pivotal as the Red Sea, which connects to the Suez Canal. As companies were forced to alter routes or increase shipping distances, the cost of oil and transportation increased almost immediately. Shipping companies are not only suffering from longer transportation routes but also increasing security on their vessels to account for the potential hostilities they may encounter.

The December 31st attack proved the necessity of increased security in the Red Sea. The aftershock of the deadly maritime attack has many concerned about global trade routes and what may be next for transportation corporations.

A Pivotal Oil Route Disrupted

Maersk, halting routes through the Red Sea, deals in line with other companies’ similar decisions from other goliaths in the area. After the maritime attack, fears rose that the security of the Red Sea was waning. Roughly 30% of the world’s container commerce flows through the Red Sea and Suez Canal, making a disruption a devastating turn of events.

In addition to the container shipping that runs through the Red Sea, the Middle Eastern shipping route is one of the busiest oil transportation waterways in the world. Moreover, the shipping room contains multiple choke points for oil, natural gas, and transportation, making prolonged alternate routing extraordinarily costly and frustrating for oil companies.

Oil and natural gas prices surged when BP stopped shipping through the Red Sea following the attack.

“In light of the deteriorating security situation for shipping in the Red Sea, BP has decided to pause all transits through the Red Sea temporarily. We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.” the oil giant said in a statement.

As hostilities continue to rise in the Red Sea and its surrounding areas, oil corporations must choose if it’s worth the risk to continue using the pivotal shipping route.

Naturally, the Houthi attack prompted economist concern over trade routes and oil supply, as insurgents continue to disregard strong warnings against further action targeting commercial and crude shipping lines.

Shipping Container Shortage

Maersk executive said that after the attacks, the events are leading to more troubles for container shipping, including a massive container shortage. The price of containers continues to spike after the Red Sea crisis, leading to complications and shipping and an estimated cost increase of at least 15%.

Additionally, the added risk has caused insurance companies to raise risk evaluations for shipping companies, leading to further inflation hikes. This price increase will happen suddenly and immediately trickle down to consumers.

Moreover, the increased shipping time will result in delayed deliveries worldwide, which could strain supplies from shipping containers. This delay will affect everything from toys to food, medical supplies to technology. The larger impact will have untold ramifications, affecting every area of life.

A Wider Impact

The Iran-backed terrorists in Yemen threatened to continue attacks on naval vessels, mainly any ship transporting goods to Israel or leaving Israeli ports. There is little hope of de-escalation at this point, with Houthi fighters pledging an increase in hostility and Military action.

Unfortunately, a broader impact will be felt throughout the world’s economy due to Houthi initiatives. By essentially pirating the Red Sea, Houthi forces have struck a significant blow to global economic stability and caused prices of goods shipped via container vessels to soar.

How Other Transportation Companies Responded

Maersk is far from alone in avoiding the Red Sea these days. Reuters reports German container transport company Hapag-Lloyed is rerouting 25 ships to avoid the hot spot, while Hong Kong’s OOCL is taking similar action following the increase of high seas attacks. The new routes these and other companies are taking will be much longer, more expensive, and less lucrative for shipping companies.

Container shipping costs are set to increase as more corporations turn away from the Red Sea in light of the hostile environment and potentially dangerous situations. With the Red Sea and Suez Canal shipping lanes less opportunistic, the cost of shipping containers from China to the Mediterranean is up as much as 44% due to the additional Logistics cost.

Experts say anything transported over oceanic waterways could be at risk for higher costs and inflated pricing.

Fear of Escalation

Naturally, one continued escalation is a significant factor looking forward to the Middle Eastern conflict. As Israel and Hamas continue in their brutal war, other nations have been pulled into the frey, triggering a global shockwave. Should the conflict continue and grow beyond its current scope, a major question moving forward is whether the United States and its allies will continue operations reactively or whether Operation Prosperity Guardian will take on a more active role.

Escalation of the Middle Eastern conflict would significantly impact trade as we know it. While oil tankers and shipping lines have made alternatives to their routes and positions for the time being, continued use of alternate shipping lanes could spike inflation to new and unfortunate heights.

The region where the December 31st attack took place remains heavily monitored to help dissuade Houthi forces from attacking again or another organization from joining the fight. Should the situation continue to escalate, there’s no telling what permanent ramifications would unfold.

By: Tyler Reed:

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Why California’s climate disclosure law should doom green energy

Energy News Beat

California prides itself for being a leader with respect to tackling climate change.  This is because they believe, albeit on shaky scientific grounds, that their citizens “already” face devastating consequences inflicted on them by manmade global warming – including wildfires, sea level rise, drought, climate refugees, and other impacts that “threaten their health and safety”.

Thus, to lower their state’s carbon footprint, the legislature recently passed a law requiring all companies doing over $1 billion in business within California to “publicly disclose” (by 2026) all their “direct” greenhouse gas (GHG) emissions stemming from fuel combustion they utilize, as well as all “indirect” GHG emissions derived from the electricity, heating and cooling they consume.

By 2027, they must also disclose “indirect upstream and downstream” GHGs emitted by sources that they do not own or directly control, but from which they purchase goods and services, including GHG emissions associated with the “processing and use of sold products.”

This certainly appears to cover almost every mega-scale entity doing business in the once-Golden State.  And it might help those who fret about climate change sleep better at night.  But will it actually lower the planet’s greenhouse gas emissions?

The simple answer is “no”.  Let me explain.

Since only “zero-emission” vehicles can be sold in California by 2035, and the state must have 100% “clean” electricity by 2045, the new disclosure mandates should (at least in theory) cover GHG emissions associated with “upstream” operations required for processing raw materials, manufacturing new energy generation and use technologies, and transporting “clean energy” equipment sold to or used in California.

The new mandates should also cover wind turbines, solar panels, electric vehicle batteries, grid-scale backup batteries, transformers, expanded and enhanced transmission lines, and other equipment associated with California’s emerging “clean, green, renewable, sustainable” economy.

And they absolutely should also cover the extraction, processing, refining and other activities required to obtain the nonrenewable metals, minerals, concrete, plastics, paints, other materials – and fuels – needed to manufacture and install those technologies.

The billion-dollar utility companies that buy and use all this equipment should absolutely be required to catalog and publicly disclose all emissions associated with these “clean” technologies.

If such an inventory is accurately taken, and that is admittedly a bit “if”, it won’t paint a pretty picture for those touting renewables, Green building construction, and EV transportation “fixes”.

The International Energy Agency and other experts report that electric vehicles have six times more metals by weight than internal combustion counterparts. Photovoltaic solar panels require six times more metals and minerals (other than steel and aluminum) per megawatt than a combined-cycle gas turbine that generates electricity pretty much 24/7/365; they also require at least 100 times more land area.

Weather dependent, intermittent onshore wind turbines need 9-10 times more than a CCGT, and offshore wind turbines require fourteen times more raw materials. Putting 850-foot-tall wind turbines in California’s deep ocean waters would require mounting them on floating platforms big enough to prevent them from capsizing in storms; that would likely mean 40 times more materials.

For every 100,000 tons of copper (enough for 2,275 gigantic 12-MW offshore wind turbines), companies would have to blast and extract nearly 60,000,000 tons of ore and overlying rock, and then use heat and chemicals to process almost 23,000,000 tons of ore. Every step involves fossil fuels.

Nickel for powerful nickel-cobalt-aluminum and nickel-manganese-cobalt EV batteries is found largely in Indonesia, where companies mine the ore using diesel-powered equipment and send it to smelters fueled by coal. Once fully operational, a single nickel-processing industrial park in eastern Indonesia will burn more coal per year than Brazil.

Cobalt for cobalt-lithium batteries comes mostly from the Democratic Republic of Congo, involves extensive child and near-slave labor and, like most other metals and minerals for “renewable” technologies, requires fossil fuels and toxic chemicals, and is controlled by Communist China.

 

Manufacturing wind turbines, solar panels and batteries is also heavily concentrated in China, whose coal-based power and resultant GHG emissions now exceed the rest of the world combined. In fact, China put 38.4 gigawatts (38,400 MW) of new coal-fired power capacity into operation in 2020 alone – more than three times the amount built everywhere else around the world.

In short, California’s Green transition is likely to be an ugly one for those actually intent on trying to lower greenhouse gas emissions. One can’t help but wonder what happens when Californian politicians realize their grand scheme to save Planet Earth from a manmade climate crisis actually results in possibly spewing out more greenhouse gas emissions into the atmosphere?

My guess is nothing at all – except, of course, to make sure such a valid inventory isn’t conducted in the first place.

Crag Rucker – CFACT.org

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ENB #192 Chicago’s “Clean and Affordable Buildings Ordinance” is Neither Clean Nor Affordable. – a critical podcast with Larry Glover and Jack McGeever

Energy News Beat

This is an article written by John (Jack) McGeever on LinkedIn, and as I read the article, I had to get a podcast with my good friend Larry Glover, CEO of Glover Group, and Jack. Larry and I have had many discussions about the disproportionally impacted communities and energy policies. Larry is a true industry leader, and I value his opinions.

Jack’s article points out that the building and permitting laws forcing the removal of natural gas do not make sense environmentally, or economically until there is more nuclear.

Sit back and enjoy this discussion, and I enjoyed learning from both men. – Thanks, Larry and Jack, for stopping by the podcast. – Stu

Connect with Larry on his LinkedIn HERE: https://www.linkedin.com/in/larry-glover-3180613/

Connect with Jack on his LinkedIn HERE: https://www.linkedin.com/in/mcguyver/

Highlights of the Podcast

00:00 – Intro

03:16 – Glover on Jack’s clean energy interest.

05:30 – McGeever on concerns about Chicago’s ordinance.

07:08 – Glover talks diverse energy mix, mentions solar.

10:07 – McGeever on challenges of renewable energy.

12:49 – Concerns about solar panel fraud.

17:11 – Glover on scaling renewable energy.

19:24 – Affordable energy for impacted communities.

23:21 – McGeever proposes neighborhood energy sharing.

25:59 – Glover on community-based energy solutions.

26:35 – Tax incentives and community solutions.

28:38 – Glover stresses energy education over subsidies.

29:18 – McGeever on future plans and policy involvement.

30:31 – Glover’s final thoughts on energy transition.

33:28 – Outro

 

 

 

 

 

Stuart Turley [00:00:08] Hello, everybody. Welcome to the Energy News Beat podcast. My name’s Stu Turley,  CEO of the Sandstone Group. Energy poverty is a real thing right now. But not only is energy poverty a real thing, there are second order of magnitude of critical decisions in the industry space right now that are really having some horrible impacts on the disproportionately impacted communities. And if you listen to my podcast, you know that I have a heart for those that are not always they’re not making the decisions, however they’re trying to live. I’ve got two fun guests today. I’ve got Larry Glover, he’s the CEO of The Glover Group, and he has been a friend of the podcast and has been on several times, and his podcast listeners have gone nuts. Larry, thank you and welcome to the podcast.

 

Larry Glover [00:01:06] Thank you. Stuart. I’m pleased to be here this morning.

 

Stuart Turley [00:01:10] And I’ll tell you, we’ve. The next one is a surprise. I’ve got Jack Mcgeever, and he reached out to me after I saw his article. That is quite amazing. The article is Chicago’s Clean and Affordable buildings ordinance is neither clean nor affordable. And that I hear what Larry and I have been working on and all these kind of things. And it led to an organic discussion with the layering and I. Jack, welcome to the podcast.

 

Jack McGeever [00:01:44] Thanks for having me. I’m really excited to be here.

 

Stuart Turley [00:01:47] You know, as we were chit chat and getting ready, Larry, you started warming up into some fantastic questions. What were some of those questions?

 

Larry Glover [00:01:55] Well, let’s do that. I was really interested. In Jack’s perspective and what drove him to look at. The issues of Chicago and particularly around clean energy. And so. And now that I’ve had a chance to meet this young man and a sense of really how incredible he is, I’m even more interested in that approach for clean energy, even though there are some things that he and I may not always agree on in terms of facts and and the light, but I absolutely applaud young person bringing a new perspective to this industry. So yeah. I’d love to understand a little bit more about. About why this issue around affordability and around clean became. What we know is that the industry is talking tremendously about affordability. And what does affordability really mean? Is it the lowest price or is it the lowest burden? And how do we now start to look at those differences?

 

Stuart Turley [00:03:19] So what are your. Yeah. Yeah.

 

Larry Glover [00:03:22] So, Jack, if you there’s. Help us help share perspective with me.

 

Jack McGeever [00:03:28] You know, I’ve lived in Chicago almost my entire life. Although I live in the suburbs now, I still like to think myself. And I’ve got the Chicago map right behind me. But I love it. I love the city. I love the people here. I think for me, obviously, as I was telling you guys before we got started. I’ve been interested in this for the last couple of years. And, when I look at this new bill that’s being proposed ordinance, one of the things that I see as the main problem with it is essentially what this bill would, would do is effectively ban on new homes and buildings from having the pipelines that provide energy, that provide your electricity, that allow you to have a warm house. And the cold winters we have here in Chicago, or for your air conditioning in the hot summer. And so for me, the problem is they want to effectively ban natural gas use. And given that so much of our electricity comes from the comes from natural gas. I think that presents a really difficult problem, because essentially what you’ll be doing that is you’ll be increasing the price of energy and electricity, because if you’re no longer using, if you know you’re using natural gas, you’re going to be turning to other methods. And those methods are going to be things such as nuclear. Illinois is the largest producer of nuclear energy. We have more plants than anywhere else in the United States, according to EIA. When you look at coal pulls dirtier than natural gas. Coal’s dirtier than oil, right? So that’s not ever going to be clean. That’s not the way to do it. And if you look at like the other things, look at the other sources, I don’t think it’s necessarily the best approach. And I think that when you look at the people of Chicago, the median income isn’t necessarily high enough to afford what the increase would be. Shouldn’t we be on natural gas? Right. And so you’re going to have people who can’t afford that energy. After we ban natural gas because the prices are going to skyrocket. And I think it’s an unfair, it’s really dangerous situation to put people in.

 

Larry Glover [00:05:32] Yeah. Let me come back and. Drop a little bit about. There’s this sense of displaced energy supply and duty to the degree. I agree with you that. The ban. Our natural gas does create an unusual burden on customers. One, because you need gas in order to in order to produce electricity. So there is there is this dependency that that is that is clearly there. But the other and I think to your point in the article, that if you remove gas from the equation, you have to fill it with something else, right? And you talked about when and what’s the growing contribution of wind, the impact of nuclear. But we know that in, in Illinois that nuclear is running somewhere close to its peak load efficiency, somewhere in the high 90s and in terms of low proficiency. So. That sauce is probably almost tapped out. But what about when you talk about coal? We know we’re moving quickly away from coal because of all those other properties. Right. It was interesting you did not talk about solar. Was that purposeful or was that something that. You didn’t fit with your equation.

 

Jack McGeever [00:07:09] I think a little bit above. I think that it doesn’t necessarily, but at least in the context of the when you look at California and Arizona, maybe here in Illinois, specifically in Chicago, where this bill is proposed, it’s not realistic. If you’re transporting renewable energy, it’s much more, sorry, it’s much more expensive than if you’re transporting nonrenewable energy. And so again, that just goes to increase the price. And I think that when you look at the way that Illinois gets its power, it’s not from, renewables.

 

Larry Glover [00:07:42] I might add, might suggest, though, that that in this energy transition space we have to look at all fuels. And even though Chicago is a midwestern city and, and, and you don’t have sun as much as you do California and Arizona, but there continue to be opportunities for solar. Right now, solar is probably somewhere about. 8 to 10% of our energy resource. The goal of that sector is to get it up to 20% by 2035. So it has to become a viable food fuel source beyond just our our our. State with with heavy sum. Zelda, I believe, is a viable, profit for markets like Chicago. And to your, your, your example when you displace gas. Solar is a fuel that is less costly. Greater impact on the grid, lower carbon emissions. And so it does represent a highly qualified fuel for us to, to join in. But yes, so I see solar from wine. But I also asked that as we try and as we move to this transition, to this energy transition, we’re looking at transportation. We’re looking at at distributed energy resources, where we can now begin to build these virtual power plants because we have solar and and rooftop solar and battery storage and, and new technology. So when you when you put that, that combination together, you do get a greater impact in lower cost. And what should impact as a lower burden on on those lower. Low to moderate income consumers. How do you how do you see you see that in terms of impacting that burden? Without gas or, with this ban on gas?

 

Jack McGeever [00:10:09] I see that if you ban gas, like I said in the article, you’re going to have to replace with something. And when you look at what the rejections are for solar projects, like you said, we’re trying to increase its capacity. And that’s not going to happen when this bill gets passed. If it does get passed, I’m hoping it doesn’t. But if it does, the solar, energy and renewable energies are not where we need them to be in order to meet that need. And that gap that would be created by, the banning of natural gas. Right. So I think that that price increase is imminent as soon as you ban natural gas. That’s right. Those prices are going to skyrocket. I think that long term. Absolutely. I agree with you. It needs to be a mix of all different sources. But for the foreseeable next five time, maybe even 15 years. I don’t think that renewables such as wind and solar, where we need them to be, particularly in Chicago. Could it be a reliable source down the line? Absolutely. I’m not going to disagree with anybody about that. I just don’t see it being a reliable energy source as far as cost goes within the next 5 to 10 years.

 

Stuart Turley [00:11:13] Let me let me add this one here, guys, because I think wind is absolutely having some horrific problems right now. It you know, you look at the number of folks that are, not able to make them work because they’re not sustainable. I think solar does have extra legs. That wind doesn’t. The hot button I have, Larry and Jack. Is that the renewable? The solar is not as, recyclable yet. The finances aren’t there. And that’s that’s one of my. Oh, we really gotta get that one fixed. Now the other one is in the housing areas versus the, buildings. I want your opinion on both of the, both of your opinions. Is that on solar rooftops for homes? It makes sense. Except there is a gigantic problem with, not so honorable folks going around installing, solar panels on roofs, and they’re selling the. Oh, is it the, really weird financial, deals on those things. And we got charlatans running around selling those things. So, Larry, if if we had a really good government program, I don’t like subsidies. That’s one that I would do to offset the costs, but I the charlatans, I want to drag them out in the street and beat this, not out of them.

 

Larry Glover [00:12:50] I too, I think what we’ve experienced, yeah, is this idea that I call open gate marketing. Okay. Because as solar first began, the goal for almost all of those companies was to get as much out there as you can, as quickly as you can get it up on your roof. And the belief that once it’s there, it will continue to get stronger. In that. Unique feeding frenzy of trying to sell it as much as you can. We know that you’re always going to have bad actors who are going to be part of. And any new product that gets into the marketplace. The bad actors normally happen in the early and along with the early adopters, because there’s a greater. Willingness for risk and and so to. So that becomes an opportunity. I think when industries begin to mature as solar is now having to mature because it’s part of a bigger mix. They also got to fix the little planks in there. And I think most of the solar companies are working really, really hard to get these bad actors out of the game. It’s hard, you know, to. When you look at who owns your home, they’re generally little older there. They’re generally, people who have worked for a long time to, to, to create this asset. And so. They are being preyed on or have been preyed on. But that’s also part of this new legislation. For example, the administration, last month offered legislation around, solar financing that had consumer protection, written into it for that very reason. So, so, yeah, the other thing that I might say is that. I don’t want us. True to believe that. What? A category one to product is introduce that you’re going to get the benefit of scale. Because that, I think, is what we’re talking about. So if we talk about if we look at so many in the next 3 to 5 years, it’s not going to be off the scale. So you’re not going to get those benefits. But if we’re planning this transition in the long term, which it is, and now we’re talking 2030, 2035, which is the mark on the world that everybody’s talking about right now. You have the ability to get it to scale so that it costs are manageable and controllable. You’re you’re you’re looking at how to integrate solar as part of this, this portfolio of products, not only for commercial but for residential. So you’re going to have some gas. You need to have a gas pipeline. I’m going to have gas pipeline. They’re they’re not they’re not going to get me to be totally electric, right. But I think it all does make make sense. And, and Jack and I’d like to hear your perspective, because I think you look at the hourglass from a from a different, vantage point that I do. And and to say. How do you protect those vulnerable consumers in the midst of. New hydrogen, which is going to cost more. When we do, it really is going to cost more. And all underpinned by the fact that when you add all of this technology and all of this stuff. To the cost of energy. We’re going to use so much more energy and the cost is not going to be less. It’s going to be more expensive. And so how do we now kind of blend that in your in your eyes to do. Make those cost equitable.

 

Jack McGeever [00:17:14] You know personally I think you bring up a good point. It’s not the cost. It’s not cheap. Right. Renewable energy is really expensive. both in the short term and the long term. You know, I think it’s important to protect people. And I don’t think that, putting legislations in place, such as the city of Chicago is trying to do right now, protects those people and those more vulnerable populations. I think that when you look at specifically and through the lens of energy, I think it needs to be what is most cost effective and what is most fiscally responsible. And for me, I don’t see in the short term, renewable energy sources merely checking that box. I think when you look at the losses that wind farms are taking in their communities. When you’re looking at solar, as I said, the cost of the solar panels is instrumentally like it’s insurmountable. It’s huge. And that’s not for fordable for the small mom and pops. And I don’t I don’t think that that cost is. Maybe necessary is not the word, but I don’t think it’s needed right now. At least, I don’t think that we should be taking on those costs right now. I don’t think the research is there yet. I don’t think the cost has come down yet.

 

Larry Glover [00:18:32] Why? The reason we’re getting there, and I think that the cost benefit is a benefit derived from scale and we just don’t there yet scaling legislation. I mean, the whole issue of net zero and for solar, for example, and that that goes back to the grid, you know, oh, how how do you manage those costs that, that net zero impact. That’s one of the issues around solar. You’re going to have some of the same kinds of things for wind. And, and they the expense of wind and the repair of those blades and, and and those tractors, they have a, they have a life span on them. That right. 10 to 12 years, I believe, eight, eight.

 

Stuart Turley [00:19:26] Nine years. I’ve been running that down and know and I have not had anything, saying no and wind and everything I’m finding, Larry and Jack is that wind is unsustainable from day one fiscally. And you take a look at the offshore wind farms, they’re even more horrible. And like I said, I believe solar has got a lot more legs. Now, from a personal standpoint, guys, I’m putting solar on my roof. I’ve also got a wind for, wind. I’m I’m serious. I if I talk about it, I want to sit there and have numbers, and I’m putting a windmill on the top of the house. And I also have, two propane tanks and two generators, and I can run any of my four buildings here. Off of all of that. Now, it’s called being energy independent. Yes. Now, here’s the problem. It’s expensive. So, you know, I, I’m sitting here, I can’t I don’t want to talk about it. You know, guys, if I can’t prove it and and, now is it going to be affordable for everybody? Larry, I really want it to be, in in California. I need help trying to find somebody. So any of our podcast listeners today, if you’re from California, the regulatory issues in California are not. They sold it to California is if you put it on your roof, you can make money off of it. And then when you make money off it, you know, be sold back and forth, but you’re having to pay for the amount of time that it’s remaining idle or the backup sources. And so they’re now taking money away from the homeowners. And it is not profitable based off of the balancing authority’s trying to balance all this stuff out. So, Larry, I guys, Jack, I would like to put our heads together and see if we can’t come up with some right ideas and solutions, because it would make sense, to distribute the costs if the benefits could be shared back out to the district, disproportionately impacted communities, because right now, the costs are spread across the board and the disproportionately impacted communities are paying a higher layer. I think you call it the, energy burden. Yeah. And they have a higher energy burden. Let’s figure out a way to take advantage of the solar and reduce that energy burden, because it doesn’t seem fair. Is that a is that a fair statement? Oh, that was a good pun.

 

Larry Glover [00:22:25] Good. Jack, you were going to say something.

 

Jack McGeever [00:22:28] I, I think it’s really important what Stuart shared earlier. That what you’re doing, somebody who’s less fortunate might not have the ability to help. And so I think that at least from me, from what I’m thinking right now, I think that the best way to go about it would be start more locally. Right now, when you look at what California is doing and when you look at, Chicago legislation, I actually think it’d be better if you were to break it up into smaller, almost neighborhoods. Maybe it’s the right way to look at it. And then each neighborhood shares, let’s say, set of solar panels or wind turbines in the middle. And that’s how they draw their energy. Right? And so, at least for me, the problem that presents that is you can have energy inequality in different areas of the country, right. Because different climates, different. Types of weather is gonna mess with that.

 

Stuart Turley [00:23:22] Larry, I think you were calling that, microgrids. And what did you, what was your other.

 

Larry Glover [00:23:29] Test, really? Well, there’s. So when when we look at. Let me back up. I like the I your idea of smaller sectors and looking at energy sources almost from a community based. But given the interdependencies that we see grid dependencies and when you when you add a new fuel source to the grid, your infrastructure now changes. And so you have to upgrade your. He agreed. That adds that add cost to the process. You also I think. Begin to look at what fuels can be localized. You know, solar is one of them when to a degree. But when you get into the, the. Gets into the grid system. I’m sorry. It won’t get into the grid system. And you don’t know where it comes from. Except that it’s a little cost. For me, I look at. Issues like solar and say. How can I build a a community solar program that does include small and medium sized commercial buildings? Does it include residential buildings and. And how and. And when you aggregate those costs and then reallocate them. I think there is a way to lower the burden on everyone because you reallocate those costs. And. If I am, if I’m a consumer, then I don’t have to pay $30,000 to get solar on my roof. But I can participate in a rebate program because we have Community solar and I’m a subscriber to Community Solar, which helps to lower my cost. All of those are little things that we we should be doing and, and, that make a real impact.

 

Stuart Turley [00:26:03] Yeah. And Larry, that’s a great point. Absolutely phenomenal in Jack. It, it is also one of the things about, a lot of the incentives for, folks is the tax incentives, but the disproportionately impacted folks don’t have that tax issue. So, you know, that we’re paying all this money in tax incentives. We gotta figure out a whole new thing. So maybe getting some legislators and some ideas. Larry, you maybe you already thought of this.

 

Larry Glover [00:26:38] Yeah. Legacy. Well, legislation absolutely has to be a key part of all of these discussions, right? It is. We have to figure out from a legislative standpoint, you need to look at folks like California, and they’re trying to figure out how to redistribute the cost so that low income, low to moderate income consumers, get some greater benefit. The challenge that they have is that. The programs that they’ve initiated. Look at income as a base. And it it’s more of a handout program than a. A savings through efficiency program. And I absolutely believe that when we just find ways to say you’re low income. And so let’s just take. 10% off the top of your bill. And you are. You are fine. For me, it doesn’t make you a better energy consumer. I’m a big believer that let me help you understand your energy use. Let me help you understand the tools that are available for you to manage your energy, cost and burden. And I’d rather teach you how to do that and take and spend another two years of teaching you how to become a better energy consumer than jumping to the end and giving you subsidies for two years. And after that two years, you still have bad energy consumer spending more than you need to using stuff inefficiently.

 

Stuart Turley [00:28:38] Yeah.

 

Larry Glover [00:28:38] And and no greater long term benefit. So I’m a real proponent in energy education and education for the purpose of helping people to reduce their burden. I think we can teach people how to reduce their burden and not pay their way out of lower burden, because it didn’t. The net effect is not a lower burden. It’s just a higher cost on everybody.

 

Stuart Turley [00:29:05] Larry, I love that. We got about two more minutes here, guys. Maybe even three. But, Jack, give us your last words. And what’s coming around the corner for for Jack here.

 

Jack McGeever [00:29:18] So, for me personally, looking ahead for the next five years. Currently involved in discussions online. I’m really done. I’ve had the opportunity to work with few grassroots organizations, so I really have been involved in policy from a grassroots perspective, namely the two organizations I’m most involved with. Our first Turning Point USA, if you’re familiar with it. And second, the American Foundation for Suicide Prevention. And so I hope to grow my involvement in both of those and the different ways that I can. I’m very interested in policy, and I think that these discussions are incredibly important. I really appreciate being here with you guys today. And with the next five years, and I’m not really sure, I’ve applied to colleges and, going really hard for a few. But whatever it brings, I’m ready for it. I love the challenge, and I love the possibilities that lie ahead for me.

 

Stuart Turley [00:30:18] Oh, that’s cool. Larry. I’d give you a hug right now, but, you know, what are your last thoughts? What’s coming around the corner for the Glover group? Well, I guess the better.

 

Larry Glover [00:30:31] Yeah. Two quick things, Jack. It has absolutely been my pleasure to talk with you this afternoon. I applaud you for for your perspective, but for your willingness to just take on this big, big issue. And I look forward to some other secondary discussions that we might have that might talk about the research and and the light. Guys, I think we are at a critical point in time in our world for energy transition. And there were three issues for me that I think are absolutely critical. Okay. One is resiliency. And and as we build our way through resiliency which mean that. We’ve seen. Weather impacted. Conditions over the last 3 to 5 years. And it happens. And these communities, these low to moderate income communities, have to be as resilient to recover from those disasters as our most affluent communities. And when we don’t do that, we do everyone a disservice. So for me, as we go forward and I look at transition issues, transportation, grid revitalization, workforce development. EV evolution or electrification. I think we have to look at all of those with I that’s not 2025, but 2035 and 2015 and and that’s when we will really realize the benefit. Of all this transition work. We’re going to have a tough time over the next 5 to 10 years because energy is going to get more expensive if we’re going to use more of it. We’re introducing technology which shifts all the boundaries. But at some point he’s going to level out. So I think we have to be able to see ourselves in, in its fullness before we evaluate how difficult it is for us right now. It always is difficult in the front. It’s always going to cost more until we get to scale and get to a process that aligns us with some equitable distribution of these costs. I think that’s where we are. So for me, it is going forward and trying to influence that. The long term planning for our company, and particularly for LMI communities.

 

Stuart Turley [00:33:28] Oh man. What a great conversation today, guys. I just can’t begin to tell you how much I appreciate both of your times. I’ll have both of your LinkedIn’s and contact info in the show notes. And with that, thank you guys very much. We’ll see you guys next time.

 

Larry Glover [00:33:46] Thank you. Thank you. Great to be here today.

 

 

 

 

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Ford cuts price of 2023 Mustang Mach-E by up to $8,100, offers 0% financing

Energy News Beat

Ford Motor Co. slashed the cost of its electric 2023 Mustang Mach-E on Tuesday to be more competitive with Tesla and get the award-winning SUV into the hands of budget-conscious buyers.

Prices are being reduced $3,100 to $8,100 depending on the model, effective immediately, according to a pricing chart the automaker sent to its dealer network.

In addition, Ford Credit is offering 0% financing for 72 months to qualified buyers, plus a $7,500 cash incentive on leased vehicles that is applied to immediately to lower the lease payment, Ford spokesman Marty Gunsberg said.

“We are adjusting pricing,” Gunsberg told the Detroit Free Press. “As we continue to adapt to the market to achieve the optimal mix of sales growth and customer value.”

Ford wants to make way for the 2024 Mach-E, too, he said.

Mustang Mach-E price breakdown

The new prices of the 2023 Mustang Mach-E, which seats five people, are:

Select rear-wheel drive (RWD) drops $3,100 to $39,895
Select all-wheel drive (AWD) drops $3,100 to $42,895
Premium RWD, standard range drops $4,100 to $42,895
Premium AWD, standard range drops $4,100 to $45,895
Premium RWD, extended range drops $8,100 to $45,895
Premium AWD, extended range drops $8,100 to $48,895
California Route 1 AWD, drops $8,100 to $48,895
GT drops $7,600 to $52,395
GT Performance Edition drops $7,600 to $57,395

The $1,800 delivery and destination fees are calculated separately. The battery range on these vehicles is EPA-estimated at 250 to 312 miles per charge, depending on the battery pack and other details, according to the Ford website.

The Mach-E does not qualify for the $7,500 tax credit, Gunsberg confirmed.

Of the versions available, the Mach-E Premium has been the top seller and is also the trim with the most availability now, Gunsberg told the Free Press.

Chasing Tesla

Tesla, which is the top electric vehicle seller in the U.S., posted on its corporate website that prices of the Model Y SUV are reduced through the end of February and will increase by $1,000 or more on March 1.

The Mach-E is second to Tesla in U.S. electric vehicle sales.

This is not the first price cut for the Mach-E or Tesla.

Ford CEO Jim Farley has been saying that consumers want electric vehicle prices to come down, and automakers must respond in a competitive market. Meanwhile, Ford is currently developing a smaller, more affordable electric vehicle that hasn’t been assigned a launch date yet.

Ford has sold 108,667 Mach-E SUVs in the U.S. since its launch in December 2020 through January 2024, Erich Merkle, Ford U.S sales analyst, told the Free Press. The Dearborn automaker sold 1,295 in January, Merkle said.

During the last three months of 2023, Mach-E saw its best sales quarter since it was introduced with nearly 12,000 vehicles, according to Cox Automotive.

A year ago, Marin Gjaja, chief operating officer of Ford Model eexplained in an interview with the Free Press the strategy behind increasing production capacity at the Ford plant in Mexico that builds the Mach-E. “The industry is transitioning to EVs. And so we have to compete as hard as we can.”
Source:  Detroit Free Press

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Russia to triple LNG exports by 2030 – deputy PM

Energy News Beat

The country now ranks fourth in the world in terms of liquefied natural gas sales, according to Aleksandr Novak

Russia plans to continue ramping up both output and exports of liquefied natural gas (LNG), Deputy Prime Minister Aleksandr Novak announced on Tuesday, as cited by RIA Novosti news agency.

During an address at the ‘Russia’ Forum in Moscow, Novak said that by 2030 LNG exports would be ramped up to 110 million tons per year, nearly triple the volume Russia supplied to the global market last year.

The deputy prime minister added that Russia already ranks as the globe’s fourth largest supplier of LNG to the global market with 8% of total exports. The planned increase in exports over the next six years would allow the country to raise its share of global LNG supply to 20%.

Novak noted, however, that the plans require a boost in production that can only be realized if all current LNG-producing sites reach their planned output capabilities.

“This is an ambitious task. It is necessary to develop LNG production clusters to achieve it,” he stated. According to Novak, production at the Baltic cluster is expected to rise to 15 million tons a year by 2030 from 2.2 million tons in 2023. The Murmansk cluster, where production is yet to begin, is slated to reach 20 million tons. The Yamal cluster will be ramped up to 60 million tons, from the current 20 million, while the Sakhalin cluster will reach 15 million tons from the current 11 million.

Russian LNG exports have been steadily growing throughout the past year in light of burgeoning demand in both Europe and Asia. The EU banned seaborne exports of Russian oil amid Ukraine-related sanctions, but Russian LNG has not been targeted by the restrictions. While pipeline gas imports to Europe decreased sharply over the past two years, member states purchased record amounts of Russian LNG in 2023.

RT’s business section

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Boris Johnson wanted $1 million for interview – Tucker Carlson

Energy News Beat

The former Fox host accused Britain’s ex-prime minister of attempting a “shakedown”

American journalist Tucker Carlson has said former UK Prime Minister Boris Johnson would only agree to an interview if he received a $1 million fee. He made the claim following his high-profile interview with Russian President Vladimir Putin.

Speaking to Blaze TV founder Glenn Beck for an interview that aired on Tuesday, Carlson contrasted his experience interviewing Putin with attempts to sit down with Johnson, who has slammed the former Fox host as a “tool of the Kremlin” after Carlson’s lengthy discussion with the Russian president earlier this month.

”So I’m over in Moscow, I’m waiting to do this interview, it gets out that we’re doing it, and I’m immediately denounced by this guy called Boris Johnson,” he said. “So I put in a request for an interview with [Johnson], because he’s constantly denouncing me.”

Hoping Johnson would “explain his position on Ukraine,” Carlson said he soon heard back from Johnson’s staff, who revealed the former prime minister would agree to the interview – but only on one condition.

”Finally an adviser gets back to me and said, ‘He will talk to you, but it’s going to cost you a million dollars.’ He wants a million in US dollars, gold or bitcoin – this just happened yesterday or two days ago!” he continued.

Carlson went on to note that he had just finished his interview with Putin, who “didn’t ask me for a million dollars.”

“So you’re telling me that Boris Johnson is a lot sleazier, a lot lower than Vladimir Putin? So this whole thing is a freaking shakedown,” Carlson added.

Johnson was highly critical of Carlson’s two-hour sit-down with Putin, penning a scathing op-ed for the Daily Mail soon after the interview aired.

”When Tucker Carlson went to the Kremlin, he had a function well known to history. He was to be the stooge of the tyrant, the dictaphone to the dictator and a traitor to journalism,” Johnson wrote, adding that Carlson had failed to press Putin on Russia’s military operation in Ukraine.

Carlson’s interview was similarly condemned by a range of Western leaders and commentators, who accused him of asking the Russian leader only softball questions, and for allowing Putin to give lengthy responses without interruption.

Asked why he hadn’t raised certain topics during the World Government Summit in Dubai earlier this month, Carlson said he wanted to do the interview because he was interested in Putin’s worldview, and did not wish to inject himself into the discussion. The journalist also explained that he wanted to talk to Putin because the US media were “lying” and because the American public was ill-informed about the conflict in Ukraine.

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Rotterdam LNG throughput up 3.7 percent in 2023

Energy News Beat

LNG throughput in the Dutch port of Rotterdam rose 3.7 percent in 2023 as Europe continued to boost LNG imports and demand for LNG as fuel increased.

The port, home to Gasunie’s and Vopak’s Gate LNG import terminal, said that total LNG throughput reached 11.92 million tonnes last year, compared to 11.49 million tonnes in 2022 when it rose 64 percent year-on-year.

In the first half of last year, total LNG throughput reached 5.94 million tonnes, up by 9.8 percent.

Incoming LNG volumes rose 2.3 percent in the January-December period to 11.6 million tonnes, while outgoing volumes surged 111 percent to 313,000 tonnes, according to the Rotterdam port’s report.

Total cargo throughput in the port of Rotterdam last year amounted to 438.8 million tonnes, 6.1 percent less than in 2022.

The port said that LNG throughput was higher as Europe continues to import large amounts of LNG to replace pipeline imports of Russian natural gas.

There was also more bunkering in seagoing LNG tankers, it said.

The port said last month that its LNG bunkering volumes reached a record level in 2023 as prices dropped from 2022 and demand continues to increase.

Europe’s largest bunkering port reported LNG volumes of 619,243 cubic meters in 2023, a rise of 53 percent compared to 406,599 cbm in 2022 when volumes dropped considerably due to high prices.

As previously reported by LNG Prime, the Gate LNG terminal handled a record number of vessels last year mainly due to a rise in demand for LNG as fuel.

Including unloading and loading operations, the LNG terminal handled 328 vessels last year.

Gate’s small-scale jetty, which launched operations in 2016, handled record 151 vessels, loading close to 900,000 cbm of LNG last year.

Source: Lngprime.com

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With limited options, Maine governor announces site for offshore wind port

Energy News Beat

 

This article was originally published by the Maine Morning Star.

The International Energy Agency has estimated that offshore wind could generate $1 trillion in worldwide investments in the next 15 years.

Gov. Janet Mills said, “the time has come to bring some of that investment to Maine.”

Mills announced at a press conference Tuesday afternoon that Sears Island in Searsport is the preferred site for a designated port to support the state’s budding offshore wind industry because of its economic and environmental opportunities. The turbines will be fabricated and assembled at the dedicated port.

Within Searsport, there were two potential locations: Sears Island and Mack Point. Both are in Penobscot Bay and have garnered conflicting reactions from the public. Since Sears Island is undeveloped, proponents see it as a blank canvas ready to be transformed into an offshore wind port. But opponents argued against clearing more natural land over the redevelopment of Mack Point.

Mills laid out half a dozen reasons why she believes the 941-acre Sears Island is the best choice financially and environmentally for the people of Maine, although she emphasized that she didn’t make the decision lightly.

A map of the proposed offshore wind port on Sears Island in Searsport, Maine. (AnnMarie Hilton/ Maine Morning Star)

Since the state already owns the land, it will minimize upfront costs and eliminate the potential for leasing, making Sears Island more cost-effective in the short- and long-run, Mills said. She didn’t provide an exact number, but Mills said the entire project could ultimately cost several hundreds of millions of dollars.

The island also has the required physical characteristics, namely a large, level surface with access to deep water.

Knowing that some people may be unhappy about the decision, Mills said she has hiked the island and circumnavigated it by boat so she understands the appreciation for the island. In 2009, the state put about 600 acres — two-thirds of the island — into a permanent easement. That portion will remain untouched by the port, which will be built on about 100 acres outside of the protected area.

Searsport and the surrounding region has faced economic challenges in the past decade after a paper mill closed and took more than 500 jobs with it.

“We have not recovered from that loss,” said James Gillway, town manager of Searsport. “Offshore wind will change that.”

Representatives from Maine State Chamber of Commerce, Maine Conservation Voters and Maine Audubon were also present at the press conference in support of the announcement. Sen. Chip Curry (D-Waldo) also spoke about the opportunities this will offer by creating a new industry to “strengthen families up and down the Midcoast” with good-paying jobs.

“Offshore wind will be essential to our transition away from expensive and dirty fossil fuels, and to realize this incredible opportunity, we need port infrastructure,” said Beth Ahearn, director of government affairs for Maine Conservation Voters, who was also part of the 19-member Offshore Wind Port Advisory Group.

Organized by the Maine Department of Transportation, the advisory group met six times between 2022 and 2023 to explore prospective sites and help inform the governor’s decision.

Maine relies on natural gas to support much of its energy needs, so diversifying power sources can help stabilize prices for ratepayers, said Dan Burgess, director of the Governor’s Energy Office.

“This is an investment in Maine-made, clean energy that we think will stabilize rates,” Burgess said of offshore wind. He added, “the more we can do homegrown, the better.”

In a statement, Sean Mahoney, vice president of the Conservation Law Foundation Maine, which was also part of the advisory group, said, “Offshore wind will grow our economy and help us meet our obligations to ditch polluting fossil fuels. It’s critical that this process is now moving forward and we’re one step closer to getting this clean energy on the grid.”

In November, a coalition of organized labor and environmental groups voiced support for building a new port for offshore wind, highlighting benefits such as job-creation and the use of innovation developed by Maine people. They also stressed the urgency of moving forward with the project for environmental reasons.

The state is still waiting for the federal Bureau of Ocean Energy Management to publish a final map showing where offshore wind can be developed in the Gulf of Maine.

In the meantime, Maine DOT will begin applying for state and federal permits. That process is expected to take about a year. Construction, however, will take multiple years. Mills estimated it could wrap up in 2029.

Even before the governor’s decision, Searsport stood out among the other options.

While the water is plenty deep, there isn’t enough space in Portland, so it wasn’t a viable option, explained Kathleen Meil, senior director of policy and partnerships for Maine Conservation Voters.

Eastport, another potential location, would require going through Tribal land and has a lot of rock, granite and other materials that would need to be blasted.

“So, that leaves us with Searsport,” Meil said in an interview with Maine Morning Star last week.

Source: Energynews.us

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Daily Energy Standup Episode #313 – Wind Farms Paid to Stay Offline and China’s Real Estate Woes: Affecting Oil Demand Dynamics

Energy News Beat

Daily Standup Top Stories

Two Wind Farms Received Over $100 Million To Switch Off

Regular readers will know that I have long been concerned over the extraordinary level of payments to wind farms to switch off. These so-called ‘constraint payments’ are deemed necessary when the wires in the transmission […]

The Kremlin has never been richer – thanks to a US strategic partner

CNN — Russia is entering its third year of war in Ukraine with an unprecedented amount of cash in government coffers, bolstered by a record $37 billion of crude oil sales to India last year, according to new analysis, which concludes that […]

Highlights of the Podcast

00:00 – Intro
01:16 – Two Wind Farms Received Over $100 Million To Switch Off
03:42 – The Kremlin has never been richer – thanks to a US strategic partner
06:44 – Markets Update
08:50 – Oil settles lower, demand worries offset geopolitical price support
13:48 – 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: [00:00:14] What’s going on, everybody? Welcome in to the Wednesday, February 21st edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up, two wind farms receive over $1 million to switch off. I’m not kidding you. That’s an opinion piece by Andrew Monfort over at the Climate Change Dispatch. We love them. Well, then quickly cover. The Kremlin has never been richer thanks to a U.S strategic partner. This feeds into our thread yesterday when we talked about India. And then I will quickly cover, what happened in the oil and gas markets today. Fairly quiet from a financial side. We did see natural gas futures pop a little bit. And then we had some earnings drop, specifically Matador and Chesapeake. I’ll talk a little bit interesting about why both those companies were actually down day over. Danny. That has more to do with, oil prices and where things are headed. But we will cover all that and a bag of chips. Guys, as always, I am Michael Tanner, rocking a solo show today. Stu has the night off. Well-deserved. So we are going to get a little bit more oil content than he used to, but we love that. [00:01:15][60.9]

Michael Tanner: [00:01:16] Let’s go ahead and dive right in. Though. Two wind farms received over 100 million to turn off, this is again, as I mentioned, this is an opinion piece from Andrew Monfort. We’ve we’ve we’ve segmented him on the show today. You know, and he says regular readers, will know that I’ve long been concerned over the extraordinary levels of payments that force wind farms to switch off. These are so-called constraint payments and are deemed necessary when the wires in the transmission grid have inadequate capacity to get a generators power to market. He goes on to talk about this idea that and not this idea. What happens is, is when there’s not enough grid capacity to hold the electricity that’s coming from the wind farms, it’s not just the wind farms are turned off, it’s that they are paid to get turned off, and a gas fired power station is paid to get turned on. That’s closer, so that the end user of the electricity is not, as he said, left short. And he has a chart here. I don’t know, Miss Produce. If you don’t mind pulling this chart up. Total constraint payments on wind farms have risen in 2023 to $382 million for a volume of about 4.3 terawatt hours, which is roughly four days of electrical demand thrown away entirely. I mean, it’s absolutely unbelievable. If you go talk about the the you know, he then breaks down the 2023 bill, we can pull up that next piece. These are wind farm constraint payments specifically to, the specific segments you’re seeing that the largest one, Moray East, gets $54 million, cannot be turned online that constrained that volume, ends up being 590GW, which is like 20% of its output, I mean, 20% of its output. It’s absolutely insane. This is the problem when you don’t have the grid ready to, to really take advantage of, even if renewables was working. And in this case it’s not working. But in this case it’s trying to supply power to the grid. And the unfortunate part is the grid can’t handle. So now not only do we have to just not have the wind for a moment, lose whatever benefits we might have, we’re also now paying them to shut down. It comes back to, we’re all for the cheapest amount of energy. And the problem is the way we’ve designed this whole renewable shift, we haven’t necessarily found the cheapest. So great article out there. [00:03:41][145.6]

Michael Tanner: [00:03:42] We’ll move on to the next one quickly. The Kremlin has never been richer thanks to a U.S. strategic partner. This goes back to a an article we talked about a few days ago, I think Monday on the podcast. Russia Now is in its third year, really at the war with Ukraine. This is a CNN article, and last year actually made a record number of crude oil sales sitting at about $37 billion of crude oil. But that’s specifically just to India. Okay. So $37 billion of crude oil sales specifically to India. This is according to a CNN analysis. So take it with a grain of salt and a lot of that crude and about more than 1 billion of that was refined by India and then exported to the United States as refined products move mostly to California, our favorite state, who you know there. Actually, it’s ironic, you go look at our stats. Most people from California love us. There are largest state. So we appreciate the listeners. The problem is you’re buying Russian crude and you don’t even know it. Bypassing the sanctions. It goes on to say that these flows of payments coming from India have increased via their purchases of Russia, grew by 30 times the pre-war amounts. And this is according to the center for Research on Energy and Clean Air, which was quote unquote, exclusively shared with CNN. They’re the they’re at the tip of the spear doing work. That’s a joke. You know, it really goes on to to kind of try to shame India and saying, Bad India, you shouldn’t be doing this. You shouldn’t be taking care of your people. I mean, this is where I think I differ a little bit with the street I’m of. For India doing what’s best for its people, as the United States should be doing what’s best for its people. Instead, we sort of dance this line of trying to walk the line of what’s good for everybody, even if it hurts us. But it also must make us, you know, it also must help us. I mean, you know, Prime Minister Modi has gotten straight down to the ax and said, no, I’m going to do what’s best for the Indian people. I know I understand that low cost access to low cost energy is the thing that have best brought in the entire world. Any first world country was brought to that point because of access to low cost energy, and that’s what Prime Minister Modi in India is trying to do. It’s why he’s buying a lot of Russian crude. So I don’t shame him for doing that. What I do shame, is Gavin Newsom for shaking its finger at Russia and then buying Russian crude via India. So India now’s the middle man. It’s making a spread on it. Gotta love it. So that’s all I’ve got for the new segment. Whenever Stu’s gone we keep it a little light. [00:06:04][142.0]

Michael Tanner: [00:06:05] There is a lot of oil and gas earnings I want to get to, so we’ll switch over to finance right now. But before we do that we got to go ahead and pay the bills here. Guys. As always the news and analysis or quote unquote analysis that you just heard is brought to us by the world’s greatest website, Energy News Beat.com The best place for all of your oil and gas and energy news, Stu and the team do a tremendous job making sure that website is up to speed. Everything you need to know to be the tip of the spear when it comes to the energy business. You can hit the description below for all timestamps links to the articles. You can hit us up. Dashboard.energynewsbeat.com Visit us again. Energy newsbeat.com. [00:06:41][36.7]

Michael Tanner: [00:06:44] You know overall markets a little choppy. Today we saw the S&P 500. stay fairly flat down about 6/10 of a percentage point Nasdaq didn’t do much better. It’s down 7/10 of a percentage point. We did see yields both on the ten year and that and the two year stay fairly flat 6.4 for the two year yield and six and for two for the ten year yield. We did see the dollar index stay fairly flat. Crude oil settles a little bit lower, mainly due to the fact that, you know, the the war in home, the war in, in, in Gaza has continued to kind of sway both ways from a geopolitical standpoint in terms of how much is it affecting oil prices, how much is is not. The interesting part that we did see today was the fact that, there’s a growing premium for crude month, crude oil futures for a second month delivery, which basically means, March. The current front month contract is getting about a $1.71 premium to why the second month contract is, which means beginning. We’re beginning to get in this really contango market. And that’s the widest it’s been about four months. What is what does that mean for the for the for to you guys. Well that means that, that the outlook for oil prices continues to get weaker and weaker. And I think the, the, the part of that has to do with what’s going on in China right now, you know, they did see yesterday their biggest ever reduction in their benchmark mortgage rate, which is basically the day the that this reference rate came out in 2019 is the largest ever and far more than analysts were expecting, as we’ve talked about ad nauseam on the show, that the Chinese real estate market is not doing well, and they’re going through kind of their own 2008 crisis, but this time with developers, not necessarily individual home buyers. And so, the amount of debt that stacked up is, has really kind of become to, to bite them a little bit. John kid Cliff over at Again Capital. We’ve quoted him a few times. The fact that the crude oil market has it responded more positively, shows you the depths of the oil demand problem in China, which is crazy because we’ve seen a, you know, the, the, the counter to why we didn’t see a huge drop in prices. [00:08:50][125.8]

Michael Tanner: [00:08:50] Today was again, the US vetoed a draft, by the United Nations Security Council resolution on Israel-hamas war, which was blocking, which was attempting to do an immediate humanitarian cease fire. And basically now it needs to go to the 15 member body. And it’s it’s it’s unlikely that this temporary cease, cease fire will happen. The U.S. was quoted or the UN was quoted as saying, this could lead to a slaughter and have to opine about the politics is all I know is if they’re if the war in the Middle East continues, that’s only going to be geopolitically unstable for oil, and it means it could go up. Now we’ve got the demand side that’s pulling down right now. So I think those are your tensions right now. Again, we settled it about, you know, we’re we’re sitting here about 552 here on the 20th. It’s about 7722. I think again, the big stuff that we’re going to see today, out of the oil and gas markets is earnings. We saw two companies drop earnings, Matador and Chesapeake. We’ll start with Matador. You know overall the market did not like their day. they were down about a basically a full percentage point, mainly off the back of a few things. You know, record oil production, lower revenues. [00:09:56][65.8]

Michael Tanner: [00:09:56] That’s never going to lead to a great combo. So, you know, kind of the top line head number is that they achieved record quarterly average production of about 154,000 boe a day, or about 88,700 barrels of oil per day. You know, they had good net cash provided by operating, but. Give you guys an idea of oil and gas revenues. Let me scroll down. He’s one of those companies that love to do a massive drop. Oil and gas revenues year over year, which is now we’re kind of seeing the full year guidance actually dropped, by about $400 million. Which is, mainly due to a little bit of a little bit of oil prices, but have a lot to do with, the fact and, and which is, which is funny because we’ve we’ve now gotten to the point where prices haven’t really gone down much. You’re now doing record record oil production, which means you’re turning on wells at a record pace. They turned on 39 wells in quarter four. Okay. And revenues are going down. I mean overall market’s not going to like that. And I got gonna like 3 billion in revenue versus 2.8 billion in revenue a drop. And oh but we’ve increased production. Well great. You’re losing money still and not losing money. But your your revenue is quote unquote shrinking. Do I think they’re in Seminole decline. No stock still at 5874. They’ve got an absolutely you know they’ve got a great asset. You know they they they they do a really good job in my opinion, of kind of being very honest with where with where they stand out. I, I love watching their presentation specifically. But you know, the market’s not necessarily going to enjoy gross production. Highest it’s ever been. Oh but revenues I mean that’s why you’re, you’re you’re seeing a 1% drop in the other company. We saw Chesapeake I mean I mean their stock was down 1.3 percentage points, mainly off the back of I think the future outlook of what’s going on. I don’t think their stock price right now or or the today’s movement is really indicative of, of their earnings release. They did, come out and say, you know, basically their their total net income was about 2.4 billion. And if you adjust that for net income, you if you do adjust, you know, adjusted net income gets get you down to 702. Again, that’s non-GAAP EBITDA tax, which is again interest before earnings and taxes, depreciation, all the other junk, 2.5 billion free cash flow about 551 million. They did about, you know, 840 million of share repurchases. You know, they’re really what they did on this call was great. Oh, let’s talk. We had a good, you know, good ish. What is a good ish portfolio. You’re doing about 3.4 BCF a day. And that’s net about 98% of that. You know, natural gas a little bit of NGLs. They did close the remaining divestiture packs for about 700 million. I feel sorry for feel sorry for that company who bought that. You know, I, I think the biggest, the the biggest reason why this the street was a little concerned. I mean, it mainly has to do with the fact that they’re, they’re, they’re slowing down their rigs. So right now they’re operating nine rigs, five in the Haynesville, four in the Marcellus and four frack crews both, you know, two in the angel, two in the Marcellus. They said that they’re going to go ahead and defer completing any new wells. And so you’re what that shakes out to is they’re going to drill 95 to 115 wells, but only going to turn 30 to 40 of those on so higher than expected capital expenditure. You know, and really what they’re trying to do is align with the market. I mean it’s as we sit here dollar 70 natural gas I mean that’s it’s tough to to to make your money on. So I think from a from a from a strategy standpoint unfortunately it makes sense. I don’t think the street is going to like it. But I mean equity was down 2.8 percentage point today. So I think with them being up front about where the market is and where they are relative to the market, I think that, you know, kind of continues to help them play out. But not a good day for oil guys. I mean, again, a lot of these oil and gas comes. You’re going to trade relative to where, oil prices go. So I, I tend to stop and, and really not talk about individual stocks only on earnings day though, because it kind of gives you that insight into where that street might be going. [00:13:48][231.6]

Michael Tanner: [00:13:48] But that’s really all I’ve got. Appreciate everybody holding out for us. You know, a lot of good stuff. Still be back in the chair tomorrow for a final episode of the week, and we will make sure, to cover everything that is, going on, and we will, not dot the final show till we are. Yeah. Wednesday and then Thursday. We’ll get that cranked out, so appreciate it, guys. We’re on Michael Tanner. We’ll see you tomorrow. [00:13:48][0.0][808.3]

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CHART: China’s Belt and Road mining investment hits record

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A new report from Griffith Asia Institute, a unit of Australia’s Griffith University, shows 10 years after the launch of China’s Belt & Road Initiative (BRI) cumulative engagement tops $1 trillion with about $634 billion in construction contracts and $419 billion in non-financial investments.

The authors point out that 2023 was the first time that more than 50% of BRI engagement was through investments where Chinese investors take equity stakes as opposed to construction contracts, which are typically financed through loans provided by Chinese financial institutions or contractors, often accompanied by guarantees from the host country.

Last year Africa overtook the Middle East as the no. 1 target of BRI projects after a 114% jump in investments and a 47% jump in construction projects on the continent. Investments in Latin America and the Caribbean also doubled last year.

Source: Griffith Asia Institute

China’s BRI-related investment in metals and mining reached $19.4 billion in 2023 according to the study, a 158% jump compared to 2022 and the highest on record.

Minerals and metals investment focused on the green energy transition with copper making up the lion’s share of new project announcements last year, followed by sizable lithium, nickel and uranium spending under the BRI.

Apart from a giant new copper processing facility in Saudi Arabia, mining investments were focused in Indonesia and various countries in Africa and South America.

Examples include vertical integration investments by the world’s largest battery manufacturer CATL, which bought shares for a nickel mining concession in Indonesia from PT Aneka Tambang (Antam).

Lithium projects in Mali attracted investment from Chinese firms Jiangxi, Ganfeng and Hainan Mining (through the acquisition of Kodal Minerals) while Zhejiang Huayou Cobalt commissioned a lithium processing plant in Zimbabwe.

Downstream investment in battery and electric vehicle manufacturing also soared, reaching nearly $10 billion, according to the report. The largest investors under the BRI last year were CATL, accounting for more than 15% of overall spending, followed by Zijin Mining at 11%.

Zhejiang Huayou Cobalt contributed nearly 9% of the total while CMOC (formerly China Molybdenum) and Minmetals each had a 5%-plus share of the $92.4 billion total investments in 2023.

For 2024, the Griffith Asia Institute sees further growth of Chinese BRI engagement with a strong focus on country partnerships in renewable energy, resource-backed mining and related technologies including EV batteries.

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