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Xcel Energy is dedicating a bigger share of its Minnesota solar incentives to lower-income customers in response to a new state law.

Since launching in 2014, Solar Rewards has provided financial incentives to help thousands of Minnesota homeowners pay for small solar installations. Over the past five years, state lawmakers, regulators, and the utility have gradually directed a larger share of Solar Rewards to income-qualified customers.

The new state law increases that amount to 50% of the program’s budget, up from a 30% expectation in the previous year. The tradeoff is that the program will fund fewer projects overall, as low-income customers get a larger incentive, much of it upfront, in order to help cover installation costs. 

While some solar companies have expressed concern that the money won’t go as far, others are happy about the increased commitment to low-income customers.

“Now that those incentives have been increased, organizations like ourselves can go ahead and sign up a lot more of these types of income-qualified participants,” said Pouya Najmaie, policy and regulatory director for Cooperative Energy Futures, a Twin Cities solar developer that focuses on lower-income customers.  

Xcel Energy and solar developers have generally exceeded Solar Rewards’ low-income targets by recruiting commercial and multi tenant housing clients. In a statement to the Energy News Network, the utility said allotting half the budget for income-qualified participants “is a large jump.” 

Xcel conceded that reaching homeowners and renters has been difficult but said it will be less so with the new, higher incentives. “The number of income-qualified residential customers grows each year, and the increase will ensure there are plenty of incentive dollars available for communities that need better access to renewable energy and solar,” the company said.

Solar Rewards is funded by the state’s Renewable Development Account, a fund that Xcel pays into in exchange for storing nuclear waste at its two nuclear power plants. The program’s budget fluctuates from $5 million to $10 million annually. It’s helped pay for more than 6,700 projects, mainly for middle- and higher-income residential customers. 

Incentives are limited to 40 kilowatt and smaller projects. Typically, solar developers help enroll clients into the Solar Rewards program and use the subsidies as a selling point. Customers who participate, including income-qualified, receive a ten-year bonus payment for unused electricity they generate and send back onto the grid.

In 2019, Solar Rewards began allocating a minimum of 10% and a maximum of 20% of the annual budget to income-qualified participants, a category that includes single-family homeowners, multifamily buildings, nonprofits, schools, and community solar gardens. In 2022, the program increased the income-qualified portion to 30% and expanded access to renters. 

For the fourth quarter of this year and all of next year, the Legislature required 30% of the budget to go to residential customers, including renters, while 20% goes to other income-qualifying participants, for a total of half the budget. 

As of September, Xcel had spent 59% of the Solar Rewards income-qualified budget, though a breakdown between residential and other customers was not available. A Commerce Department analysis saw that as a good sign,  suggesting “participation is progressing well considering significant mid-year funding changes.”

State Rep. Patty Acomb last session chaired the House Climate and Energy Finance and Policy Committee, where the legislation originated. She said the Legislature wanted to make sure the program is benefitting those customers and not just nonprofits, schools, and other institutional customers.

“You don’t see as many people in the low- and moderate-income categories that have participated, so we’re doing what we can to incentivize and to extend that opportunity,” Acomb said.  

Legislators also believed that changing Solar Rewards allows income-qualified applicants to take advantage of the 30% tax credit and other federal incentives in the Inflation Reduction Act, she said.

The increased income-qualified budget should assist single-family homeowners, multifamily owners, and tenants interested in reducing utility bills.

“We certainly heard from the development community that there was a need there,” Acomb said. “We’re hearing from developers that we need more money in Solar Rewards and certainly not less.”

Minnesota Solar Energy Industries Association executive director Logan O’Grady said Solar Rewards has been around long enough to have reached many early adopters and moderate-income customers. Incentives have changed over the years, sometimes declining to spread the money to a wider group. The legislation “will refocus” the industry on the lower-income market.

“I think (incentives) are going to be really important for helping push those that are on the fence about solar right now to over the fence, with more people deciding ‘I’m going to invest in this,’” O’Grady said. “The challenge now is reaching those underserved communities.” 

Bobby King, executive director of Solar United Neighbors’ Minnesota office, agrees. His nonprofit saves money by bulk buying, or hiring contractors to buy panels and install at the homes of many customers living in a city or a neighborhood. Solar Rewards previously has not offered enough incentive for people living paycheck to paycheck to invest in solar, he said, causing some homeowners to drop out after seeing the price tag.

The new incentive structure will allow Solar United Neighbors to recruit more income-qualified households to its group buying program, King said. The incentive now provides income-qualified customers enough money to pay for as much as two-thirds of the cost of the panels and installations, which is a better deal than the program previously offered. 

“I’m pleasantly surprised at how it’s moving pretty robustly in the right direction,” King said.

Qualifying buyers under the old Solar Rewards rules also limited applicants to those receiving Energy Assistance. Xcel agreed to expand eligibility requirements to include people on medical assistance or involved in other government programs, King said. The broader the income-qualified buyer pool, the more likely the Solar Rewards budget will meet the 50% goal.

Michael Allen, chief executive officer of All Energy Solar, likes Solar Rewards but advocates for smaller incentives to spread the money more widely. He questions giving substantially more money to income-qualified customers because it cuts into the budget for subsidizing other homeowners.

Smaller incentive packages allow developers to sign up more customers and will result in more solar being installed, he said. Giving significant subsidies to fewer people does the opposite, Allen said.

Reaching income-qualified customers remains challenging. Many of them initially have little knowledge or interest in solar, and identifying which customers are income-qualified can be difficult. Allen suggested that the fastest way to get income-qualified customers the benefits of solar would be to help them enroll in community solar gardens.

Another approach would be to allow for more third-party ownership of solar installations in disadvantaged neighborhoods, a technique that Cooperative Energy Futures and a handful of other developers have used.  

Allen, however, said the state’s public utility regulations only allow third-party solar owners to fund around two dozen projects without coming under Public Utilities Commission regulation. Permitting third-party owners to develop more projects could deliver more income-qualified solar projects in Minnesota, he said.

“I’m not discouraging low- to moderate-income solar,” Allen said. “I’m just saying that we haven’t figured out the recipe yet.”

 

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Berkshire Cash Pile Hits All-Time High $157 Billion, As Buffett Sells A Record $38BN In Stock In Past Year

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

Michael Tanner: [00:00:14] What is going on, everybody? Welcome to another edition of the Daily Energy News Beat Standup here on this gorgeous Monday, November 6, 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, the purveyor of 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][23.6]

Stuart Turley: [00:00:39] Oh, I think it’s a beautiful day in the neighborhood. It’s a crazy day out there, dude. [00:00:43][3.9]

Michael Tanner: [00:00:43] It’s a crazy day. It’s been a long weekend. We’re excited to be back with you guys, though. But nonetheless, we come to read you the news. First up on our show today, we’re going to start with Warren Buffett’s Berkshire cash pile hits all time high record of 157. Ba ba ba ba ba billion. As Buffett sells a record 38 billion of stock in the last year. Holy smokes. Got it. Interesting tweet that we also cover. Something could be up with Berkshire, but we will leave the speculation to you. Next up, our favorite random guy on substack David blackmon. He had a nice article in the Daily CALLER titled Do Big Wind Project Cancellation Signal peak subsidy has been reached. IEA, our favorite, which is the International Energy Administration, even admit the issue. Great article that was actually published in the Daily CALLER. So we will we will cover that from David Blackmon. Next up, 12 countries request permission to install small nuclear reactors in the EU. Oh, no. What are the second order magnitude effects? Interesting. Whoever wrote that title must be listening to the show because we love talking about second order effects. Next up, EU chief sheds light on new sanctions against Russia. Yeah, like those will work, so we’ll see what they’ll attempt to do with only make Russia more money. And then finally we’ll come back home. House Panel Advances Draft of Pro-nuclear Bills. This is Stu’s wet dream right now. We’ve got, you know, modular reactors going on right now in Europe. House is now advancing pro-nuclear. So Stu will keep us abreast on everything that’s going on with the nuclear business. He’ll then toss it over to me. I’ll quickly cover what happened in the in the finance space, mainly kind of a recap of what happened last week. A lot of date, a lot of news coming out, specifically with the Fed’s decision not to raise rate. What kind of break that down, what it means specifically for the oil and gas business. We saw prices. Now, you know, as we as we’re awaiting the market open here in about an hour as we record this on Sunday, prices sit at 80, 80, 89 after closing at 8051, which was down about two and a half percentage points. So obviously some of that data coming in on Friday, which we saw did not play well. We’ll look at rig counts. Not a great week for rig count. And then there’s a couple of earnings that we might touch on and then we’ll let you guys get out of here and start your week. Hopefully, you don’t have too many meetings on a monday, but if not, we will keep you we will keep it brief and we will keep you up to speed with everything. But guys, before we dive into all of that, remember all of the news and analysis you are about to hear are brought to you by the world’s greatest website www.energynewsbeat.com The best place for all of your energy news. Stu and a team do a tremendous job of keeping this website up to speed with everything you need to know to be at the tip of the spear when it comes to the oil and gas and the energy business. You can hit the description below and see all the articles that we are about to reference in the show. You can see the timestamps if you just want to jump ahead and see what rig counts were. And here’s Stu or here’s Stu’s take on the pro-nuclear bills. You can do that via the show notes. Again, the team does a great job of keeping that up to speed. You can follow us via Apple Podcasts, Spotify and YouTube at Energy News Beat. That’s really probably the best way to support the show. Go subscribe to us on YouTube there. We really appreciate all the support. You can email us [email protected]. You can hit Stu and I up on LinkedIn again, all of that via the description below. Finally, we’ve got a little data news product [email protected]. Go ahead and check that out. Give us some feedback on that via [email protected]. We’re gonna try to push that forward here. Q1 of 2024. I mean, we’re already looking forward to the new year, so I’m already getting people to email me, say I will worry about that next year or my next year. Folks, it’s just now November, so we’re going to stay locked in for you till the end of the year. I’m out of breath, tho Stu, where do you want to begin. [00:04:19][215.7]

Stuart Turley: [00:04:20] And start with our buddies over there at Berkshire. Our cash pile hits an all time high, 157 billion as Buffett sells a record 38 billion in stock last year. Did I really want your opinions on some of these points in here? Because people are looking at going to cash big time. But you snuck up with a beautiful piece of tidbit in here on on oxy. I love oxy. I love the fact that they’re investments. But Geico, they’re crown jewel of Berkshire’s insurance empire, had been his favorite child. And it has been it’s been clobbered, Michael, by a progressive And so they’re now starting to build it back with 1.1 billion the railroad now the railroad was also tied to the cancellation. AtIon of the pipeline. You know, the one out of Canada because he was going to make money by hauling all the oil sands. So there’s some there. The man knows what he’s talking about. But let me give you a quote here. The if the facts of significant increase in home mortgage interest rates in the U.S. over the past year has slowed demand for home building businesses and our other building product businesses, Burke Shire said in a report. We continue to anticipate certain businesses will experience weakening demand and declines in revenues. What are your overall thoughts of them going to cash? [00:05:55][95.3]

Michael Tanner: [00:05:56] Well, I mean, how could you not be in cash right now? I mean, they’re not really in cash. You have to remember. What’s this split, Stu? It’s 300 or it’s 3.8 billion of actual cash and 126.4 billion in T-bills, which is basically money market accounts. So you’re yielding five, 6% right now. You’d be dumb not to if you don’t know what you want to put your money into. You’d be dumb not to just go open a money market account right now, which is basically what Berkshire’s doing when they’re investing in T-bills. They’re saying we don’t know where to put it, but the yields are so incredible because interest rates are so high, we might as well just I mean, well, what’s 5% of 126 billions do? That’s not bad, especially when you know, and he’s it’s not like he’s got it in a Vanguard account. But Vanguard will, you know, or State Street, they’ll drop your monthly distributions based on that. So I don’t think it’s necessarily a bad and I think it’s a wise decision when you don’t know what to put your money to. And I think this has been a theme now for a few years now of this growing, growing cash pile. And I think people have over the years, they they’ve tried to say, oh, well, this is why he’s he’s building this cash pile. One’s got their theories. You know, when he originally bought Oxy, going back and tying this into energy, people thought it was he was going to go, you know, he was going to go all in on energy. Well, he really hasn’t yet. No, he he provided a line of credit probably because he smelled a good way to make money, smelled a way to get some preferred stock, because remember, this was this was a huge preferred stock deals, about 10 billion of class double stock, which is he was getting about 800 million a quarter on or I don’t know, it was a quarter a year. It was something goes 800 a year. There was 200 million a quarter million total. And he ended up converting some of that into stock. And considering when that acquisition was made, which was right prior or, you know, when that acquisition was made, that stock value was much lower really than it’s risen to right now. So we probably got to or at least feels like he had to go, but that was it. You know, to bring back to my original point, Stu, he that acquisition or that funding of Oxy, that wasn’t his you know, wasn’t the first step of 97 moves to get an energy he’s really held back in this cash pile has continued to grow. And so I asked the question, what is he really saving up all this money for? You know, I have the producer bring this up. There’s a really interesting tidbit. We love Twitter. Aubrey Triple underscore K noted. Well, this picture up. Ooh, that’s interesting for our podcast listeners here. What are we seeing? We’re seeing a flight tracker here title the or the headline goes Smells like an Oxy acquisition. We got to we’ve got a route that goes from Houston to Omaha back to Houston. Now the plane has then departed. Houston is in Odessa, right outside of Midland. Hmm. I wonder why. And it’s on its way back to Odessa. So I love the title. Smells like an Oxy acquisition. What do you think’s going on here? Do you think this is? You think it’s just routine? What do you think? Oh, what is this smell like? Something to you, Stew? [00:08:41][165.0]

Stuart Turley: [00:08:41] Well, it does. And there’s a lot of cash going in, as you know. And when now, how much of it’s going to go back into oxy? He’s building up his little war chest. I think that he’s actually gone into Oxy because he is one of the early adopters and investing into wind farms. They have exited a lot of that because of the tax subsidies and everything else. Well, carbon capture that Oxy is doing is one of their last areas that you’re going to still see money being poured into. So the man Sharpe, I, I really think he’s he’s doing something I think it’s an acquisition. But when you and I both know there’s a lot more acquisitions and M&A activity going on in them in the oil market. [00:09:26][44.1]

Michael Tanner: [00:09:26] Yeah. The interesting I mean, it definitely could be a small acquisition to I do I think it’s a it’s it’s a groundbreaking acquisition. I don’t know. We might have heard something that, you know, this this this screenshot was taken on November 2nd. So it’s been a few days now. I think the answer to what Warren Buffett and then we’ll move on here. What he’s doing is is unfortunately not his sex. I mean, my theory is it’s is not as sexy. I think he just sees a recession coming in the next 5 to 10 years or, you know, maybe it’s now. But I think he sees an opportunity to basically obtain because you you you just covered it his his Geico you know the crown jewel of his insurance empire Geico you talk about all these units apple you know he’s he’s big into plight for flying J you know See’s candy he takes an opportunity to acquire large shares of established companies. During recessions And what’s the best thing to have during a recession can, I guess, is they’re making so much money on T-bills right now, there’s no point to invest it until you see an opportunity to really buy quality as a discount. Not sexy, but probably the smart move. [00:10:27][61.0]

Stuart Turley: [00:10:28] And, you know, I always follow what he does. So that’s. [00:10:31][3.3]

Michael Tanner: [00:10:32] Cool. All right. What’s next? Your favorites, Guy on substance. [00:10:34][2.3]

Stuart Turley: [00:10:35] Favorite guy. Let’s go to David Blackmon. Do when project cancellations signal peak subsidy has been reached. Well, I even admit the issue, Michael. We just we got a lot of the IEA over there saying that oil is still dead. I’ve reached out to them to try to jump on the leadership, to jump on the podcast and their advisor. So we’ll keep you posted. But they agreed. [00:11:01][26.2]

Michael Tanner: [00:11:01] But we got the time team switch. I mean, they’re so bad they couldn’t even get the time change, right? So we’ll we’ll, we’ll try. [00:11:06][5.0]

Stuart Turley: [00:11:07] Yeah, we’ll work on it. They. Never mind. Okay. When we sit back and take a look, we’re dead. This is all predicated on Orsted down here. In one of his paragraphs down here, Orsted is not the only wind developer taking write downs. Reuters reports that two big oil companies who have invested in Biden’s offshore, the UK giant BP and Norway’s Equinor took 540 and 300 million. So even oil companies can’t do it right. But what oil companies had was they had income from the oil and gas that Orsted did not have inserted about, ready to just totally, you know, get hit in the back of the head. They can’t even keep going. Now there is article after article in in our trends on energy newsbeat dot com. We are seeing lots of trends of people canceling everything. I mean it’s just they can’t support oil I mean wind offshore wind especially. [00:12:12][64.8]

Michael Tanner: [00:12:13] Yeah. So offshore wind is has the very has some of the same economics as what I would say large scale. You know, I would say shale development, exploratory shale development. And the problem is there’s not a legitimate market to somewhat to sometimes sell these, you know, sell your distribution into the market. So it’s pretty funny. It’s the same stuff that happened in 2012 and through 2014 with all these crazy shale companies taking up billions of dollars, making no money and investing billions of dollars into drilling new wells that, oops, maybe don’t pay the bills. So you’re right, without oil and gas equinor and BP, they’d be sunk too. Luckily, they do have a little bit of oil and gas in their business. [00:12:54][41.0]

Stuart Turley: [00:12:54] And the percentage, Michael, that are in the story, go read the story as well later on. But they had the present without a willing gas, they’d be dead meat. So let’s go to the next one. This has been bring up about two or three more. 12 countries request permission to install small nuclear reactors in the EU. What are the second order of magnitude effects? There’s another article that we’re going to talk about that helps describe some of that there. Okay, Michael, the EU, this is a bigger part of the second order is, I think the EU’s crumbling and the leadership is absolutely failing. Watch this list as we go through it. In the future, they’re going to be pulling out of the EU, Bulgaria, Croatia, the Czech Republic, Finland, France, Hungary, the Netherlands, Poland, Romania, Slovakia, Slovenia and Sweden. All of them are in the energy crisis area and they are wanting small modular nuclear reactors. And the reason for this is, is they can’t get it in. France has surpassed Sweden to become the largest exporter of electricity in Europe. Net export electricity for France is 17.6 terawatts. That’s a lot. And their nuclear fleet is only running at 50% because they can’t do any better. [00:14:21][86.5]

Michael Tanner: [00:14:23] Sounds like the politicians that we’ve got here made these rules. [00:14:26][2.8]

Stuart Turley: [00:14:27] But the Swedes have declared they’re going to triple their nuclear capacity over the next few decades. The UK model for this. [00:14:36][8.9]

Michael Tanner: [00:14:36] Will run into the same capital and regulatory issues that we’ve had here in the United States, because that’s really what’s, in my opinion, what holds back nuclear from taking over is the fact that at least in the U.S., we have this insane regulatory system. Is that going to be the same in the EU that’s going to hold this project back? [00:14:52][15.5]

Stuart Turley: [00:14:53] No, and I’ll tell you things, because if you want to get elected in the EU and I was talking to Irina and a few other folks over there, and that is if you want to get elected, you better get them. Power in Germany is not getting them power. They’re about to have some other folks in Bulgaria, and I’ve been getting ready to tee up some more. Our podcast with folks in Germany. People are getting grumpy and they’re tired of the bills. [00:15:18][25.6]

Michael Tanner: [00:15:19] So was this is this your official Turkey 2024 EU Chancellor bid? Is that what I hear? [00:15:26][6.8]

Stuart Turley: [00:15:26] I wouldn’t want to go down on that rat shit. All the rats are going to be bailing out. The UK was smart to do a Brexit. You’re going to see how do you say a Bulgaria Brexit in a year and a half current global exit? Boy, I you know, I can’t say the countries anyway without throwing an exit on the back of them. [00:15:46][19.8]

Michael Tanner: [00:15:46] Yeah. No. All right, let’s stick in the EU here. This is hilarious. [00:15:49][3.2]

Stuart Turley: [00:15:50] Oh, it is. All right. Sanctions don’t work as intended. And you sit back and kind of go along. There are the package. Mandelson, the the head of the EU. The new batch of restrictions will include additional import and export bans to tighten the caps on Russian oil. That has failed and has failed miserably. Here’s a quote in here from her. And she says, Far too long, many in Europe thought we could trade with Russia and integrate it into Europe’s security order. But that has not worked and it will not work as long as Russia’s actions are driven by delusional dreams of empire, she stated, vowing that Brussels will continue to apply maximum pressure against Russia until the end of the aggression and until Ukraine has reestablished end just and lasting peace. Okay. Hungary said last month it will veto any measures against the Russian nuclear crisis. Michael. Remember on our blog, as we talked about it, the U.S. buys 20% of our uranium from Russia. They all buy all of their stuff. Hungary and several others have nuclear projects in the air right now with Russia. There is absolutely no way if they do that, they’re going to make Russia merry. And. [00:17:30][100.4]

Michael Tanner: [00:17:34] Well, here what’s funny is so the EU is just sanctioning themselves. That’s the funny part because China and India will continue to purchase, as you’ve mentioned. So they’re just sanctioning themselves and forcing and driving up their own cost of energy. It’s hilarious. You know, Brussels will continue to screw the EU people. That’s really what that code should say. [00:17:52][18.3]

Stuart Turley: [00:17:53] Oh, yeah. But let me give you this quote from the Hungarian foreign minister, Peter. I don’t even want to pronounce his name, but it’s the sanctions policy simply does not work. Sanctions may harm Russia, but they definitely cause greater harm to the European economy and to European countries. And sanctions will cause more harm to those who impose them, to those in whom they are directed. Then what’s the point of continuing with him? I got to hand it to him. He’s he’s dead on. Right. And politicians now realize they won’t get reelected if they don’t get their people some power here real quick. [00:18:32][39.1]

Michael Tanner: [00:18:33] So it’s it’s pretty insane. [00:18:34][1.5]

Stuart Turley: [00:18:35] All right. The House panel in the U.S. and in answering your question, I think you’re going to have to see some regulatory stuff. Lighten up. It’s been teed up. We’ve talked about it. But the House panel ever advances draft or draft, pro-nuclear? I don’t have to talk to the knucklehead that put that out there. Pro nuclear bills. Jeff Duncan, Representative Jeff Duncan. I’ve reached out to him to see if I can get him on the panel to talk about this on the podcast. But there are some really cool ones that he’s put out here. Let’s get you real big quick quote in here. Our shared goal in this committee is to advance bipartisan durable policy that will expand nuclear energy and its benefits to the nation. He’s the chair of the agency’s Energy Climate and Grid Security Subcommittee. That’s pretty darn cool. All right. Let’s go through some of these. The Advanced Reactor three Reduction Act fee reduction, so that the they can reduce the hourly rate for the address collected by the NRC and applicants for advanced reactor licenses. Then you have the targeted awards to cover fees for the NRC national nuclear reactor. And then we have the preparation site for the brownfield. There’s some good stuff in here. Modernization of the Nuclear Reactor Environmental Reviews Act to submit a report and conduct rulemaking to facilitate efficiency. There’s some good stuff in here. [00:20:12][97.3]

Michael Tanner: [00:20:13] Yeah. The government inefficiency, though, that’s two words that you just got to put the word not in front of them. [00:20:18][5.3]

Stuart Turley: [00:20:18] It’s the first stuff I’ve seen that they’ve even tried. Okay. I am so thrilled to talk about legislative processes that don’t involve Trump or Biden falling asleep or falling off of Air Force One. I was pretty. [00:20:34][15.6]

Michael Tanner: [00:20:36] Speaking of falling down some stairs. [00:20:38][2.2]

Stuart Turley: [00:20:38] Newsom. [00:20:38][0.0]

Michael Tanner: [00:20:39] Our favorite governor, is trying to imitate Biden. He fell down earlier last week. He fell down. [00:20:44][5.2]

Stuart Turley: [00:20:45] Oh, he wasn’t imitating. It was in solidarity. That was his biting. So move. Who said that his bag was not lumpy enough? So he just did the nose dive off of that. So I got a ten. [00:20:59][14.6]

Michael Tanner: [00:21:00] So is there anything in here that pushes the regulatory process forward? Is there any one of these bills? [00:21:08][7.7]

Stuart Turley: [00:21:08] Because I’m going to have to go get copies of I will get copies of them and find out the key. [00:21:14][5.3]

Michael Tanner: [00:21:14] We’ve got 25 different things they announced. The first thing should have been. We’re just going to cut the red tape on Permian, because that’s really the issue, in my opinion, with all this stuff. Not that the technology doesn’t need to do advance. Obviously, we need the technology, but we have to understand that when, you know, if we can get licenses quicker and that specifically you talk about that license efficiency act, that’s hopefully going to solve it. The problem is there’s a lot of other councils that have to go round it. So if hopefully there’s enough meat on that Nuclear Licensing efficiency act, which, you know, they were, you know, not our guy of the week, hear what the iron guy in the week should have put that one upfront. It’s about seven down in this list of 18 so we need to. That should have been the first thing we talked about. But if there’s no meat on that bone, then I give up because that’s really critical. And I think in in in my opinion, where all of this legislation needs to start is literally getting the legislator out of the way. [00:22:10][56.0]

Stuart Turley: [00:22:11] Right. I’ll tell you, you know, when you sit back and take a look, that’s what all of this is the thread, the underlying hidden thread between all these articles. People are tired, people are tired. And if you’re an elected fish official, unless you’re cheating, people are getting grumpy and you’re going to get voted out of office because of high cost of energy regulatory it being redone as part of the high. [00:22:36][24.9]

Michael Tanner: [00:22:36] Cost of you in here. You’ve got to modernize the nuclear reactor. Environmental reviews, which speeds up the NEPA process, which, you know, if you come from the mining business or you come from large infrastructure, you know that NEPA, the National Environmental Policy Act, which is one of the larger pieces of environmental legislation out there, for good reason. It does. It does some good stuff. The problem is, especially in the mining business, a NEPA review could be a thousand page document that you have to submit and could take five years. So I’m glad that’s in there. Again, they’re pitching this all wrong. They need to throw the legislation and the regulatory stuff higher, if only because that’s where the all of the issues come. Yes. You know, we need to have this global nuclear energy assessment and cooperation. Nobody cares about that. Cut the red tape. [00:23:18][42.1]

Stuart Turley: [00:23:19] Let me ask this and I’m just asking. Okay. The Inflation Reduction Act absolutely did not do that. In fact, as you’ve heard me say, the Dan Bongino, it’s the Porkulus bill. Do you think that they’re learning that you quick work and you call it something else strawman in here and then that way they might get it passed? It’s I don’t even know. [00:23:44][25.2]

Michael Tanner: [00:23:44] I don’t know. I mean, how much of this will actually get passed? I don’t know. It’ll be interesting. Hopefully we can create some bipartisan bipartisan consensus around this because we really need it. [00:23:54][9.6]

Stuart Turley: [00:23:54] We do. And we all need to get rid of energy poverty in the US. [00:23:58][3.7]

Michael Tanner: [00:23:59] Absolutely. That’s what we’ve been on. [00:24:00][1.2]

Stuart Turley: [00:24:02] Speaking of that, and I want to give a shout out to Joanna Friedel being 4109. She commented on Africa as a response to the West self-serving energy policies with the Secretary General of the African Petroleum Producers Organization. She says, Great video. I love that they want to have their citizens be in control and learn the skills need to take them out of poverty. Education. It’s the only way. Sorry that there’s been so much corruption in a continent that has so much in natural resources and only the few benefit. Love the comment. Thank you for. That’s just one of the great comments and things that we do get. Michael just want to give her a shout out. [00:24:45][43.6]

Michael Tanner: [00:24:46] Yeah, absolutely. Absolutely. We appreciate everybody who interacts with us. Again, you can email the show [email protected], comment on any of our YouTube stuff or hit Stu and I up directly, but let’s go ahead and move over to finance due lot happened you know, from an oil and gas side you know we actually had I mean from a finance side specifically, we saw overall markets up. S&P was up about a percentage point, NASDAQ up about 1.2 percentage points, mainly on the back of couple of data points. One, we saw us job growth. Slowed in October, considering the new unemployment data that we saw and we also saw wages continue to decline. One of my favorite quotes out of here, if you just go to our favorite friends over routers, they tell you that U.S. job growth slowed more than expected in October, according to official data, while wage inflation cooled, pointing to an easing in labor market conditions. I love that sentence still. First off, we got, you know, U.S. job growth slowed are so bad and people aren’t getting jobs. That’s not good. It’s or, you know, people aren’t getting jobs. Yay. Reuters. You know, job growth, slow markets up. And then they talk about this is my new favorite. This is why this is what had this been happening and sandstones do. We’re having wage and we’re not having enough wage inflation. Wage inflation. Cool. Wow. Oh, for you’re not getting a raise. I just I know this is why people get paid the big bucks over at Reuters to tell me to come up with new terms like wage inflation, a.k.a.. You’re not getting paid enough. But again, why does that matter? All of this matters because this bolsters the view that the Federal Reserve has that they don’t need to raise interest rates because what are U.S. interest rate rising designed to do? Well, it’s designed to literally put the economy in a recession. And what is putting the economy into recession? Is it raising the unemployment, making you earn less? I’m not saying that because I dislike the Fed. I do dislike the Fed, but I’m saying that because that’s actually what they’re literally mandate is instructed to do. So take that into account as job numbers. And and all of this new data rolls out, it’s going to be kind of anti correlated with what you think. More people getting jobs that’s not really good for the Fed raising rates because raising rates is designed to drive that unemployment rate higher and you know, cool wage inflation. Sorry. So if you’re expecting a raise this offseason, Jerome Powell is doing his best not to make it happen. And what does that mean on oil prices? Well, we saw a little bit of a drop yesterday or on Friday. We saw about a 1.25 or excuse me, about a 2.3 percentage point drop. Brant was only down about 1.28 percentage point. Crude oil finishes 8051. That’s for the WTI index. Brant finish is 8596, so still a little bit higher. Natural gas finished actually up about 1.2 percentage points, mainly off the back of some of some weather data. Again, as we move into what I would call draw season from the reserves, specifically in those Western reserves, you’re going to see natural gas continue to move up. I thought this was interesting. Stu. Rig counts again last week were slightly up to this week, down 7 to 168. Canada added no rigs internationally. We did add 22 rigs. We’re still down 152 rigs from last year. But, you know, where’s this? I don’t know where this new production is coming from. Still ain’t coming from the U.S. We drill and we’ve been cover, you know, every week we cover these numbers going down, down, down. You know, again, you know, I got asked this question this weekend, you know, oh, well, we’re just always going to keep making more oil. I said theoretically, yes. The problem is if we keep dropping rigs, we’re not going to produce more oil because oil wells obviously decline over time. So it’s going to be extremely fascinating in the next six months to see the fallout from what really is in. And it’s an insane drop in oil rigs over really what it’s been this year and a half cycle. Obviously, they’ve come up from the bottom. But considering where we were COVID, but it’s still crazy to think about where oil prices were last year relative to where we are now and considering the rig difference. So it also goes to show you how slow capital investment follows oil prices. It’s really lag because they’re probably still unwinding some of their positions. If we’re shedding rigs from the turn, the downpour, the downturn, the quote unquote, happened at the beginning of the year. So, again, highly fascinating, very interested. And we will be following rig counts all the way. We had kind of a finishing up of earnings last week. Stew bunch of companies announce earnings. We saw Murphy announced their earnings beat tax up in Canada. They announced their third quarter earnings and went ahead and confirmed another quarterly dividend and, you know, another Canadian company. And plus they went ahead and pronounced another quarterly cash dividend and increased their production guidance for 2023 ring energy mean in unfortunately do anything they just announce results which doesn’t mean anything of vital energy off the back of a few really big M&A deals had a really nice quarter but we love them they’re one of the most you know do a little shout out to I think it’s called Vital Energy. Vital Energy. All I know is about two weeks ago I saw them hiring about seven, seven software engineer jobs and I fell out of my chair. Love that. Oil and gas hiring software engineers. You don’t see that too publicly. You see a lot of it in the and not in in-house engineers, not just, oh, we’re going to bring in a consulting firm, build us a data warehouse. Oh, we’re going to bring in a few consultants to manage this and maybe build us some some cool front end here. They’re hiring developers in-house, all of that stuff to do that gets my blood flowing. I’d love to have their I don’t know who their CIO is or CTO is, but we’re going to get that guy on the podcast too, because that’s the stuff that I like. Oil and gas, investing internally heavily in technology, because that’s really where, in my opinion, 5 to 10 years from now you’re going to see the gains come from companies embracing technology. So city engineer you can dive into. All of these earnings at the world’s greatest Web site. EnergyNewsBeat.com. But let’s go and take a look and dive deeper into pioneer’s earnings. Do this probably be the last time we get to see them by wireless just on the way out the door. Scott Sheffield goes ahead and drops third quarter oil production of 377,000 barrels of oil per day, and that’s straight oil per day. Third quarter total production averaged about 721,000 B.O. per day, which was near the top end of their quarterly guidance cap. Free cash flow of 1.2 billion. Quarterly variable dividend of about 300 or $3.20 a share. And to give you an idea of their full 2023 guidance, they hit really all of the midpoint. So they’ve increased all of their midpoints for production on both oil and bogey. They’re kind of winding down their capital guidance. You know, they’re starting to trim a little bit off their 2023 drilling completions and water infrastructure CapEx, if only because now they’re now they’ve got X charge. So they don’t get to necessarily set their own CapEx budget and they’ve actually lowered their 2020, which is interesting, Stuart. You got to CapEx budget of 4.3 billion, but only 150 million is is more is spent specifically towards exploration, environmental and other capital. So you can see the amount of development they see they need to do. We don’t need to explore, we need to go develop that mass amount of acreage we have. And that’s what Exxon’s about to do. Really finishing with net debt of 4.8 billion is absolutely insane considering amount the amount of stock, what their stock is worth relative to what Exxon paid for 2.1 billion of liquidity, about 98 million cash on hand, about 2 billion of an unsecured undrawn credit facility. So Exxon’s going to be a rolled this up really nice average realized price was about $81 a barrel. So not horrible. You know they’re affected. You know I was like, look, this is stuff that I always find interesting. Effective tax rate was 22%. So, yeah, someone’s paying taxes here. And I always like to look at their IPO or their production costs about $11 a barrel. That number seems high. But when you when you take into account that’s just on ETS, on everything, that’s not breaking into what I like to do, which is more of a variable versus fixed cost because you know, a lot of some of your costs are fixed electricity, chemical program, pumper costs, but you also have some variable spent. You know, obviously your water transportation is going to be variable whether or not you’re trucking, saltwater disposal, all that jazz. So but I do like to look in and kind of get a quick look, you know, $11 per BOE, He’s got to give you guys an idea that an $81 average realized price, $11 cost of production. You know, there’s a lot of profit in there. You know, they do sell a lot of NGOs. But, you know, only again, only reason I dive into this a little deeper is this probably the last time we’ll we will see Pioneer’s assets specifically stripped out. You know I’m sure Exxon over the next couple of you know, over the next probably two or three earnings reports will probably highlight what Pioneer’s assets are doing specifically to help their infrastructure. But at some point like now, you know need now they don’t specified between XTO and Exxon. It’s just all Exxon and eventually will happen with with the pioneer’s assets. So hey Scott Sheffield riding off into the sunset. [00:33:11][505.5]

Stuart Turley: [00:33:12] Oh he did good didn’t he. [00:33:13][1.2]

Michael Tanner: [00:33:14] He did. He did. He must, must love himself some, some Exxon stock which is still confuses me. But you know, maybe he’s just maybe Exxon stock’s the easiest he’s the easiest to get loans off of because he’s just going to cash out all he’s going to go take all of this. He’s going to go sell all stock to the bank. But that’s all I’ve got. Stu, what should people be worried about coming up this week? [00:33:33][19.4]

Stuart Turley: [00:33:34] Oh, just kind of. Hang on. Buckle up. Hug you, Doug. [00:33:36][2.8]

Michael Tanner: [00:33:37] But how’s it what’s going on with the Israel the war in Israel? [00:33:41][4.1]

Stuart Turley: [00:33:42] I’m about to visit with Congressman Zach Nunn. He is taking this on charge. I’m interviewing him tomorrow. We’re going to try to release this. He is really involved in the lead in what’s going on. So I will really try to get that there. Zelensky is now very, very jealous. There is a lot of rumblings that the U.S. is really saying to him they’re going to back off and make a deal. You know, they say Zelensky will make a deal, we’re done, and then all of the other EU is done and he’s whining about Israel. So I’m going to find out some more as I interview Congressman Zach Nunn. [00:34:26][43.7]

Michael Tanner: [00:34:26] Yeah, it’s going to be great. That’ll be a great podcast that comes out a lot of great content that we’re dropping. So it’s really exciting stuff. And again, guys, you keep it here for all, you know, state the tip of the spear when it comes to all of your energy news. Bola He’ll go ahead and let you guys get on out of here. Start your day. We appreciate you checking us out here on this Monday. Stay strong, guys. The meetings will end quickly and soon You’ll be sitting down watching Monday Night Football. But until then, guys, stay up to speed to pursue it. Truly. I’m Michael Tanner. We’ll see you tomorrow, folks. [00:34:26][0.0][2015.4]

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BAKERSFIELD, Calif. (KGET) — The City of Bakersfield’s plan that would ban gas stoves in new construction is dead — at least, for now — after a huge pushback from the community.

The public feedback portion of the plan ended Aug. 31, and because of that feedback, the city of Bakersfield has decided to put the brakes on the plan.

City manager Christian Clegg sent a memo to the council saying the city “will not move forward with the Climate Action Plan as initially anticipated”, but also said the stall will just cost more time and money because of state energy mandates coming soon.

“There could be a little bit of an additional cost that is going to be part of taking more time to do more study,” Clegg told 17 News. “But, we don’t see significant changes in the overall aspect of the plan.”

Clegg said city staff will be providing written responses to comments and frequently asked questions over the next six months. Then, the data is going to city council for final review.

 

Clegg also said the planning commission will now conduct a new feasibility study to address the outpouring concerns about Bakersfield’s main economic driver — oil and gas — while simultaneously aiming for economic diversity through the path of clean energy.

“There are thousands and thousands that depend on agriculture, that depend on traditional oil and gas. So, we fight for those industries everyday,” said Clegg. “At the same time, we’re also being thoughtful about seeing the future of an even more robust economy that continues to evolve our existing industries.”

17’s Rob Hagan will continue to follow the city of Bakersfield’s next steps in the Climate Action Plan.

 

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ENB Pub Note: David Blackmon’s article from the Daily Caller is excellent, and we highly recommend that you follow the Daily Caller and his personal substack. We also highly recommend subscribing to all of his channels. His energy insights are fantastic and look at energy from the fiscally sustainable to benefit humanity in the long term.

The last few months have seen a parade of troubling news related to the health of the offshore wind sector, as rising inflation, mucked-up supply chains, and high interest rates have rendered big projects planned for the U.S., UK, and German offshore regions uneconomic. The remedy sought by big players in the industry like Siemens, Orsted, BP and Equinor has been to seek higher subsidies from local, regional, and national governments whose renewable goals drive the rationale for the industry’s very existence, and whose largesse sustains its business model.

More and more often, though, the answer back from those governments has transitioned from the easy ‘yes’ of the past to an increasingly frequent and unambiguous ‘no.’ In September, for example, big Danish wind developer Orsted requested more subsidies from the state government of New York in the form of a big OREC adjustment related to its Sunrise Wind project and was denied in a decision upheld by the state’s courts in October. For those unfamiliar with the industry’s acronyms, the term “OREC adjustment” refers to Offshore Wind Renewable Energy Certificates, a classic environmental rubric in which local, state or the federal government pays wind developers an agreed-upon fee for each megawatt of power they build in locations favored by those governments. Those fees end up being worked into the utility rates paid by electricity consumers as one of an array of hidden charges on their monthly bills.

That denial of more subsidies for Big Wind turned out to be a harbinger of things to come. Orsted dealt a major blow to the offshore wind aspirations of the Biden government and Democratic policymakers in several northeastern states this week by announcing the cancellation of its Ocean Wind 1 and Ocean Wind 2 projects planned for construction off the coast of New Jersey. In its earnings release, Orsted said it was recognizing impairment losses of DKK 28.4 billion, which equates to roughly $4 billion USD, blaming “adverse impacts relating to supply chain delays, increased interest rates, and the lack of an OREC adjustment on Sunrise Wind” for the need to take the write-down. (RELATED: DAVID BLACKMON: A Reckoning Is Coming For The Failing Energy Transition)

The company’s financial struggles were no real secret, especially since it has engaged in a strategy of using “farmdowns,” i.e., selling off interests in its existing projects to raise cash to offset losses in recent months.

The announcement by Orsted is obviously a big setback for the arbitrary and unneeded offshore wind goals of the Biden administration, and for New Jersey Gov. Phil Murphy (D) and his desires for the state’s grid to be 100% powered by renewables by 2035. The rising controversies over offshore wind and its alleged destructive impacts to endangered whales, the environment, and home utility bills are also a big problem for New Jersey Democrats as they try to hold onto majorities in the legislature in the Nov. 7 elections.

Murphy made his displeasure with Orsted’s decision clear, saying, “Today’s decision by Orsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence. As recently as several weeks ago, the company made public statements regarding the viability and progress of the Ocean Wind I project.”

Orsted isn’t the only U.S. wind developer taking write-downs. Reuters reports that two Big Oil companies who’ve invested in Biden’s offshore wind program – UK giant BP and Norway’s Equinor – took impairment losses of $540 million and $300 million, respectively, in recent days. That amounts to fairly small potatoes for those companies, whose oil and gas operations are hugely profitable in today’s high commodity price environment.

But pure wind developers like Orsted do not enjoy the luxury of being able to offset losses from major offshore wind projects with profits from a more robust core business segment. The industry’s go-to strategy up until now has been to simply appeal to friendly politicians to invoke higher subsidies to enable their projects to continue moving ahead. But now it seems that even some blue states in the U.S. have reached the point of being unwilling to throw more good money after non-profitable ventures.

For the offshore wind industry, if Peak Subsidy really is on the horizon long before anyone expected, the question now becomes, what next?

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Twelve EU member states have called on the European Commission to create a pan-European industrial union and allow the installation of small nuclear reactors, according to Contexte.

It is noted that Bulgaria, Croatia, the Czech Republic, Finland, France, Hungary, the Netherlands, Poland, Romania, Slovakia, Slovenia, and Sweden in the letter call on the European Commission to create an industrial union for small modular nuclear reactors – analogs of nuclear power plants that, due to their smaller size, can be installed in more locations.

In their view, such a union would allow for strengthening the “energy sovereignty and competitiveness of the European Union (EU) industry.” The countries hope that the European Nuclear Energy Forum, which will take place in Bratislava on November 6th and 7th, “will provide an opportunity to make progress in this direction.”

It is stated that small modular reactors could become a solution for electricity production without fossil fuels by 2030, and by 2050, nuclear energy could provide the EU with one and a half times more electricity than it does currently.

Export of electricity and nuclear reactors

France has surpassed Sweden to become the largest exporter of electricity in Europe. France’s net electricity exports totaled 17.6 terawatt-hours, with the majority of the electricity going to the United Kingdom and Italy. Sweden has now moved to the second position.

The Swedish government has declared the need to triple its nuclear power capacity over the next few decades. The Scandinavian country plans to build at least 10 nuclear reactors by 2045.

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There is a growing rift among the bloc’s member states on imposing additional restrictions

 

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The growing use of national currencies by BRICS countries is likely to speed up de-dollarization, economist Joe Sullivan says

 

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