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In 2023. clean energy witnessed one of the toughest years in its short history. Supply chain issues, the energy crisis post Russia’s invasion of Ukraine and the ensuing ramp of interest rates and inflation hit all entities across the natural resources value chain. Clean energy bore the brunt of these global tensions more than other sectors in this space. By the end of last year clean energy stocks were down and underperforming against the overall market and their energy market peers.

Let’s take a look at what went wrong last year and the reasons for optimism going into 2024.

So, why did clean energy take the biggest hit?

Firstly, clean energy entities (wind and solar markets here) are typically more exposed to cost of capital and interest rate hikes, unlike their cash-rich energy major and mining peers with proportionally lower capital expenditure as a function of overall cost base.

Secondly, as the world has re-prioritised energy security over sustainability, large energy companies have rolled back on renewables ambitions to focus more on hydrocarbons once again. Market sentiment followed, leaving clean energy firms undervalued in comparison.

The role of technology cost increases

Renewables are characterized by high up front capital expenditure, with very low operating costs. Solar PV costs jumped up 23% from 2022 to 2023, a trend seen across the renewables space. The industry, which typically underestimates cost reductions, was not designed or prepared for these radical cost increases.

A key market driver in Europe is renewables auctions, alongside PPAs. The market response was significant under-subscription to auctions as ceiling prices were evidently too low, resulting in unprofitable economics and a lack of successful bidders.

There was also a notable slow-down of the secondary market. Between Q4 2023 and Q3 2023 we saw a 71% drop in secondary market transactions (transactions between existing investors and developers of solar projects).

 

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About 63% of solar installer members in California are facing cash flow issues following a new policy that reduced homeowner incentives.
Rooftop solar system sales in the state have plummeted by 85% compared to the previous year, causing some companies to close or leave the state.
The downturn in the green energy sector, including solar, is expected to persist well into 2024, affecting investments in clean energy ETFs.

The solar industry in California is facing significant headwinds following the implementation of a new policy in April, which reduced incentives that had encouraged homeowners to install solar systems.

Bloomberg reports the California Solar & Storage Association has found about 63% of its 400 solar installer members have reported cash flow issues because the new policy crushed consumer demand.

Since last April, sales of rooftop solar systems across the state have crashed 85% in the most recent months of 2023 compared to similar periods one year before, according to solar firm Ohm Analytics.

On Wednesday, California Solar and Storage Association Executive Director Bernadette Del Chiaro told an audience at the Intersolar North America conference in San Diego that 25 to 30 solar companies have already closed shop or abandoned the state.

We are worried about the next two months,” she said. “We think a lot more fallout may be coming.” 

Besides a reduction in incentives, higher interest rates and expensive panels have also curbed demand. This means that solar installers have a dismal pipeline of work through the year’s first half.

Meanwhile, a Bloomberg MLIV Pulse survey of professional and retail investors from late last year found the green energy downturn will last well into 2024.

iShares Global Clean Energy ETF has nearly roundtriped Covid lows.

The ownership portfolio of the iShares Global Clean Energy ETF shows solar, wind, and hydrogen stocks have been clubbed like a baby seal over the past year.

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The following article was written by Dr. Rob Jeffrey when completing his PhD Thesis at the University of Johannesburg. With his permission I am republishing it . The data was based on the South African 2019 Integrated Resource Plan (IRP).

It stands, in my view, as an excellent critique against the levelized cost of electricity (LCOE), exposing the hidden subsidies and the complexity involved in determining the full cost of electricity (FCOE). The article is also a defense of a mixed electricity system and the numerous benefits that it will bring to the South African economy.

Dr. Jeffery is an advocate of the relative cost of electricity metric, that takes into account the load factors. The RCOE is easy to use for a matchbox calculation, and it makes intuitive, sense if one is to compare the output in kwh by taking into account how much overbuild is required.

Relative cost of electricity = LCOE divided by the load factor.

The reason why he divides by the load factor is that it takes into account the cost of overbuilding wind and solar, because the metric aims to compare the total output in kWh.

For the calculation below he uses 0.35 , 0.26, 0.90 and 0.80 as the respective load factors for wind, solar, nuclear and coal in South Africa. I used 0.70 for LNG, based on a different source.

LCOE of Wind = R0.62/kWh, RCOE of Wind = R0.62/kWh ÷ 0.35 = R1.77/kWh
LCOE of Solar = R0.62/kWh, RCOE of Solar= R0.62/kWh ÷ 0.26 = R2.38/kWh
LCOE of Nuclear = R1.30/kWh, RCOE of Nuclear = R1.30/kWh ÷ 0.90 = R1.44/kWh
LCOE of LNG= R1.50/kWh, RCOE of LNG= R1.75/kWh ÷ 0.70= R2.55/kWh1

The difference is substantial and it clearly shows that coal and nuclear might be more competitive than we are being told.

Dr. Rob Jeffery furthermore advocates that we use “global reality” by simply comparing residential prices.

Another warning is that a higher penetration of renewables will eventually make us geopolitically dependent on natural gas import, effectively depriving us of energy sovereignty.

The final nail in the coffin for South Africa is that increased penetration of wind will lead to a rapidly rising import bill for gas imports and the demise of its coal mining industry if not the entire mining industries.  These are catastrophes which could ensure that the future of South Africa will move towards rising unemployment, increasing poverty and increasing social and political instability.  South Africa needs to focus its energy plans on HELE or ‘clean’ coal, nuclear, domestic solar and limited gas apart from some use of other sustainable energy sources such as biomass, Hydro and pump storage.

In my opinion, the world is currently incurring a significant opportunity cost by moving away from coal, and by demonizing nuclear power as “too expensive”. We are going to burden future generations with the deprived opportunity and asset destruction that is being converted into debt. Countries like Japan, whose leadership remain committed to clean coal, may likely have an advantage in the future.

South Africa should, in my view, draw fewer lessons from Europe and North America, but instead focus on Asia for insights into the energy transition. The electricity mix and geographic challenges in Asia are more comparable to ours, and their leadership comprises generally speaking of technically qualified individuals rather than lawyers and economists without practical experience.

There are various metrics involved in comparing the true cost of electricity, price and value and they are by no means perfect. I wouldn’t say that the RCOE is a final nail in the coffin, but it does make one rethink the simplistic story that we are being told by looking at LCOE only.

Below is his article.

Weaknesses of solar and wind, Myths and Questions that require an answer

Introduction

It is claimed that wind and solar are far the cheapest source of electricity and these sources should dominate future electricity supply.  There is substantial debate regarding this subject.  There are many and complex issues that are involved.  These include climate change, environmental issues and many other externalities.  This paper focuses on known costs and subsidies and excludes these other issues.  That is not to say these other issues are not important or that there are not additional costs involved.  All sources of energy and their associated technologies are subject to similar issues and additional costs to varying degrees.  These will need to be addressed in a separate paper.

Wind and solar claim a cost of 62cents/kWh.  This is the price at the gate of the supplier.  It does not include all the costs of supply necessary to convert this electricity from non-dispatchable electricity supply at the gate to dispatchable electricity supply at the point of supply to the customer.  In order to achieve this result, these costs are paid either by the utility, in this case Eskom, or by other suppliers or they are passed through directly to the customer.  Either way customers pay either directly or via additional taxation.  These are in effect direct subsidies to solar and wind suppliers whereas they should be added as cost to the renewable energy suppliers.

Critical to the debate are the following basic facts concerning the energy sources considered in this paper namely solar and wind called solar and wind in this paper and coal and nuclear.  Solar and wind such as hydro biomass and thermal have different qualities and are not considered here.  Hydro and thermal are not options as they are not available in quantity in South Africa.  Gas is another fossil fuel which at this stage is not found in major economic quantities in South Africa.  They receive large subsidies paid by other energy suppliers and the electricity utility, in this case Eskom or by other customers.  Critical issues are that solar and wind have very low load factors in the case of wind an average of 35% or less and solar 26% or less.  Their supply being weather dependent is highly variable, intermittent, interruptible unpredictable and unreliable.  Since on average supply is not available on average more than 65% of the time electricity supplied from these sources needs substantial back up.  This back- up must be available at any time i.e. 100% of the time 24/7.  In summary the availability of back-up supply must be 100% of the time, its utilisation is at least 65% of the time or greater.  Coal has a load factor on average of approximately 80% and nuclear an average of 90%.  The load factors here are affected by predictable maintenance requirements and normally to a lesser extent by unpredictable repair requirements.  A reserve margin (or back up) of 20% has traditionally been considered sufficient to cover for both these events.

Additional costs of solar and wind

To the claimed costs of 62cents/kWh for solar and wind the additional costs that should be added include the items that follow in this list.   At this stage it is apparent that these costs are not included in costs and should be added to the quoted cost of 62cents/kWh Ultimately, it is essential that these additional costs be measured in cent/kWh.  The additional costs to Eskom, other suppliers or directly by customers can be measured in R millions /annum.

Additional grid costs:  Most wind farms are some distance from the existing grid and customers.  Not only do transmission lines have to be built but they will only be used less than 35% of the time.  This suggests that at minimum grid costs of wind must be at least approximately 3x the grid costs of dispatchable power units if not far more.  The capital cost per kWh and the running cost per kWh must be approximately 3X that of reliable dispatchable power supply.
Back up costs:  100% back up must be available 100% of the time.  Back up is utilised on average 65% of the time or more.   Taking coal or nuclear as a comparison with a load factor of 80% and 90% respectively.  Only 20% back up power needs to be kept and this will only be used on average 20% of the time or less.  This suggest that back up capital costs of wind would be approximately 5X higher per kWh than say coal with running costs approximately 3.25X that of reliable dispatchable power supply such as coal.
Efficiency loss of back up and alternative electricity supply:  Back-up power or other power supplies would only be used where necessary.  As a result, due to low utilisation back up facilities would normally be running well below their optimal efficiency. There efficiency loss is in effect a direct subsidy of the solar and wind in this example say wind. The wind price would need to be increased by the efficiency loss incurred by back up suppliers or alternative electricity suppliers.
Excess supply of electricity:  Because electricity supply from solar and wind is variable, unreliable intermittent and unpredictable there will be periods where a surplus of electricity will be generated. In terms of the power purchase agreements (PPA), Eskom must pay the renewable producers for the excess power being produced.  There are periods when other electricity producers producing secure dispatchable power cannot close the plant or reduce power.    All these are additional cost that at present are passed on to the utility (Eskom) or other electricity producers or to consumers.  SA cannot export surplus electricity to other countries, which European countries e.g. Germany or States in the USA do.
Insufficient electricity supply as a result of technology being unable to immediately close the gap between supply and demand:   Because electricity supply from solar and wind is variable, unreliable, unpredictable and intermittent there will be periods where a shortage of electricity supply will exist.   Despite the fact that they require substantial back up there will be periods when the back-up will not be available.  This will arise because whilst models indicate certainty of supply the real world is governed by uncertainty and back up will not be immediately available.  There will for a period be no supply before supply increases sufficiently to cover the deficit.  This will arise purely because the system will not adjust immediately to meet the supply demand imbalance.  This would suggest that the deficit would be determined by the statistical variability of the different electricity technology sources.  The economy would suffer as a result of the Cost Of Unserved Energy (COUE).
High Economic Cost Of Unserved Energy: The economic Cost Of Unserved Energy (COUE) can be measured and these costs are extremely high.  The IRP estimates the COUE at R87.85/kWh.  This COUE of R87.85/kWh is as per the National Energy Regulator of South Africa (NERSA) study.  In December, a senior energy expert estimated that load shedding has cost South Africa over R1.0 trillion over the previous decade or over 1.5% GDP growth per annum.
Insufficient electricity supply as a result of extended periods of weather-related conditions:  Because solar and wind are dependent on unpredictable and highly variable weather-related conditions there will be extensive periods when electricity supply could fall well below average supply and could not be available at all for an extended or unexpected period.  This could involve long periods of excessive cloud, no wind or excessive wind making electricity generation impossible.  The country and/or parts of the country could be entirely dependent on backup generated electricity, which cannot immediately be supplied to meet demand.
The Higher the penetration of low load, high variable intermittent technologies the higher the Cost Of Unserved Energy:  Models invariable are only as good as the assumptions used.  In addition, most models assume certainty of output and do not take into account risk and uncertainty.  The fact is that the real world is subject to risk and uncertainty.  There are a number of uncertainties and risks apparently not taken into account in the current set of models.  Firstly, there is a pause and delay before new generation technologies coming on line when a technology closes down.  Secondly, as set out previously, the period of stoppage can increase and exceed the average planned for stoppages.  This can result in back up supplies becoming inadequate.
Reduction in sales by Eskom as a result of artificially low prices offered by renewable suppliers: Installation of renewable power direct at customers or potential customers premises of Eskom reflect finally as lost demand or sales at Eskom or lack of growth of demand at Eskom.  A simplistic example would be at a factory or mine or even a solar installation at a customer in a shopping centre or domestic house.
Cost of back up for installation directly supplied by solar and wind:  If there is a reduction in such customers electricity supply due for example to several days of no wind or clouds Eskom is expected to provide immediate back up supply at normal rate costs.  Eskom must have substantial back up readily available which is costly.
Cost of purchasing electricity from customers who have their own renewable installations:  The trend is that customers can sell their surplus electricity supply to Eskom.  Invariable there is a commitment to purchase which in return reduces the perceived back up required.  However, this is not true as back-up is still required for normal back up requirements but also for the full installation of the renewable supply at the customer’s premises.  The truth is such customers are receiving hidden subsidies from Eskom paid for by Eskom unless passed on to other Eskom customers.  Either way customers are paying for the additional costs involved.
Destruction of industries and political social economic impacts:  The move to solar and wind as set out in the IRP would result in the South Africa’s coal industry shrinking by 46%.  Coal mining accounted for 26.7% of the total value of mining production in 2015 making it the most valuable in terms of sales of the 14 main mining commodities.  A number of previously prosperous communities in Gauteng and South Africa would become ghost towns with rising unemployment and increasing poverty levels.  Social benefits would increase dramatically.
job Lack of permanent creation:  Renewable energy sources do not give rise to permanent jobs being created.  Most jobs created by solar and wind relate only to the construction phase.  In fact, most jobs, particularly skilled jobs, are created overseas in countries supplying equipment.  These countries would primarily be Germany in the case of wind related equipment and China in the case of solar equipment.
Export of jobs and Loss of energy sovereignty:  The move towards solar and wind will mean that South Africa loses it energy sovereignty, primarily to Germany for imports of technology and equipment related to wind and China for equipment related to solar.  South Africa will effectively export its skilled jobs overseas and suffer a loss of skills.  Instead of South Africa being an energy exporter it will become an energy importer as a result of losing coal exports and becoming dependent on gas imports.
Creation of a current account deficit and not utilising valuable natural assets:  Coal is one of South Africa’s largest commodity products.  It is also one of the country’s largest exports.  It is also the country’s largest by value commodity export.  The importation of gas and loss of coal exports will result in an increasing and substantial current account deficit.  Coal mining accounted for approximately 26% of the total value of mining production in 2015 making it the most valuable in terms of sales.  Potential uranium reserves are also substantial.  The drive for wind would deprive South African citizens of these benefits.
Levelised Cost of Electricity (LCOE) is not a sound methodology to compare highly variable and interruptible electricity technologies with electricity supplied by reliable and virtually continuous energy generating technologies.  A report entitled ‘Critical Review of The Levelised Cost of Energy (LCOE) Metric’, by M.D. Sklar-Chik et al, South African Journal of Industrial Engineering December 2016 concludes that “LCOE neglects certain key terms such as inflation, integration costs, and system costs.” They note “Many international reports prove that such electricity supply is extremely expensive due to its variability, interruptibility, inefficiency and its requirement of 100% backup”.  The work of Paul Joskow et al of the Massachusetts Institute of Technology published in February 2011 wrote a paper entitled Comparing The Costs of Intermittent and Dispatchable Electricity Generating Technologies.  The paper demonstrated that LCOE comparisons are a misleading metric for comparing intermittent and dispatchable generating technologies, because they fail to take into account differences in the production profiles of intermittent and dispatchable generating technologies.  The paper uses a simple set of numerical examples that are representative of actual variations in production and market value profiles to show that intermittent and dispatchable generating technologies with identical Levelised total costs per kWh supplied can have very different economic values due to differences in the economic value of the electricity they produce.
Methodologies and more realistic estimates of the true costs of solar and wind:  There are many methods of calculation trying to prove one side of the argument or the other.  A simple or “simplistic” method using the load factor alone, gives the cost of wind at R1.77/kWh and the cost of solar at R2.38/kWh.  These compare to coal of R1.31/kWh and nuclear at R1.44/kWh.  More complex methodologies taking risk and uncertainty of outages into account and using variance or standard deviation as the estimate of risk put the costs of wind at R2.52/kWh, coal R1.10/kWh and nuclear R1.33/kWh.
The test of global reality:  There is nothing like the test of global reality.  In 2016, the prices paid by industry in Germany were approximately 52% higher than France (nuclear) and 86% higher than Poland (coal).  The average estimates discussed above result in costs that are close to this global reality.

Corruption

It is a separate exercise to ensure that all technologies are under all circumstances kept free of corruption at all levels.  Corruption must be stamped out.  It is essential that the correct electricity generating sources are selected.  This must be made on the basis of efficiency, effectiveness and long-term cost and viability free of any corruption.   Corruption is a separate exercise to dealing with the economic choice of electricity technologies.

Conclusion

Emerging economies need to focus on those technologies which are efficient and effective.  In South Africa, mining, manufacturing and industry need security of supply of electricity at competitive prices.   The only two electricity generation sources of energy that can achieve these objectives in this country would appear to be High Efficiency Low Emissions (HELE) coal, otherwise called ‘clean’ coal and nuclear.

The country must focus on raising its economic growth rate by ensuring it has sustainable secure supply of electricity at the lowest economic cost.  This must be accompanied by the necessary supporting condition fostering domestic and foreign investment into its economy.  The arguments above show clearly that solar and wind in the form of solar and wind in particular, almost certainly have substantial additional costs which are not fully accounted for in the current costs being utilised for them.  This also means that the so called least cost optimum mix is wrong.  As a result, this methodology as currently defined and used is badly flawed.  Furthermore, increased penetration of technologies such as solar and wind, which are variable, unreliable, intermittent and unpredictable, will automatically lead to higher cost of the optimum mix.  Finally, the risk and uncertainty posed by solar and wind leads to rapidly increasing economic costs as measured by the COUE.  All these are not currently allowed for or measured accurately in current models associated with the least cost energy mix.  The impact and economic COUE as set out by the IRP is approximately R87.85/kWh.   The technique and methodology recommended uses statistical calculations based on variable calculations utilising the variance and mean of each technology to calculate the COUE.  Current models do not utilise any such statistical technique.

The above arguments and estimates lend force to the argument that solar and wind in particular are unaffordable in the current economic situation in the country.  The estimates strongly suggest that the least cost methodology is badly flawed and that going forward the renewable technologies of solar and wind should play a marginal role in any future technology mix for the country.

The final nail in the coffin for South Africa is that increased penetration of wind will lead to a rapidly rising import bill for gas imports and the demise of its coal mining industry if not the entire mining industries.  These are catastrophes which could ensure that the future of South Africa will move towards rising unemployment, increasing poverty and increasing social and political instability.  South Africa needs to focus its energy plans on HELE or ‘clean’ coal, nuclear, domestic solar and limited gas apart from some use of other sustainable energy sources such as biomass, Hydro and pump storage.

Appendix   Notes 0n the Costs of solar and wind are substantially less than coal and nuclear

This leads to the myth which is accompanied by loads of misinformation.  Operating costs are low for solar and wind and far higher for coal and nuclear.  The argument then becomes one of comparing Levelised Costs of Electricity (LCOE). This is another flaw and myth that leads to much public misinformation championed by idealists, vested financial and business interests and overseas experts with little interest in the long term sustainable economic development of the South African economy.

It is estimated by the CSIR that the LCOE, which takes capital cost and all the above factors into account, for wind and solar is 62c/kWh, coal is R1.05/kWh and nuclear R1.30/kWh.  Solar and wind apparently now becomes the clear winner.  However, solar and wind need full back up plus all the additional costs set out in this paper.  The fact remains that, using wind as an example, solar and wind need 100% back up.  Despite technological improvements, this leads to huge grid and integration problems, which substantially increase the real costs of solar and wind.  The reports avoid the issue that the renewable industry then effectively receives hidden subsidies from more reliable energy sources to cover these weaknesses as set out in this paper.

In summary, the rankings are quite clear, wind again becomes the most expensive option, Solar and wind, despite the protestations of many so-called environmentalist, are not capable of driving reindustrialisation and creating conditions suitable for high economic growth in a country such as South Africa.  This paper has not touched on the vast land area required for windfarms and their grids and the devastating impact on the environment that goes with this.  The following notes on each point raised previously are in addition to and should be read in conjunction with the points raised in the previous sections.

1.      Additional grid costs:  This suggests that at minimum grid costs of wind must be at least approximately 3x (100/35) the grid costs of dispatchable power units if not far more.  The capital cost per kWh and the running cost per kWh must also be approximately 3X that of reliable dispatchable power supply.

2.      Back up costs:  This suggest that back up capital costs of wind could be approximately 5X higher per kWh [100/20] than say coal with running costs could be approximately 3.25X [65/20] that of reliable dispatchable power supply such as coal.

3.      Efficiency loss of back up and alternative electricity supply:  This would suggest the efficiency loss could be approximately 54% [(100-65)/65].  There would need to be a price increase of the back-up or alternative electricity supplier of the same amount namely 54%.  This estimate is based on all solar and wind particularly wind require 100% back up which is used only 65% of the time i.e. it is running at only 65% efficiency.

4.      Excess supply of electricity:  This would suggest that such events increase with increased use and penetration of solar and wind.  Based on usage where for coal the load factor is say 80% of the time, nuclear say 90% and only 35% for wind suggests that surplus electricity occurs at least about 2.3X [80/35] more frequently using wind energy.

5.      Insufficient electricity supply as a result of technology being unable to immediately close the gap between supply and demand:  This will occur despite having a spinning reserve.  This occurs more frequently when such changes are unplanned and occur more often in an unplanned or unpredictable way.  This is the case with renewable technologies particularly wind and solar.  There is a statistical risk of non-supply which would increase with lower load factors combined with a higher variability arising out of low load factors and high variability and intermittency.  This is a statistical calculation based on load factors and standard deviations of each technology.  Basically, the lower the load factor the higher the standard deviation and the higher would be the resulting COUE.  Equally the higher the penetration of low load factors and high variability solar and wind automatically increases the economic COUE.

6.      High Economic Cost Of Unserved Energy: The impact of Eskom’s latest stage 2 load shedding of 2,000MW is set to cost South Africa’s productive economy R2 billion in 13 hours daily according to some energy analysts.   Together with corruption these are frightening figures.  No wonder there is insufficient domestic and foreign investments.  Investors have lost confidence in South Africa managing itself.

7.      Insufficient electricity supply as a result of extended periods of weather-related conditions:  This would suggest that risk parameters would rise rapidly with increasing penetration of low load factor solar and wind with unreliable, high variability, high intermittency and low predictability.  This is a statistical calculation based on load factors and standard deviations of each technology.  As far as is known this is not fully taken into account at present in the models.

8.      The Higher the penetration of low load, high variable intermittent technologies the higher the Cost Of Unserved Energy:    The extent to which these can or will occur increases risk of electricity supply shortages whether these be due to multiple short period inadequate supply or as a result of the extended period shortages.   Both cases result in economic costs to the area region or country resulting in an increasing economic COUE.

9.      Reduction in sales by Eskom as a result of artificially low prices offered by renewable suppliers: This results in a loss of revenue for Eskom however Eskom must still provide full back up for these facilities.

10.   Cost of back up for installation directly supplied by solar and wind:  Eskom must have substantial back up readily available which is costly.  This is therefore a direct subsidy to solar and wind and these additional costs should be added to the renewable cost.

11.   Cost of purchasing electricity from customers who have their own renewable installations:  The actual cost to Eskom will depend on the terms arranged.  A calculation based on the current arrangements would almost certainly reveal that as a system it would be cheaper to have permanent supplies from Eskom.  For the customer as long as he continues to have cheap back up electricity available from Eskom the perception that he has achieved lower cost electricity is a reality.  In effect the customer is receiving a subsidy.  The outcome for the country and entire system is negative even though for the customer it appears to be positive.

12.   Destruction of industries and political social economic impacts:  A report by Econometrix prepared in 2018 indicates that the countries coal industry would be adversely affected.  The report found that the negative impact on the coal industry would reduce the GDP of South Africa by over 2.5% or R75.2. billion.  Compensation of employees would be reduced by R25.1 billion.  Investment would be expected to be R3.8 billion lower per year.  Government tax income would be reduced by R16.2 billion.   There would be a loss in employment of 29000 jobs in the coal mining industry alone, and almost 162000 jobs in the economy.  Approximately 1 million dependents would be adversely affected.

13.   Lack of permanent creation:  It is interesting to note that Energiewende or the movement towards solar and wind in Germany is considered by many to be a total failure.  Germany has closed its solar related production facilities.  China has expanded its manufacturing of solar related equipment.  These goods are primarily for export.  Chinas primary major energy thrust is focussed on High Efficiency Low Emission (HELE) “clean” coal and nuclear.  This is also the case in other high growth ASEAN countries and India.

14.   Export of jobs and Loss of energy sovereignty:  In Germany the Energiewende programme has resulted in Germany becoming dependent on energy trade with other countries.  This involves both the export of surplus electricity and the import of electricity when faced with electricity deficits.  South Africa is not in the fortunate position to trade energy with other countries on any scale.  This happens more frequently than generally recognised.  In fact, during the winter of 2016 Germany had an extended period with a chronic shortage of electricity.  Many people suffered as a result.  Germany and much of Europe has become dependent on gas from Eastern Europe and Russia.  International energy experts and strategist consider that Germany has lost its energy sovereignty to Russia.  There is real concern about this situation.

15.   Creation of a current account deficit and not utilising valuable natural assets:  South Africa has 55 billion tons of coal left which would last over 100 years.  The discounted value of coal reserves is more than a ten trillion Rand.  The value of Uranium reserves is probably equal to this.  South Africa cannot afford to leave these valuable assets and their value added buried in the ground.  They represent to each South African of working age a value of over R500000 per working person (R0.5 million/per working person).

16.   Levelised Cost of Electricity (LCOE) is not a sound methodology to compare highly variable and interruptible electricity technologies with electricity supplied by reliable and virtually continuous energy generating technologies.  A study entitled “Nuclear Energy and Solar and wind: System Effects in Low-carbon Electricity Systems investigated” 2012 by the Nuclear Energy Agency (NEA) and Organisation for Economic Co-Operation and Development (OECD) estimated the additional grid costs alone would amount to more than R0.3/kWh.  A similar result and other factors can be found in the study entitled The Full Costs of Electricity Provision 2018 by the NEA and the OECD.   Various in-depth studies by experts around the world substantiate this fact.  Such papers and reports include a recent Australian Research study by GHD and Solstice Development Services entitled “HELE Power Station Cost and Efficiency Report.”  Another study by B.P. Heard et al entitled a ‘Burden of proof: A comprehensive review of the feasibility of 100% renewable-electricity systems’ concluded that “there is no empirical or historical evidence that demonstrates that such systems are in fact feasible”.  They also reviewed the CSIR proposals.  The study concluded “both the use of the terms ‘technically feasible’ and the attempted costing of the proposed system are inappropriate and premature”.  A research report by D. Weißbach et al (2013) on Energy Returned from Energy Invested (EROI) in Germany showed that solar and wind are uneconomic and will lead to economic stagnation.   Another scholar, Tim Mount et al in his paper entitled The Hidden System Costs of Wind Generation in Deregulated Electricity Markets, brings an interesting angle to this discourse.  In his paper of January 2011, he deals with the hidden system costs of wind generation.  These hidden costs appear to completely ignored in current models.

17.   Methodologies and more realistic estimates of the true costs of solar and wind:  The simple or “simplistic” method using the load factor alone uses simple logic.  The argument is that each technology should be able to support its own electricity supply.  The simplistic calculations are that the cost of wind is R1.77/kWh (100/35XR0.62)).  The cost of solar is R2.38/kWh (100/26X62) cents.  These costs compare to coal which are estimated R1.31/kWh (100/80XR1.05) and nuclear at R1.44/kWh (100/90XR1.30).  These are purely guideline estimates and do not take into account the additional grid costs and other costs set out previously.  The more complex methodologies taking risk and uncertainty of outages into account and using variance or standard deviation as the estimate of risk need to be discussed separately.

18.   The test of global reality:  If any further proof is required, it is a reality that there is no country in the world with high penetration solar and wind, where electricity prices are cheaper than coal or nuclear-powered electricity where available.  This includes countries such as Denmark, Germany, Ireland, and states within countries such as Australia like South Australia and the USA such as California.  Many such countries and states are experiencing energy poverty and deindustrialisation.  High growth emerging economies such as China, India, the Asean countries are focussing on using fossil fuels and nuclear.  This is also true of Russia and countries in Eastern Europe including countries such as Poland.

Other Factors

There are many other factors that need to be taken into account.  This includes cost environmental economic political and social factors.

Such other factors that need to be taken into account include:

1.      Reduction of sales by Eskom from economic policies:  The poor economic policies of government have effectively reduced economic growth.  In particular they have reduced the growth of industry mining and generally goods producing industry.  This has led to a structural change in the economy where the service sectors particularly government with low electricity intensivity and public sectors have experienced high growth whilst goods producing sectors with high electricity intensivity have experienced low growth.  This has led to relatively low electricity demand growth.  In the long term this is an unsustainable economic growth model for a country such as South Africa which require as set out in the National Development Plan NDP high growth in its good producing sectors.  This would suggest that the below average electricity growth of Eskom has been as a result of factors beyond Eskom’s control.  If correct policies are followed electricity growth should increase.  Planning must take this into account.  This will require an increase in reliable base load power.

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Winter storms Gerri and Helen, which swept across the United States this week, highlight the need to add transmission capacity in the country, according to Federal Energy Regulatory Commission Chairman Willie Phillips.

The Southwest Power Pool, which runs the grid from North Dakota to north Texas, imported a record 6.8 GW to help keep power flowing in its footprint, Phillips said Thursday at FERC’s monthly meeting.

In a move that could bolster the U.S. grid, Phillips said he expects in the “coming months” that the agency will revamp its requirements for transmission planning and cost allocation.

A new transmission planning rule would build on FERC’s updated interconnection requirements — issued in July — for connecting generator and energy storage projects to the grid, he said.

A new transmission planning rule would help ensure the grid remains robust, reliable and responsive to future energy needs, Phillips said.

“I’m confident that the collective expertise and commitment of FERC will lead us to equitable and forward-thinking transmission solutions that will stand the test of time,” he said.

During a media briefing, Phillips said he had “extreme confidence” that FERC’s commissioners have the working relationships needed to move a regional planning and cost allocation rule forward in the “very near future” and that “there’s nothing that I know … that can make me believe that we can’t get this work done.”

FERC is also exploring the possibility of taking steps to bolster transmission capacity between regions, Phillips said. Those efforts are running alongside a North American Electric Reliability Corp. study on the issue, he said, noting the study has started and may not take 18 months, the amount of time Congress gave NERC to do it.

“We are working on these two projects in parallel so that when NERC concludes its study, FERC is ready to act immediately,” he said.

Interregional transmission appeared to help grid operators deal with bitterly cold weather in the past week, according to FERC Commissioner Allison Clements, who noted the PJM Interconnection exported about 12 GW on Wednesday morning.

“It is worth taking a moment to consider the encouraging aspects of this week’s experience,” Clements said. “We can meet the challenges of extreme weather with proactive steps.”

Based on initial reports, it appears that lessons learned from Winter Storm Uri in 2021 and changes that have happened since then contributed to supporting the grid this week, according to Clements.

Since Uri led to rolling blackouts across Texas, the Electric Reliability Council of Texas, which runs most of the state’s grid, tripled its battery storage to 5 GW and doubled its demand response capacity to 4 GW, according to Clements.

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Rocked by two weeks of farmers’ demonstrations against cuts in diesel subsidies, Germany now faces hundreds of disaffected hauliers protesting, as they assembled in Berlin Friday morning to oppose plans for raising road tolls and carbon taxes on their industry.

Approximately 1,500 trucks paraded along the A13 road towards Berlin in a two-kilometre long convoy before paralysing the city centre on Friday afternoon. Truckers are getting organised against recent government tax hikes and foreign, predominantly Eastern European, drivers undermining wage rates.

Vorbeifahrt des kompletten LKW-Korso auf der A13 in Richtung #Berlin. Mittlerweile ist der Korso über zwei Kilometer lang.#b1901 pic.twitter.com/DLwcADNrl3

— Marcus Fuchs (@mr_marcus_fuchs) January 19, 2024

Demonstrations led by the truck drivers lasted into Friday evening.

With their sector under threat, truckers had already joined the farmers’ protests of previous weeks. To date, attempts to reach a compromise between the ruling traffic light coalition and farming groups have fallen through, as the government clings to its Net Zero commitment. Despite signals that the traffic light coalition would acquiesce to some farmer demands, the German Bundestag’s Budgetary Committee this week locked in many of the proposed green austerity measures leading to speculation that the protests could rumble on.

“When it comes to costs, the industry has reached its limits,” truckers’ representative Daniel Constant declared in a German radio interview. Hauliers hope that Friday’s rally could put pressure on the government in Berlin.

Speaking ahead of the rally, freight company owner Marc Kampmann blamed a new CO2 surcharge and a recent spike in toll prices for the unease felt by truckers, adding that the entire business model of the sector was threatened increasingly by the policies of Germany’s green-left rulers.

 

The truckers were joined in solidarity by a smaller contingent of farmers, who had already converged on the capital to coincide with the organic food show, Berlin International Green Week.

The signs that yet another sector could be mobilising against Germany’s traffic light coalition is bad news for Chancellor Olaf Scholz, whose government has been undermined by rising energy prices, poor foreign policy, and a €60 billion constitutional ruling that has jeopardised their lofty plans for a green transition.

Germany faces yet another week of agrarian demonstrations, with Deutscher Bauernverband president Joachim Rukwied predicting an “eruption” of protests in the coming days and weeks.

Source: European Conservative 

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Would you buy a Ford self-driving car that would automatically drive to a repo company if you missed a payment? 

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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’s going on, everybody? Welcome in to the Saturday edition of the weekly Energy News Beat daily standup recap. We appreciate you guys sticking with us all week. Stay tuned. The team has a great weekly recap. We talk about everything that happened this week was top of mind. Lots of reform. Um, Biden trying to ban natural gas. Absolutely unbelievable. Guys, I’m going to turn it over to the weekly recap guys. Hit the description below for all the info. We’ll see you next week. [00:00:41][26.5]

Stuart Turley: [00:00:42] Would you buy a Ford self-driving car that automatically would drive to a repo company if you missed a payment? This is not headline news, I didn’t. I found this on a little local TV station, so I’ve embedded the video here and I just thought it was absolutely. Who the, the, uh, newscasters from the local ten. Or we’re, like, going, huh? Can you imagine having your car wake up in the middle of the night and go, you a bad man, and then run out and go to the collection agency? [00:01:14][32.2]

Michael Tanner: [00:01:15] So, so. Yeah. So, so to bring you guys into the fold here, Ford has filed a patent for self-driving cars that would basically drive the car away from the owner after a series of missed payments in catch. I mean, it’s kind of funny, to be honest, and it’s something I didn’t even think about when it comes to self-driving. And in this, I mean, self-driving an EV cars are different, but it’s one of those second order effects that we like to talk about of, oh yeah, it’s a payment. Now, instead of having the guy come up and and try to slip your car into, uh, in into a tow truck as fast as possible, you just sort of a sudden move down to see your car just driving away. [00:01:53][38.5]

Stuart Turley: [00:01:54] Now, here’s where I bring up a couple warning. They said the first infractions would be, uh, the heater going on, uh, really bad. The. And then the sound. No, they didn’t. [00:02:04][10.5]

Michael Tanner: [00:02:05] They’re just going to blast you with heat in the summer. [00:02:06][1.5]

Stuart Turley: [00:02:07] Oh, yeah. And then they’d play rap where they would play some music that is not in your, you know, your, uh, venue. You know, some people hate country western, some people hate rap. They would just go to whatever you never listen to and play it. Really, for. [00:02:20][13.4]

Michael Tanner: [00:02:21] Some people, they would just blast the energy News podcast 24 seven. [00:02:24][3.3]

Stuart Turley: [00:02:25] Hey, there’s some advertising for you. Hey, here’s another burger is actually is is, uh, terrorism. Uh, and we know that the EVs are capable of being hacked. So what happens if, uh, Big Brother U. Here’s where it gets really, uh, once they get the disinformation done, can you imagine putting something out on Twitter and they go, you bad, you very bad. And then they take that almost sound like Elmer Foot. They take the car and it goes away. It goes into government prison, your car, because you put something bad on Twitter. The Biden administration is about to just absolutely make it all worse. Uh, you gotta love a quality administration. This last article, uh, Biden administration issues a new natural gas tax in the latest fossil fuel crackdown. This is just absolutely despicable. Um, this was on Fox News, and the EPA spearheaded the proposal, said it will help tackle wasteful methane emissions from the oil and gas sector, encouraging facilities with the highest emissions to level or meet or exceed levels of performance. You’re going to get taxed, which begins at 900 per metric ton of wasteful emissions in 2024 and increases to 1200 for 2025 and 1500 for 20 and 26. I just had another great interview with, um, some folks, and this is a lot of money to the oil and gas industry. Unbelievable. [00:04:06][100.9]

Michael Tanner: [00:04:07] Well, again, it’s going to put the smaller companies out of business and it’s going to lock in large, you know, you know, large international companies. I mean, when it comes down to it, Chevron, Exxon and BP love these type of rules I‘m sure. Yeah. Add a little tax on there. You know who can’t stand it. The 90% of oil and gas operators who are considered small cap. So they don’t account for a large amount of production. What they do account for is a large amount of, you know, and they do actually account for a large amount of production relative to what the big companies do. But I think this is where I always. [00:04:38][31.7]

Stuart Turley: [00:04:39] 50% of the oil in the country is made by private companies. [00:04:43][4.7]

Michael Tanner: [00:04:44] Yeah, but I’m talking about your mom and pop, your mom and pop operators, the companies that, you know, the guys that are supplying, you know, are selling 15 loads, you know, 150 loads a month versus are doing 2 million barrels of oil a day. What I’m saying is Exxon loves it when they come out with this. There’s a reason why the API, who is funded by the large oil and gas companies, have come out for a carbon tax. You think it’s because they like the carbon? Well, no, it’s because eight companies provide their funding, and all eight of those companies would love nothing more than to raise the cost of winter freeze cuts US natural gas output for everybody who’s in the Midwest right now, I’m sure you are experiencing the quote unquote deep freeze that’s going on right now. I‘m here in Dallas. It’s only 11 degrees, so it’s not horrible. People here are a little ridiculous, but subzero temperatures in much of the United States have frozen gas wells, leading to a drop in production to the lowest levels in eight months, according to Reuters, citing local data. His report also added that demand for electricity, on the other hand, was heading for a record high in some states, notably the one I sit in, which is Texas the grid. Later there, Ercot issued a conservation, um, call for Monday on expectations that demand will break last summer’s record. Here’s that quote out of air. Uh, Ercot operating reserves are expected to be low Monday morning due to the freezing temperatures, record breaking demand, and unseasonably low wind. Gotta throw that last part in there for all of our renewables, folks. Unseasonably low wind. It’s what happens when there’s no wind. Unfortunately, the turbines don’t spin. Rotors also cite some data from LCG. Its market research unit suggested that demand for natural gas, including exports, could hit 164 point 6,000,000,000 cubic feet today, rising to a further 171.9 BCF on Tuesday. Both figures would be record breaking. In North Dakota, we saw gas production was down somewhere around 700 and 800,000,000 cubic feet a day, while oil production had declined by somewhere around 250 to 280,000 barrels of oil per day. Absolutely unbelievable. Ironically, we did see, you know, futures prices didn’t hold up great, but we did see spot prices specifically that Henry Hub spot price surge by 400% over the weekend. Um, hitting about $17 per British thermal unit pound. That compares about $3. And then BTU that is currently what’s kind of getting traded on right now. Um, absolutely incredible what’s going on? I mean, it comes out to say, you know, you can put up the tweet from David Blackmon. I mean, I mean, this says it all right. Now you’ve got 0% wind going on. That’s never going to help. You also have 0% solar. It is at 530 in the morning. So it’s a little bit of a uh a smoke and mirrors there. But absolutely unbelievable. Natural gas even with being frozen is saving the day. Hope everybody this morning to go warm shower and thank your local oil field worker. [00:07:38][174.2]

Stuart Turley: [00:07:39] Let’s go to the op ed. New report highlights green failure in Europe and warns America. Um, this one’s pretty interesting. Uh, ruber. Uh, that was, uh, report for the Real Clear Foundation has a couple great quotes in it. Uh, those who cannot remember the past are condemned to repeat it. Um, uh, you know, this ties in to, uh, the Davos crew and everything else. Uh, the analysis of this Great Britain heating the cries for decarbonization, starting when Parliament wrote an 80% decrease in emissions in law in 2008, they raised it to 100% or net 0 in 2019. And since they have, it’s been a disaster. So, um, the differences between the British energy cost and those here in the US are static. Greek Brits pay an average of $228 per megawatt hour for electricity from coal in 2022, and Americans pay an average of $27 per megawatt net in huge difference. Yeah, I mean unbelievable. [00:08:57][77.5]

Michael Tanner: [00:08:58] Yeah. I mean it’s it’s it’s pretty crazy. I talked about this last night in my show low solo show, Show Low. [00:09:03][5.5]

Stuart Turley: [00:09:05] We got us a new podcast. [00:09:06][0.7]

Michael Tanner: [00:09:06] Our show this this inflation reduction act. Everyone’s taking a bite out of the Apple. You’ve got Blackrock buying up infrastructure companies. Why? Because they care about climate change. Absolutely not because they want a little bit of that government revenue. [00:09:21][15.0]

Stuart Turley: [00:09:22] Right. It’s absolutely hilarious. Former New York City Mayor Michael Bloomberg was given well over $1 billion of his personal wealth to the Sierra Club to fund its Beyond Coal and Beyond Carbon campaigns. He designed it to rid the U.S. of every coal fired plant by 2030. [00:09:42][19.2]

Michael Tanner: [00:09:43] You that you wouldn’t save the environment more if you just took that billion and flushed it down the drain, then you would actually deploying it through the Sierra Club and out into the economy. [00:09:54][11.7]

Stuart Turley: [00:09:55] You know what? You know what. Total energy right now. [00:09:57][1.8]

Michael Tanner: [00:09:57] Fliers, our friends, more oil and gas. [00:09:59][2.2]

Stuart Turley: [00:10:00] Our friends over a year. Yeah. Our our friends over at Total Energy figured it out. They bought new, uh, natural gas power plants in Texas. Uh, enough to power the. Two nuclear reactors and they’re going to make money on. Yeah. So absolutely. Yeah. Okay. Anyway, what would a second term mean for U.S. oil and gas. [00:10:22][22.1]

Michael Tanner: [00:10:23] Second Trump secondary. [00:10:24][0.8]

Stuart Turley: [00:10:25] Trump term. Thank you. Let me say this. I got to give a shout out to, uh, RT Trevino, uh, big dog over there at Pecos Operating. He has said he makes more money when a Democrat is in power because the oil prices are higher. All right. Yeah. So all the oil guys are over here kind of going okay. Lowering regulatory issues, uh, is good under the Trump Biden administration. Biden makes them more money. [00:10:56][31.3]

Michael Tanner: [00:10:58] Well, I think well, what to expect from a Trump administration if he were to win again. Well looser regulations. Rig count instead of going down, are probably gonna go back up. Oil production is going to continue to increase at a rapid pace because more smaller operators have the ability to produce. And guess what that means. Prices will naturally be suppressed. It’s interesting from the standpoint of everyone, gas is generally a Republican, but we all make way more money when the Democrats are in power. So I love that they that aren’t talking about this because it’s really true. It also is good to point out that leasing on federal lands and specifically offshore, is going to be a lot easier, which those two things move the needle way more than, you know, six. [00:11:46][48.7]

Stuart Turley: [00:11:47] Actually. Exactly. And this article has some fantastic points in it. Uh, but I think R.T., uh, was absolutely the best way we could articulate that point. Yeah. [00:11:59][11.8]

Michael Tanner: [00:11:59] And to be honest, President Biden’s liable to get us into a war with Iran that’s going to send prices through the roof. Oh, yeah, I might get drafted, but that’s, you know. [00:12:08][8.6]

Stuart Turley: [00:12:08] Yeah, the Hootie and the Blowfish are already at it and we’re about to you know, he’s going to go try to take out. He doesn’t even know what he’s doing though. But hey, um, I mean, I’m ready for some ice cream. I’m a little hungry talking about Biden’s good buddy Biden. He weighs in banning natural gas exports to save the climate. Holy cow, Batman, this is out of Politico. The Biden administration is launching a review that could tap the brakes on booming U.S. natural gas exports. We’re the largest exporter of natural gas in the world. We’re really hoping that the Doe will pause any new permits for industry, because we know that the Biden administration really needs a climate win in order for them to win the public, win the election. This is criminal. If these politicians want to be elected or reelected in this upcoming presidential election, they’re going to have to make some bold choices and some bold moves. In the words of Scooby Doo, retro second order of facts are going to go horribly on this one. [00:13:26][77.3]

Michael Tanner: [00:13:26] Yeah, I mean, I think here’s the problem. The problem is natural gas is probably the only thing that can save us from climate change with, with, while also not absolutely destroying the communities when it comes to how much energy we have available. So it’s absolutely insane that they want to do this. You know, we’re about to cover why the EIA and the IEA need reform. The Department of Energy need some reform. [00:13:53][27.0]

Stuart Turley: [00:13:54] Oh, absolutely. And and also when you they’re they’re looking at $34 trillion in debt. But when you talk about the exports, the math for exports, you got to have exports when you’re in debt, $110.5 billion in exports this year. Geez. All right. Anyway, market to be short of oil from 2025 on onwards, says Occidental CEO at Davos. Uh, hey, I was surprised to see her there. Um, I said hi to her in the hall, but she, uh, kind of was a little busy. I I’m surprised I’m not surprised by her comments. Um, and I’m not surprised that she’s there, quite honestly, is because Occidental has done a great job. You’ve. In order to survive in this carbon nutty world, they’ve gone down the carbon round and are getting the carbon subsidies and everything else. Um. Hollub said that the near term, the markets are not balanced, supply demand is not balanced, adding that 2025 and beyond is when the world is going to be short of oil. So this is what she is saying is indirect. Contrary to what the EIA or saying in the IEA, both of those are, you know, like missing some cookies upstairs. I think this is another quote from her. I think the industry is going is looking at a scenario where we will be able to do all the right things we need to do as part of the transition. She’s got a level head on her shoulders. Even though she’s at Davos. I hope she takes a bath on the way out. [00:15:35][101.3]

Michael Tanner: [00:15:36] She really does. I mean, we did the the Oxy Crown ROC deal we did on the deal spotlight. Little expensive little expensive. But if prices are going to rise significantly maybe the deal doesn’t look that bad to begin with. Um, but yeah, it’s surprising to see her at Davos, but also not oxy. Uh uh uh, if you had to say a progressive oil and gas company, they’d qualify as one from the standpoint of they dabble in ESG. They dabble in, you know, the carbon capture space. They’ve got their stuffs in there. They’re more you know, it doesn’t surprise me that oxy there I did see on CNBC this morning. Uh Michael Wirth Chevron is well represented there. So they’re all there man. [00:16:13][37.0]

Stuart Turley: [00:16:13] Hey I gotta give a shout out to Jamie Diamond. Uh, this morning he had a, uh, also an interesting comment. He said, why can’t we all just get along and say, uh, quit having, uh, the Democrats start, you know, yelling at the the mag is because the mag is actually had some good ideas. And so he just says, hey, why don’t we all have discussions? I liked what he had to say. I don’t always like what he has to say, but I want to give a shout out to folks when they do say something like, yeah, I don’t agree with everything, Maggie, but I don’t agree with me and yelled at either. Joe. All right. [00:16:13][0.0][936.8]

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Housing market is frozen, people have gone on buyers’ strike, sellers are hoping that this too shall pass.

By Wolf Richter for WOLF STREET.

The median price of existing single-family houses, condos, and co-ops in the US whose sales closed in December dropped to $382,600, down by 7.5% from the peak in June 2022, according to data from the National Association of Realtors (NAR) today.

This puts 2023 on record as the first year since the Housing Bust when the seasonal high in June was below the seasonal high (and all-time high) a year earlier. Given the price surge in the spring 2023, the median price was 4.4% higher than in December a year ago.

In another unusual development, prices have dropped every month since June – it’s unusual because seasonally, before the pandemic, there were upticks and flat spots in October through December periods, the little hooks in the chart (circled). There were no such upticks or flat spots in 2022 and 2023, prices fell right through that October-December period (historic data via YCharts):

Demand for existing homes has collapsed.

The seasonally adjusted annual rate of sales of existing homes fell to 3.78 million in December, the lowest since the worst two months of the Housing Bust in 2010. For the whole year, sales fell to 4.09 million, the worst year in the NAR’s data that goes back to 1995.

Sales compared to prior Decembers (historic data via YCharts):

From 2022: -6.2%.
From 2021: -37.9%
From 2020: -43.2%
From 2019: -31.6%.
From 2018: -24.4%.

Actual sales – not the seasonally adjusted annual rate – fell to 297,000 homes, down by 42% from December 2021.

Seasonally, January and February mark the low months of the year in terms of closed sales. Sales that closed in those two months reflect the lull in deals over the holidays. June is usually when closed sales peak, reflecting deals made during the end of “spring selling season” in April and May. During the second half of the year closed sales decline (data via NAR):

Months’ supply, at 3.2 months, was the highest for any December since 2018 (when a surge in mortgage rates due to Fed rate hikes slowed the housing market). And it matched 2017. Months’ supply is the result of sales that collapsed while sellers were still trying to outwait this situation (historic data via YCharts).

Active listings always drop sharply in November and December as sellers pull their homes off the market before the holidays. But in November 2023 they rose, and in December, they barely dipped and at 714,000, were the highest for any December since 2019. The difference between 2019 and 2023 has gotten smaller every month since May. In May 2023, active listings were 50.7% below May 2019. By December, the difference shrank to 30.9%.

Active listings are inventory minus homes listed as “sale pending” (2023 = red; 2019 = green; data via Realtor.com)

New listings of existing homes always drop in the second half of the year and particularly going into the holidays.

But in the second half of 2023, new listings have fallen less than normal, and the difference to pre-pandemic years narrowed. In December 2023 new listings (red line) were up from a year earlier, and the gap to 2019 narrowed to just 11.8%, down from a gap of over 30% in May and April 2023 (2023 = red; 2019 = green; data via Realtor.com):

Median days on the market jumped to 61 days in December before the homes were either sold or pulled off the market, the highest since March, according to data from realtor.com. This metric reflects in part how quickly sellers pull their listings off the market when they don’t get the hoped-for response:

This is the picture of a market that is frozen. Prices are too high, buyers have gone on strike, demand has collapsed, and sellers are trying to outwait this situation, thinking that this too shall pass.

Homebuilders, however, are not thinking that this too shall pass. They’ve adjusted to the market. They’re building smaller houses with fewer amenities and sell them at lower prices, and they’re buying down mortgage rates, which is expensive and for home builders is like a price cut, and they’re throwing other incentives at buyers, and they have been able to produce decent sales of new homes, taking buyers away from existing homes, and demand for existing homes has collapsed.

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The post Amid Collapsed Demand for Existing Homes, Prices Drop Further, Supply Highest for any December since 2018, New Listings Come out of the Woodwork appeared first on Energy News Beat.

 

Energy News Beat

We need low-cost energy in the United States, and I love talking with people about the energy market. Shane Stolp, CEO at Wescom, and I had a great talk about all forms of energy. We talked about Wind, Solar, Electric Vehicles, Nuclear, Bitcoin mining, natural gas, oil, and protests. Yes, I just said protests.

We need to have a balanced discussion about energy. And we are taking care of the environment without printing money to achieve the lowest kWh delivered to everyone on the planet. But it seems like the “green” energy side will not discuss physics and finance.

Shane and I covered one of the biggest problems: the next generation coming into the energy market. He has wonderful discussions about total energy. Westcom installs solar and oil field services. They understand energy.

Sandstone Group is working on a home school and curriculum initiative to get all of our original content turned into tests and syllabuses and help the alternative education markets that are underserved markets. This podcast would be wonderful as an example of discussion around the real-world aspect of energy.

Thank you, Shane, for what you and all of your employees are rockstars at delivering all forms of low-cost energy. I am looking forward to our next visit! – Stu

Follow Shane on his LinkedIn HERE: https://www.linkedin.com/in/shane-stolp-49454711/

Check out Wescom’s website HERE: https://wescominc.com/

Energizing America Podcast HERE: https://wescominc.com/energizing-america-podcast/

Highlights of the Podcast

2:30 – Shane Stolp discusses “Energize in America,” covering various energy aspects, including solar, oil, gas, and EVs, emphasizing dialogue on energy misconceptions.

06:58 – Shane talks about challenges in renewable energy adoption, highlighting practicality in extreme weather and diverse energy perspectives between Minnesota and North Dakota.

10:04 – The rising energy costs in Minnesota due to a net-zero goal are discussed, emphasizing the need for realistic approaches and educating children on energy complexities.

12:42 – Challenges in finding employees are discussed, and Shane shares the success of his company through pride, education, and employee ownership.

16:11 – Shane highlights his company’s environmental responsibility, mentioning Bitcoin mining projects as solutions for stranded gas in North Dakota.

20:40 – Shane expresses optimism about Bitcoin’s growth, especially in addressing gas takeaway capacity issues.

23:22 – The importance of considering the lowest cost per kilowatt-hour is emphasized for humanitarian efforts and poverty alleviation.

27:23 – Shane shares his journey from humble beginnings to a successful business, urging action and impact.

32:34 – Shane encourages listeners to visit west.com, highlighting the Energizing America podcast, and expresses gratitude for contributing to the industry conversation.

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Stuart Turley [00:00:08] Good morning everybody. Welcome to the Energy News Beat podcast. My name’s Stu Turley president and CEO of the sandstone Group. We got some really, really interesting conversation today. Uh, I have been on this gentleman’s, uh, podcast before. I absolutely love everything that he is doing. I’m going to introduce him here in a second, but let’s tee this up. 2024 is shaping up to be one of the single best, most entertaining years of our lives. There’s a lot going on. We just had Cop 28, in which there was a lot of big oil showed up, and there was a lot of green. People showed up and their heads were exploding. David Blackman just put out. There’s going to be a resurgence in nuclear around the world. In my opinion, I think we’re going to have nuclear not really in the US because of the legislation through regulation, but we’re seeing a, uh, resurgence in nuclear like Dubai just put out or excuse me, the UAE just put out a nuclear reactor. So then you’re going to have natural gas. Natural gas is really kicking off around the world. And I’ve got a van tastic energy expert here today. I’ve got Shane and he is absolutely the CEO of West Com. And they know energy. They know solar. They know oil and gas. And I love them. Welcome, Shane. And thanks. I’m so glad you’re here today.

Shane Stolp [00:01:51] Well, thanks to you. I’m excited to be on here and talk about energy in America and how we need all these forms of energy. And boy, there’s an untold story behind the headlines. And unfortunately, as Americans and folks around the world, we just love the headlines. And it’s so easy to buy into that headline, isn’t it? It’s incredible that even the things you just said, there’s so much behind all of that to unpack and what you and the sandstorm group are doing and including David Blackmon, all the folks that are out there using the Substack and getting this message out, we can’t get enough of it. It’s awesome. So thanks for having me on to tell the story.

Stuart Turley [00:02:25] And then I’ll tell you, um, a couple things. You also are a podcast host, and this is really awful, Shane, because you had me on your show and it got I got real busy because I was going to have you back. But tell us about your podcast. And then we’re going to go into what you’re seeing in the energy space.

Shane Stolp [00:02:40] Yeah. Right. So our podcast energy is in America is just how we need energy in our life in all forms of energy. And sometimes we talk about business energy, just different business tactics. And, you know, I’m part of a group that grew from zero to a few hundred employees out in a little patches. And I love to tell a story about blue collar workforce. So that’s a big piece of it. We talk about solar. I have solar at my house. I got solar at my shop. 90% of my work though is comes from oil and gas. So, you know, we got an EV. Of course we talk about EV vehicles. Sometimes we just talk all things energy. Sometimes we get politicians in, uh, to talk about their opinions and blab what they have to say about things. We have. Pete Stauber is a representative of ours from Minnesota. He’s been a great guest on our podcast. And then sometimes we get lucky enough to get people like you come on and talk about some of the world events around oil and gas and and just all in energy approach to our podcast, energize in America really started just with the mission of sharing the need for energy and and sharing the story behind the folks who produce it, because there’s so many awesome people out there talking about the human part of energy and how important that is. And sometimes it gets forgotten that it actually takes humans behind the energy to even produce it. Right? Uh, I love this idea of, oh, let’s just go all electric. I love electricity, I mean, I’m my my electrician, right? This is great. The problem here is, is that folks forget we have to produce the electricity. So somehow they think if they’re not using their gas vehicle, the electricity just magically shows up. None of them, very few of them actually understand that electricity has to be generated by the way, which is oftentimes most affordably done via coal, natural gas, you name it. It’s very rarely done by a renewable source. There’s some of it, right? If we could have more nuclear like you started with, we’d be great. But there’s that untold story of the humans behind there that are producing that energy, all forms of it.

Stuart Turley [00:04:31] Hug your linemen. Uh.

Shane Stolp [00:04:34] They’re going to need those hugs.

Stuart Turley [00:04:36] Absolutely. Because, you know, the FARC just put out a chain that the U.S. grid is not doing too hard because of the sustainable, uh, or the sustainable or the renewable energy that is not sustainable. Uh, being put on Texas is having to put in we’re using more coal now than we’ve used. Kerry is trying to shut all that down. And you were just talking. You’re up in the middle of the tundra up there and. And you are having snow. You’re not getting any solar today, are you?

Shane Stolp [00:05:11] No. And so this is this is the cool part about actually having solar, right? Uh, when we started our podcast of energies in America and really trying to get the message out. People ask me about solar, and I didn’t I didn’t have enough details about it. And I’m a reader. I can read a lot about solar, but I love when I get to experience it. So we made an investment here to shop, put solar, and I got a monitor. All running shows how much solar energy we’re producing. I got it at my house on my roof. Same thing. But I’m telling you, in July and August, right up in northern Minnesota. December, January, February. Not so great. We get a lot of snow. And, uh, it’s it’s not cool unless you get your solar panels off and then it’s only six hours of sunshine. So unless you have a big battery billing system, which is totally unaffordable. And oh, by the way, we just did on the biggest copper deposit in the world pretty much up here in the northern half of the US. But guess what? We can’t mine it. That’s a whole nother matter. So we don’t have we don’t have affordable ways to storage the energy. So it’s awesome to have real data still to talk to people about that. You know, when they say, oh, you’re not only on gas. What’s wrong with you? What do you mean, what’s wrong with me? I’m actually making sure that you get to get up this morning. Like, for me this morning I woke up first and it is hit my, you know, oil produced phone started up because it’s 80 degrees out there at the lake. Started to pick up at the floor. Ooh, I like that nice tile heat, you know that I have. Obviously my propane boilers work in a way out the door I go and get my that fossil fuel ridden pickup, which is a really, really nice way to drive compared to the electric vehicle in northern Minnesota. With this temp is not so warm. The electric vehicles are so fun. Still, I’m sure you’ve read them. They’re still fun, but when it’s 20 degrees out they’re not very fun.

Stuart Turley [00:06:55] You know, home and they don’t.

Shane Stolp [00:06:57] Get rings.

Stuart Turley [00:06:58] Because my in-laws, uh, the green side. Why is it you and I can have this conversation? I love all forms of energy. Has to be sustainable. You can’t print money where the global economy is now facing horrible things. But do you see, up in northern Minnesota, this conversations of religion around the quote unquote renewable side? Uh, and I love my oil and gas folks love oil and gas because they’re they’re, uh, the Texas Rangers of energy. As far as I’m concerned. I don’t care where you are in the U.S. if you’re drilling a rig, I love you. I don’t care if you got mud all over you. I’m going to come hug you. And it’s because I realize that as low cost energy. But what kind of conversations do you have when you’re talking to folks? Is it just.

Shane Stolp [00:07:53] They answer fascinating conversation stew. And people are so uneducated in this. They’re so opinionated on something that they have no knowledge of. For example, I’m at the local elementary school. We’re getting set up for a carnival. Me and this girl open up conversation. What do you do for a living? She says, I protest, I should really what do you protest? She says, oh, things like the Enbridge Line three project. And I say, oh really? This is going to be fun. And you could, you know, politeness. She asks me, now what do I do? And I say, well, I run out. I run into energy services company that primarily works in oil and gas in North Dakota. Uh, exactly what you’re protesting against us trying to transport. And so then we have this lively conversation. But super, you know, if you if you try and meet them where they’re at, like, hey, so tell me why you’re protesting, right? Well, I believe I take care of the waters. Oh, you do realize most of the oil and gas that we import comes from overseas over the beautiful ocean? Does that not concern you? Because if it does, it seems like you would want it to go on a pipeline underneath American soil where we have good regulation and good things in place. Right. And eventually by the end of the night, she’s actually coming around. And that, boys, when we get in the pickup, they go, boy, dad, I wanted to wring her neck, you know, but yet by the end of the night, she’s totally understands it. Yeah, that’s true. She didn’t. She actually drove her car to the event. You know, if you didn’t walk to my question. Because why didn’t you walk here? If you truly believed in it, you got to be all in. And so you have to somehow meet folks where they are. Here’s what’s fascinating, though, is a conversation over in northern Minnesota terrible. There’s so many environmental groups with just the one sided agenda that are all focused on climate change. Without knowing the facts of it, you get over to North Dakota, which is one of my favorite spots in the world, and there all the time you can have real conversation with real people who, by the way, this is what never is told. The oil and gas folks out there, they’re some of the best environmentalists you could ever find. Because guess who’s out there hunting? Guess who’s out there fishing? Guess who’s out there using the outdoors? It’s those folks. While the environmentalists are chaining themselves up to some painting somewhere about some forsaken thing that no one even cares about. They don’t use what they were trying to protest with.

Stuart Turley [00:10:04] Did you see the one that glued their hand? To the pavement and had to cut the pavement out. And then he lost his hand.

Shane Stolp [00:10:14] And it has a weird way of taking care of things, doesn’t it? But there’s this idea of just trying to meet folks where they’re at that. Minnesota came out with this big, you know, net zero goal by 2030. So local utilities increasing their cost by ten, 20% a year. You can get a handle on it. And finally, it seems like people are getting hit in the pocketbook where it counts. And obviously maybe this isn’t the best strategy, right? Maybe we need to do something differently. But unfortunately, the train has departed the station and we’re too far gone in northern Minnesota. I don’t know what’s going to happen, and it’s in the whole state. It’s terrible. One of his tax states and energy cost is not. Again, they don’t consider that a tax. If they did, we would be worse in California and we’d be one of the top in the nation. It’s terrible. But I do believe with the right set of circumstances, which is one cold weather that has a way of keeping things very real when it comes to energy. You guys experienced it in Texas a few years ago. I think it’s cool. Yeah. When it gets cold, people pay attention. So cold weather that that’s that’s one thing. The second thing is cost people in the pocketbook. And I’m telling you up here, the energy costs are getting out of control. And we have oil and gas all over. There’s no reason for it.

Stuart Turley [00:11:27] I did not know that. Uh, I knew that the the legislation through regulatory action is now weaponized against the American citizen. And it said, look at New York.

Shane Stolp [00:11:42] So we try and get, you know, even one of the things we’ve tried to do is try and get these kids, they’re in an education system where this stuff is being they’re being told from day one that, you know, oil and gas is any fossil fuel. We don’t even have to say oil or gas, right? It’s fossil fuel, just an absolute attack on any natural resource use, right, other than solar and wind. That info bad bad bad. So we we grab a solar panel, we grab our west content, we head to the local elementary school every spring. We have the kids outside. We got a little fan and a light on the thing. We we have it out in the sun. The kids get to touch it. They get to learn about raceways and electrons and everything. And then we shove it under the tent and they realize what happens when the sun goes down. It’s a very real thing. And I tell them, we don’t have a windmill because we don’t have enough wind up here. But it’s the same exact thing with wind. So what I’m trying to what we’re trying to do is give these kids a little opportunity, even at a younger age, understand that there’s probably more to it than what they’re being told.

Stuart Turley [00:12:38] How cool is that?

Shane Stolp [00:12:40] It is one of the funnest days of the year.

Stuart Turley [00:12:42] I’ll tell you. Um, I’ve got a I’m trying to get. We’re just covered over with work, but, uh, we have a homeschool initiative at sandstone that we’re trying to take all of our podcasts, put tests on them for the high school students and, uh, and junior high, junior high and high school for energy, because a lot of the talks of the guests that we have are phenomenal. I learned so much. You know, I even though I went to Oklahoma State and that’s a little bit of a handicap sometimes. Uh, I’m kidding. I love my college, but they didn’t graduate people that couldn’t read. But that’s a whole nother story. Um, but we’ll leave that alone. Uh, so. And anyway, but I love the idea of giving back and educate the next generation as a big employer. Shane, are you having trouble finding energy employees out there?

Shane Stolp [00:13:40] Well, you know, we we’ve struggled with employees overall, just like everyone has in today’s world, right? It’s a tough deal. I’m pretty proud those two we’ve had when my brother and I got going in this, we had five employees. We now have over 250. And these folks are so committed to the energy industry. One of the one of the secrets we’ve done, though, is and it’s not even a secret, we just have the conversation. Guys, don’t be ashamed of what you do. Let me tell you. I interviewed Luke warts. He works for Marathon Oil, a massive producer over in the Balkans. He’s a children’s author. He’s got the coolest kids books ever. So I give it anyone. Anytime someone has a baby around here, they get a little baby outfit from me and they get a couple kids books about oil and gas and how important it is, and I try and help everyone else come embrace what you do. Because guess what? We wouldn’t be where we are without you. I would not be warm in my bed at night without oil and gas. I just simply wouldn’t do it. I would not have this nice shirt on without oil and gas. I wouldn’t. I wouldn’t have nothing. It. Look at the difference between the Liberty CEO does such a great job and this is in his annual reports.

Stuart Turley [00:14:43] Hearst right.

Shane Stolp [00:14:43] Love is phenomenal in this. In talking about the the low cost affordable energy, what it does. And that’s why America is what it is. And it’s a shame that we’re not allowing other countries to follow suit once we got it. We don’t want other folks to do so. We try and tell our employees, embrace what you do, go home, brag about what you do, tell your coworkers or your your copy to members. Tell the folks at the football game embrace what you do because and learn the facts about it. You know, a lot of folks just don’t even realize how impactful their work is. So that’s why even our model of energy in America came to be. We used to just like, I don’t know what our model was ten years ago, maybe safely serving the best oil companies right online. Know what are we actually doing? We’re like saving lives. We’re energized in America. Think about how cool that is and embrace that. And through that, I think our folks feel very fulfilled at work. And then, oh, by the way, we happen to of this year, uh, became employee owned. So my brother and I yeah, I put all the shares of the company into a trust fund. And you earn the share through your efforts of working. You don’t buy the shares, you can only earn them. And so, yeah, we’re an employee stock owned company, and, uh, folks get to own the company. They work for us. So that’s also been very helpful for those those employees.

Stuart Turley [00:15:56] You know what I’m about to tear up. Uh, I, you know, I feel like I could.

Shane Stolp [00:16:00] Be a first.

Stuart Turley [00:16:01] Yeah. Uh, Lee Greenwood merc, uh, you know, I I’m breaking into my my Texas America here. How cool is that, man? Well, it’s true.

Shane Stolp [00:16:11] Here’s the thing. See, this is what we get to tell now about this. Everyone who has this agenda, we we kind of lump people together, right? Uh, green initiative, uh, the, uh, ESG, all those folks kind of get thrown in this big pile. Right? But once you start stripping that pile out, you go, wait, you care about ESG? Let me tell you about environmental social governance, at least from a company of a few hundred people doing several million dollars a year in revenue. Our employees own the company. Go find me a green. Company that only does solar whose employee owns you, will not find them. You will not find them, okay? You’re not talking to them, right? Oh, uh, you care about taking care of, you know, the environment. Go find a company that has 90% of their staff. Oh, they’re hunting, fishing and doing all the kinds of things that we should be doing with our natural resources. And by the way, I got 20 people, one set of folks out in North Dakota. You know, all they do for a major producer is go back and fix burn back and flares to do better for the environment. That particular producer spent over $10 million last year.

Stuart Turley [00:17:18] 9.

Shane Stolp [00:17:19] Million in the Balkan chocolate. So if you want to talk about people who care about an environment, we’re all in.

Stuart Turley [00:17:25] Oh, isn’t that great? Hey, let me ask this, and I’m sorry. Uh, I would give you a man hug right now because I just love everything that you got going on your humanitarian first. Um, let me ask this, because Bitcoin, uh, I love bitcoin. And there’s, uh, there’s a whole political reason behind it. And when you sit back and take a look, uh, I love the Bitcoin miners because it gives the ENP operators additional income if they put a mining operation on stranded gas or if they’re flaring out and they can’t get a pipeline out because of the regulatory kind of issues. I mean, this is a round robin. Aren’t you seeing any Bitcoin mining up there? And I do love bitcoin mining.

Shane Stolp [00:18:14] Yeah we are. We’ve seen um, we were involved in a fairly large project last year and a lot of uh, taking stranded gas, uh, you know, North Dakota about 25 to 30% of their production comes right off the Indian reservation. Uh, the energy has some power. Uh, they have some takeaway capacity issues from the from the natural gas. And then subsequently they also have some, uh, political issues in getting the local utility to bring power in.

Stuart Turley [00:18:42] So there’s a bit about that. Yes.

Shane Stolp [00:18:44] There’s a perfect storm going on where they can use this gas to create, like, little mini power grid and, and do something. Right. Um, one of which could be putting it back on the line or Bitcoin mining, I would say 20% of our sites we find bitcoin uh, mining anymore on because of one of our producers is really into it. They’re using it some of that gas some some constraints with its due, you know, um, you know, how it is in the oil and gas. Sometimes the gas is coming out, it’s flowing perfectly. And then all of a sudden the well runs into an issue. The gas shuts down. You got a lot of infrastructure costs in that Bitcoin. Um, North Dakota state regulators have been a little bit, uh, tough on the bitcoin miners. Uh, a lot of the bitcoin miners want to import, uh, their computers and different components from China. They’re not unlisted. That that makes sense if you a little bit. But I think we’ve worked through a lot of those challenges. There was just one project last year that out of all the ones we’re involved, that didn’t go as quite as well as they would have hoped. So now they’re moving that set up. The beautiful thing about that Bitcoin mining. And so you know when in the shall we we start the well up right a lot of oil comes out. And as it ages more and more gas starts to come out. What do we do. North Dakota has a massive takeaway issue. It’s it’s brewing. Then on February 28th, we’re going to be in a world of hurt. They’re going to have to curtail production, which would be terrible.

Stuart Turley [00:20:05] So as regulations are coming out changed.

Shane Stolp [00:20:07] So it’s so bad. You talked to Lynn Helms, a director of Mineral Resources there. He’s done phenomenal. I think it by uh, in 20 years, you know, they used to produce 100,000 barrels of oil a day there and all of our one point almost hitting 2 million. And he says by the time it’s 2:00 in the morning, they produce more oil than when he first started in his job. Right. And what they did in a 24 hour day. But this, this Bitcoin mining is a great way to take care of some of that natural gas take away capacity issue. At the same time, reduce revenue for folks.

Stuart Turley [00:20:40] And get rid of the emissions. And then, uh, so here’s I, I get excited when I’m talking ESG, making money and saving and putting power and all that. I would love to interview your customer that you did do that and you and really kind of educate our listeners more about the goodness of Bitcoin mining. If we can get that kind of a thing scheduled because people think, oh, Bitcoin mining is bad. Uh, and I’m if the digital currency from a government kicks in, it’s not good. And I’m, I’m sorry, but you’re going to see here’s a prediction and I, I want your opinion on this too I think bitcoins are getting ready to run to the races.

Shane Stolp [00:21:24] Uh, I think it’s went through enough of its cycles that it has to test the highs and the lows. It seems like it’s within the next couple of years. It’s going to be here to stay, and it’s going to be a growing asset. The thing is, we have to. This is where it gets so complicated for folks to get. So singular minded rather than taking this all in approach. And this is why all the podcasts at sandstone Group does, and all the publications and everything are so important to be involved in. It’s an all in approach. We’re considering all the elements and pulling it all together, of which Bitcoin mining as a place and can do phenomenal things. I had an employee one time who well, he still works for me and he works over in Minot Or he lives over in Minot, North Dakota, and he was back in mining in his basement, and he was telling me his electric bills were out of this world. Right? Meanwhile, 65 miles away, there’s a well that’s just has nowhere to put the gas which is flaring off into the atmosphere, right, in all kinds of energy. They could put a harness right there with some computers in it. It’s in Bitcoin mining. Gone. It’s a win win for all parties involved. There’s some infrastructure costs. But here’s the thing. They’ve gotten so good with Bitcoin mining. Now we can basically this is modular. You can pick these things up as it goes bad. And it doesn’t have the gas take away anymore. Pick it up move it down the road to the next. Well that does have some take away issues right. What I wish is that we could get that bitcoin mining going down in the Permian Basin, and very slow adopters in the Permian Basin to us. However, they have a lot better takeaway capacity. They don’t have the same issue with flaring as we have up north. But they’re they’re headed there. Right. If it’s the same. Uh, of course, the geology always depends where you’re at, but more than likely they’re going to start experiencing what the Balkan basin has experienced, which is gas here. Wells over time. What do we do with this take away capacity.

Stuart Turley [00:23:12] Right. He said gas here you have seven boys. So I figured.

Shane Stolp [00:23:21] We. Yes.

Stuart Turley [00:23:22] Yeah I get, I get, I just I’ll tell you uh, bit deer we’re working on and, uh, maybe signing up as a sponsor of the show. And I’m trying to get the executive in here, and we’re working on a nice marketing budget for next year, and I, they’re the biggest, uh, bitcoin miner out of Singapore. And they are not really in the investor market, which we’re trying to help with. So, uh, you know I’m I’m really looking forward to visiting with you. More about the Bitcoin up there because I think that’s a huge win for ESG. I didn’t think about it that way a couple of years ago.

Shane Stolp [00:23:59] No. Well you know, it’s funny I was in a hotel in Utah, North Dakota. This is back in 2016. We did a Christmas party at this hotel, is headed up to my room. A guy gets in the elevator and we start talking. What do you do? He says, Bitcoin mining. I said, what? And he starts talking about, oh he’s going to do this, I engineer I told my brother that night, that guy is crazy. By the morning I told him, you know, Jeremy, I wonder if that guy, you know, on to something. Four years later, in 2020, he had over 30 wells that he had bitcoin mines set up on and he was doing very, very well. Now we know that bitcoin mining you know profitability in Bitcoin can go up and down right. But if you if you’re if you’re producing it for free then it’s just a matter of how long you’re willing to hold it. And when you’re willing to sell it like any investment.

Stuart Turley [00:24:43] Oh, you know, the, um, uh, cost per kilowatt hour. So this, this conversation, Shane goes back around, humanity needs the lowest cost kilowatt per hour to get it out of humanity, to get it, uh, to elevate out of poverty. Kind of like Chris Wright said over at Liberty that you mentioned. Um, I mean, he’s the one that set the tone for the Energy News Beat podcast humanitarian. And then Alex Epstein was also the same way. You know, I got to interview, uh, both of them a couple times, and I love both of them. So, you know, they helped set how I was, like, going, uh, a light went off. So this conversation of the lowest kilowatt per hour for ESG, for Bitcoin mining, for finances has come back around to this circle of humanity to in order to elevate people out of poverty.

Shane Stolp [00:25:39] But and because it’s so important to people, again, they’re not thinking about every kilowatt of energy has to be produced. And so what does it cost to produce it? Who’s paying for it? Newsflash the government doesn’t just give you free energy. Now that’s not very creative in in tax credits and everything else, but we have yet to see where they go to the local homeowner and they say, you know what, due to our added regulation, we’re just going to go ahead and start taking care of your power bill. It’s not going to happen, folks. You’re going to take care of your own power bill. Are utility over here in northern Minnesota tells us when we’re talking about payback to a solar system relying on a 3% annual rate hike from here until 2050. But you know what they do every year when they go to the legislature, they ask for a 13 to 22% rate increase. Wow. That’s the reality of what thereafter. And folks are going to just they’re going to cost themselves right out of affordable energy. And you might not think it doesn’t matter. And this is one other thing I always tell our elementary kids when we’re talking to them in our our coworkers, okay. For us in the oil and gas. Business or us who have able bodied minds and healthy bodies, we can go make a living and we’re maybe middle class or a little above. You probably really don’t. It’s easy to say you don’t really even hardly care. Oh well, your power bill went up 4%, right? What I’m talking about is the same people, when lumping in this pile who are after ESG are the very. People that oftentimes can’t afford that rate increase. We do energy scholarships as part of our ESG o movement. We do every year. We call a couple of the elementary schools we say we want for families who can we pay their power bills for a for four months. We send a thousand bucks to the local utility company for that, for that family to help out with their energy costs. Right.

Stuart Turley [00:27:22] Because cause that where.

Shane Stolp [00:27:23] It’s bad, those folks that are living in right on the edge. And guess what? That’s most of us living right on the edge financially. And now we’re going to go ahead and increase your price. Because why?

Stuart Turley [00:27:35] But, uh.

Shane Stolp [00:27:36] Yeah, there’s no reason for it. In today’s world, with this abundance of energy we have, there’s no reason for it.

Stuart Turley [00:27:41] You nailed what’s happening in New York right now. Uh, Governor Hochul put out four months ago. Shane. Uh, they are having to increase. She she said you’re going to have a 20% increase in energy, uh, this year. Then you’re going to have another 20% and then you’re going to have 100%. So I like I said, we I went to OSU 20 plus 20 plus 100 and gets expensive. I don’t care who you are. I mean that’s bad when.

Shane Stolp [00:28:14] It’s 20 on top of 2000 on top of that 40. Right. Exactly.

Stuart Turley [00:28:19] Yes.

Shane Stolp [00:28:21] It’s bad. We don’t even have to go to college to know that. But I think that’s that’s the cool part about this podcast that we can do think about the medium we have today to help share the story. Yes, but there’s action required on everyone’s part and that’s even better. Christmas Party is this year, as we’re all talking about where we’re headed as a country and what we’re doing even as a company, as part of this, you know, we’re just a small little speck, but you get to decide how big your speck becomes. How many people are you sharing your story with, how much of an impact are you making? And each one of us has a role in your pocket.

Stuart Turley [00:28:55] I love what you do chain, because you are, uh, the epitome of the backbone of the US. Uh, I am serious. If we can help you and and everything else, I’m surprised by the success of our podcast. I’m humbled by it. We have so much great feedback. And and it’s podcasters helping, podcasters helping spread the word. People are tired in the mainstream media. Uh, you need to interview, um, uh, JP Warren. He’s also written a book I love, JP. JP is Coolcat and you. So you need to interview him. And, uh, I guarantee I want to interview the other author that you have about his child’s book. And maybe we get both of them, all four of us on a, uh, child’s book, uh, panel. I think that would be absolutely a fun hope.

Shane Stolp [00:29:51] Well, you know, I have had this conversation also with our team. Here’s the cool part about being in America. There might be in today’s world, ways that we get stopped or tried to be stopped. But we’re a country of ingenuity. There’s always a workaround. There’s always a workaround. I grew up in I was born in North Dakota, grew up in Duluth, Minnesota. My my dad never went to college. He was a boiler operator, which was often and just a fancy title for a generator in a mall. They raised all nine of us kids, seven boys, two girls. I end up with seven boys and two girls myself.

Stuart Turley [00:30:25] And here’s the water up there, dude.

Shane Stolp [00:30:28] It will be tough because I’m telling you, it’s an awesome life. You imagine? Last night I was out on the lake with my seven boys playing hockey. We it was magical. And the girls are inside with mom. It’s a wonderful life. Here’s the thing, though. You know, Mom and Dad hardly had any ability to even pay for all nine of us. We grew up in an environment that was tough. It was bumpy 1980s economy stuff. We went out, dad. The only way he survived the 80s was by moving us out to North Dakota, being part of the coal gasification plant, you know, before he came back in the 90s to Duluth here and raised all of us. My point is, is I started with nothing, absolutely nothing. And my brother and I got involved in this business when there was five of us. We just loved oil and gas. We loved the industrial field. We loved the American strap on your boots. And the people we’ve been able to meet in this industry are just phenomenal. It doesn’t matter if you’re in North Dakota, New Mexico or over here in Minnesota. We got an office in Wisconsin that’s all across every single state, nearly. We had West Coast pipeline this year. We had an East Coast pipeline that we worked on. We’re all over the place, and there’s such incredible people that are just like me. All they’re doing is putting on their boots and giving it their best. And some of us get really, really lucky. We end up owning a business, which is some of the most incredible people ever. And then the cream on the top is that we get to give it back to them. We get to give the company to them so that they can take the future rewards. There’s so much of that here, and we forget that we can get frustrated with all the noise and all the headlines and everything else. Go turn it into action. Do something about it. Get involved. Listen to that podcast or somebody about it. Whatever you do, we can do it.

Stuart Turley [00:32:08] I’m fired up. Okay. This is we’re going into 2024, and I’m fired up for our podcast. Host Shane lean forward into his chair and we are getting ready to run down that road. I guarantee you we are going to have a blast. Shane, I cannot wait to see you again.

Shane Stolp [00:32:28] Thank you Stu. It’s been awesome. We got to keep this message alive.

Stuart Turley [00:32:31] Oh, I’ll tell you what. Preacher and preacher.

Shane Stolp [00:32:34] And. Well, my wife, my wife always says, settle down. Now, don’t go in church as much as you do. And you know, they do just have not ignited their passion. See that? That’s the thing, everyone. Everyone wants the same thing. A nice, safe home, right? At the end of the day, we all enjoy that, right? What is what are some of the critical components of that? A good job, boy. Get in the energy business. Because if you want a growing business, a growing industry over the next ten years, no matter if you’re in fossil fuels, green movement, whatever you want to call it, linemen, think about the transition that we are under. Whether you agree with it or not, there’s like massive.

Stuart Turley [00:33:09] Beautification is here.

Shane Stolp [00:33:11] It’s here. How we how we’re going to produce electricity. That’s where the fun is. But there’s tons of future in that. Right? So how easy is that to talk about. Everyone likes to be warm. Well that requires an energy. That’s an easy conversation. All of this is such an easy conversation and everyone has the same goal. We just got to learn how to ignite that passion within them. When we do well, you can move mountains.

Stuart Turley [00:33:34] I’ll tell you what. You made my day to day. Shane and I will keep a pledge to you is keep heckling you and, uh, bugging you on, uh, LinkedIn, sharing your stuff. And, uh, I want to help you out in any way that I possibly can. Let’s do some of these other panels. Uh, I really am excited to to do some of those. And let’s get the word out there. How do people find West Con and how do people find your podcast?

Shane Stolp [00:34:03] Yeah, let’s con income is where you’ll find everything about West. Com, including our Energizing America podcast. Energizing America podcast is on every platform you can find. Come join the conversation. It’s a fun one. We need everyone involved in that. And I really appreciate the opportunity to sit down with you again, your passion for the industry and everything you guys are doing. Please keep it up because we just want to be a small piece of the conversation.

Stuart Turley [00:34:26] Oh, you’re a huge piece. So thank you very much I appreciate you. We’ll talk soon. Jane.

Shane Stolp [00:34:32] Thanks to.

 

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