Week Recap: Blackouts, $9 Gas & Shell’s Big Play!

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

Stuart Turley: [00:00:00] This is a huge bill, and I like the way that it’s phrased, because we’re finding out that it’s not a good thing to have wind and solar on your grid. There’s a place for it, but not on your [00:00:14][14.7]

Michael Tanner: [00:00:15] Yeah, it’s, I’m, I can’t disagree with anything you’re saying. I mean, this is probably something that Ercot should have done years ago, which is probably, you know, for, for everything that’s great about Texas Ercot is not one of the great things about Texas because they are, they, it is so much for getting them on the bug. [00:00:34][18.7]

Stuart Turley: [00:00:41] Hello, everybody. Welcome to Energy Newsbeat Daily Standup. This is the weekend edition. Welcome. Sit back. The staff is picking the top stories of the week and you’re going to just love it. So if you’re out boating, turn it up. You want your neighbors to hear the fun stories on energy this week that we’ve had at energy newsbeat.co or the energy news beat.substack.com. Also We want to give a shout out to Steve Reese and his team over there at ReeseEnergyConsulting.com. Great job if you’re in the midstream or if you are looking to build a data center. You need to know how to save money and put it to your bottom line. Give them a call. SteveReeseEneryConsulting.com, ReeseEinergyCosulting, Steve Reese is the head guy there, tell them Stu sent you. Have a great day. Enjoy the day. [00:01:38][56.5]

Michael Tanner: [00:01:38] First one here, U.S. Largest grid operator is warning of summer. Power outage. This is crazy guys so if you’re not familiar with how the grid is set up there’s six or seven key what are called interconnections which are basically regions, okay? And each year they release their reports specifically upcoming in the summer when power demand goes way up. And so PJM. Okay one of the largest of, you know, supplying most basically PJM is part of the Eastern interconnection. So you can imagine, okay, you can Easter, so you’ve got New York, you’ve got all this stuff, okay, so this is PJM is the Eastern. Part of the grid. Okay? And every year, multiple different annual assessments come out. Okay? This year, the North American Electric Reliability Corporation, NERC, their headline was America’s Largest Grid Operator Warns of Summer Power Outages, which actually refers to PJM’s recent warning, which PJM put out in their summer 2025 outlook. So I’m going to quickly read some of the key highlights and then we’ll dive into the kind of the scary part of what they put. So first, they said forecasted peak demand. PJM expected a summer peak demand of just about 154,000 megawatts with a potential for an all-time of more than 166,000 megawatts under certain extreme heat scenarios. Historical peak loads include about 165,563 megawatths. All the way back in a 20. Last year, our peak was about 152,700 megawatts. And in 2023. It was a hundred and forty seven thousand megawatts. About available generation capacity is sitting at approximately 179,200 megawatths of of generation capacity with about 7,900 megawatts. Of contracted demand response resources, which can be activated. Demand. This is the crazy part there. For the first time ever in PJM’s annual assessment, they brought up the risk of a shortage. They said available generation capacity may fall short of required reserves in an all-time extreme planning scenario where demand could exceed 166,000 megawatts. And this reflects concerns about maintaining grid reliability. Under record heat and this goes along with the weather prediction for this summer. Hotter than normal summer conditions are forecasted especially along the Atlantic seaboard where PJM ends up, which could exacerbate demand. And strain. The grid, this is unbelievable. I mean, if you know this is coming, and yet you can’t deal with it, that’s the part that gets me. Why is this happening? So potential. Causes of this were one a bunch of retiring fossil fuel plants much of the retired electricity generation is in the form of fossil fuels, which as we all know, is the most despatchable part of our grid, which means we can fire up a new coal plant or fire up new natural gas plant if needed. Really hard to go construct a new wind farm or lay new solar panels. So super, super interesting there. We’ve also seen slower than expected renewables growth. It has not been keeping pace with demand. That’s what PJ SEM, you know, basically what they said was PGM plans to issue some Guidance for inverter-based resource owners to adhere to certain standards, but the challenges do remain. And we’re also just, again, expected to see soaring demand. Due to the heat. If heads up, folks, if you’re on the East Coast, many of our listeners are, it’s gonna be hot and you’re gonna wanna make sure you have a backup generator in the house because you never know. When PGM is going to start throttling your demand. It just goes to show you the poor energy planning that are great as it meets do hound the table day after day about this. The grid is not as reliable as we might think, and it really, really goes to show, especially when the grid operator themselves are saying So if you’re on the East Coast. Stay safe, but… Man, this is this is unbelievable. [00:05:51][252.5]

Michael Tanner: [00:05:52] Newsom’s war on oil could send California gas prices to nine dollars. Analyst warn guys, this is unbelievable, so as we all know, refineries in California are getting shut, shut down, and now all of a sudden local news is starting to pick up. I mean, local, the local ABC news affiliate in Los Angeles, not the bastion of conservative thought here. Okay, so the local ABC affiliate, K-A-B-C-7, reported, this is straight from the article, the Phillips 66 refinery in Los Angeles could close by the end of the year, which would send skyrocketing prices above $6, according to USC Professor Michael Misch. Again, USC not known as a bastion of conservative economic thought. Even they think gas prices are going above$ 6. Misch also added that if that Valero refinery in the Bay Area closes by the end of next year, which is according to plan. That that could send gas prices soaring close to nine dollars a gallon so they know this they know that closing these refineries are going to drive gas prices up why do they do this who knows this is the crazy part though in response to this governor newsom great friend of the show one of our favorite governors told the spokesperson at kfmb tv that the governor has directed the state to intensify collaboration with refinerys to maintain a stable and affordable Gasoline supply what he does not point out is where those refineries are they’re probably not in California And that’s the funny part. They’re just outsourcing their emissions to somebody else. Well, if it doesn’t happen in California Then I guess it’s okay Not quite how it works. I don’t think pollution just stays in the state in which it was made, or so the theory goes. It probably floats out into the atmosphere. So if you’re truly, truly worried about emissions, why would you worry about it? It’s the whole NIMBY thing. Not in my backyard. I do not care what happens over there. Those guys should be able to do it, but it should not happen in my back yard. It’s unbelievable. CalMatters.org has actually sent out a warning. Again, CalMatters.org. Again. Again! California not the bastion of conservative thought they warned in April that the closure of two refineries will actually will again send gasoline prices sky-high And, you know, this comes days. After Newsom has already signed bills that require refiners to maintain minimum gasoline supplies. I mean, we know this, Newsom and his entire stooge of political Creeps, we can call them that, creeps. Have really been demonizing the oil industry for years. They’ve sought to ban the sale of gas powered cars in the state. They’ve also accused the industry of price gouging them. Well, what are they gonna do now when gas prices rise? Well, guess what? They’re gonna go back to their old bag of tricks. And tell us that, oh yeah, they’re they’re price gouging again, so. I mean, the playbook is here. The playbook is here. You know, again, we saw a year ago, Bright Bart releasing a story that said Newsom was going to war with the oil and gas business. He blamed pump jacks in LA for local health problems. It’s just unbelievable. Here’s a quote from Newsom. They’ve been gouging. They’ve taken advantage of you. They’re lying to you. They’ve polluted. They’re the polluted heart of the climate crisis. He, and then he also claimed that oil jobs would be replaced by clean energy jobs, yet all that offshore wind they’re building. I mean it’s unbelievable, Oilslick Newsom himself. Has no idea what’s going on. You know, maybe on his new fresh podcast that he’s got, he should maybe bring on some energy experts to actually talk about this stuff, because clearly he doesn’t know what he’s talking about. He doesn’t have anybody in his office who knows what he is talking about, and all he is out there for. Political point. So unbelievable. I mean, to be honest, for California’s sake, I hope they do shut these refineries down. Let’s just run an experiment and see what happens to those gas prices. Unbelievable. [00:09:43][231.7]

Stuart Turley: [00:09:44] And this article is actually from Irina Slav over at oilprice.com. We love Irina and her insights. We love oilprICE.com And Just let me go through these bullet points here. Saudi Arabia faces fiscal strain as Brent crude prices remain below the $90 to $96 barrel needed to balance its budget. With a projected 2024 deficit of 5% of GDP. Michael, holy smokes, Batman! Despite non-oil sector growth, Saudi Arabia’s economy remains tied to oil. Riyadh may tighten its spending or raise taxes, while analysts warn the deficit could exceed $67 billion if Brent averages $62 this year. Holy smokes, what a great article. [00:10:36][52.0]

Michael Tanner: [00:10:37] No, great article. As you said, we love Irina Slav, but what’s interesting is that they’re the ones clearly behind driving the price down. And so I get all of these articles coming out saying they’re still spending like $90 oil. They’re still spinning. They’ve got break fiscal break. Even prices above 90. Well, clearly they don’t care or they’re down to take out debt. In order to keep oil prices low. It is a little bit of like, okay, sweet, but that doesn’t necessarily change what they’re doing now. [00:11:07][30.3]

Stuart Turley: [00:11:08] It doesn’t in fact, I’m trying to take a look at and writing some articles and figuring some of this stuff out And I think RT’s got one over at the crude truth coming out tomorrow on what he thinks is going to be that. So we’ll publish that one out there and taking a look at how. He thinks the oil prices, he’s got a pretty good insight as to what could be balancing out that number. [00:11:34][25.9]

Michael Tanner: [00:11:35] Yeah, again, I will beat this dead horse until until it and I am dead. I’m tired of hearing about fiscal breakeven prices in Saudi Arabia because clearly they’re willing to take. Long and they’re drilling they’re willing to take a long-term pain in order to lower oil prices. Why? We can only speculate, but… You know, I will beat that horse till it’s dead and I pass out of heat exhaustion. [00:11:57][22.7]

Stuart Turley: [00:11:58] I love me some Texas story. Now this one is from Ed Ireland. I love Ed Ireland, this is absolutely wonderful and I recommend everybody follow edireland.substack.com and when we take a at winter storm Yuri pushed Texas electrical grid to the brink within 4 minutes and 37 seconds from a total collapse. Michael, that’s pretty darn close. But the problem in Spain was Michael. They lost power for… Three seconds oops as power generation failed and electricity demand skyrided Since then, ERCOT, the Public Transmission Commission of Texas, and lawmakers, they weatherization requirements for power plants to handle extreme cold past and now here’s where it gets kind of fun. If you take a look at this quote in here, Texans now pay the highest electricity rates in the South. 28%! In just four years and it’s not an accident. We’re shelling out. Listen to this, Michael. $2 billion a year to cover the reliability costs dumped on us by the wind and solar costs that they should be paying. Next year, over 50% of our reliable power, natural gas, coal and nuclear will be 30 years old. Why? Because the market is rigged to favor more unreliable, subsidized generation. This is a huge bill. And I like the way that it’s phrased because we’re finding out. That it’s not a good thing to have wind and solar on your grid, there’s a place for it. But not on your grid. [00:13:41][103.4]

Michael Tanner: [00:13:41] Yeah, it’s, I’m, I can’t disagree with anything you’re saying. I mean, this is probably something that Eric caught should have done. Years ago, which is probably, you know, for everything that’s great about Texas, aircott is not one of the great things about Texas because they are. So much for getting them on the podcast. We can have a conversation about how terrible they are at their jobs. I mean, we could be nice about that. [00:14:06][24.7]

Stuart Turley: [00:14:06] I think they’ve done a great job, to be honest with you, in many ways. Because they’re being forced by what the legislature shoves at them. So, you know, when they’re trying to balance it out. I don’t think that we should be allowing any more projects in the way that the bills are written i’ve kind of gone through them is that they’re going to be requiring wind and solar to be paying for natural gas. Well, there’s a problem with the natural gas plant side of things is because that’s just going to add the cost to the consumers and any natural gas for the next four years, natural gas plants, turbines are sold out. Michael, we are in a national crisis here, Ro. Yeah, so we got to keep these things rolling the the coal plants that are there and everything else [00:14:56][49.5]

Michael Tanner: [00:14:56] Is Shell Sizing Up? Biggest Power grab. Yet guys, there is massive, massive, massive speculation that Shell is considering purchasing BP. Which would be pretty unbelievable. And this comes off the back of some weak earnings by BP. Pretty unbelievable what they’re saying here. This basically was run in Reuters right now and there’s the speculation. Has really resurfaced mainly because of that 5% stake that Elliott. Management bot who’s trying to get some premium for that. Stu, if you were running corporate development. At Shell. What would your recommendation be to, or I guess, let me see, as the CEO of Shell. What would you think, you know, I’m your corporate development guy. I come to you and say, Hey, Stu, I think we need to buy BP for these reasons. What should those reasons be and what do you think Shell should do in this case? [00:15:50][53.6]

Stuart Turley: [00:15:50] Uh, if I was the CEO of either shell or BP, I would move if I was the two answers. I would make an offer to BP before. They moved to the United States. And then I would move Shell to the United States. And here’s why. They have now gone to 78% tax. Because of the windfall profit taxes that has been going on. I would as a trying to protect my shareholders. My shareholders would make more money if I was in the United States. Now, if I were the BP CEO, I would move to the U.S. Before Shell made the offer, so that I could get a bid from ExxonMobil or Chevron, and here’s why. Because BP has a lot of Gulf of America assets, it has some non-op in Alaska. It has some still in the Permian. And by the way, I worked on a lot of the BHP. That sold to BP. Wells and I know what those are like. So when you sit back and kind of go. Where you’re playing on this. It’s a two-fold question. If I’m the CEO of Shell, I would say I need to do it. And then I’ll move. But if I’m the CEO of BP, I move so I can get another bid and put a bid war going on to really increase the value of my company. [00:17:17][86.8]

Michael Tanner: [00:17:18] No, absolutely. I completely, completely agree with you on the interesting to see. Because the U.S. Also gets being listed on a U. S. Stock exchange also gets a little bit of a premium. If Shell waits for BP to reorganize in the US, then they have to pay. U.S. Stock market quote-unquote premium prices. The question is if they do it before BP reorganizes, do then they have to pay even more of a premium to match a so-called U.S.? Be very interesting, but I love where your head’s at. Completely completely [00:17:48][29.9]

Stuart Turley: [00:17:48] agree. And it’s kind of interesting that they’ve already been paid a bunch of money from investors and everything else. And I could not track it down. So I did not put it into the story, but the Norwegian energy giant Equinor is considering terminating it’s 810. Megawatt empire wind farm off Long Island due to the Trump administration putting a halt to the construction project. I can’t blame them because all this is going to do is with the tax credits going away is going to raise New Yorkers electricity. That’s all it is going [00:18:37][48.3]

Michael Tanner: [00:18:37] Yeah. And I, you know, what this article is really talking about is the fact that you’ve got one side of the equation where Equinor is saying, Hey man, these were approved. We’ve spent, I mean, you read the article here, they’ve invested over 2.5 billion dollars and costing them hard cash 50 million a week. Right to keep so what is it 11 vessels on standby so i see where where equinor’s like i mean come on guys like i get that you may not like offshore wind but this has been approved we’ve spent a lot of money what’s going on here on the other side of the equation you’ve got doug bergam secretary of the interior basically saying that hey this project was rushed through and it didn’t go through the approval process now okay there is something to be said about legislation through regulation. When it favors our side. Maybe we overlook it a little bit. [00:19:28][50.7]

Stuart Turley: [00:19:29] Well, I’m more of a black and white kind of guy. I like what the rules are. If they’re good rules, follow the rules. Good rules are… [00:19:37][8.3]

Michael Tanner: [00:19:36] Good rules are just the rules in general. [00:19:38][1.6]

Stuart Turley: [00:19:38] The rules in general sometimes are baked by the left and they’re not good rules. So we don’t follow rules we don’t like? No, you have to follow the letter of the law. Now go ahead and try to pull this crap on me. You’re winning straight. You got a few podcasts where I had to drop an F-bomb and it snuck through production. You’re not going to get past that today, dude. So no, honestly, Doug Burgum is exactly right. This was rushed through and I was trying to, as I said earlier, I was trying to track the money down because some of the money I thought had come from USAID in some of the NGOs. And I did not have the proof, so I did not include it. So that’s why I was getting ready for this discussion. [00:20:20][42.3]

Michael Tanner: [00:20:22] No, absolutely. And I mean, I think we can all agree that offshore wind is a terrible. T E R R A B L way of renewable energy. There is a place for solar. There may be a place for onshore wind, but offshore wind has to rank at the lowest. I’m putting it below bio LNG. [00:20:40][18.4]

Stuart Turley: [00:20:42] But BioLNG turns waste into… [00:20:44][2.9]

Michael Tanner: [00:20:47] I know, I know. But yes, I mean, the flip-flop, flip- flop doesn’t help. In this case, I’m in favor of the flip flop because I think we can both agree offshore wind sucks. I do think that we got to do something with the permitting process though. And when it favors one side, yay. When it doesn’t favor another side, that’s when I want to know. [00:21:05][18.6]

Stuart Turley: [00:21:05] I want to talk about this all the time and that is there’s 79,000 wind farms in the United States, windmills and turbines that are going to need land reclamation. Who’s going to pay for land Reclamation that’s a big question the taxpayer the landowner [00:21:23][17.9]

Michael Tanner: [00:21:24] Yeah, or the taxpayer. [00:21:25][1.0]

Stuart Turley: [00:21:26] Russia readies billions of domestic fleet build-out. This I found very interesting is that when you take a look at what Russia right now there’s about tankers in the dark fleet. This article is talking about Russia’s building up their shipyards and they want to build up a thousand scenario four seas, 1,637 vessels. Will be built in Russia by 2036, of which 713 in the next five years. That is where the United States needs to get in our shipbuilding. That’s why I ran this story, because it is important to understand what Russia is doing. And a good chunk of them are gonna be ice carriers. That means that they’re going to be really building up that Arctic Bridge to Asia. And that… If you understand what’s going on is that he is making sure his Supply lines to Asia can go year round. They have six nuclear-powered icebreakers. And so when you combine those with the capability of these ice. Cargo ships, tankers and everything else. Russia is going to be a powerhouse. [00:22:40][74.7]

Michael Tanner: [00:22:41] No, and it’s really part of their long-term strategy, which basically goes all the way to 2050, which is sort of their version of the Belt and Road Initiative that China is Which is they’re anticipated having a fleet of about 26. Hundred of these vessels to basically again become a global energy power. Russia rightfully understands that energy is security and security has a lot to do with energy. And they’ve done a good job of doing this. We also see that their Deputy Prime, First Deputy Prime Minister, Dennis Markuva, he says that, I love how this article says, he says, that the scheme includes large-scale modernization efforts to eliminate shortage of shipbuilding capacity, including establishing new shipyards and replacing foreign shipboard equipment with domestic alternatives and developing ship repair centers. And this is a lot of money. This is $500, $6.2 billion in federal funding that they’re putting in there. [00:23:33][52.3]

Stuart Turley: [00:23:34] Well, they’ve got it, and you have to hand it to them that they are again. Germany lost negative GDP in two years. Running and in Russia, even with all the sanctions, had a 4.2% increase in GDP growth. Yeah, so pretty darn cool. Washington issues further sanctions with aimed at Iran’s trade with China. Let’s take a look at how second tier sanctions could actually stop Russian oil. Let’s take a look at this for Iranian oil. The Trump administration. Imposed extensive sanctions on Iran, focusing on its nuclear program, oil exports. Financial system and aiming to pressure Iran into renegotiating the nuclear settlement. This is actually very, very important. When you take a look at the sanctions, they are actually Looking at sanctioning China’s refineries, Michael, oops. They take it one step further and they go after Iran’s that’s not in this article. But if they get serious and Iran starts doing this. Will sanction the Indian refineries. Will you watch for those two things to happen? Iran’s economy will crack. [00:24:52][78.3]

Michael Tanner: [00:24:53] Now, it’s. It’s really true. And I mean, this is a And I like your EMB pub note here that, you know, these are theoretically second-tier sanctions, but they’re probably going to do the most damage. [00:25:06][13.1]

Stuart Turley: [00:25:08] I mean, you sit back and kind of go, OK, what do you do? You put a sanction on 60 fat oligarchs? That need to get the ozempas shot. No, it means absolutely nothing. Oh, Oh, oh, oh Zimbabwe, the fat shot, as president Trump called it. Hey, I got one of my friends called me and I need a fat shot. So he was paying a, he was saying $1,800 in the United States and it was $80 in the UK. Boy the- Pharmaceutical companies are screwed. [00:25:08][0.0][1481.3]

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