Daily Energy Standup Episode #114

It is now established that the US dollar’s status as a global reserve currency is eroding. When corporate western media begins to attack the multipolar world’s de-dollarization narrative in earnest, you know the panic in Washington has fully set in. The numbers: […]

Highlights of the Podcast

00:00 – Intro
04:05 – De-Dollarization kicks into high gear
07:38 – Energy better positioned for any kind of recession analysts says
11:06 – California might require bidirectional charging capability in EVs
12:17 – How Al Gore has made 330 million with climate alarmism
15:11 – First Republic being taken over by JP Morgan Chase
16:14 – Market Updates
16:57 – Exxon Mobil Rolling out Trading Business

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

Michael Tanner: [00:00:14] What is going on. Everybody, Welcome into another edition of the Daily Energy News. Stand Up here on this gorgeous Tuesday, May 2nd, 2023. As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, joined by the executive producer of the show, the purveyor of the show and the director and publisher of the world’s greatest website, EnergyNewsBeat.com, Stuart Turley, my man. How we doing today? [00:00:37][23.0]

Stuart Turley: [00:00:38] Hey, it’s a beautiful day in your neighborhood, and I just want to give a shout out to all the Russians that hit our website over the weekend. We had 35,000 people from Russia, hit the website. [00:00:47][9.6]

Michael Tanner: [00:00:48] 35,000 people from Russia. [00:00:50][1.7]

Stuart Turley: [00:00:50] Oh, yeah. I don’t know what I did. I was trying I think they were on the page where I was imitating Putin, but I’m not sure. [00:00:55][5.1]

Michael Tanner: [00:00:56] They may be. Are you prepping for a run for Russian president? [00:00:59][3.0]

Stuart Turley: [00:01:00] No, I’m ethical. [00:01:01][0.9]

Michael Tanner: [00:01:02] I know that we do appreciate all of the traffic. Some of the numbers, Stu tells me. I’ll be honest, I don’t even believe it. But I mean, it’s true. It’s just kind of crazy to think about the reach and that’s all to you guys we appreciate it. We have an absolutely stacked show for you guys tonight. [00:01:18][15.8]

Michael Tanner: [00:01:18] First up on the menu, De-Dollarization Kicks Into High Gear as much as that sounds like a stu ism, this is a great article talking about how basically divesting from the dollar around the world and the global consequences and really what that means for oil. If you have a chance to look at the cover art on it, I think it’s pretty cool it’s pretty funny. [00:01:36][18.1]

Michael Tanner: [00:01:37] Next up, Energy Quote, Better positioned for any kind of recession according to analysts. This is a Wells Fargo piece from our Yahoo Finance piece from a Wells Fargo analyst who was really looking at what these earnings mean in energy it’s a good read we’ll cover that. [00:01:52][15.0]

Michael Tanner: [00:01:52] Next up, California might require bi-directional charging capabilities in EVs. Stu will give us an update on that. Always what’s new coming out of the EV markets in California they’re really set in the blaze. ExxonMobil will be picky over potential acquisitions, as they should. This is a great Bloomberg article diving into really what as what’s emerging is Exxon being probably the chief acquirer in what will probably be a hot M&A market as we move into the next earnings season. [00:02:21][28.4]

Michael Tanner: [00:02:21] And finally, How our AL GORE has made 330 million with climate alarmism. Former VP made a fortune after losing to George W when he set up a Green investment fund now worth 36 billion that pays him 2 million a month as he warns about rain bombs and boiling oceans that has to be a title you created Stu. Did you edit that title? [00:02:40][19.3]

Stuart Turley: [00:02:41] I did not. That’s one of the few that I did not edit. [00:02:43][2.6]

Michael Tanner: [00:02:46] There’s not much you explain but Al Gore getting a lot of money so Stu will dive into what’s what’s going on there. He’ll toss it over to me. I’ll quickly cover what happened in the oil and gas markets and overall financial markets for that matter considering First Republic Bank is been taken over by JP morgan or proposed oil down to 75, 65, basically flat on the day, natural gas down a little bit, $3, $2.30. [00:03:08][22.3]

Michael Tanner: [00:03:10] And then quickly, I will cover back to Exxon they’re rolling out a new trading business that’s been in the works since 2018. But this is, you know, quarter to quarter, three quarter four of 2023 will probably be their first actual foray into this. So they had some pretty interesting comments I thought be interesting to cover. I’m following their earnings and then we’ll let you get out of here and get back to work. [00:03:30][20.7]

Michael Tanner: [00:03:31] But before we do that, guys, all the stories we’re about to cover are courtesy the world’s greatest website www.EnergyNewsBeat.com hit the description below you can find links to all the articles you can see timestamps our team does a great job of making sure that’s up to speed Dashboard.EnergyNewsBeat.com the best place for your data and energy news combined. [00:03:48][17.4]

Michael Tanner: [00:03:49] Stuart does a great job of making sure all the stories get piped into that. Make sure you get that while you still can you never know when it might go behind some subscription wall again www.EnergyNewsBeat.com Stu I’m out of breath I need a drink of water. Where do you want to begin? [00:04:02][13.1]

Stuart Turley: [00:04:02] Well, let’s start right here. And the De-Dollarization kicks into high gear. I’ve been talking about this for a little while, and I love your comment on that picture. We got to some gangsters. I mean, we got as President Xi, we got Putin and they all got them. [00:04:19][16.9]

Michael Tanner: [00:04:20] Really? Aviators. It’s those aviator glasses. [00:04:22][2.3]

Stuart Turley: [00:04:23] Yeah, the Avery Except they look good in them. President Biden, not so much. He looks like he could be eating an ice cream cone with his head. Okay. Now it’s established that the US dollar’s status as the global reserve currency is eroding. It is now a fact let’s go down here a little bit further. [00:04:42][19.1]

Stuart Turley: [00:04:43] Over 70% of the trade deals between Russia and China now use either the Ruble or the Yuan, according to Russian Finance Minister Anton Slavon Holy smokes. Let’s come around the corner on this. [00:05:01][18.2]

Stuart Turley: [00:05:01] Russia and India are trading in rupees less than four weeks ago, Banco BPM became the first Latin American bank to sign up as a direct participant in the cross-border interbank system, CPS, which is the Chinese alternative to SWIFT. I told you, where do you see the BRICS credit card for consumers coming out? [00:05:31][29.4]

Michael Tanner: [00:05:31] I will again, as much patting on the back as we do, you called this months ago that this stuff was coming. It’s finally here. And it’ll be interesting to see what the actual fallout is. I think obviously, Stu is a doom and gloom guy. I’m somewhere in the middle of doom and gloom and it’s not great. I’m probably a little bit more on the not great than doom and gloom, but it is not great. There’s no two ways around it. [00:05:54][22.6]

Michael Tanner: [00:05:54] The fact that the dollar is now no longer being traded for oil means that the United States just has that much less of a bargaining chip when it comes to global affairs. And you can argue whether or not that is good or bad but what it means is that change is coming. And for some things it might be good. Trust me, every other country has existed without being the global currency to think that we’re going to fall apart because they’re trading in the Yuan is slightly misguided. [00:06:20][26.1]

Michael Tanner: [00:06:21] But it means that we have we just become basically a background character. We become an NPC, a non-player character in the affairs. You know what I mean? We just become another country that falls in line and really can’t do anything we become Argentina, We become Brazil! [00:06:35][13.9]

Stuart Turley: [00:06:36] Or Turkey with 78%, you know, higher inflation, here’s one of the things the British pound sterling a hundred years ago was the reserve currency of the world. They haven’t fallen off by the wayside they did produce the Beatles I mean, they did still have some rabble, but we had to bail them out of several wars. So you know who’s going to bail us out? [00:07:02][25.8]

Stuart Turley: [00:07:02] Okay,. Let’s go to here this is one of the last ones here, dude, with there was one other one here. Ermo France is now buying the deal between Russia and Bangladesh for the construction of the super nuclear plant will also bypass the US dollar. [00:07:20][18.0]

Stuart Turley: [00:07:21] The first 300 million payment will be in Yuan, but Russia will try to switch to the next one to Rubles. So here’s the thing. I mean, we’ve lost a lot of street cred when it comes to this. Anyway, let’s get off of this and go to something more fun. [00:07:37][16.2]

Stuart Turley: [00:07:37] Okay. Energy better positioned for any kind of recession analysts says. Michael, I’m seeing this all over the place. Investors are calling and asking and they’re saying things like, What in the world do we do? It’s energy, baby you know, it’s all about energy. [00:07:54][16.3]

Stuart Turley: [00:07:54] And Chevron, Exxon post robust Q1 profits despite falling gas, they’re still got the profits. And for the ones that are good management, good numbers like you and I have always said, they’re good investments. There’s a couple quotes in here that are just fabulous. [00:08:11][16.7]

Stuart Turley: [00:08:12] Roger Reed says, Always a tough question to answer for the company or for us. So I think if you look at what’s typically made M&A work in this space, it’s more often occurred during a time of stress, meaning low commodity prices or other extraneous event that for reasons creates mergers. It doesn’t mean it can’t happen. We just would be saying watch for those moments as opposed to just waking up one day and seeing everything. [00:08:43][30.4]

Stuart Turley: [00:08:43] You know what this is saying is last year the Dow Occidental was number one on the Dow on their Dow exchange. So when you sit back and take a look, Oxy number one, you know, that’s only one investment. You have 50% of the AMP operators in the U.S. are privately held. They’re good investments as well. But you have real estate, Michael, coming around the corner. [00:09:09][25.4]

Stuart Turley: [00:09:10] I was watching Maria Bartiromo this morning and the real estate in San Francisco and New York, I think it was 48% is now vacant of commercial space. There is going to be a lot of commercial people looking to get out. So what you’re going to see is a run on minerals. You’re going to see a run on things with passive income. Anyway, I’m sorry for rolling on that, but I thought this was incredible. [00:09:43][33.1]

Michael Tanner: [00:09:44] Yeah. I mean, I think he I think he accurately points out and I thought, you know, Roger, he’s a Wells Fargo analyst, so think what you want about about their ability to predict. But I think he poses what I think is the right way to think about an ExxonMobil from a perspective of M&A because really what they’re talking about is while all these other things are crashing, where possibly should companies be looking at in terms of energy M&A. [00:10:11][27.1]

Michael Tanner: [00:10:12] Well, when you’re looking for an acquisition, are you looking for future drilling sites or more of a decarbonization play, which I think is key there’s two driving forces that are going to keep energy high. Obviously, commodity prices and that goes into the future drilling locations. But then also the decarbonization, all the stuff that’s going on in the Inflation Reduction Act. Who says there’s not an Inflation Reduction Act 2, and all of a sudden the CCUS is thrown in there? [00:10:35][23.4]

Stuart Turley: [00:10:36] Here’s the thing. There’s absolutely zero reason to fight the clout and, you know, fighting the client. Great. Let them do it. Go make some money and then, you know, punch them in the nose or squeak their nose or squeak the horn later and just go put your money where you can make money. And it’s in natural gas, nuclear, modular, nuclear all you got to do is watch out for yourself. All right, let’s go. [00:10:59][23.0]

Michael Tanner: [00:10:59] Let’s go to California. What’s next? [00:11:00][1.1]

Stuart Turley: [00:11:01] Oh, do just look me in the nose this is absolutely a hoot. California might require bidirectional charging capability and EVs. And the picture on this for our podcast listeners, there’s a guy out in front. I mean, he’s a good looking, tough kind of guy. His wife is behind him trying to pick up branches and you see the Ford F-150 in the garage powering the house. Ooh, that’s about a 15 minute burn on a house. I mean, you can if you can’t drive 150 miles in a Ford – 150. [00:11:39][38.0]

Michael Tanner: [00:11:39] I mean, how many screens you got hooked up in your man cave? Sadly, I’ve run that cave for about 20 minutes, and then he would be shut off. [00:11:47][7.2]

Stuart Turley: [00:11:47] Oh, yeah. I mean, I’m like dead meat. I need a fleet of these bad dogs, you know? So anyway, I just got really tickled at this and then California rule in line with this article. California rule passed Friday Michael passed Friday that New California rule will ban diesel trucks by 2036. It’s passed,. [00:12:10][23.3]

Michael Tanner: [00:12:12] Which was a bad idea. [00:12:12][0.7]

Stuart Turley: [00:12:14] Let’s go to the next one Okay. How Al Gore has made 330 million with climate alarmism. Former V.P. made a fortune after losing to George Dubya when he set up green investment firm now worth 303.36 billion. That pays him 2 million a month as he warns about rain bombs and boiling oceans Michael I missed my calling. [00:12:41][26.8]

Stuart Turley: [00:12:41] And for our podcast listeners, the picture of him when you take a look at this, is going to be important on a couple of quotes. Look at the picture, Michael. Looks like Al Gore is out over his skis. He is on a ski jump and he has just taken off from this thing. I mean, look at that he’s an amazing man. [00:13:02][21.0]

Stuart Turley: [00:13:04] Okay. Let’s go down here, though. It’s at the World Economic Forum and let’s see, he’s been at the forefront of green technology investment gore’s company generation pays him 2 million. We talked about that. Let’s come down here. [00:13:19][15.6]

Stuart Turley: [00:13:21] The firm. Between 2008 and 211, the firm generated roughly $218 million in profits to be split between its 26 partners. As the founder, Gore likely had a large stake in the profit. The firm owns millions of shares in companies such as Amazon, Microsoft, Google’s parent Alphabet, and Charles Schwab oh, he was also standing there at the World Economic Forum by Charles Schwab. Okay. Gore’s Democratic Party ties are also never my know. I don’t want to get into politics because they’re all evil. [00:13:59][38.3]

Michael Tanner: [00:14:02] Oh, tell us how you really feel. No, I mean, I think I think, you know, it’s pretty clear that Al Gore, whether you agree with climate alarmism or not, clearly we don’t agree with it. He’s he’s clearly he’s clearly out over his skis. He has profited tremendously from this. And he has a huge conflict of interest as he moves forward in this space. So if you’re taking what a guy like Al Gore is saying seriously or I help you, there’s nothing I can do there’s no convincing I can do that. If you can’t if you if you can’t see the irony in it. [00:14:34][32.0]

Stuart Turley: [00:14:34] Okay. I’m I got to rework my billing says here in the article, Gore also needs at least 200,000 per speaking engagement my billable for consulting services only 350 an hour. So I’m really cheap, Michael you know so. [00:14:48][14.6]

Michael Tanner: [00:14:48] You need to up your rate is one I can say [00:14:50][1.4]

Stuart Turley: [00:14:50] Got to my right baby you know I’m a comedian slash consultant here anyway. All right hey off to you there, dude. [00:14:58][8.2]

Michael Tanner: [00:14:59] Yeah, I think there’s there’s there’s there’s two real things I think to cover. First, the overall finance market, S&P was flat at about 4/10 of about 4/10 of a percentage point down. NASDAQ down about a 10th of a percentage point First Republic being taken over by Jp morgan Chase. The great bank consolidation is under way. [00:15:17][17.8]

Michael Tanner: [00:15:18] You know, we could spend probably all all all of this segment talking about what happened. I think I think this is just a the lack unfortunately, the lack of regulation, the laziness of regulators has led them to get what they ultimately want, which is only for banks to have to regulate. I mean, this comes down to just them being lazy, them not doing the regulate, not them not doing their job as regulators to ensure that small and mid-sized banks are doing what they should be doing. [00:15:44][26.3]

Michael Tanner: [00:15:45] And basically creating this era of bank consolidation to the point where it will only have 3 to 4, I mean 3 to 4 banks to do. I mean, it’d be a great gig if I cannot do my job and the outcome of me not doing my job is that I’ll, in the future have to do less of my job, sign me up. So I’m putting my name out there for U.S. banking regulator. Please call me up. I’m definitely interested. [00:16:06][21.1]

Stuart Turley: [00:16:07] You couldn’t do Michael. Michael, you could not do it. You’ve got ethics. You could not do it. [00:16:13][6.5]

Michael Tanner: [00:16:14] Yeah, maybe oil prices guys stayed fairly flat we’re only up to 7563 on crude oil as we record this about 642 the night before here on Monday. Natural gas prices up to $2.31 I mean not much on you know, we’ll start in natural gas, if only because that weekend weather data did sort of maintain a little bit of a demand drop to delight to very light according to nat gas Intel for May 7th through the 15th. [00:16:39][25.0]

Michael Tanner: [00:16:39] Remember, we look about a week out for how natural gas prices are. Look. So whether a week out is really what matters, we are going to see, you know, if there’s a potential for some storage builds over about 100 Bcf, which is not going to do anything good to prices here at this point. So hopefully they stand they stand fairly firm there. [00:16:57][17.4]

Michael Tanner: [00:16:57] I think the other interesting thing to to to point out is ExxonMobil, they’re getting back into they really are getting into the global trading game. We know that, you know, in 2018, they announced officially that they were getting into the trading game nothing really happened. They kind of just laying around Lounge and Lounge around and COVID came obviously screwed everything up. But now they are officially back in business it was announced on their June 1 earnings call that come quarter three, quarter four, they will have been fully up and running trading arm. [00:17:25][28.1]

Michael Tanner: [00:17:26] You know, really what this is, is I mean, what they saw was a lot of money get made by BP. They saw a lot of money get made by Shell. They saw a lot of money get made by these companies that were able to use their deep knowledge of the market and use their proprietary data sets because, you know, trust me, who has the best data sets on oil and gas flows throughout the country? It’s midstream companies and, you know, downstream producers, if you have all three and upstream, but you’ve all three, you’ve got a pretty good view of what’s going on. [00:17:57][31.3]

Michael Tanner: [00:17:57] I mean, you know, basically the quote from Darren Woods was the new combination will further integrate the value chains, get the company really streamlined and good view of the marketplace. Yeah, Here’s this quote. We think this makes a lot of sense we did a lot of work over the last couple of years to validate that the opportunity size was there. What would we need to get after it? And now we’re putting the organization you’re putting in the sports is bringing in talent, developing the talent and growing talent in that space. [00:18:18][21.0]

Michael Tanner: [00:18:19] You know, this is not about going out and taking speculative positions this is about going on optimizing, given the asset base, given the value chain and the opportunities that come with those insights into exactly what if you do want to start a prop desk Darren Woods, my number, and you can find my contact info in the description below. Stu and I will start a little prop fun for you and we will put a little speculative trades in there because I’ve got some ideas and some models you might be interested in. [00:18:41][22.5]

Michael Tanner: [00:18:42] I found this interesting, Stu they’re going to trade off all up and down the entire length of the value chain, the arbitrage between markets. This will be I thought this was interesting. I noticed this. The the woman who was tapped to run this let me pull this up here. [00:18:55][13.7]

Michael Tanner: [00:18:56] At first glance, you’re like, Huh, Tracy Goon sis, I don’t know, a gun slogan, but she’s she’s the chief human resources officer, which is kind of crazy tap to run the new trading business. But you have to remember, here’s the background initially joined Exxon shipping in 91 is a U.S. merchant marine deck officer and became manager of the U.S. product supply operations by 2004. [00:19:16][19.9]

Stuart Turley: [00:19:16] Wow! [00:19:16][0.0]

Michael Tanner: [00:19:17] Also previously served as a commercial operations manager and pipelines for a Calgary subsidiary. Imperial Oil knows her way around the business. So probably a good move to bring in nice to have on your H.R. Deck just to bring over to run your trade and overqualified H.R. that’s probably one of the most overqualified H.R. People i’ve ever met. [00:19:37][20.4]

Stuart Turley: [00:19:37] I want to get her on the podcast because she would be di. I want to know what her career was like. [00:19:43][5.2]

Michael Tanner: [00:19:43] Very interesting. Yeah, no kidding. But so Exxon rolling out the trading business. Anything else, Stu? [00:19:49][5.7]

Stuart Turley: [00:19:49] Yeah, just real quick. I would not want that kind of business going into MP midstream and downstream because when you have the Class one, Class two and Class three carbon taxes coming around the corner, if. [00:20:04][14.7]

Michael Tanner: [00:20:04] Scope 3 emissions? [00:20:06][1.1]

Stuart Turley: [00:20:06] Scope 3 scope 1 emissions, you own all three you are ho-ho-host. It was, in the words of Ron White. Anyway [00:20:13][6.9]

Michael Tanner: [00:20:14] Yeah, no kidding. [00:20:15][0.6]

Stuart Turley: [00:20:15] So it’s a great day. Oh, yeah Do you think the feds are going to rise again on Wednesday? [00:20:20][4.6]

Michael Tanner: [00:20:20] Yeah, they will. I think they’re going to go up 25 basis points, but we’ll see what happens. But we will dive into all of that tomorrow. Guys. With that, we’re gonna let you get out of here, get back to work. We appreciate you checking this out. for Stuart Turley. I’m Michael Tanner. We’ll see you tomorrow. [00:20:20][0.0]