Trump’s $500B Stargate

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

Michael Tanner: [00:00:10] What’s going on, everybody? Welcome into the Thursday, January 23rd, 2025, edition of the Daily Energy News Beat Stand Up. Here are today’s top headlines. First up, U.S. sanctions trigger Russian oil exodus. This is a pretty kind of putting some cold, hard facts to some of the stuff we’ve been talking about over the last couple of weeks with regard to these new oil sanctions. Next up, Trump unveils $500 billion A.I. Stargate project. This is, on some levels, awesome. On some levels, creepy. We’ll dive into what this means for energy. Well, then jump over and quickly cover some oil and gas finance stuff, including banks ditching net zero as climate alliances crumble. You know, you had to see this coming, folks. I think it’s interesting the timing on all this stuff, though. So we will cover all that. And a bag of chips guy, Stu is out on assignment again, so I am rocking another solo show. Let’s go ahead and kick it off. All right. [00:01:05][55.6]

[00:01:06] First up, U.S. sanctions trigger a Russian oil exodus. I mean, obviously, you know, these these sanctions that got put in place last week by the outgoing Biden administration and most likely are going to continue to hold through the Trump administration has really significantly actually affected Russian oil exports. And some of that data is tricky trickling in right now. You know, specifically some of the data we’re getting out now, you know that Indian refiners, including the largest refiner, Bharat Petroleum, are severely struggling to secure what they previous how they previously have imbibed from the Russian oil business, specifically from Surge got NEF Gas and Gazprom Neft to the oil firms in Russia that handle about 25% of Russian exports. Those two companies, an average shift, shipped basically a million barrels of oil per day in 20 2012. Basically, they’re selling that to Bharat Petroleum and India at what is considered the spot market. Here’s the pretty crazy part from a spokesperson over there. Quote, We have not received any new offers for March delivery. Window traders are asking us to wait. We are waiting to get offers. We are not expecting the similar number of cargoes that we used to get in the months of December and January. Pretty unbelievable. You know, this article does point out that India did announce the other day that it will abide by the sanctions and turn away any tankers that are sanctioned. You know, there was it was an interesting note on whether or not them and or China was going to abide by this. India is whether or not China will, I think remains to be seen. But, you know, this this goes a long way to show that, hey, there are some there is an ability for some sanctions to work. Is the question then in my mind is, will these last? How long will they last and what will be the long going impact on prices? That still remains to be seen. [00:02:56][110.3]

Michael Tanner: [00:02:56] Let’s jump over. Trump unveils $500 billion A.I. Stargate Program. This is, as I said, in the open. On one level, great. On one level, spooky. Basically with Larry Ellison, Sam Altman and Masha Shiro. Signed by his side, U.S. President Donald Trump announced the launch of Stargate, which is a new initiative set up. That is, according to reports, going to invest up to $500 billion in artificial intelligence, intelligence infrastructure. You know, basically the three primary caught corporate partners, SoftBank leading the financing side open, A.I. leading the operational side, and Oracle, which is kind of leading the data center effort, have pledged $100 billion in investment. And with an additional $400 billion set to be attracted over the next four years. The quote from President Trump is that this is a monumental undertaking and a resounding declaration of confidence in American potential under a new president. You know, they already you know, you know, Larry Ellison said in kind of an initial kick out meeting that they already have one of these data centers, these Stargate data centers under construction here in Texas. There will be up to 20 of them, which each spend basically about half 1,000,000ft² are plan to support the huge amount of infrastructure that’s needed across these high computational AI systems. Trump went ahead and said he estimated that these would create 100,000 jobs across the United States. Sam Altman, who’s the CEO of Open Air or Closed? I also named ARM Microsoft and Indivior as key financial technology partners. You know, this was dropped actually back in 2023. The news website Information did report that Microsoft and Open Air were collaborating on a supercomputer known as Stargate, which was estimated to cost about $100 Million. It’s not quite clear, per se whether or not that project is connected to the new Stargate initiative that was announced today. You know, I think one I think it’s fascinating. And then the part where I think this connects into energy is where one obviously AI in these huge supercomputers need power and eventually you can’t hook it up to a wind farm can’t hooked up this these a solar farm you’re either going have to pipe in natural. Gas or start building nuclear facilities. And my guess is because Larry Ellison came out and said that there’s already one of these in construction in the great state of Texas. My guess is that they’re going the natural gas route. So I think that’s that’s you know, what this means for energy is this could become an interesting off grid solution for natural gas companies. And it’ll be interesting to see exactly where this is located, because if you can now all of a sudden, almost like a Bitcoin mine, take your gas off grid and instead of trucking it to a, you know, energy transfer or, you know, who’s going to send it on down to their processing or fractionation facility, you know, you’re now able to take the gas directly out of the pipeline or directly from these oil and get these upstream firms and power your, you know, power your your data center. It could be a very, very interesting shift of the model when it comes to what we would consider on versus off grid power generation. I had a great interview actually with Eric Rice. He’s the president over at Sovereign Capital. And we talked a lot about on grid off grid type generation when it comes to specifically Bitcoin mining, but this type of stuff as well. I mean, you know, if you’re able to, again, take this gas that would otherwise be sold down a pipeline or flared off and use it to power these data centers, you know, you’re going to see this is truly where when companies like IQ talk about the artificial intelligence boom as it comes as it pertains to the natural gas mortgage, this is things they’re talking about specifically. So again, I think it remains to be seen how they’ll power this. But, you know, this is this is a big endeavor. And, you know, $500 billion is nothing to sneeze at. It’ll be interesting to see. We did see Elon Musk in a in a tweet war with Sam Altman basically say, hey, you don’t even have less than 10% of this $100 billion raised. And Sam kind of quipped back at him. So again, it’ll be interesting to see how this works. And we know Elon Musk is no fan of open air or, as he calls it, closed air. So we will see what happens. [00:06:59][242.4]

Michael Tanner: [00:06:59] Let’s jump over and talk specifically about some oil and gas finance stuff. But before we do that, let’s quickly go ahead and pay the bills. Guys, as always, thank you for checking us out here on the world’s greatest website. Energy news beat.com Stu in the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy in the oil and gas business. You can also check out the description below for all the links to the timestamps, links to the articles, and and specifically, check us out via substack. The energy news beat that substack.com. The best way to support the show if you feel so inclined, go ahead and give us a subscribe there and go ahead and sign up for a subscription. You’ll get some great custom articles. Access to Stuart I on a much more personal level, so it’s awesome. Go check us out again the energy news beat.substack.com. [00:07:41][42.2]

Michael Tanner: [00:07:43] A quick look at some of the top line indices. S&P 500 today was up about 0.6 of a percentage point, setting all time highs today. So boon for the market there. Nasdaq was up slightly more, about 1.38 percentage points. Two and ten year yields were up about 5/10 of a percentage point. Dollar index up about one fifth of a percentage point. We did see Bitcoin drop to about 103,000, $104,000 down about two percentage points. Crude oil dropped about half a percentage point to kind of finished a kind of a choppy week relative. Brant dropped about another half a percentage point, down to 7892 crude WTI sitting at 7539. At the natural gas was actually up about $0.23, or about six percentage points, up to $3.89. XLP which is our EMP secure Ian P f t contract down about 0.9 of percentage points down to one 4246. You know, really when you talk about this weekly low relative to where prices are, I think a lot of that has to do with some of the uncertainty around the the political nature of what Trump’s going to do when it comes to trade. I mean, you’re talking about tariffs on Chinese goods, tariffs on Mexican goods, tariffs on on Canadian goods. You know, that’s going to affect any import that’s that’s imported. It’s also going to increase the cost of Chinese goods coming in. So whether what that does to the economy and where that place has oil, I think remains to be seen. I think, you know, traders right now are slightly skeptical. API crude oil inventories come out later today, remember, were pushed back a year later today. As we record this, we do this on Wednesday afternoon as you the day you listed as the when you listen to this, you will know the EIA crude oil inventory report were pushed back a day on everything mainly because of not mainly because of Martin Luther king Jr day, but analysts are expecting a draw in the markets a router bomb and associates. They had a note today. Possible or possible sanctions under the new Trump administration remain unclear with possible tariffs related to Canada and Mexico now seemingly at the forefront of trade are uncertainties. So it’s going to be very interesting. He also vowed to do stuff on European imports, which is pretty crazy. You know, he also said that the administration is going to stop buying Venezuelan crude oil, which is a member of OPEC. We imported about 200,000 barrels a day from Venezuela during the first ten months of 2024, which is up from an average of 100,000 barrels in 2023. That’s according to the EIA. Iran also today denied that it once and is developing nuclear weapons. Who knows if we believe that OPEC’s. Leader Saudi Arabia of crude oil exports in November jumped to the highest number over eight months. I did mention that that one point, a 1.6 million barrel estimated drawdown is what analysts are projecting. It’ll be very interesting. You know, assuming that’s correct, I find really interesting, that would be the first time that crude oil storage has dropped nine weeks in a row since 2018 when the when they set the record with ten. You know, basically it’s a fairly big you know, it’s a fairly significant if they go ahead and do this. So we will be watching that super closely. We did see some of those Texas ports begin to resume operations after kind of the crazy winter storm that’s going on there down in Houston right now. So everybody who’s listening from the south in the south Gulf Coast, New Orleans, all that area, please, guys, stay safe and enjoy the snow. [00:10:55][191.3]

Michael Tanner: [00:10:55] Let’s get to our last story here. Banks Ditch Net zero Climate Alliance as Client Alliances crumble. U.S. major U.S. and Canadian banks have withdrawn their support for the Net zero banking alliance known as the ANZ Bank, following basically the two prong approach, or A22 headed monster for both Republican red states and the newly elected President Trump. BlackRock, who is kind of was, you know, is the world’s largest asset manager, kind of the leader and was the leader of this have also left the net zero asset managers initiative due to quote, legal concerns and confusion surrounding its practices. You even got European banks reevaluating their participation in these net zero alliances and the future of climate finance initiatives. Uncertain. I mean, that climate finance I mean, is somebody who’s actually in the finance space. I mean, I just I always laugh is like climate finance. What do you mean by that? It’s just I can never get around with it. I find it funny that, okay, so this all happened in early December. Well, you know, they’re getting ahead of the Trump administration. They were waiting to see what happened with the election. I think if, you know, VP Harris or former VP Harris had one, I don’t think maybe you would have seen this happen. But Goldman Sachs, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, JP Morgan have all quit the ANZ be a Texas attorney general. Ken Paxton said, quote, More and more financial institutions are taking a major step in the right direction by leaving the radical and anti-energy net zero banking alliance, including BlackRock, quitting the Net zero Asset Manager initiative, which again continues a massive a massive exodus from that. They actually launched that that net zero asset manager actually launched in 2020. There they were. You know, they aimed to support the asset management industry to commit to the goal of net zero emissions in order to mitigate financial risk and long term value of the assets. But they went ahead and quit. And I think they kind of they didn’t quit because they said it was bad. You know, I think it’s, you know, some some legal not legal chicanery, but they really use the the legal terms of, quote, cause confusion regarding BlackRock’s practices subjugated us to legal inquiries from various public officials. I mean that is that just a nice way of saying, hey, we’ve been looking for a way to get out and we’re just going to, you know, say the lawyer screwed us on it. Who knows? With that, it is pretty interesting. You know, they’ve they’ve they’ve been hit hard. And and this goes to show you guys, this is all not a fugazi, but it kind of is from the standpoint of they’re really just saying these words, ESG, climate finance, net zero as a buzzword to try to get you sucked into their point of view when there’s really no words about it. Because obviously, when the tide swifts the other way, that’s where they move. And I think that’s the point that I want to make here, is that, you know, corporations are looking out for their shareholders best interest. They’re not looking out for the collective goods, best interest. They’re not looking out for your best interests. You know, I tell you and I tell, you know, if I’m ever talking to somebody just starting out their career, like, you know, my sister would come and ask me, hey, you know, I’m not really I don’t really like the job I’m at. What do I do? It’s like, well, you know, think about it for a second, you know? Yeah, you can stay. If you don’t like your job, you can stay. But also think about from the corporation’s perspective, if they found that you by letting you go, their profits were increase. They’d let you go tomorrow. There there’s no loyalty from the corporation because their loyalty is to the shareholders and their loyalty is to profits. So on the other hand, you shouldn’t have loyalty to your company and vice versa. Here, if you have loyal, if companies are going to always be watching out for their shareholders and their profit, as they should, as their charters are not saying it’s a bad thing, that you have to watch out and you have to understand that their moves are going to be made to do this. So, yeah, sure, BlackRock is now swinging back at they’re great. Yeah, she’s a scam. Well, if Kamala would have won, they would have gone headfirst into this because it’s what they are trying to protect their shareholder interests. So I think that’s the biggest point there, guys. [00:14:36][220.4]

Michael Tanner: [00:14:36] That’s really all I’ve got, though. It’s it’s as you guys are listening, this is Thursday. We will have a new interview with Stu. Go live on Friday. You will hear the weekly recap on Saturday and then we’ll be back in the chair Monday morning. We appreciate you guys. Stick with us and the entire week. And I’m going to go ahead and let you get out of here. Finish up your day, finish up your week. We appreciate you guys checking us out here on the porch where this podcast. [00:14:36][0.0][862.2]

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