Daily Energy Standup Episode #124 – Revolutionizing Energy: Ford’s Hydrogen Drive, ONEOK’s Oil Expansion, Dominion’s Ambitions, China-Taiwan Conflict’s Energy Fallout, and the Controversy Surrounding Biden’s EV Goals

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

Michael Tanner: [00:00:15] What is going on. Everybody, Welcome into another edition of the Daily Energy News Beat Stand up here on this gorgeous Tuesday, May 16th, 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? [00:00:38][22.7]

Stuart Turley: [00:00:38] Its a beautiful day in the neighborhood, and I’ve been busier than who’s got lots of news going on. [00:00:43][4.4]

Michael Tanner: [00:00:43] Yeah, it’s we’ve got an absolutely packed show for you guys up first up on the menu, is Ford getting interested in hydrogen fuel vehicles? This is very interesting cover what’s Stu has been doing? Full disclosure. For the sake of transparency, I drive a Ford so you can pull up there in the bottom [00:01:00][16.9]

Stuart Turley: [00:01:00] I love Ford. [00:01:01][0.2]

Michael Tanner: [00:01:01] We’ll see it looks like they’re interested in hydrogen fuel. Next up, Dominion Eyes, more natural gas plants, and modular reactors. Stu couldnt go a few days without mentioning small modular nuclear reactors so we slip that one in there. But good for Dominion I mean, if you’re going to diversify anywhere, I would move towards this so Stu will talk through what’s going on at Dominion. [00:01:23][21.7]

Michael Tanner: [00:01:23] And in classic Stu fashion, when China invades Taiwan, some energy consequences this is extremely doom and gloom considering it starts with When but we’ll let Stu walk through some of the ramifications for the Chinese invasion of Taiwan. [00:01:41][17.7]

Michael Tanner: [00:01:42] And then finally, this is an opinion piece coauthored by Jason Hayes, 25 Reason Biden’s EV goals are economically and environmentally harmful Stu kick it over to me how quickly to cover what happened in the oil markets. [00:01:53][11.3]

Michael Tanner: [00:01:53] Oil up currently to about 7144 as we record this here, about 6:20 here on the 15th. I will also quickly dive into what’s going on with one OTC. They went ahead and acquired Magellan Resources in a pretty big midstream deal with what, $18 Billion I think there’s a few interesting notes of that and then we’ll let you get on here and out your way. [00:02:12][18.8]

Michael Tanner: [00:02:12] Before we do that, guys, as always, these articles we’re about to cover are courtesy of the world’s greatest website www.EnergyNewsBeat.com the best way for all to get all of your energy news Stuart as a great job of curating that website to make sure the top stories are there. I just I’m on the way home from the office I just message to say, hey, you got this article, you got this article, this article, boom, boom, boom they’re all sitting there in my inbox. [00:02:35][22.3]

Michael Tanner: [00:02:35] The team does a great job of also making sure the description to this podcast has all the links to the specific articles we are about to cover and timestamps Check us out Dashboard.EnergyNewsBeat.com the best place for all your data and energy news combined. Get it while you still can it’s probably going behind a paywall soon. So just FYI I wait out for that, but that’s about it. Stu. I’m out of breath. Where do you want to begin? [00:02:59][23.7]

Stuart Turley: [00:03:00] Hey, let’s have some fun. Let’s start with some Ford. I love me some Ford. I’m always been a big Ford fan, and I’ve been like, crying since I got rid of my 250 Is for getting interested in hydrogen fuel vehicles? [00:03:14][14.3]

Stuart Turley: [00:03:15] The company is planning to test a small fleet of H2 powered e transit vans in the United Kingdom. Okay, let’s go through here. The test will be conducted by a consortium led by Ford, and it will run for three years. [00:03:30][15.0]

Stuart Turley: [00:03:31] Quote, Ford believes that the primary application of fuel cells could be in its largest, heaviest commercial vehicles to ensure their emission free, while satisfying the high daily energy requirements of our customers demand, said Tim Slater, Ford’s UK chairperson in a prepared news statement. [00:03:51][20.5]

Stuart Turley: [00:03:52] I love this from a standpoint, Michael, this could be the bridge in the heavy trucks. Now they said three years. It’s going to be years before we could do it on cars, but EVs and trucks just can’t handle the load. Hydrogen can if it’s done. So I was pretty excited to see this. But how you produce the hydrogen is going to be the big question. [00:04:15][23.5]

Michael Tanner: [00:04:16] Well, guess what it also says in here, it said Ford will be leading the consortium that includes BP. Yes. Oh, so BP’s in on probably going to be doing some of the hydrogen fuel. I would say they’re going to be providing some of that hydrogen, which is interesting. [00:04:30][13.6]

Michael Tanner: [00:04:30] I think I think, you know, as you mentioned, this is seen as the low as the easiest way to go to apply, you know, emissions free, some new emissions free technology to the long haul, you know, the long haul trucking ports. [00:04:47][16.9]

Michael Tanner: [00:04:48] So I think, again, this this will be very interesting to think I’m with you. It’s going to take a lot longer than three years. But, hey, I mean, this is what you got to give a timeframe for CapEx to. I’d be I’d be shocked if they did spend it all in three years. They’re going to milk this baby for all its worth. [00:05:02][14.6]

Stuart Turley: [00:05:02] Well, here’s the other thing Arnold Schwarzenegger years and years ago, before he was a governor, had his hydrogen Humvee and his hydrogen Humvee he went and drove up the coast to go to a movie shoot. He had hydrogen there’s no hydrogen stations. So he had two other trailers. Follow him with enough hydrogen to get him there. He had to pull over and stop seven or eight times, but it made it. And are you ready for the price tag on that thing? [00:05:36][33.7]

Michael Tanner: [00:05:37] It’s got to be expensive. [00:05:38][0.7]

Stuart Turley: [00:05:38] $280,000 for that Hummer there was hydrogen. [00:05:43][4.6]

Michael Tanner: [00:05:44] And what and what year is that? [00:05:45][1.3]

Stuart Turley: [00:05:46] It was like 12, 15 years ago. [00:05:48][1.9]

Michael Tanner: [00:05:48] So that’s probably, what, $2.8 million today? [00:05:50][2.1]

Stuart Turley: [00:05:51] Probably but I loved it. I mean,. [00:05:53][1.9]

Michael Tanner: [00:05:53] $0.5 billion Dollars [00:05:54][0.7]

Stuart Turley: [00:05:55] You know, and I thought it was great. It was a well-done test, you know but anyway. All right. Let’s go to the next one. [00:06:01][6.2]

Michael Tanner: [00:06:02] This Article unfortunately, will not be back what’s next? [00:06:04][1.7]

Stuart Turley: [00:06:08] There’s a lot of technical stuff to be fixed with hydrogen. Next story coming around the corner, Michael Dominion eyes, more natural gas plants and modular reactors. Love me some dominion. [00:06:19][11.0]

Stuart Turley: [00:06:19] They are looking to try looking out they do solar they do when they do everything. But they are trying to watch the bottom line, watch consumers. And this is one quote I really like in here from it. This is all the above approach ensures that we can reliably serve our customers around the clock, especially on the hottest and coldest days of the year, Ed Main, the utility’s president, said in a news release. Our plan balances the benefits of renewables with the ability, reliability of on demand power so we can meet the growing needs of our customers. [00:06:58][38.6]

Stuart Turley: [00:06:59] This is beautiful, Michael. I felt I was all teary eyed when I was reading this one I was like, Oh, somebody gets a plan, You know, natural gas is supposed to be the bridge fuel, but it’s kind of hard to be a bridge fuel when you’re being banned. [00:07:12][13.5]

Michael Tanner: [00:07:14] Yeah, no and I think one of the concerns you you you talk about was these organizations saying, well, you’re just trying to score political points because you got to remember. Glenn Youngkin you know, this is something that we covered, you know, way back in the fall. If you we ran the tapes, we ran an article we talked about something that was passed in Virginia, was known as the Clean Energy Act or Clean Economy Act. [00:07:36][21.3]

Michael Tanner: [00:07:36] And what he did is in October of 2022, released his own plan, which basically was a criticism of premature natural gas retirements and did exactly what Stu’s been calling for, the expansion of nuclear generation, specifically bringing up small modular nuclear reactors. [00:07:51][15.1]

Michael Tanner: [00:07:51] So I think, you know, that’s where some of the criticism I think is coming, because I think they’re just trying to pony up. But obviously, you know, taking a serious you know, I think here’s the quote from from from Glenn Youngkin. I applaud Dominion for taking a serious look at the anticipated demand and providing commonsense pathways to proactively delay the retirement of critical baseload. Who’s ever writing this stuff form is Brilliant I don’t think this guy himself is probably that brilliant who’s ever writing for him. Oh, I’ll be there. Stuff. [00:08:20][28.5]

Stuart Turley: [00:08:21] I was all crying. I was curled up. I was. [00:08:23][2.4]

Michael Tanner: [00:08:23] Like, Somebody got it. [00:08:25][1.4]

Stuart Turley: [00:08:25] Let’s put that pressure the agent writing this as energy secretary, I think we’d survive. [00:08:31][6.2]

Michael Tanner: [00:08:32] IR guy of the week right there. [00:08:33][1.1]

Stuart Turley: [00:08:34] Right there. All right, let’s go to the Next [00:08:35][1.6]

Michael Tanner: [00:08:36] Whats Next? [00:08:36][0.2]

Stuart Turley: [00:08:36] I love me some Dominion guy. Okay this one. I had so much fun looking at this one When China in invades Taiwan, there are some energy consequences. Yaw Think?. Okay, there are some similarities the author of this article absolutely did great. [00:08:57][21.0]

Stuart Turley: [00:08:58] The first steps. China and Russia have similar and things in common both are authoritarian states. They’re both lost territory in the 20th century both are set on redressing and attacking again. We already got one of them attacking Ukraine, China has been groping around on this for a long time. President Xi is got some real problems with his economy and in the past, whenever a communist leader has got some problems, they declare war on somebody and. [00:09:30][31.8]

Michael Tanner: [00:09:30] Well it’s an easy way to stimulate your own economy at home because you have to begin to up your production. I mean, it’s it’s an unfortunate reason, but there’s an oddly tactical reason for it. [00:09:42][11.6]

Stuart Turley: [00:09:42] Oh exactly, the scale of this shot assumes for a moment this is one of the paragraphs in here that China launches a full-scale invasion tomorrow. And imagine that the Taiwanese people and its military do not surrender instantly as the Ukrainians were supposed to do. Imagine their headlines imagine the political response and imagine the economic fallout. Holy smokes. [00:10:07][24.4]

Stuart Turley: [00:10:07] Think about the world’s economy stopping and wondering what’s going to go on. It would be even a bigger shock if the U.S. plus or minus allies retaliated militarily. There’s even some more things in here this is the energy policy challenges of Europe I mean, of China. [00:10:28][20.5]

Stuart Turley: [00:10:29] They don’t care they have all they’ve been doing the rare earth minerals for 20 years. And now all of a sudden, all of our country is sitting there going, we’re going to go to EVs. We got to have rare earth minerals and critical minerals. And it takes how many years Michael? My beloved School of Mines graduate, takes a long time to dig a hole doesnt it? [00:10:54][25.6]

Michael Tanner: [00:10:55] Mines are 50 year investments you know, I think this article points out that we’ve at least done a decent job of recognizing that China is a threat on this, you know, through the CHIPS Act and, you know, this okay job of saying that, okay, they are a threat on this on this infrastructure side, we’ve passed the CHIPS Act. [00:11:13][17.9]

Michael Tanner: [00:11:13] I think, you know where the energy policy gets dicey specifically with when China invades Taiwan, if that’s what the sentiment we’re going to it’s going to be that clean energy economy. That’s where the ripple effect is through. They own the critical minerals supply chain. It’s going to be very hard for us to in an instant get lithium, nickel, copper, cobalt, of all things do. [00:11:34][21.0]

Stuart Turley: [00:11:34] Wind turbines, Solar panels? [00:11:36][1.6]

Michael Tanner: [00:11:36] Yep. [00:11:36][0.0]

Stuart Turley: [00:11:37] And if we destroy the natural gas machine. [00:11:40][3.3]

Michael Tanner: [00:11:41] We’re not going to be able to pick that machine up you’re exactly right. And that’s where it’s going to hurt us, is we’re going to end up with way more demand than we have in dispatchable power and are not going to be able to do. [00:11:52][10.2]

Michael Tanner: [00:11:52] So I think, you know, this article goes on to point out the dangers of the gradualist approach, which I think is key. We can’t just we can’t do death by a thousand cuts you’ve got to cut the head off the snake now. [00:12:03][10.9]

Michael Tanner: [00:12:03] And I mean, cut the head of the snake, secure our own supply chain. You can’t you know, China is going to do what China’s going to do. We’ve got to secure our own supply chain so that when the inevitable happens, we’re good to go. [00:12:14][10.5]

Stuart Turley: [00:12:14] Oh, well said. Well said Dude [00:12:17][2.4]

Michael Tanner: [00:12:18] Michael Tanner, Secretary of State, 2024? [00:12:20][1.6]

Stuart Turley: [00:12:21] I think so you would actually you would. [00:12:24][3.1]

Michael Tanner: [00:12:24] Absolutely. [00:12:24][0.0]

Stuart Turley: [00:12:25] For you hey, I’d vote for him let me call Trump. [00:12:28][2.1]

Michael Tanner: [00:12:28] Yeah, no kidding. What’s next? [00:12:29][1.4]

Stuart Turley: [00:12:30] Okay. [00:12:30][0.0]

Michael Tanner: [00:12:31] Speaking of EVs. [00:12:31][0.5]

Stuart Turley: [00:12:32] Yeah, 25 reasons. Michael, We had one of our best articles was when we had 100 reasons Biden couldn’t manage energy this one is Absolutely. [00:12:44][12.6]

Michael Tanner: [00:12:46] 100 reasons Joe Biden couldn’t stand up. [00:12:49][3.1]

Stuart Turley: [00:12:49] Right? And it was funny. It went bonkers. This one is 25 reasons Biden’s EV goals are economically and environmentally harmful. Everybody’s just got to sit down. When you go to the bathroom, print this out and you’ll have a blast reading this one. During electric capacity shortfalls or blackouts, EVs can’t be charged. We all know that rural areas lack charging they know that. [00:13:18][29.2]

Stuart Turley: [00:13:19] There’s some things in here that are critical. Large battery packs required to power the EVs make them 33% heavier than internal combustion engines, which means they go through people more and farther. [00:13:35][16.4]

Stuart Turley: [00:13:36] The other thing is a Tesla caught on fire and that they had to use an additional 400 gallons of water to put it out more than a normal fire. The other thing is and that’s in number five, the thermal runway. The other thing is that it’s not even listed in here is the amount of extra money that we’re going to have to pay to repair roads. Michael, what is asphalt in cement built with coal? [00:14:06][29.5]

Michael Tanner: [00:14:08] Make coal great again. [00:14:10][1.2]

Stuart Turley: [00:14:10] Make coal great again. [00:14:11][1.0]

Michael Tanner: [00:14:11] You got to love this is my favorite one here. [00:14:16][4.1]

Stuart Turley: [00:14:16] Which one? [00:14:16][0.3]

Michael Tanner: [00:14:17] It has to do with? Where was it? I was just seeing it. Number 20 child labor, hazardous working conditions and lax environmental regulations plagued mining of critical minerals such as coal. But in countries like the immigrant populated Congo, modern day slavery folks, I mean, that’s what you do. You support these? [00:14:33][15.3]

Stuart Turley: [00:14:33] Oh, absolutely. In fact, this one really is applicable to you because Mama Tanner called me and said, don’t harass my son about being the same size as children. So I’m going to make sure that you go out as an emissary for the United States to Congo so that they would all run to you and you could be the U.S. emissary to Congo. What do you think I do? [00:14:58][24.5]

Michael Tanner: [00:14:58] It’s exactly what I need I could check out the rest, guys, because there are 25 of them they’re good. I highly recommend reading this article for Michael. Is that all you got? [00:15:08][10.2]

Stuart Turley: [00:15:09] It is and God bless you and I’m. Sorry for Mama Tanner. [00:15:12][3.1]

Michael Tanner: [00:15:14] Well, we’ll go over the finance guys. Not much to cover. Prices slightly rise on the oil side. 7146. That’s up about one percentage points. I think there’s a couple reasons we end that losing streak. I think we’ve seen a little bit of demand tightening. [00:15:27][12.6]

Michael Tanner: [00:15:28] There’s some wildfires, a wildfires in Canada shutting in at least 300,000 per day. The interesting part is they expect that fire to continue to worsen. So there could be some more knocked off. We’ll make sure to keep you guys updated what’s going on there in Canada in Alberta, The one the one place that we love in Canada, we love Alberta. So if you if you’re listen to us from there, you know, stay strong let us know how we can help. [00:15:49][21.3]

Michael Tanner: [00:15:50] And then it’ll be interesting to see what happens Dollar was fairly flat today. I think obviously with this fire, we’ll probably see prices continue to rise over the week. You know, it seems like these planned OPEC cuts are also going to impact. We’ve got, you know, third bridge analyst Peter McNally. Third, you know, just as an effort, I don’t name your your research company, third Bridge like Lake Point, that makes it seem like, oh, for a fourth take analysts like this fourth go around or whatever. So Peter McNally is is your third this is your third rate, third bridge Analyst Day for what it’s worth, I’m sorry I’m sure he’s a good guy tho. [00:16:25][35.8]

Michael Tanner: [00:16:26] The OPEC cuts are likely to have a greater impact as we move through the summer as previous attempts to balance the markets were offset by seasonal weakness and the release of strategic reserves. Take that for what it’s worth. [00:16:35][9.9]

Michael Tanner: [00:16:36] Natural gas prices bump a little bit, $2.35. We’ve seen some pretty heavy cold weather throughout the Midwest here, unfortunately, not in Dallas. We saw a lot of got a lot of rain in San Antonio and down south this weekend so hopefully everybody stayed safe. But but a little more rising Natural gas prices doesn’t hurt the fact. [00:16:53][17.3]

Michael Tanner: [00:16:54] I think that to piggyback off that, one of the you know, I think the a move everybody was talking out today in the M&A space. U.S. pipeline operator one of moves into oil and products specifically going out and purchasing Magellan Resources or Magellan Midstream at $18.8 billion, a deal valued in cash and stock representing total valuation of about 22% and 5 billion of Magellan’s debt. You know, really what this does was, you know, diversify them and get them more into oil and refined products. You know. [00:17:26][31.7]

Michael Tanner: [00:17:26] Currently this you know, currently they’re a majority natural gas pipeline operator. This new combined entity is going to have about 40% of its business in NGOs and about 21% of refined products, according to that presentation that they send around. [00:17:37][11.7]

Michael Tanner: [00:17:38] Quote from one CEO the combination of one of Magellan will create a diversified North American midstream infrastructure company with predominantly fee based earnings, strong balance sheet and financial flexibility. That’s Pierce H. Nord the second, who’s going to go ahead and head up that combined companies. [00:17:53][14.3]

Michael Tanner: [00:17:53] I mean, they get a decent amount. I was trying to look up there, they’ve got like a couple hundred thousand or I don’t even want to say, you know, feed a pipeline. They’re going to become one of the bigger players. [00:18:02][9.1]

Michael Tanner: [00:18:03] Magellan has a decent reputation in the business you know, they expect this deal to go ahead and close at the end, end of the quarter. Goldman Sachs, for what it’s worth, was the lead financial advisor. So, you know, they probably you know, they probably very bullish on natural gas of course, they’re hiring Goldman Sachs. I mean, of course, one to excuse and Goldman Sachs, a natural gas. Of course it may. It all makes sense now we all Stu is actually behind this deal, folks. [00:18:29][25.5]

Stuart Turley: [00:18:29] I love me some Mono I’ve worked with them they’re good people. [00:18:32][2.5]

Michael Tanner: [00:18:32] Do you got any thoughts on this deal? [00:18:34][1.1]

Stuart Turley: [00:18:34] I think it’s fabulous. I think you’re going to see more and more pipeline. It also means that they’ve got midstream is where it’s all at. I mean,. [00:18:44][9.5]

Michael Tanner: [00:18:44] Well it’s an oil it diversifies them in oil. I think that’s the biggest thing over here by natural gas pipelines. That’s not a bad thing, but you’re probably not getting a 22% premium. So I think that shows you where companies see the value moving forward oil versus gas. [00:18:56][11.9]

Stuart Turley: [00:18:57] That is correct but on the other hand, pipeline as a pipeline, as a pipeline, it is a asset. [00:19:02][5.0]

Michael Tanner: [00:19:03] It is an asset it is an asset. [00:19:04][1.5]

Stuart Turley: [00:19:05] And I’m an ass. [00:19:06][0.5]

Michael Tanner: [00:19:09] Well, what else you got Stu thats about oil on my plate? [00:19:13][3.3]

Stuart Turley: [00:19:13] Oh, no, dude. Hey, I just appreciate you and appreciate everything you get going on. [00:19:17][3.6]

Michael Tanner: [00:19:17] No we appreciate you for keeping this up with that guys, we’re going let you get out of here. Appreciate you check this out www.EnergyNewsBeat.com for all your updates for Stuart Turley, I’m Michael Tanner. We’ll see you tomorrow, guys. [00:19:17][0.0]