September 20

Daily Energy Standup Episode #212 – Navigating the Shifting Landscape: Ford’s EV Focus, Bidenomics, and Energy Market Dynamics

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Higlights of the Podcast

00:00 – Intro
03:21 – Monday’s energy absurdity is the day Ford CEO prioritizes EV transition over employee demands amid the UAW strike.
08:10 – Biden nomics simplified.
10:29 – Imagine no jets, ships, defense or space program.
14:28 – Market Updates
16:07 – Vital Energy’s made two or three acquisition spree of acquisitions and in order to pay for that they’re taking out more debt.
18:17 – Outro

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

Miachel Tanner: [00:00:14] What is going on, everybody? Welcome into another edition of the Daily Energy News Beat standup here on this gorgeous Wednesday, September 20th, 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, Energy News Beat Stuart Turley, my man. How are we doing today? [00:00:37][22.9]

Stuart Turley: [00:00:38] It’s a beautiful neighborhood here in West Texas. [00:00:40][2.1]

Miachel Tanner: [00:00:41] Yeah, you’re holding it down in West Texas. We appreciate it, but still have an opportunity to bring you an absolutely banger of a show. We’re going to start out with our favorite random guy on Substack, David Blackmon. He has an opinion piece, Monday’s Energy Absurdity of the Day Ford CEO Prioritizes EV Transition over Employee demands amid the UAW strikes. This deal will cover all things that’s going on with that strike. Next up, simple headline, folks. Biden nomics simplified who I’m shaking in my boots wondering what this is. So we will have an update from Stu on exactly what Biden now mix is and he’ll simplify. Next up, great headline. Imagine no jet ships, defense or space program. So I assume this is going to be talking about the looming jet and fuel crisis. There’s a lot of stuff that’s happening in Russia right now in terms of the actual refined products of Stu’s going to dive into into all what’s going on and talk to us about a world with no jets, ships, defense or space program. He’ll then toss over me. I’ll quickly cover what’s happening in the oil and gas markets. We did see prices actually ease a little bit today off ten months highs, mainly due to the fact of some rebalancing going on. As we mentioned, there is some fuel, there is actual some refined product shortages. So those crack spreads are up to all time highs. Russia did come out and say some stuff about imposing some export taxes on refined products. So very interesting to see how that all plays out. Natural gas did drop a little bit and then I’ll quickly finish up by covering what the API’s going to predict the crude oil storage numbers will be today as you listen to this. And then viral decides to pay off some lower interest rates debt by taking out higher interest rate debt. So we’ll buy dynamic simplified folks right then and there. We’ll end it all with a bow. Exactly out my word. But before we do all that, guys, again, the stories and analysis you about here are courtesy the world’s greatest website, energynewbeat.com. You can check us out there. You can listen to this podcast, Apple Podcasts, Spotify. Subscribe to this channel on YouTube at Energy News Beat The best way to stay in touch and support the show. You know, energy news beats doing. The team does a great job of curating all of that content to make sure the website in the podcast is up to speed with all of the pertinent energy information that you need to know to stay up to speed on the business. You can hit us up. Dashboard.energynewsbeat.com. It’s our data news combo product. We appreciate everybody’s. Check that out. You can look the description below all the time stamps all of the articles we’re about to cover. And you can also get in contact with the show or email us [email protected]. I’m out of breath. Those too. Where do you want to begin? [00:03:16][155.4]

Stuart Turley: [00:03:17] Hey, let’s start with my buddy David Blackmon. Monday’s energy absurdity is the day Ford CEO prioritizes EV transition over employee demands amid the UAW strike. Michael I got tickled at this one. I love David Blackmon, but I want to ask you something. The Ford CEO, his name is Jim Farley. Do you think that he ever did an imitation at a Christmas party of the Chris Farley of the consultant in a van down by the river? Could you imagine the CEO of Ford going, I can bet you live in a van down by the river. I would pay money for that one. Okay. Let’s jump on to this story. [00:04:02][45.6]

Miachel Tanner: [00:04:03] Here, what he looked like on CNN last. [00:04:04][1.7]

Stuart Turley: [00:04:05] Week. It’s about that’s exactly where it’s going. Okay. Here we are in an interview with CNN’s Jake TAPPER last week, Farley left no room for doubt that his company’s pursuit of government subsidies for the ongoing EV transition far outweighs any real concerns about the company’s employees. Okay, here’s the thing. Biden now, Max, which we’ll cover here in a second. Biden’s EV rebates have caused so many people heartburn. They have a new hotline for help, one 800. I don’t understand Biden’s EV policies. And let’s go here. Several weeks ago, Ford plans to lose 4.5 billion on its TV unit in 2023. Michael that’s sustainable. [00:04:55][50.9]

Miachel Tanner: [00:04:56] They’re losing $67,000 per car sold in the EV unit. [00:05:02][5.2]

Stuart Turley: [00:05:02] Yeah. And he says while the company wasn’t opposed to wage increases, that double digit range going to 40% would put. The company out of business and he would not cut Ford’s push for EVs, even though the company is expecting to lose 4.5 billion this year alone. Here’s a quote from him. There is a fine line that we won’t go past, which is we want everyone to participate in our success, Farley said. But if it prevents us from investing in this transition to EVs and future products like the one we have now, the new Ford F-150, best selling vehicle in the world, in the U.S., then everybody’s job is at risk if we don’t invest. [00:05:44][42.5]

Miachel Tanner: [00:05:45] And remember, this is important because the United Auto Workers Association is striking right now. The big three, GM, Ford, and the last is whichever one that owns Jeep and Chrysler. They’re all they’re all striking right now. They won 40% wages at first. That sounds outrageous. It’s probably way too high. I mean, not do I? It’s probably a little high. But you have to take into account that over a four year business plan or a four year span, that’s not that’s including inflation’s if you include the inflation that we’re dealing with right now, it’s really like a 10 to 15% raise. But the fact of the matter is Ford is giving them eight is is has laid out ten or like a 20 22% raise on the fact that they’re losing four and a half billion on EVs. So I love David Bachmann’s point here. They’re willing to pour money at a losing proposition in order to line their pockets, which is a quote that I’m about to read here, line their pockets with government subsidies while the workers eat it in the shorts. This is exactly how the frame of it is going. President Sean Penn, he wrote This is an op ed. He’s the president of the UAW. He says, quote, We will not let the EV industry be built on the backs of workers making poverty wages while CEOs line their pockets with government subsidies. I can get behind that one steel. [00:07:04][79.0]

Stuart Turley: [00:07:05] I can’t, too. I’ll tell you, the the whole thing about this is I want the union workers to build a Ford F-150 van for Farley so that he can go down there and say, I live in a van down by the river and have him try to negotiate there. I just find it appalling that we’re here now because we should go to hybrids rather than EVs until the technology is there. You’re not going to go there. Biden’s policies have put us in this situation. In fact, today, Michael, the unions asked Biden not to help out and negotiate this deal. [00:07:46][41.5]

Miachel Tanner: [00:07:49] Can you blame. [00:07:49][0.3]

Stuart Turley: [00:07:50] Them? No, I don’t want Biden to help. I hope Biden retires early. [00:07:55][4.8]

Miachel Tanner: [00:07:55] I wouldn’t want Biden’s help making a peanut butter and jelly sandwich. No, I. [00:07:59][4.4]

Stuart Turley: [00:08:00] I would want nothing. [00:08:01][0.6]

Miachel Tanner: [00:08:02] All right. Speaking of our favorite president, we got to talk. Biden nomics. [00:08:05][3.0]

Stuart Turley: [00:08:06] Oh, Biden nomics. You know what’s funny? Before I even get started in here, Biden nomics simplified. So I’m going to have to open this up like a first grader reader if I’m reading this to Joe. Okay. So here we are. What is Biden nomics? Biden nomics started as a joke from the Wall Street Journal and he took off with it and run. He didn’t realize it was a slam Emmy. And it’s like, let’s go, Brandon. It’s the let’s go Brandon of the finance world. He loves it. Biden nomics. Simply put, Biden nomics is borrowing trillions from China to spend on a Green New Deal to enrich China and U.S. international supporters as part of this Green New Deal. Cut off as much oil and gas production as the U.S. drives prices higher. Right. Okay. That’s it in a nutshell. There’s a lot more in here. But when you sit back, Michael, and take a look. [00:09:06][59.9]

Miachel Tanner: [00:09:07] At nomics is simply printing money. It’s what he’s done time and time again. We saw the Inflation Reduction Act, the Porkulus bill, as you’ve talked about, you know, all of these different bills that were signed. They have one thing in common. Print more money. Money. That’s by nomics. I like it. Unfortunately, the money’s not getting into my pocket. If it was, I’d like it more. But, you know. And where’s that coming from? As you aptly pointed out. It’s all coming from China. [00:09:32][24.9]

Stuart Turley: [00:09:32] That’s right. Now, here’s the thing. And I’m disappointed. You Almighty. Millennial Mouse, like Mighty Mouse. If we are going to treat here. [00:09:41][8.7]

Miachel Tanner: [00:09:41] I. [00:09:41][0.0]

Stuart Turley: [00:09:42] Mean, we’re on. [00:09:42][0.5]

Miachel Tanner: [00:09:42] 33 trillion of natural of national debt, $250,000 of debt per taxpayer. Right. That’s criminal. [00:09:50][7.5]

Stuart Turley: [00:09:51] Yeah. Especially when half of them are on the take. I mean, you take a look at I mean, it’s just pathetic. And when you sacrifice your livelihood and financial independence and freedom for the Green New Deal. Unbelievable. Now, here’s the biggie. Michael Biden nomics in a real world scenario. You should have never been created. I don’t know how we got to this point. We got here by both parties. This is not a Democrat versus Republican. We got here because politicians got us here. [00:10:25][34.0]

Miachel Tanner: [00:10:25] Oh, absolutely. Let’s talk about this next one. [00:10:27][1.7]

Stuart Turley: [00:10:27] All right. Let’s go here. Imagine no jets, ships, defense or space program. I got to give a shout out to. This one is from Ronald Stein. I interviewed him on the podcast. This is an excellent get it. Give him a shout out because this is an excellent article. His website is Energy Literacy Web site. He’s pretty cool now. He is a cool cat. He’s an engineer policy advisor, and he’s got clean energy exploitations. Here’s where I’m going to tie this to last yesterday’s show, Michael. There were tens of thousands of climate protesters in New York City with those tens of thousands there claiming to shut down oil and gas immediately. Michael, I vote. We give that to him. All those in favor. If you’re listening to this show on the podcast, send us a note. And let’s cut all gas. All products made from oil and gas. Let’s shut down all energy in New York. Unless it’s renewable. No clothes coming in. No nanny, none of the other stuff. So let’s go ahead and shut New York down. I’m okay with this. I think it’s a great plan. Let’s keep these people happy. [00:11:49][81.3]

Miachel Tanner: [00:11:49] Yeah. I mean, I’m. I’m right there with you. I mean, you know, we’d lose podcast listeners, but I think I’m willing to do it for the sake of making a point that renewables are we actually might get more because now more people have access. What am I saying? We’ll have more listeners. [00:12:02][12.8]

Stuart Turley: [00:12:03] We will. And and more people will sit here instead of so many people going to the bathroom on the sidewalks and and everything else, they’ll have to because there will be no water to flush. There will be no nothing. So they’ve already set the tone. Now, the energy conundrum is that renewables only generate electricity, yet most products are derived from oil. Nobody’s bothered to tell that to these folks. You know, it’s not I don’t like wind. It’s not that I don’t like solar. It’s that you can’t recycle them. [00:12:37][34.4]

Miachel Tanner: [00:12:37] Yeah, my my issue is that you’re attempting to create top down government regulation and force products onto a marketplace that isn’t accepting that. But, you know, we’ve talked ad nauseam about this. It would. [00:12:50][12.1]

Stuart Turley: [00:12:50] Be great. One other thing. China has or except China, they have closed a 3 million barrels per day of refining capacity with the exception of China. China has increased it. So then you have also Russia, as you aptly said, was putting out that they are going to be cutting out their diesel exports there. They are building 88 new refineries. Yep. [00:13:18][28.8]

Miachel Tanner: [00:13:19] They’re cranking it out. And it’s it’s only going to get dicier, folks. I mean, oil’s $90 right now. It’s only going to be crazy. Anything else on the news? Kind of a slow news day. [00:13:27][8.2]

Stuart Turley: [00:13:28] I’ll tell you what, M.D.s is out there and he’s talking to Brit Baird tomorrow. I saw some of the stuff. Oh, I can’t wait to see that. And some of the stuff that I’m seeing coming out of the Saudis is pretty entertaining. I mean, by 2030, they are looking at having a whole new society. And if you think about it, they’ve turned the corner in a lot of ways. Do I think I applaud with everything now, can women now drive in Saudi Arabia? Yeah, it’s kind of cool. [00:13:58][29.9]

Miachel Tanner: [00:13:59] Did they sponsor the energy needs, be bodyguards? Absolutely. [00:14:01][2.1]

Stuart Turley: [00:14:01] I’m going to call him. Let me let me see if I can get M.D.s his personal. [00:14:04][2.9]

Miachel Tanner: [00:14:05] Get them on the phone. If you just do what? What software did they use to hack Jeff Bezos? What was the one that they use? They use the Israeli as listening to some podcast. Apparently, NBC owns this Israeli software that you can type in somebody’s phone number and you just make clone of it. Pegasus, I think, is what it’s called. [00:14:22][17.6]

Stuart Turley: [00:14:23] Oh, and Pegasus, It should be. [00:14:24][1.7]

Miachel Tanner: [00:14:26] No kidding. So I. Well, who could we cover what’s going on in the markets, guys? We saw the S&P down about a quarter of a percentage point. NASDAQ dropped a quarter of a percentage point. Crude oil did drop about a quarter or about one and a half percentage points, currently sitting 9067 as we record this about 615 actually on the 19th. There was two reasons for that. One, we saw U.S. oil output fall actually for the third straight month, according to the IEA. So that’s going to soften prices a little bit. As we did mention in the open, Russia’s gone ahead in attempting to raise its export tax on fuel up to 250 per metric ton, which is enormously higher than its current fees. And that could start October 1st until June 24. And that’s in an attempt to. Fuel shortages at home. But it’s also going to put an impact on the amount of available refined products that hit the market. We did see crack spreads, which is the difference between refined products and crude oil rise to its highest level since not seen before COVID. So the market reacted to that extremely positive by, again, drop a little nugget that they believe that oil output from top produce from the top shale producing regions is on track to fall to 9.3 million barrels per day in October would be the lowest since May 2023, and it would mark a third consecutive fall. So something to watch there. The API did come out and say that they believe a 5.25 million barrel drop from the strategy from the crude oil petroleum reserves is possible at 10 a.m. the day you listen to this on the 20th, you’ll find out whether that the EIA actually confirms or denies. You’ll find that out at 9 a.m. Central Standard Time. All other interesting stuff I found still was was Vital Energy’s. Remember they just made two or three acquisition spree of acquisitions and in order to pay for that they’re taking out more debt. I love this. They’re trading in their nine and a half percent senior unsecured 2025 notes for a fresh round of 10.125 senior unsecured notes due in 2028 and a smaller subset of 9.75% due in 2030. Dual interest payments to be made in January or excuse me, to be made on April 15th and October 15th and January 15th and July 15th reoccurring. So four times a year you get hit up with interest payments, going to work out to be about $60 million a quarter. So it’s going to be fun to be on that squad, going to be fun to do that. I love that you paying off your low interest rate debt to fund your acquisitions at a higher interest rate. I mean, if this doesn’t signify the top, what does I. [00:17:05][159.9]

Stuart Turley: [00:17:06] Boy, you got me on now on dude. I’m over here kind of going, wow. Hey, what is the Fed’s going to do to today? [00:17:12][6.1]

Miachel Tanner: [00:17:12] Oh, I mean, I think they’re going to probably raise a quarter interest point. I mean, that’s that’s really what I think the market’s looking for. I think that’s probably what we’ll see. But we’ll make sure to break it all down tomorrow, Stu, because all I know is I don’t know what’s going to happen. [00:17:24][11.5]

Stuart Turley: [00:17:24] I don’t either. But I’ve said this once and I’ve said it twice. The only way you’re going to break inflation, Michael, reduce the energy costs, quit printing money. Yeah. And then. [00:17:35][11.2]

Miachel Tanner: [00:17:36] What else? Just stop being reliant on China. [00:17:39][2.4]

Stuart Turley: [00:17:40] Lower the interest rate so that there is an access to cash if. Well, we’re back to almost nothing. You do those three things. Stop printing money, get the energy. Guess what? It never going to happen. So do you think they’re going to get rid of inflation any time soon? [00:17:57][17.2]

Miachel Tanner: [00:17:58] That early 2024. I see. I see. That sounds a lot like a stance. [00:18:03][5.6]

Stuart Turley: [00:18:04] I’m just telling you the only way to get rid of inflation. [00:18:06][2.2]

Miachel Tanner: [00:18:07] Got a little bit, folks. Well, we appreciate you guys checking us out. We’ll let you get out of here. For Stuart Turley, I’m Michael Tanner. Folks, have a great day. We’ll see you tomorrow. [00:18:07][0.0][1044.8]

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The post Daily Energy Standup Episode #212 – Navigating the Shifting Landscape: Ford’s EV Focus, Bidenomics, and Energy Market Dynamics appeared first on Energy News Beat.

 

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