Daily Energy Standup Episode #326 – Federal Funding Boosts Nuclear, Utilities Profit, Aramco’s LNG Talks, Geoengineering Debate, and Banking Implications

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Daily Standup Top Stories

Federal money could supercharge state efforts to preserve nuclear power

Aramco in Talks for US LNG Projects as Mideast Gas Race Heats Up

The Banks: “Unrealized Losses” in Q4, Securities Held by Banks, Bank Failures, and the Dropping Bank Count

Highlights of the Podcast

00:00 – Intro

01:50 – Federal money could supercharge state efforts to preserve nuclear power

04:39 – Green-Plating the Grid: How Utilities Exploit the “Energy Transition” to Rake In Record Profits

08:42 – Aramco in Talks for US LNG Projects as Mideast Gas Race Heats Up

11:24 – Bizarre Geoengineering Project Floated to Save the World From “Doomsday Glacier”’

15:25 – The Banks: “Unrealized Losses” in Q4, Securities Held by Banks, Bank Failures, and the Dropping Bank Count

19:25 – Markets Update

23:35 – Outro

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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’s going on, everybody? Welcome into the Monday, March 11th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up, federal money could supercharge state efforts to preserve nuclear power. That’s over in Michigan. We love that. Next up green plating the grid how utilities exploit quote the energy transition to rake in record profits. That’s from one of our favorite sub stacks the energy bad Boys. They will be on our podcast later this week. We look forward to talking them. Next up Aramco in talks for U.S. LNG projects as Mideast gas heats. Up next. Bizarre geoengineering report floated to save the world from Doomsday Glacier. You can’t make this stuff up anymore. And then we’ll finish up the news segment with the banks. Quote, unrealized losses in Q4, securities held by banks, bank failures, and the dropping bank count. Stu will do his best to tie this into energy, or I will strangle him. No, I’m just kidding. But we can. Pretty nice. The intense news lineup we’ve got. He will then toss it over to me. I will quickly cover what’s going on. And happened really on Friday and over the weekend here in the oil and gas markets, we have seen bitcoin pop above 70,000. It’s back below. So everybody the commodities boom really is here. Oil’s down a little bit right now. The A. We’ll get the open here soon as we record this. So lots going on with rig counts. And then we’ll dive into all that and a bag of chips guys. As always I’m Michael Tanner joined by Stuart Turley. All right. Where do you want to start. [00:01:49][94.8]

Stuart Turley: [00:01:50] Hey let’s start with some federal money. You know, what’s a few billion between friends? Federal money could supercharge state efforts to preserve nuclear power. Mine all this is absolutely huge. Even in a Democrat. Democrat governor Gretchen Whitmer successfully pushed for 150 million in state funding last year for the Palisades restart. The plant is owned by a Florida Haltech international bought it in 2022 to decommission it. Michael. And then you and I talked about a little while ago that they have actually snuck around and did a re, redone. They were going to decommission it. And then the decommissioning applied for federal money, and they got the extra money to fire it back up. That’s pretty darn cool. [00:02:40][49.5]

Michael Tanner: [00:02:40] It’s good. I mean, we’re all for nuclear here. We’re excited to hear about that. Was it great? Gretchen Whitmer, the one that was abducted by all the feds? [00:02:48][7.9]

Stuart Turley: [00:02:49] She. Well, it was y. Yeah, I that was. There’s actually a little conspiracy theory out there that says the CIA did their own. They were the ones that are up to. [00:03:01][11.7]

Michael Tanner: [00:03:01] Date with the keys. I just, I, I had to just pointed out that I think Gretchen Whitmer was the one that the feds attempted to abduct. What is it? Two out of the 12 people were not. And it’s it’s just unbelievable. All right. Back on track here, guys. We love the fact. The quote is that, this is from the chief of staff, Kara Cook. She’s over there. The the Michigan Department of Environment, Green Lakes and Energy. She says reviving the plant is really stepping to make sure we can meet our clean energy goals. At least they’ve got some responsible people over there because you wouldn’t. You’re not hearing that come out of California. And they have the exact same choice with Diablo Canyon. Right? [00:03:37][35.9]

Stuart Turley: [00:03:37] Well, Diablo Kim did get an extension just recently. And there are six states Connecticut, Illinois, Kentucky, Montana, West Virginia, and Wisconsin recently repealed bans on adding new nuclear, in part to enable such reactors. Yes. You can’t have wind solar without nuclear. If you want to get rid of natural gas and fossil fuels, you have to have nuclear. But, you know, everybody has to remember, if you want your iPhone, you’re gonna need some oil and gas, because you can’t make oil. You can’t make an iPhone out of, solar panel. [00:04:17][39.5]

Michael Tanner: [00:04:18] It’s gonna cost you $5,000 a month in Verizon fees before you. Your phone will cost a hundred grand. [00:04:24][6.0]

Stuart Turley: [00:04:25] Which is very possible. Hey, let’s roll over here. And I a shout out to, what’s her name? Gretchen. You know, for, hey. [00:04:33][7.8]

Michael Tanner: [00:04:33] Safe out there. [00:04:34][0.6]

Stuart Turley: [00:04:34] Yeah. Stay safe. Look at her shoulders. Okay. Hey, green plating the grid. How? Utilities exploit the energy transition. Rake in record profit. Michael, this is from Isaac or. And Mitch rolling. They are the energy bad boys. And I get a hoot out of reading their Substack. I highly recommend everybody, go out in and read what they’ve got going on. Here’s where they go through. This is one of the single best descriptions of why wind and solar is being. Push by utilities. Let me read this part for you, Michael. Utilities are never going to rival tech companies or biotech companies in terms of growth, but this is the best utilities growth environment that we’ve seen in decades. When you combine those two big macro themes of electricity nation and clean energy, seeing utilities with growth like we haven’t seen many, many years. These just aren’t growth prospects for the next year or two. This is a growth that we can last for a decade or more. A lot of the clean energy goals and electrification goals are out there 20, 40, 20, 50. You look at the infrastructure investment that’s needed to get to these goals. It’s a long runway for utilities. Great quote. That’s why the utilities are a good investment. But here’s where a little bit later in here, they start describing on the asset and the depletion of assets on this. And when you take a look at the 30 year mark on, energy, I’m in the, miss producer, if you could slide over the one with the green arrows and a, a downward. [00:06:27][112.3]

Michael Tanner: [00:06:27] Yeah, the depreciation schedule and utility, corporate profits over time are really interesting because what this is showing is the value of the plant over time relative to the corporate profits, which meaning as the longer you have a plant, the less profit is being made because you’re paying off more and more of the plant, meaning the depreciation is less offsetting your profit. So while at and what they go on to say is a plant that is fully paid off has some of the lowest cost energy available to the consumer. But if you’re a if you’re a utility, it offers some of the worst economics from your standpoint. So there’s always a push to invest new money into capital, whether it’s working or not. Which is why you which is a really interesting point to show. This is why everybody’s been moving into wind and solar. They don’t care if it works or not, because them spending on infrastructure allows them to fully depreciate and take advantage of this kind of accounting trick, you know, and I love that this is where we’re at. We’re innovating by making by taking advantage of the accounting that, you know, real, you know, that’s using a business model that doesn’t stick around too long when you’re innovating on something other than at least a product. Can we now right now. Oh, we’re able to grow because of an accounting trick. Oh. Good luck. [00:07:49][81.1]

Stuart Turley: [00:07:49] Oh, they’ve done such a great job. And if you look down into the the map from the Smart Electric Power Alliance shows utilities have pledged to achieve 100% carbon free, net negative, net zero reduce emissions. Mr. Producer, if he could slide this map in, take a look at that map. And net zero or carbon neutral. Look at that Big Ten area in there. Michael. Look at all of California net negative. You’ve got either net zero or not. Net negative or 100% carbon free. You’re looking at the most expensive, electricity in the entire planet. The universe right there. [00:08:36][46.4]

Michael Tanner: [00:08:37] No, it’s it’s it’s it’s crazy. All right, what’s next? [00:08:39][2.3]

Stuart Turley: [00:08:39] Okay. Hey, great job to those guys. Let’s go to Saudi Aramco. Our buddies over there. And Saudi Aramco in talks for U.S LNG projects is Mideast gas race heat. this is actually pretty cool. Saudi Aramco is in talks with companies for the U.S., men. And Nasser, he’s the CEO of, Saudi Aramco. Let’s see here. They’re also talking with maybe, Abu Dhabi, National Oil. Let’s see here, Arab and Emirates and Cutter. They’re looked at buying 25% of Sempra Energy Port Arthur Arthur facility in Texas. But it was pulled back. So they’re planning some bigger, things and looking at some more investments in the U.S.. [00:09:31][51.3]

Michael Tanner: [00:09:32] Yeah. I mean, because they’re looking for there. [00:09:35][3.0]

Stuart Turley: [00:09:36] And trying to. [00:09:36][0.6]

Michael Tanner: [00:09:37] Well, because I think they’re seeing the shift globally to while LNG could become the long term. I’d if you play it out 30 years, LNG is probably the most commonly you will be continued to be the most commonly fuel used in the world. And I think they’re trying to position themselves at the head of that. You’ve seen Qatar kind of take the lead. You’ve seen UAE take the lead. Saleh. It’s about time Saudi stepped up a little bit. And I think they’re recognizing the shift that’s going on. I think it’s I think they see the U.S. market. I don’t know how it would work if they’re trying to get into the U.S. market, which clearly they see is okay if no. More of these LNG facilities are going to get built in us. They’re only going to become more valuable the ones that already exist. You’re basically limiting the supply and therefore keeping the price. Now what does that mean? There’s going to be a lot of domestic LNG, but the stuff that gets exported, if you have a piece of that, that’s really where we saw the arbitrage come in, specifically when you saw what was going on with the prices in Europe. So it’s a smart move. [00:10:40][63.5]

Stuart Turley: [00:10:41] Extremely smart. And we’ve already seen, total energy, as we say, by sick, enough natural gas power plants in Texas, enough to have, two nuclear reactors. That’s a lot of gigawatts, dude. And that they’ve been. So you’re seeing foreign energy companies investing in the U.S. energy projects. Hey, let’s roll around a corner here to this one is I had to get into a conspiracy theory. You can’t beat this kind of an entertainment. I saw this and rolled over in the floor. My wife had to wonder what I was doing. I had a hernia, I was laughing. Listen to this one, Michael. Bizarre geoengineering project floated to save the world from a doomsday glacier. I didn’t change anything. There you are, drinking yourselves. Okay, let’s take a look at this thing. The glacier in question is known as the, towards glacier. A Great Britain sized located in western in Arctic. It’s been nicknamed the Doomsday Glacier by climate zealots because it can be subject to warmer ocean currents. Ooh! Dun dun dun dun. They’re looking at putting in a global curtain. The Glacier Curtain is the brainchild of John Moore, a glaciologist from the University of Lapland in Finland. What in the world is a glaciologist? [00:12:13][92.5]

Michael Tanner: [00:12:15] I was going to say, what do you have to study to become a glaciologist? I don’t know. [00:12:18][3.2]

Stuart Turley: [00:12:18] Do you brush your teeth twice a day? I don’t know his main issue. The Earth’s two large ice sheets in Antarctica and Greenland will deteriorate. Ooh, I’m getting warmer already. Scenarios of the climate change projection into the future. This deterioration has already begun for Antarctica and Greenland. Unbelievable. Okay. The curtain, they went $50 billion in order to do this. [00:12:47][28.7]

Michael Tanner: [00:12:47] Now we figure it out. Hey, Billy. That makes sense. Okay. [00:12:51][3.8]

Stuart Turley: [00:12:52] You bet. Yeah. And it’s the. It’s a climate scam. Yeah. They want to put a curtain around this thing. The concept of geoengineering as a solution is nothing more than a money grab by. [00:13:06][14.1]

Michael Tanner: [00:13:06] Put a curtain around it. Isn’t that the same thing is like them. Them saying we want to shoot stuff into the atmosphere to stop climate change. Like, hey, that sounds like a worse idea to put a curtain around this thing. I mean, this all comes back to the point of if this what do they call it that the what is Glacier? Yeah. If that were to fall in western Antarctica into the ocean, they’re claiming ten foot sea level rise. Oh, yeah. [00:13:29][23.1]

Stuart Turley: [00:13:30] But, you know, the Obamas are on four feet. You know why? If the Obamas thought that they were going to have an ocean rise up, why would they buy something four feet? [00:13:43][12.6]

Michael Tanner: [00:13:43] The smartest thing somebody ever told me is the insurance industry never loses money. There’s one industry throughout the last 60 years that has always made money. It’s the insurance industry. If we were all, it’s doomed, then you would never be able to get house insurance to for something on the beach. The fact that you can get affordable house insurance on coastline tells you all you need to know. The smartest people, the most amount of data in the world. The insurance business still will give you house insurance, flood insurance, you know. [00:14:12][28.7]

Stuart Turley: [00:14:12] So do you. Did you think with your comment that just as we talked about, there’s probably a toe tag on the EV market since insurance is putting a toe there stopping EVs? [00:14:24][11.6]

Michael Tanner: [00:14:25] Interesting. I did not know that they’re stopping. [00:14:26][1.4]

Stuart Turley: [00:14:28] They they’ve doubled the insurance and tripled the insurance on EVs. Yeah, yeah. [00:14:34][6.1]

Michael Tanner: [00:14:35] Oh, sure. And and what I tell these guys this this, what’s his name? John Moore. Yeah. Name John Moore. I’m trying to look. Yeah. John Moore, University of Lapland. Yeah. I’d like 50 billion to man. [00:14:48][13.5]

Stuart Turley: [00:14:49] So it’s a few billion between friends. Yeah. Yeah. We can spend a billion of that 50 on a survey and then have it falsified and pay for that. Then you could bribe the judges so that you could get out of jail and still have to. We could pay taxes on a 25 billion and still have 25 billion on our in our pockets. That’s not a bad. A deal for the for the economy. Great. All right. Let’s go to the next one here. What? [00:15:18][29.1]

Michael Tanner: [00:15:18] He said. What’s next? Oh, yeah. Great. The banks unrealized losses. [00:15:23][5.0]

Stuart Turley: [00:15:25] That the banks unrealized in Q4, securities held, banks, bank failures and the dropping of bank count. This one is by, Wolfe Richer at the Wall Street. He is a good cat. I like reading his articles and stuff. And so when you come in in here and you take a look. In Q4, unrealized losses on securities fell by 206, or 30% from the prior quarter to a cumulative loss of four, 178 billion, or 8.8% of the 5.43 trillion in securities held by those banks. Unbelievable. These paper losses started piling up in 2022. So when you come down in here, the bank failures, the bank failure issue, Michael, is going to be some serious issues coming around a corner. Back in 1936, there were only five, failures without FDIC insured banks. In 20 and 21. No bank failed in 2018, no bank failed 26 and 2005 bank fail. And that was it. So each of the remaining of the 88 years some bank failed, in 1989, at the peak, 531 banks failed. Holy smokes. [00:16:52][87.1]

Michael Tanner: [00:16:53] Yeah. I think these, you know, these unrealized losses that he’s talking about, he does a good job in, in my opinion, of splitting them up. You have to think about there’s, there’s, there’s what we call mature, securities or losses that are held in these at, in these securities that are what are known as held to maturity, which means they’re not going to sell them or they’re going to hold them out until the life of that, you know, security or really it’s that ten year Treasury bond pays back. Because, remember, there’s really only so many different ways of talking about government issued, bonds or Treasury securities. Those are specifically the ten and two year yield, which, you know, occasionally in the finance section, I’ll throw those numbers out. And that’s important to know, because those are generally when they buy those treasuries, that’s what they’re talking about. So there are certain ones that are held in maturity. But then there’s also ones that are available that anybody can buy that they basically put on the market. Those actually those are make up of over half of the unrealized loss. So you gotta you know, so there’s on both sides of the coin here. You’ve got stuff going and you know the accounting trickery or whatever between the held to maturity ones or the ones that are available is a little bit good. But yeah, I mean it’s going to get spicy. This is a again comes back to when. What does it mean when the Fed’s tightening monetary policy. They’re raising rates I mean we all know that we’ve talked about you know we’ve talked about at nauseam about how that’s sort of that’s what that’s what’s happening over in China a little bit. And that’s what’s causing some of the stuff that’s going on is a little bit different over there because of the debt loads here. But we know that the fed has been very aggressive at raising rates. And it seems to be the the stock market is at all time highs are close to all time highs seems to be trending upward. But it definitely you know the tune over here is interest rates. Where will they go. Because if they continue to rise or stay at if these are long term levels of where interest rates are going to be, these unrealized losses are going to continue to pile up, because we just came out of an era of seven years or eight years of 0% interest rates, and that’s only going that. It’s going to take a while to unwind. And it’s and and these unrealized losses will continue to persist, if only because that unwind is only in its infancy. [00:19:03][130.2]

Stuart Turley: [00:19:04] Yeah. And and I like, what he says down here at the bottom in 2024, some banks will fail. We pretty much know that. We just don’t know how many. If eight banks fail, that would be on par with 2015 and 2017. So, he’s pretty coolcat. [00:19:20][15.6]

Michael Tanner: [00:19:21] Yeah. No. Go go go check Wall Street of follow. We appreciate that. [00:19:24][3.1]

Stuart Turley: [00:19:25] All right. That’s it for me, baby. [00:19:26][1.6]

Michael Tanner: [00:19:27] I will pop over and talk about what happened on Friday. You know, we saw you know overall the markets were down about one and a half percentage points for the Nasdaq. S&P 500 trades down about, 6/10 of a percentage point. We saw the two year yield down about, 6/10 of a percentage point ten year yields only down about 2/10 of a percentage point dollar index flat. Bitcoin the big mover over the weekend it was up above 70,000. Now just a little bit below 69,422 for that crude oil. Not a great day. Down about 1.1 percentage points. For the close on Friday 7801 looks to open somewhere a little bit below that. You know, mainly just due to the fact that, you know, as I you know, what’s funny is, you know, the the story at the beginning of the week and what drove prices above. 80 was the fact that OPEC plus decided to extend its supply cuts which you know, Saudi kept the the little sugar on top. We saw the UAE you know we saw a lot more. You know even Russia came in and said hey we’re going to we’re going to bring less oil to the markets now. Stewart argued that they’re just going to sell it around the back end to get around sanctions. And so, sure, there’s where your Dark Fleet comes into play. I think it’ll be you know what I think we saw to close the week out was a little bit more of, okay, let’s take a step back. And now look at the macro environment. You know, you know, we have what’s going on in China continuing to to sway things. But again I don’t think I think yesterday’s price action or Friday’s price action, excuse me, has more to do with just the unknown of what’s happening going forward. I mean, we have we’ve seen less and less geopolitical craziness rolling out. And I think that’s playing more into, you know, obviously where the forward sentiment of where things are going in the Middle East seem to, you know, and maybe it’s just because just like in Ukraine, we just get tired of hearing about it. So maybe it’s it’s the fact that we’re not hearing about it. But there’s, it seems to be things have calmed down a little bit in that region from a geopolitical standpoint, when it comes to how it applies to oil and gas, obviously what’s going on there is a tragedy and and Ukraine as well. But from how that’s affecting the geopolitical oil markets, it seems to be slowing down a little bit, which is going to only soften oil prices if really the extended supply cuts were already what they’re doing. If, you know, if if OPEC decides to come in and cut more and add more sugar on top of it, you know, and and then maybe yes. So I think it’s still it’s a really interesting dynamic on what we have going on right now with prices. We also did see rig count numbers drop, in the United States and abroad. We saw Canada drop six rigs to 225 U.S., dropped seven rigs down to 200 or 622 internationally. We also saw a dip of seven. So obviously, you know, these rig counts are these rigs are coming offline, I think, for a couple reasons. One, in the United States, we’re seeing a lot of natural gas rig shut down. We saw Chesapeake and their new merged southwestern come out and say, yeah, no, we’re going to only run two rigs and only one frack crew, which was basically cut in half on both sides. We saw EQT come out and shut in a billion or a BCF per day, and you can only imagine their shedding rigs as we speak. You know, in Canada, obviously we we’ve, you know, we’ve seen some of those spreads come down a little bit unfamiliar, with, with some of the big happenings up there in Canada. But but, you know, everything in this market again, rolls, you know, 30 days behind. So these decisions to cut rigs, you can’t do it as snap of a finger. So where was prices 30 days ago. Where us were softer than they are now. You you we were in this in the lower 70s about 30 days ago. So I think that’s part of what is you see reflected in a lot of these rig count numbers. We did see a lot of earnings roll out this week. Nothing that I thought was interesting. Ring energy drop. There’s it really was, you know, kind of a catch up, to what’s going to happen. You know, being energy had some, you know, interesting interesting stuff. We’ll let you guys read that on Newsbeat. But that’s really all I’ve got. Stu. It was a little bit quiet on Friday. We’re ready to rock and roll this week though. So lots of great stuff coming up. [00:23:27][240.5]

Stuart Turley: [00:23:28] Oh, absolutely. Buckle up. [00:23:30][1.5]

Michael Tanner: [00:23:30] I’ll call up. You got anything else before we let him go? [00:23:32][1.8]

Stuart Turley: [00:23:32] I don’t know, it’s going to be a van tastic Monday. [00:23:34][1.9]

Michael Tanner: [00:23:35] Absolutely. So with that, guys, we’ll let you get out of here. Appreciate you guys checking us out. World’s greatest website. Energy News Beat.com [00:23:35][0.0][1370.9]

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