Daily Energy Standup Episode #342 – Regulatory Wrangles, Subsidy Skepticism, Fossil Fuel Dynamics, and Shareholder Spats

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Daily Standup Top Stories

BlackRock hit with ‘cease and desist’ after allegedly misleading investors about ESG practices

Highlights of the Podcast

00:00 – Intro

01:32 – BlackRock hit with ‘cease and desist’ after allegedly misleading investors about ESG practices

03:40 – Yellen challenges clean energy subsidies for market fairness

05:48 – How federal tax dollars meant to fight climate change could end up boosting Louisiana’s fossil fuel production

07:45 – Good news and bad news on Pa. electricity includes reduced CO2 emissions but high costs for residents

10:59 – Oil up 1%, US WTI at 5-month closing high, market seen tight

12:03 – Rig Count Overview

12:48 – Kimmeridge Issues Open Letter to SilverBow Shareholders

15:59 – Outro

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

Michael Tanner: [00:00:14] What’s going on, everybody? Welcome into the Tuesday, April 2nd, 2024 edition of the Welcome to Energy News Beat daily stand up.Here are today’s top headlines. First up, black Rock hit with cease and desist after allegedly misleading investors about ESG practices. Leave us a good Larry Fink story. Next up Janet Yellen challenges clean energy subsidies for market fairness. Yikes. This should be good. Great video to go with this one. Next up, how federal tax dollars meant to fight climate change could end up boosting Louisiana’s fossil fuel production. And finally, good news and bad news on the Pennsylvania electricity front that includes reduced CO2 emissions, high cost for residents. As always, you eat it through the drive thru Stu. Toss it all to me. I will quickly cover what happened with oil and gas today. Prices you know above $83 for oil. We absolutely love that and will lightly touch on rig counts. I was out of pocket yesterday. and then. So we’ll cover rig counts a day by and then we will also talk about Cambridges open letter to Silver Bow shareholders. This is turning into a fun activist fight that we will get to the bottom of your on the podcast. We will cover all that in the bag of chips, guys. As always, I am Michael Tanner, joined by Stuart Turley. Go ahead and kick us off, my man. [00:01:31][76.7]

Stuart Turley: [00:01:32] Hey, let’s go over there buddy. Over there Fink. Blackrock hit with cease and desist after allegedly misleading investors about ESG practices. Couldn’t happen to a nicer guy. The subheadline is. The cease and desist order was issued by Mississippi Secretary of State Michael Watson. Michael, quote Blackrock made untrue statements of certain to its fund do not incorporate ESG considerations as detailed extensively in this order Blackrock stated on multiple occasions, either expressively through publications or by action. The company does in fact incorporate ESG considerations in as non ESG funds. I think this is absolutely hysterical that ESG investing hypocrisy or Kim is coming from the folks that are yelling, about investing in green and trying to kill the fossil fuel industry. I just thought it was really pretty funny. [00:02:41][69.8]

Michael Tanner: [00:02:42] Yeah. I mean, we love a good energy hypocrisy. I love the fact that it’s completely now turned on its head. They were so far down the ESG rabbit hole, and now they’re getting a cease and desist letter to stop. [00:02:54][11.8]

Stuart Turley: [00:02:55] There’s no I. [00:02:56][0.4]

Michael Tanner: [00:02:56] Think this is more of a show of hey, we don’t like Blackrock. Will this go anywhere with though maybe some fines. [00:03:02][6.2]

Stuart Turley: [00:03:03] Well this one there’s about 13 other states that have their states that are bailing out $8 billion. Last week you and I covered out of Texas, you know, giving them the double barrel finger and then notably, read Blackrock just recently withdrew from the Climate Action 100 Alliance. You and I talked about. When is investor hypocrisy going to hit a, all time like, hey, we need our money back here. I think we finally are finding what that work is. [00:03:40][37.2]

Michael Tanner: [00:03:40] Yeah. No. Absolutely. All right, what’s next? [00:03:42][1.9]

Stuart Turley: [00:03:43] Hey, let’s go to our buddy over here. Secretary Yellen. Yellen challenges clean energy subsidies for market fairness I want to give her a shout out in that I think that she is missing, some marbles up there. But her barber definitely is needing. I’m, I’ve got a better barber, but, Miss Producer, could you call up this 18 second clip? I’ve got a, a video of her, an exclusive video showing her getting ready for this meeting. And so let’s go ahead and kick that off. [00:04:18][34.9]

Michael Tanner: [00:04:28] It’s it’s absolutely insane what we did. I mean. [00:04:32][4.0]

Stuart Turley: [00:04:33] I’ve never seen him really start to look at that poor thing. What in the world is that? That is inspiration for Janet. Look at the fur falling on the floor. [00:04:44][10.9]

Michael Tanner: [00:04:46] Hey, at least she’s able to get a haircut, unlike you. [00:04:48][2.4]

Stuart Turley: [00:04:49] Oh, no. My mind’s a razor. So, let’s go to the article, though. I want to give her a shout out. This is actually. She plans to voice these subsidy concerns during her upcoming diplomatic travels. Her primary worry is that national subsidies on the energy sector may lead to an oversaturated market and global price imbalances. And she’s also leaning and saying that there is too much clean energy subsidies in the pricing model. Wow. Where did this come from? Did she actually wake up and get fettered so that she could start making sense? I’m not sure I like it, but it was like, what am I saying? Here it. [00:05:40][51.1]

Michael Tanner: [00:05:40] Is. I won’t get into it. What’s next? [00:05:42][2.3]

Stuart Turley: [00:05:46] I’m full of shocks today. This article was absolutely a hoot how federal tax dollars meant to fight climate change could end up boosting Louisiana’s fossil fuel. Billions of dollars tax dollars will be pouring into Louisiana, to fight climate change at the projects they’re supporting may actually boost fossil fuels, the very products warming the planet. I actually really enjoyed this article because I heard the the author’s head snapped a few times. His neck was cracking, and he was having some serious problems by the time he got through this article. Fossil fuel industry advocates are eager to get project proof. Louisiana has a chance with our geological structures to make a big splash in the pond for CO2 in the world, and it’s because of the CO2 injection wells. It’s because of just the way, CO2 and it is being redone. Take a look at this map. Miss producer, if you could bring this over, take a look at the Louisiana map. With all of the pipelines and infrastructure going into the Gulf of Mexico. And you’ll notice that there are some of those in there, those greener ones. There are the strategic Petroleum Reserve. You know, there’s, a couple biomass power plants in there. There’s all these others. But when you take a look at it, the funds are actually the more we use renewables in this area with CO2, the more fossil fuels we’re getting. And you’ve been. [00:07:24][98.9]

Michael Tanner: [00:07:25] Saying this for years now, the more we go green, the more we go for. And now it’s been confirmed. [00:07:30][4.9]

Stuart Turley: [00:07:31] It is confirmed. [00:07:31][0.5]

Michael Tanner: [00:07:32] I hate I hate saying you were right, but we have to say on this podcast right now, you were right. [00:07:37][5.4]

Stuart Turley: [00:07:38] It’s only the second time. It’s only the. [00:07:40][1.8]

Michael Tanner: [00:07:40] Second. Hopefully it’s the last. What’s next? [00:07:42][1.8]

Stuart Turley: [00:07:43] Holy smokes. Bad man. Good news and bad news for Pennsylvania. I’m full of good news. I’m a cheery kind of guy today. Electricity includes reduced CO2 emissions, but a higher cost for residents. Here’s the subtitle. According to a Peco report in Pennsylvania, reduced its carbon dioxide emissions by 10%, the largest year on year decline since 1990. But the cost of cents per kilowatt hour is higher than the national average. Retro. Now here’s where the some stats come in. Pennsylvania is still highly dependent on natural gas. Fossil fuel for 59% of its electrical generation. More than the U.S., average. [00:08:33][50.0]

Michael Tanner: [00:08:34] It should be 100%. You’re literally in the. [00:08:36][2.7]

Stuart Turley: [00:08:36] Heart of. [00:08:37][0.6]

Michael Tanner: [00:08:37] The Appalachia basin. [00:08:39][1.4]

Stuart Turley: [00:08:39] Why is it not a hundred? And they want to know why. They want, they only get 3.7% other than fossil fuels or nuclear. Fuel. Only reason they reduced their CO2 is because of reducing coal plants. Peco, which operates electric services to 1.7 million customers within bucks, Chester, Delaware, Montgomery, Philadelphia and York counties, is the largest electricity provider in its 45th and country in terms of renewable. [00:09:18][39.0]

Michael Tanner: [00:09:21] But also there’s this quote in here from Thomas Schuster, the only thing present vending Peco from supplying more affordable solar energy to his customers is the antiquated, pure procurement process. But yes. So you’re telling me it’s an old procurement process that’s slowing us from a. That’s crazy to think about. We know solar doesn’t pay off layer in an antiquated, you know, procurement process. You know, they’re in trouble. Oh, yeah. [00:09:48][27.4]

Stuart Turley: [00:09:50] And the only thing that’s happening is the they get to pay for it. In the drive through, I want to give a shout out again to Janet Yellen for making my day to prove that I’m right again. And she’s having a great hair day today. Yeah. This is, after you, Michael. [00:10:08][18.1]

Michael Tanner: [00:10:09] We’ll go ahead and, and before we flip over to finance, guys will pay the bills around here. As always. You can check us out online. www.energynewsbeat.com. All the news and analysis you heard is brought to you by that website. It’s doing. The team do a tremendous job making sure that website stays up to speed with everything you need to know to be the tip of the spear when it comes to the oil and gas business. Dashboard.energy.Newsbeat.com. The best place for your data energy news combo. Check us out. there as always, energynewsbeat.com. [00:10:38][29.4]

Michael Tanner: [00:10:40] But let’s move into finance guys. I mean markets had an okay day to. We saw a little bit of of upside on the Nasdaq. Nasdaq up 2/10 of a percentage point SMP actually down about 2/10 of a percentage point. So from a from a market standpoint we saw fairly choppy really where where most of the gains to be had were in crude oil. We were up a little bit over 1% bringing U.S., WTI, up to a five month closing high, which is a little bit above 83, 71. Where we currently trade at right now, Brant futures currently trading 8744 mainly off the back that, you know, some some, some economic growth that that’s happening right now in U.S. and China will continue to boost demand. You know, we already know that Russia is going to be holding back some supply. So that balance is sort has, you know, you know, started to kind of squeeze its ugly head here. We did see that the US diesel crack spread which again what is that that measures different refining outputs relative to profit. So you think of it as kind of the profit margin for U.S. diesel narrowed to its lowest since May 2022 for a second day, which is good R us. The US manufacturing index actually jumped for the first time in about one one and a half years, you know, so that is again, mainly leading to a lot of this increased demand segment. You know, I can tell the entire business loves himself a good $83 oil. Since I was out yesterday will quickly cover rig counts. Miss producer, if you don’t mind pulling up this image right now, you’re seeing rig counts. For for United States. Finished. Net, negative for three rigs. So we see the current count, 621. That’s, drop of three relative to what it was week over week. You can kind of see the the break out there in terms of we had about 506 oil, 112 gas. We still see in gas rigs. It was all oil rigs that were shedded which which is super interesting. And we saw those rigs get dropped from Colorado Louisiana and Texas. Relative are excuse me relative week over week. But we did see New Mexico bring five rigs that Delaware Bay have Bowen spring stuff is is really coming up to play right there. The only other thing I’ve got is I’ve got Kimmeridge here. Stu. This is there’s a war going on right now. We’ve got I mean, demurrage issues. Open letter to Silver Bow shareholders. So they gotta give you guys the backstory. Silver Bow and and Kimmeridge are engaged in this war of of PR in order to, you know, eventually end up at some said merger. So to give you guys the backstory, Kimmeridgeowns about 12.9% of the outstanding shares and is the largest shareholder in Silver Bow, which is a publicly backed company, are a publicly traded company, that sits in in, in and is a primary eagle for producer Kimmeridge. Being the largest investor in Silver bow has proposed multiple different strategies in order to increase quote unquote, shareholder value out of Silver Bow. They’ve been going back and forth on a combination of silver bow and injection of about 300 million of capital and the acquisition of Cambridge, Texas Gas, which was, Kimmeridge operated unit, which which was started in 2022. I mean, we could go through and read this, you know, big, big, big letters in this PR release. Do silver bows, misleading claims regarding its engagement, big bold letters. The next one, silver bows incumbent board and management strategy. And they highlight the board and management team are singularly focused on fighting Kimmeridge at all times and in all costs, quote unquote. And Stan, and there’s another part of this and stand ready to negotiate in good faith. With the company. Unfortunately, Silver Bow has taken a different course. They go ahead and lay out, why they think this is a great deal. They talk a lot about Cambridge, Texas Gas. They released a lot of different information. They released a reserve report, a lot of like really minute data. Considering the fact that, relative to what, a normal company, assuming they’re going to war to they release publicly the reserve report, they put together a special slide deck. I mean, we might have to do a whole deal spotlight on this, because clearly there’s something silver bow and, you know, there’s something Silver Bow and Cambridge there on the different page. I mean, I look preliminary at some of the stuff Cambridge released. I don’t know if Cambridge Natural or Texas Gas is, is that great. You’re talking it’s 80% nat gas right now. You’re talking. Well I mean you’re only at $1.80 natural gas. There’s very little room to move. Only 11% oil, 9% natural gas. You know, they’ve got $0.44 for Louis. You know, they’ve they’ve it’s it’s really difficult to see how, you know, how they really want to, play this. What I do like is they did I both a 6 to 1 and 20 to 1 conversion for natural gas. So that’s from from a BOE to natural gas. So I really like that. But they’re going to war. [00:15:35][294.7]

Stuart Turley: [00:15:38] Let’s see here. The Dallas Fed survey will cover that. [00:15:43][4.9]

Michael Tanner: [00:15:43] We’ll cover that tomorrow. We got to cover the Dallas Fed survey tomorrow. So okay. Because that’s got some real good nuggets in there. [00:15:49][6.1]

Stuart Turley: [00:15:49] It does. [00:15:50][0.2]

Michael Tanner: [00:15:51] It’s got some really good nuggets. But no it’s Cambridge going to war. So gotta love it. We’ll see what the outcome is here. But that’s really all I’ve got. Stu. What what are you looking at for the rest of the day? [00:16:01][10.4]

Stuart Turley: [00:16:02] Oh, busy is all. Get out, get love. Customers gotta love em. [00:16:06][4.1]

Michael Tanner: [00:16:06] Gotta love it. We appreciate everybody who’s tuned in. We appreciate we’ve got some great sponsors that we’re lining up here. Super excited to bring you some stuff there. But with that guys we’ll go ahead and let you get out of here. Get back to work. Appreciate everybody for checking us out. World’s greatest website energynewsbeat.com. We’ll see you tomorrow. [00:16:06][0.0][912.1]

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