Daily Energy Standup Episode #90

Highlights of the Podcast

00:00 – Intro
03:29 – Oh No! The Ford F-150 Lightning Struggled in Our Towing Test
06:55 – Iraqi Kurdistan Region’s oil output at risk after Turkey halts pipeline exports
08:29 – David Galluch: Coming soon — the Shapiro energy tax
12:30 – China’s Deep-Sea Floating Wind Platform Heads Offshore
17:19 – American company Outrage after Mexican military police seize Caribbean facility
18:46 – A Rivian buyer got his dream car after a 3-year wait. Days later, the car was dead and he faced a $2,100 bill
20:33 – Market Updates

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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 is going on. Everybody, welcome into another edition of the Daily Energy News Beat Stand Up here on this gorgeous Tuesday, March 28, 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][22.6]

Stuart Turley: [00:00:38] Building neighborhood. We’re going to have a great week now. [00:00:40][2.5]

Michael Tanner: [00:00:40] We’re going to a great week. You have a great show for us lined up today, guys. We’ve got some absolute bangers for articles. First one we’ve got on the menu, no pun intended to Ford F-150 lightning test struggled in our towing test. If you don’t know F-150 and Ford is rolling out an electric version of the F-150 and obviously it didn’t quite pass the towing test just you will cover how much you can actually pull with that bad boy. [00:01:05][24.7]

Michael Tanner: [00:01:05] Next up, Iraqis. Kurdish regional oil output is at risk after Turkey halts pipeline exports. This is fairly critical and really plays into the moves we saw. I mean, oil prices, they still cover what’s going on over in Turkey. [00:01:18][12.8]

Michael Tanner: [00:01:19] Next. David, according to David Gaul, it’s coming soon. The SHAPIRO energy tax. If you’re a citizen of Pennsylvania, this is going to either you’re going to get, as Stu would say, take it in the shorts on this one to cover what’s going on. [00:01:32][13.0]

Stuart Turley: [00:01:32] They’re going to get you in the kitchen,. [00:01:34][1.9]

Michael Tanner: [00:01:34] The drive thru. Next up, guys, China’s deep sea floating wind platform heads offshore. China not only is one of the biggest buyers of crude oil, but it’s also one of the biggest exporters and suppliers for wind farm materials and wind farms themselves they’re debuting a huge offshore wind platform, still a cover. What that means for the global energy landscape. [00:01:54][19.2]

Michael Tanner: [00:01:54] Next. American companies outrage after Mexican military police seize Caribbean facility. Quote, This is insane. I’m Stu had to explain to me how this fit into the show. So I’m just going to leave it at that and let it do that as this article comes. [00:02:09][15.1]

Michael Tanner: [00:02:10] And next, finally, a classic, A rivian buyer got his dream car after a three year wait. Days later, the car was dead. It is a 2100 bill. Absolutely incredible, guys. EVs continue to crush it. All of those articles will make up our new segment stool, then kick it to me and I will cover quickly what happened in the oil and gas markets today. [00:02:31][21.1]

Michael Tanner: [00:02:31] Oil up, natural gas down. I think there’s a little bit of a some insights to glean from that. And then we will let you guys get on and start your day. But before we do that, guys, as always, the articles that we’re about to cover are courtesy the world’s greatest website www.EnergyNewsBeat.com Hit the description below and check out you can also see the timestamps if you want to skip ahead and figure out what’s going on with the Kurdish oil supply, you can boom hit the link and you will be automatically transported there. [00:02:57][26.3]

Michael Tanner: [00:02:58] It’s like we basically invented time travel. Really. It’s really what we’ve did with these show notes. We put in the show, the the show notes and the clickable links within the Spotify app. You can literally travel in time. [00:03:10][11.9]

Michael Tanner: [00:03:10] So I’d recommend taking some time travel, figuring out what segment you want to do. But before you do that, hit Dashboard.EnergyNewsBeat.com It’s our data and news combo, get it while it’s still here. You never know. It might go somewhere, but I’m out of breath. Stu I hope we get the show started. Where do you want to begin? [00:03:26][15.8]

Stuart Turley: [00:03:26] Hey, let’s go ahead and start with. Oh, no. The Ford F-150. Lightning struggled in our towing test. Okay, before we get started on this story, you know, I’m a Ford guy. Love me a Ford. [00:03:38][12.2]

Michael Tanner: [00:03:39] I agree. I drive an F-150. I love me. [00:03:42][2.4]

Stuart Turley: [00:03:43] Yeah, I miss my 250. I had a Ford 250. So. Hey, Michael, you’re familiar with where my boat is here. And you know what they call the ramp when you’re loading and unloading your boat? [00:03:55][12.7]

Michael Tanner: [00:03:56] Yup. Divorced? I don’t know what they call it. I know it’s. [00:04:00][3.4]

Stuart Turley: [00:04:00] They call it divorce. Hell, we would go over in our golf cart and we’d get a bunch of beer and we’d sit there and we’d watch all the men drive the boat in, and the women would back the trucks in or the trailers or vice versa and it does a divorce. [00:04:15][14.4]

Stuart Turley: [00:04:16] A man and a woman should be married. They should not go together. So anyway. All right. That being said, Divorce Hill is actually the ram. We’re going to leave all that alone. So when you take a look at lithium batteries, they’re saying that when you have a Ford 150 lightning it has, consider how far you can go. [00:04:40][24.4]

Stuart Turley: [00:04:40] This test was really, really good in it. Let’s go through there. They wanted they were warned to expect the range to be cut in half when telling. But the effect of towing these travel trailers proved even more significant. [00:04:54][13.1]

Stuart Turley: [00:04:55] Even with the smallest trailer, they measured a range of only 115 miles. That figure fell to a 100 mile with a middle weight trailer and sent to 90 miles with a £7,200, you know, 7000. Almost nothing. I mean, think about that with the £775 torque on tap, the electric four wheel shoves off from a stop smoothly and confidently. But it’s the lithium batteries. Wow. [00:05:25][30.4]

Michael Tanner: [00:05:26] Yeah. I mean, it doesn’t take a rocket scientist to figure out that the heavier you have, you, the heavier your load is, the less efficient your battery is going to be because you’re less fuel efficient. If you’re if you’ve got more weight. So it’s like, well, are we just going to default all of a sudden? Now EVs can defy the laws of physics and now it’s going to be just as strong. [00:05:48][21.7]

Stuart Turley: [00:05:49] My four wheeled my four wheel drive for 250, got nine miles to the gallon. Actually ten miles to the gallon. It was a V ten, ten miles to the gallon. Towing a boat. Not telling a boat, it was ten. Oh, yeah, it was here. It was beautiful, man. I mean, that bad dog would go up walls. It would take down. Yeah. I mean, it was an Amazon. Yeah, it was a bruiser. So anyway, but it never even noticed a boat behind it. [00:06:17][27.9]

Michael Tanner: [00:06:17] So yeah, I think it’ll be, I think it’ll be interesting. I do think you’re going to see a decent amount of demand for this because I do think there’s a marketplace for this. I think you’re going to see I think you’re going to see companies that you that I figures you construction companies roll this out inefficiently, but that still means there’s demand for it. So I do think these are going to, quote unquote, fly off the shelves. [00:06:39][21.4]

Stuart Turley: [00:06:39] I don’t have a problem with electric. I think electric is going to be great eventually. I just don’t I’m looking for the new next battery technology that. [00:06:50][10.8]

Michael Tanner: [00:06:50] I think Would you buy would you buy one of these? No. HA!HA! What’s next? [00:06:54][3.8]

Stuart Turley: [00:06:55] Okay. Iraqi Kurdistan Region’s oil output at risk after Turkey halts pipeline exports. Oil production in Iraq’s semi-autonomous Kurdistan region is at risk. 400 and Michael 450,000 barrels per day of crude exports in this region. That’s pretty amazing. I mean, they need that coming around through the Black Sea. [00:07:21][25.6]

Michael Tanner: [00:07:22] Yeah. I mean, just to give you guys an idea. Turkey halted that pumping of Iraqi crude from the pipeline after Iraq won an arbitration case in which it said Turkey had violated a joint agreement by allowing the Kurdistan Regional Government to export oil to Sanaa without Baghdad’s consent. [00:07:37][14.9]

Michael Tanner: [00:07:37] Oil firms operating in the region have been left in limbo as they await the outcome of the ongoing discussions between and among some, you know, some town somewhere, Baghdad and KRG, as they look away to resume exports. [00:07:48][10.6]

Michael Tanner: [00:07:48] But, you know, this impending legal battle does not look good for getting that pipeline turned back on. That’s 450,000 barrels to, as you mentioned, being taken off line. We saw what it did to oil prices they were right away up to 70 to 91 on the cusp of 73. So all of a sudden, supply demand is now back, is now hot on supply demand now. [00:08:09][20.3]

Stuart Turley: [00:08:09] Oh, yeah, it’s you’re one pipeline away from $100 oil. Oh wait, this is Goldman Sachs calling it. [00:08:18][8.9]

Michael Tanner: [00:08:19] Really? Because they need me on that nat gas tax. They’re dying for you on that Nasdaq. That guest is All right. What do you got next? Okay. [00:08:24][5.8]

Stuart Turley: [00:08:25] Let’s go to the next one. And this one is really kind of hilarious. The title of the article is David Gallo Coming Soon The SHAPIRO Energy Tax. This is out of Pennsylvania. Michael. Governor Josh SHAPIRO quietly acted to raise home heating and electricity cost for Pennsylvania families. It’s officially termed the Regional Greenhouse Gas Initiative, or RGGI. I like the way the author called this should be called the SHAPIRO Energy Tax. [00:08:57][32.3]

Stuart Turley: [00:08:58] This is let’s go through this here in a little bit, because it’s really it’s called a cap and invest. This is really talk about putting a a shell game out there for carbon tax. They’re trying to encourage people to conserve at home. So let’s go through the scenario. The only thing purchasers who buy credits, they would find itself missing billions of dollars from that budget. [00:09:27][29.3]

Stuart Turley: [00:09:28] But they’re planning on two thirds of all Pennsylvania’s electricity comes from producers who will be hamstrung. But 100% of its insecurity will come from this. So what that means is that you’re going to buy a cap and trade program with your electrical companies, and it’s the consumers that get it in the drive through on this. [00:09:51][22.9]

Michael Tanner: [00:09:51] Yeah, absolutely. This is going to get this is a classic not thinking second order and as Stitt mentioned, we as the collective a.k.a the people in Pennsylvania. I’m sorry Paul Jerome take it in the drive through because think about this. [00:10:06][14.3]

Michael Tanner: [00:10:06] This is the easiest thing to pass on to the consumer. How did they not think about this? There wasn’t somebody in the room when they came up with this that was like, Hmm, let’s just see if we’ve got a shortfall and people have to buy credits and it increases their cost. [00:10:19][12.9]

Michael Tanner: [00:10:20] I wonder if these people are just going to absorb the cost internally. How about, you know, like what business absorbs the cost? Right. But, I mean, that’s fine. The cost gets passed off to me. Don’t make dumb rules like this. [00:10:35][14.7]

Stuart Turley: [00:10:36] This one’s really dumb, though. Was it then? It was in the movie with Mel Gibson and Danny Glover when they were in there. Mel Gibson, Danny Glover. And they were all in this one accounting around. And he goes, They always get in the drive through. They always get in the drive through. That’s exactly what this is. [00:10:55][19.4]

Michael Tanner: [00:10:56] Here’s the thing. Under this what is he calling it? The RGGI and I’d recommend hitting the description below and checking out this article. What you’re going to have happen is because of the way this cap and trade system is set up, you’re basically introducing this carbon credit market within Pennsylvania that is going to be this weirdly unregulated trading of credits. [00:11:15][19.8]

Michael Tanner: [00:11:16] That’s the issue with cap and trade as a whole as well. I like the idea of cap and trade. It’s the idea is you have a total number of emissions you want. You load them up into as many number of credits as you want and you deal them out accordingly. [00:11:28][12.4]

Michael Tanner: [00:11:29] And then you let the free market trade them. The problem is there needs to be a little bit of regulation around that. It can’t just be, Oh, everybody go, because then it’s then it’s the wild, wild West. Then you get, you know, competitive practices, manipulation, things like that, that it can get to our head. [00:11:48][18.6]

Michael Tanner: [00:11:48] So, yes, I think in theory, cap and trade is not a is a great is a pretty good economic solution. But it’s naive to think that it’s like in game theory, you make the assumption that every player is rational. The funny part is when you look at like you try to play game theory on actual real life data sets, you can’t take the assumption that you’re playing with rational players because we don’t make rational decisions. [00:12:10][22.0]

Stuart Turley: [00:12:11] No, I always Joe Pesci, by the way, that got it, saying they always get you in the drive through. All right. I’ve got that going for me on my deathbed. [00:12:19][7.6]

Michael Tanner: [00:12:19] People in Pennsylvania are getting hit hard in the drive through. They’re getting it automated in the drive thru. And you get these these drive thrus are automated. What’s next? [00:12:28][8.7]

Stuart Turley: [00:12:28] Okay. Hey, let’s go to the next drive through here. China’s deep sea floating wind platform heads off shore. Michael, this story is absolutely loop, as we say in Texas. This thing is new. Let’s talk about some of the things on this floating platform for one wind turbine. Okay? [00:12:55][26.5]

Stuart Turley: [00:12:55] It will generate 2.22 million kilowatts of clean energy annually and save nearly 10 million cubic meters of fuel gas, says Mangaung Smart Energy. All right, that all sounds really good. You know what? This gigantic one wind turbine is going out to support an empty oil derrick. This is going to be supplying electricity to oil derricks that are drilling oil and gas in the China Sea. Well. [00:13:33][37.9]

Michael Tanner: [00:13:34] I as much as I don’t want to give credit to China for this brilliant idea, you have to put this stew, in my opinion, is one of the most brilliant moves you could do. Think about this. [00:13:47][12.9]

Stuart Turley: [00:13:47] Do you want. I can’t explain. [00:13:49][1.8]

Michael Tanner: [00:13:50] It. [00:13:50][0.0]

Stuart Turley: [00:13:50] No time is lying to me. Are you going to fight the. [00:13:52][2.5]

Michael Tanner: [00:13:52] Hardest thing to get on an offshore oil rig? Women answer what. [00:13:57][4.4]

Stuart Turley: [00:13:57] Women. [00:13:57][0.0]

Michael Tanner: [00:13:59] Like. Okay, So yes, that you. You correct. You are absolutely correct. That’s the first thing. The second thing. That’s a good one. I didn’t even think of that would be back on point. The third thing is fuel, power, electricity. [00:14:17][17.7]

Michael Tanner: [00:14:18] Think about it. They have huge generators that take up huge amounts of space that cause a huge amount of noise, that causes a huge amount of extra weight when theoretically you could have that source right next to it and completely be self-sustainable in terms of how you do that. Personally, I think it’s a brilliant idea, but I think we should be doing this in the Gulf of Mexico. I don’t know. But I think this is an interesting case study in what on paper seems like a really good idea to me. [00:14:49][30.7]

Stuart Turley: [00:14:49] This is like something that I believe would be in a movie or a former secretary of state is going to be teaching in a college about Benghazi and really how to make a decision. This is dumb. And I’m sitting here sitting here kind of going when you take a look at this, Michael. Okay. A rig drills what oil and gas offshore gets a lot of natural gas. Why don’t you just burn, which they do on so many platforms? They burn their own natural gas. [00:15:26][36.6]

Michael Tanner: [00:15:27] Yeah, but it’s going to. Okay, It’s. But it’s going to save you 22 million kilowatt hours and ten or excuse me, 10 million cubic feet of fuel gas, because you can’t just you can’t run those generators off the gas that you produce. That’s it’s a huge, huge misconception. It’s fuel gas, which has to be refined. So they’re cutting out the middleman. I think this is genius. [00:15:48][21.6]

Stuart Turley: [00:15:49] I could be be persuaded. I still think it’s a joke. [00:15:53][3.6]

Michael Tanner: [00:15:54] But I mean, I think. You think I don’t think this wind farm is going to power Houston, but I think a offshore wind farm that specifically is powering oil, offshore oil Pat. I don’t know. On paper, this seems to me kind of brewing. You sent this story like 2 hours ago and I was like, oh, I don’t know where I fall on this one. I actually am kind of thumbs up on it. [00:16:14][20.1]

Stuart Turley: [00:16:15] I disagree. And here’s why. When you’re out in the middle of a Op-Ed, A, you can’t find anybody to date. B, you’re sitting there and you’re trying to, you know, young single man on a dare just absolutely are miserable. So old married guys are happy because they’re out there. [00:16:31][16.8]

Michael Tanner: [00:16:32] Yeah, That’s your dream. [00:16:33][0.9]

Stuart Turley: [00:16:34] The dream job, you know. So when you sit back and take a look at it, you go one wind turbine, this jet, you’re putting electric motors out there and you have one wind turbine for all these platforms. I think that that’s a failure. That is a single point of failure There’s only one that’s going to support that. I call that a oops. No, I don’t like the design on this. [00:16:58][24.5]

Michael Tanner: [00:16:59] All right. Well, we’re going to agree to disagree we’re going to agree to disagree. [00:17:02][3.0]

Stuart Turley: [00:17:02] We’re going to follow this story. We’re going to follow this story. [00:17:05][2.8]

Michael Tanner: [00:17:05] But you got to wait till it turns out to be a genius idea. Oh. [00:17:08][2.9]

Stuart Turley: [00:17:11] That was another good one. I always love what’s his name? Lurch. Okay, American. Next story coming around the corner. American company Outrage after Mexican military police seize Caribbean facility. This is insane. The article had me on. This is insane. Okay, so the seizure of an American companies quarry facility in Mexico by the Mexican military and local police has sparked outrage. Michael is the Vulcan Minerals Company, a Alabama based company and the largest producer of construction aggregates. And you say, hey, stupid. I mean, Stu, why is this on here? It’s not a real energy story. [00:18:00][48.5]

Stuart Turley: [00:18:00] It is in the standpoint that they are Vulcan is using asphalt ready materials. You can’t build roads without them. I mean, they are very, very critical. And this is the same thing that can happen with lithium. It’s the same thing that could happen with anything in the value chain for energy. And so you just have to be careful. [00:18:23][22.5]

Stuart Turley: [00:18:24] This is only step one and especially with other things that we have going on with Mexico or anything in South America could be seized. That’s why I suggested we bring this up and talk about it. [00:18:37][13.2]

Michael Tanner: [00:18:37] Yeah, I mean, next thing, I’ll be seizing this podcast. [00:18:39][1.5]

Stuart Turley: [00:18:40] Well, come on, stop it. [00:18:41][1.4]

Michael Tanner: [00:18:42] What’s next Stu. [00:18:43][0.6]

Stuart Turley: [00:18:45] That was A Rivian buyer gets his dream car after a three year wait. Days later, the car was dead and he faced a 20 $100 bill. And Michael, for our podcast listeners, they need to go look at it in the show notes. These they’re standing in a snow the snow snowed in there. I mean, it’s just buried. Rivian’s Customer service disappointed one early adopter in a time of need. I’m just not the right person to be an early adopter, but I love it. [00:19:19][33.3]

Michael Tanner: [00:19:19] I love it. [00:19:20][0.9]

Stuart Turley: [00:19:20] He said it was his favorite car he’d ever had. He got in. Mario, 24, put down a deposit three years ago. Wow. He got behind an $85,000 car. Oh, I’ve never paid 85,000 for a car now. Wow. I was in the honeymoon phase. [00:19:39][18.4]

Michael Tanner: [00:19:40] The new car bubble has burst. I think Carvana has shown that. And I would say the new car bubble, but really just the car bubble in general. And I think there was also a used car bubble as well. This whole the car the car bubble. [00:19:52][12.5]

Michael Tanner: [00:19:52] I think, is something that that has been bursting and probably burst that a little bit for two or three quarter four of last year. So it’s just it’s people are paying $85,000 for a car. They get three days use out of pretty bad auto I. [00:20:04][11.4]

Stuart Turley: [00:20:06] Yeah. I hit about two and a half feet of snow and it stopped right there. The batteries got. No. Yeah. Yeah. I mean, batteries, when they either are going or they get cold. Yep. Oops. So anyway, that’s it for me. I mean, I was in rare form. [00:20:23][17.0]

Michael Tanner: [00:20:23] Today, and. No, you’re absolutely rare for me if we learned anything, is that being single on the rig is not fun. Oh, no. [00:20:30][7.2]

Stuart Turley: [00:20:31] Being married is good in marriage. [00:20:33][1.7]

Michael Tanner: [00:20:33] Excellent. Cracks me up. Well, we’ll kick it over to finance, guys. I think really the biggest thing to cover overall markets aspi up quarter of a percentage point. NASDAQ actually tumbles about three quarters of a percentage point 30 year fixed down one down a 10th of a percentage point excuse me, 1/10 of a percentage point ten year yields up 1.14 percentage points. [00:20:59][26.1]

Michael Tanner: [00:21:00] Dollar index tumbled a quarter of a percentage point, which leads to crude oil up really about three, three and a half percentage points. You know, opened the day I’m trading a little bit below 69 I think is what we recorded yesterday show it was 6992 currently trading at 7296. This has mainly due to,. [00:21:18][18.0]

Michael Tanner: [00:21:18] I think two reasons. One, we see the dollar index down a quarter of a percentage point, but mainly as you covered in our opening segment, this pipeline shutdown in Turkey, which, you know, I ended the interesting to see kind of the fallout from that. It’s only 450,000 barrels of crude oil, but it’s oil that’s already in the supply chain. I think that’s the difference between this and some potential demand. [00:21:37][18.9]

Michael Tanner: [00:21:37] The reason why I think this has more of a impact on a day to day basis than all of this hoopla over, oh, here’s what’s China is going to buy or here’s what Russia may or may not produce. This is a this 450,000 barrels was in the supply chain. It’s cruising, it’s cooking down pipelines. It’s got refiner buyers put up. Now, you take this off the market, that does impact a little bit that ground game a little bit. [00:21:58][20.5]

Michael Tanner: [00:21:58] So I think this is why you see a little bit more of a significant impact. Even though 450,000 barrels a day doesn’t seem like much when you factor in that it’s already baked into the supply chain. Not necessarily a hypothetical like some of these other reports are that we’ve been seeing. I think it explains most of the movement, at least northward for crude oil. [00:22:14][15.8]

Michael Tanner: [00:22:14] On the other side, natural gas continues to sit here around $2.11, you know, over it, nat gas again, one of my favorite places. You know, we’re just as we look, you know, they say natural gas futures struggle amid a towards expiry. We do expire here in three days. [00:22:31][16.4]

Michael Tanner: [00:22:31] So we will see that roll over to the the the next curve, which will be up a little bit about $2.40, I believe, when we roll over. So we will see a little bit of a kick. But again, we could see that drop on the nat gas storage side. We do expect somewhere between 38 to 76 Bcf draw. But last year we did actually see a 15 Bcf build. [00:22:53][21.6]

Michael Tanner: [00:22:53] So anything on a draw. So I would actually be fairly bullish. But right now really the oversupply is true. So it’s going to be interesting to see where prices go again. As we roll over, we will see a little bit of an increase in that spot price, but not much going forward. [00:23:06][13.0]

Michael Tanner: [00:23:07] And that’s really all I’ve got. Stu, There ain’t much on the EMP side. It’s kind of quiet. I think there’s some moves out there that that that may or may not be interesting coming around the pike. I know you’ve smiling, you’ve heard some things, but I think I think mainly employees are taking it a little bit slow right now. I think they’re in there in plan mode. I think there’s a lot of different, different, really interesting things going on. [00:23:27][20.4]

Stuart Turley: [00:23:28] There are we’re about to see some things happen globally in the next 30 to 60 days, maybe 90, but it’s going to be significant. [00:23:36][7.7]

Michael Tanner: [00:23:36] Well, with that, guys, Mike, drop, we’re going to let you get out of here. I’ll appreciate you guys checking this out. Take a walk in this whole way for Stuart Turley on Michael Tanner see tomorrow. [00:23:36][0.0]