Reliable Power Fuels Growth

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Highlights of the Podcast

00:00 – Intro

01:30 – Rethinking the global electricity debate: Why reliable power matters for economic growth

03:12 – Iran-Russia Treaty Signals Deepening Ties, Defiance of West

04:55 – Trump Will End U.S. Passivity in the Western Hemisphere

07:17 – U.S. LNG Industry Prepares for Boom Years Under Trump

09:51 – 2025 Brings Fundamentals Back to the Fore in Oil Markets

14:30 – Markets Update

16:46 – Langford Buys Murchison Midland Asset

17:50 – Outro

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

Michael Tanner: [00:00:10] What’s going on, everybody? Welcome into the Wednesday, January 15th, 2025, edition of the Daily Energy News. Beat Stand Up. Here are today’s top headlines. First up, rethinking the global electricity debate. Why reliable power matters more for economic growth will then go abroad. Iran Russia Treaty signals deepening ties and defiance of West. A lot of interesting energy stuff that goes into this and will come back home. Trump Will End U.S. Passivity in the Western Hemisphere. Notice a theme here, guys. And finally, or next up, U.S. LNG prepares for boom years under Trump. I wonder who’s been saying that for the past six weeks. Wow. Maybe me, I’ll pat myself on the back later. And then finally, 2025 brings brings fundamentals back to the forefront in the oil markets. I’m going to disagree slightly with this article, but this will be a good one. Stu will then toss it to me. I will quickly cover what has happened in the oil and gas markets and finally talk slightly about a finally a publicly available deal got done. So dry, January is officially over here on the Sea of Nice. We will cover all that and a bag of chips, guys. As always, I’m Michael Tanner, joined by Stuart Turley. Where do you want to begin? [00:01:29][79.2]

Stuart Turley: [00:01:30] Hey, let’s start over here with rethinking global electricity debate. Why reliable power matters for economic growth. This one, I got to give a shout out. This is for Ronald Stein visiting with him later in the week as well, too. He is a good friend of the show and this is a very important point. This follows along why Germany? You’ve heard me talk about this a bunch. Germany has been failing. You go green energy without baseline. And here it is without baseline energy of nuclear or natural gas. You fail in this article really comes up into a beautiful lays it out very nicely. The world faces another critical crossroads with heated debate on the role of crude oil, renewables, nuclear power and driving future growth. You got to have oil. There are 6000 products made with oil that you can’t make out of a windmill. Renewables you got to have baseline power or renewables don’t work. Nuclear, It’s a great baseline, but you can’t get there without in the United States because of the regulatory problems. Anyway, this is a great, great article that talks about goes from fire to nuclear. So I love this. [00:02:48][78.1]

Michael Tanner: [00:02:48] Walden Now, absolutely. We love love us some Ronalds Stein Highly recommend checking this out. I think it’s such a good point. People think, well, we’re moving to electric cars. We won’t need crude oil. It’s like I’ve gone to the hospital recently. How do you know all this? All the other sub products that oil is used in it, you know, and you said it perfectly. You can’t make it out of a wind farm. [00:03:10][22.1]

Stuart Turley: [00:03:11] Can’t make it out of a wind farm. Hey, let’s roll over to Iran. Russia treaty signals deepening ties of defiance of the West. There is more to this than you can shake a stick at. Russia and Iran will sign a comprehensive strategic partnership treaty on Friday focusing on defense and security cooperation. This is very important, especially when you consider the the close ties that Russia has been developing and quietly developing with Japan. Yes, you heard me say that. You heard they they are developing them with also South Korea. You heard me here that say that as well, North Korea and Asia. And this is coming in to the whole shifting of power is rolling right along through. So this is a huge development when you talk about both of these guys. Both countries are in OPEC plus and both countries are huge in the shadow fleet in avoiding sanctions. [00:04:13][62.3]

Michael Tanner: [00:04:14] Yeah, And the interesting part is, you know, they’re both under intense US sanctions. And the real question is what from an energy standpoint, does this help them get around those sanctions via Iran? Iran is probably going to be an easier time getting around the sanctions if they partner up with Russia. How that all works, I don’t know. But I think it’s something super interesting to watch also. It’s just also not, you know, not great that they’re teaming up. You know, that creates kind of an interesting monolith there in the Middle East. It does. [00:04:43][29.1]

Stuart Turley: [00:04:43] And anyway, and believe it or not, we forced Putin’s hand to do this. So this is all based on lousy geopolitical from the current administration. Let’s go to the next story. Michael Trump will end his US passive passive. I can’t even say this. I want to thank you. I went to Oklahoma State University and we can barely spell U.S. passivity in the Western Hemisphere. I’m wearing. State t T-shirt here for everybody. Okay. Now, prioritizing the Americas after decades of neglect returns to traditions and a U.S. strategy. This is an excellent article, beginning with Jimmy Carter’s decision to abandon the Panama Canal in the 1970s and all the way through. I am just going to give it a little shout out here. I’m interviewing Christopher Messina, who wrote the book seen as federal budget, and he was in the room with President Trump when they were talking about Greenland and the advantages of there. So when you take a look at what China and Russia are doing to Greenland and what China is doing to the port or the Panama Canal, President Trump is not putting up with any of this stuff. And this is an outstanding article kind of laying out what he’s going to be doing. [00:06:01][78.2]

Michael Tanner: [00:06:02] Yeah. And I think I think a lot of it is going to be more aggressive on, you know, sticking up for American interests. We’re going to see a lot of higher ups. And we know Canada is already bracing their their energy business is bracing for a huge amount of tariffs, specifically on what comes in the United States. We know China is already doing that. So I think what this what this will do is this hopefully will strengthen from an energy standpoint, strengthen the United States energy production and strengthen our energy position and have us focus on how much of our oil can we drill, produce and actually use and consume here at home versus shipping a lot of it abroad. [00:06:39][37.2]

Stuart Turley: [00:06:40] And I’ll tell you, when I’m going to be trying, I’m working on a couple of articles and one of them is Hawaii. Hawaii’s 67% of Hawaii’s electrical is by Michael fuel oil. The word interesting. Yeah, the worst kind of pollution you possibly can do. And you sit there and kind of go, why are we allowing that? I mean, I’m not a fuel oil kind of guy and it’s expensive. And you would think you’d have an LNG facility there anyway. That’s for president. As for our new energy secretary to try to make Hawaii great again. Let’s go to the next story. U.S. LNG Prepares for Under Trump. What do you think, Michael? [00:07:22][42.1]

Michael Tanner: [00:07:22] Well, you know, I. I can’t say I told you so on this one, but I would completely agree with this article from the standpoint of, you know, when people kept saying, drill, baby, drill, oil production is going to go crazy. I don’t think so. I think drill, baby, drill, and I’ve been saying this now for weeks is code for less regulation. Regulation has not affected oil companies from drilling new wells. Really, it hasn’t. Even offshore. All the offshore that’s being drilled right now was permitted even under the Biden administration, right under that 2022 act they were required to hold if they were going to do offshore wind leases, they had to offer offshore oil and gas leases, and they did that. So where Biden really hurt was the ban on new LNG permits, which could be a way to unlock the natural gas business in the United States. There are large private equity companies that are gambling everything on this. We won’t name them Cambridge, but you know it in so this this code in this I don’t want to maybe code’s the wrong word but this take of LNG exports leading to a resurgence of natural gas was what I think was code for drill, baby, drill or vice versa. Drill, baby, drill was code for. And let’s get rid of regulation and let’s allow the U.S. LNG industry to thrive because one that actually does allow us to make more oil because a lot of the times if there’s no if it’s if we have no end consumption, it’s like you just put natural gas in a tank and let it sit there. Not quite how it works. You got to use it. So that means if your if if there’s nowhere to take it, you can’t put it into a pipeline, meaning the wells that are producing natural gas or even producing oil with natural gas as a byproduct can’t produce because they’re not going to want to put their gas. [00:09:05][103.1]

Stuart Turley: [00:09:06] So, well, there’s a couple of big things in here. The U.S. LNG export capacity expected to double over the next five years. That’s a lot of new LNG coming online. That is an incremental 1.3 trillion boost to the US economy through 2040. This is extremely huge. But here’s where I want to also. So many talking heads will sit there and say that they can replace European or Russian natural gas for U.S. LNG. It does not work that way. They’re not even the same. A Russian natural gas is a 7,700% whatever. The number is cheaper. You cannot compare the two. That’s for over the next one year. 2025 brings fundamentals back to the fore in oil markets. This is actually from Irene Slob over there and oil price. Quote Humans did have more success in 2024 than Alagoas, which is different than the last couple. Of years. A CIBC private wealth group hold senior energy trader Rebecca Babin told Bloomberg. It could probably be argued that 2024 saw the point of saturation with algo trading on the oil market. You and I have talked about this a lot and that is some weird is going on with trading. I mean, it used to be a tanker would blow up and people you know oil price would spike for a while now is like who cares. [00:10:34][88.7]

Michael Tanner: [00:10:35] Yeah, I mean I agree and disagree with this art. Yes. We saw a lot of algo trading in 2024. The real question is we were 14 days into 2025. And the real question is there’s not enough data for me to say, yeah, this is it’s going to you know, it’s going to change. Yeah, we’ve dropped a half a percent. We’ve dropped over 50%, but we’ve just dropped from 4% to 2%. We only 14 days, 15 days into the year. This could clearly go back up. It was it was a loss making year for the algo traders, which was a second, you know, as Bloomberg reported, it’s their second year in a row they’ve done that because a lot of these, you know, where these algos were betting on a demand slump in China and an oversupply thanks to a bunch of OPEC’s spare capacity. Didn’t quite work, though. [00:11:18][43.1]

Stuart Turley: [00:11:18] And they did not see the the huge demand from India come in. [00:11:22][3.3]

Michael Tanner: [00:11:22] Absolutely. Absolutely. CBI Private wealth Group, senior energy trader Rebecca Babin. Her quote is humans did have more success in 24 than the algos, which is different than the last couple of the year. So the question is, will that switch? I don’t know. You know, there’s always the phrase a blind mice finds cheese every once in a while. So was it just a bad year for the algos? Will that change again? I think it’s way too early. I think it’s way too early to tell. And we have seen, again, oil prices move up, which you could argue is part of some of that algorithmic trading, even though we have seen their total share of trading gone down. It’ll be super interesting. You know, it’ll it’ll be super interesting to track. Now we will definitely keep track. [00:12:03][41.0]

Michael Tanner: [00:12:04] Let’s move over to finance, Stu But before we do that, as always, we’ve got to pay the bills here. Thank you for checking us out here on the world’s greatest website, the energy news beat.com, All the quote unquote, news and analysis that you just heard is brought to you by said websites. Do in the team, do a tremendous job keeping that website up to speed everything you need to know to be the tip of the spear when it comes to the energy in the oil and gas business. Go ahead and hit that description below all the links to the timestamps, links to the articles. And also, go ahead, hit us up on substack. The energy news beat.com The best way to support the show is go ahead and sign up for a paid subscription, which gives you access to Stu. You just wrote an article that got thrown up there. [00:12:44][40.6]

Stuart Turley: [00:12:45] Yeah, I did. It was pretty good when it was on. It’s the beginning of about five different articles I’m working on on electricity and natural gas, and it’s pretty fun. Great. [00:12:55][10.3]

Michael Tanner: [00:12:55] Well, give us a little tease on it. [00:12:57][1.5]

Stuart Turley: [00:12:57] Well, I did not know that a Californian. And when you sit back and take a look at how much stuff comes from California, where does California get its crude oil and subsequently its oil and gas diesel imports to California, Iraq, Saudi Arabia, Brazil, Ecuador, Guyana, Columbia, Canada. Mexico. The United Arab Emirates? Do you know how bad this is for them to put all of that oil on ships and haul it all around the world for emissions? What do you think? [00:13:36][38.7]

Michael Tanner: [00:13:36] Now? It’s it’s super easy, as always. You hit the nail on the head with going back and going that second, third, fourth level deep and not just covering the surface. And I think it’s wild. [00:13:46][10.0]

Stuart Turley: [00:13:47] It’s crazy and it is unbelievable. Biodiesel is absolutely a waste of energy, by the way. I just thought I’d let you know. [00:13:55][8.3]

Michael Tanner: [00:13:55] Absolutely. But go check us out. Subscribe to us on substack the energy news be.substack.com. As always, guys, you can also check us out. Invest in oil dot energy news be.com. It’s never too early to get ahead on your 2025 taxes and it’s also never too early to start receiving some sweet monthly dividends. The owning working interest in oil and gas. We can send you all the information and a great little e-book that we’ve put together that can kind of cover a little bit about what we are talking about. And so you could do that. Invest in oil dot Energy news beat.com. We’ll send you all the information. [00:14:30][34.6]

Michael Tanner: [00:14:30] Let’s go ahead, Stuart. Just quickly look, top line indices. S&P 500, Nasdaq gold slide as we record this mark, it’s about the close here, 210 year yields. You know, they actually dropped about six percentage points, ten year yield, basically flat dollar index down about 2/10 of a percentage points. Bitcoin fairly actually up a little bit. It’s over 96,400 $500. Crude oil was down about 1.6 percentage points, 7750 want Brant oil dipped below 80 7987. That’s down about a half a percentage point. Natural gas up about 1.2 percentage points after falling off a cliff. Yesterday was all the way I mean, I wouldn’t say falling off a cliff, but. Opening above $3, $4.30. Closing that day around $3.80. We’re now now up about to $3.97. Our opium poppy contract is up about 2/10 of a percentage point, 142 and $0.28. You know, mainly what’s going on with prices is is the EIA dropped a U.S. energy demand forecast that basically says there’s going to be a steady, you know, basically steady oil demand in 2025. But that decline was limited by new U.S. sanctions, both on Russian exports and key buyers, both in India and China. You know, so it is basically what we’re seeing here is that oil demand in the U.S. is going to remain steady at 20.5 million barrels per day in 2025 and 2026. Output for the nation would rise to 13.5 million barrels per day and an increase of that previous forecast by about 300,000 barrels a day, which was sitting at 13.52. You know, Phil Flynn, he’s a senior analyst over a price futures group. He said the markets were anticipating the EIA short term energy outlook to see if a predicted gain in supply would be reversed. But it didn’t happen. So basically they’re waiting to see what the EIA predicted, which still flipped everything. You know, analysts are also expecting these new sanctions on Russia, Russian oil to erase about 700,000 barrels per day surplus they had in their forecast. But the real impact could be lower. So I think that’s a lot of what you’re seeing on this recent price increase On that, we’re also on the natural gas side. I think a lot of people are just, you know, a cold weather continues to kind of surface here. And as we enter the winter months, we’re definitely seeing a little bump in prices. You know, real quick, we finally got a publicly not a it’s a deal between two privates, but we did get a press release on a deal. Langford Energy Partners enters the Midland Basin with its acquisition from Murchison Oil and Gas. You know, we do love Murchison Oil and Gas. I’ve got I’ve got I’ve got a few friends over there. So I you know, I know personally their acreage is really good. They’ve you know, this deal included about 8000 net assets, which is primarily Midland and Howard County, little bit of board production of about 770 200 BOE per day from about 63 operated wells, a decent amount of delineated drilling locations that is available, full infrastructure that’s built there. We did not get a sale price. I’ve heard a few numbers get floated around, but I don’t necessarily want to. Don’t a tout them out but great great deal I think for both sides. I think you know they’ll they’ll they’ll they’ll both figure this out from the standpoint of you know good deal but we finally dry January is overdue. We did get a deal. And if maybe we might look at this deal a little bit more if we do find anything interesting. But actually, all I got to do anything else were missing. What should people be thinking about before we close? [00:17:52][201.5]

Stuart Turley: [00:17:53] I just keep your head on a swivel. We are approaching the 20th with the inauguration coming on board. [00:17:58][5.1]

Michael Tanner: [00:17:58] Yeah, we’re going to need to. So, guys, we appreciate everybody checking us out here on the world’s Greatest podcast or Stuart Turley, Michael Tanner. We’ll see you tomorrow, folks. [00:17:58][0.0][1058.3]

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