Week Recap: Blackouts, Climate Setbacks, and Policy Shifts

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Stuart Turley: [00:00:10] Everybody welcome the Weekend Edition Daily Stand up for the energy news beat My name’s Stu Turley President and CEO of the Sandstonegroup. I hope you had an absolutely fantastic Thanksgiving with family friends and hopefully you listen to some of the podcasts that we had come out this week as you were traveling. We know that we got a lot of great feedback on all of our great stories. There’s some really crazy things going on. I did not have on my bingo card this week that President Trump would say, Hey, I’m going to put 25% tariffs on Mexico and Canada and then Mexico and Canada call up Trump to go, Well, you know, that’s not necessarily a good thing. So not only are we having peace deals looking to sign all around the world, President Trump is not even in the office and he’s do making things happen. So shout out to him, shout out to all of our followers, all of our new folks that are signing up. We have got great numbers. We’re putting the year in numbers and it’s looking like millions of download and millions of transcripts read. Man, we are just so blessed and thank you for everything that all of the fans. So thank you. Have a great time. And I’m turning this over to the staff. Have a great day. We’ll talk to you all soon. [00:01:28][78.3]

Michael Tanner: [00:01:29] Half of the U.S. at risk for blackouts during extreme cold this winter, according to grid watchdog. I mean, guys, it’s going to be cold here to a new report out by the North American Electricity or Electric Reliability Council, known as Nurk, has basically they’re in charge of assessing the United States. And Canada’s grid reliability has basically released a report calling the 2024, 2025 winter of reliability assessment as some very crazy stuff. The report warns. Here’s a quote, Electricity supplies are at risk from freezing temperatures that threaten reliable operation of bulk power systems known as generators. Fuel supply is used for natural gas fired generation and wind and solar energy resource limitations. Pretty unbelievable. And one of the reasons why they’re so worried about specifically the grid this winter is going back to what I talked about, what’s happening in Europe. It’s not just going to be cold in Europe. The EIA is forecasting a colder winter than this year, which is also going to strain not only renewables, but also some of the natural gas fired power generation. Quote from the report Natural gas, fire fired power generator availability and output can be threatened when natural gas supplies are insufficient for when flow of fuel is unable to be maintained. It’s really that second part. Unable the flow of fuel unable to be maintained, it is most likely going to unfortunately be the issue. And that really hits to the point of where you’re reliant on a single source. That’s the problem with the grid. It’s solely source with a few different things. We’ve obviously attempted to diversify away, but I mean, if you just have one coal plant in your town that does get Old Spice, you’re just reliant on wind or solar. It could get even worse. The Midcontinent independent system operator known as MISO, that covers a ton of the kind of electrical reasons it covers 15 states across the Midwest and northern Great Plains and a little bit of south central U.S. has actually reduced its coal and natural gas fired generation by five gigawatts since last year. And they specifically point that out. Nurk does, because that’s going to create problems when all of your other systems can’t come up. You’ve you’ve reduced it in favor of these other types of electricity generation, a.k.a. wind and solar, which are going to struggle just as much, if not more, in this crazy weather. To give you guys an idea, if the average American home consumes about 900,000 watt hours per month and, you know, because it’s sort of a it’s a sign you sold a wave, which means you use a lot more energy in the mornings and at night than you do during the day because you’re gone. But to give you an idea of five gigawatts of electricity generation running for one hour could power 50,000,100 watt light bulbs for one hour. I mean, that’s how much we’ve taken offline. We’ve taken off 50 million light bulbs for one hour by just artificially reducing this up. It’s pretty unbelievable. You know, some of the natural gas, specifically the Natural Gas Supply Association, which is I own and natural gas line here, has come out and said some of the natural gas reliability that is a little bit overblown. I would tend to agree on that side of it. I mean, it’s in NRC’s interest to just say the grid socks, we need more funding. There are lobbying groups on the grid side. It’s on the natural gas lobbying side. It’s in their best interest to say, well, you know, it’s not that bad. The answer, obviously, is somewhere in the middle. The big issue is that we’ve taken off intermittent electricity, a.k.a. natural gas and coal, in favor of renewables, which are going to do way more in the winter. And it’s not going to look good because it could be chilly. So get your Koch guys. Watch out it again. It comes back to what I’m saying. We need to make sure that we have a sufficient grid. You know, it doesn’t matter if we have ample supply. We’ve got ample supply here. And the problem is the grid sucked. And, you know, I cut this story from the line up talking about some of the the energy secretary nominee, specifically, Chris. Right. Doug Burgum of interior and head of the EPA. One of the things they’re going. You need to dive into his grid reliability regardless. So pretty fascinating, guys. Get your winter coats. It’s going to be cold. [00:05:16][227.7]

Michael Tanner: [00:05:17] California’s gas warfare heats up over exodus of oil companies. I mean, this is pretty funny, guys. So if you don’t remember, about a month and a half ago, I got a friend of the show. Slick himself, oil slick himself. Governor Gavin Newsom signed assembly. Bill two, dash one. This grants the state the power to, quote, require oil refiners to maintain a minimum inventory of fuel to avoid supply shortages. It’s also designed to limit, quote, higher profits for the industry and authorizes this. Whatever this bureaucracy they’re creating is to force, quote, refiners to plan for resupply during refiner maintenance. Basically. Two days later, Phillips, 66, announced it’s shutting down the refinery, which has a facility in Carson and another five miles away in Wilmington that’s linked by a pipeline. And they’re doing that in the fourth quarter of 2025. So about a year from now on, both sides have been in operation for basically 100 years and have done about a million do about a million barrels of gasoline for Southern California motors. That’s even according to the Los Angeles Times, which is no friend of the oil business, I’ll tell you that much. Phillips, 66, believes that, quote, This is the long term sustainability of the Los Angeles refinery is uncertain, and which I love this article says, which is a polite way to say that lawmakers are creating hostile business conditions and that conventional energy companies to struggle under an idea guise that Phillips, 66, has about 600 employees full time and about 300 contractors will be impacted. And obviously, we’re going to see you’re going to see if you live in Southern California. Gas prices also shoot up tremendously. And Phillips, 66, has pledged to work with California to maintain current levels, to increase supplies to meet consumer needs. They will be out of there come 2025. So who knows? It just goes to show you that when when the free market is the best way to manage all, it’s going back to the grid. If they’re going to mess with the grid. And what I would recommend if somebody asked me, Hey, Mike, what would you do to fix the grid? I would incentivize the free market to figure it out because I know I’m not smart enough to figure it out. But I do know that the market will figure it out because the market will always guide itself. I just got done listening to a great interview with the CEO of Uber talking about how they manage their prices. And guess what? Whenever they don’t manage their prices. Guess what? As the prices of Ubers rise on the marketplace, more drivers sign up because they see a profit to be made. And guess what? That increase of supply of drivers drives down the price because now the supply reaches demand. Vice versa. When prices get too low, drivers drop off raising the price because now demand is higher than supply. The same thing can happen in the grid if you can incentivize people to invest in the grid. And I don’t know quite how to do this because the problem is, you know, that the grid is somewhat monopolistic, is we don’t need seven different grids. We need one grid. You need one set of pipes running into your house. You don’t need seven different companies. So we do need a way to figure that. But if I was on this Energy Council that they’re creating, go. Chris Right. Go. Doug Burgum I would figure out a way to do grid reliability and make the marketplace figure out how to fix the grid because they will figure it out and it’s going to hurt you guys in California. If anybody are listening. I’m from California. You’re about to be buying all of your oil from China. I’m sure they produce a clean a much cleaner than you know. It is unbelievable. I mean, we know it’s super hard if you’re an oil and gas company to do business in California. The attorney general, Rob Bonta, has recently sued Exxon Mobil over, quote unquote, plastic recycling messaging. Again, it’s a scam. They’re just trying to it’s all legal. We’re doing. We’re hard on oil and gas. Well, guess what? You’re driving out energy and you’re going to jack up prices. So you got with you know, if I was in California, I would your tax dollars are going, in my opinion, to some pretty ridiculous stuff. [00:08:52][214.9]

Stuart Turley: [00:08:52] Germany urge to return to nuclear as wind and solar fail. You can’t buy this kind of entertainment when you go green. You absolutely and you go to renewable energies, which you’ve heard if you’ve been listening to this podcast, you know that renewable energy is not renewable. It is absolutely a waste to Islam, which was very much coined on a podcast, is a true thing. The last four years we’ve been tracking the more money that is spent in renewable energy, the more fossil fuels will be used. And in Germany they had phased down their entire fleet of nuclear reactors over the last several years and hope to rely on renewable energy, claiming they were cheaper and cleaner. And that is not the case at the UN Climate Change conference in Morocco. Rafael Grossi, head of the International Atomic Agency. The IEA, had warned that Germany can no longer turn its back on nuclear power and needs a reorientation of energy policy is necessary. The government must reopen its debate on nuclear power. I am. That is an absolute wonderful statement. They. Reactors that they have not dismantled yet, that they could fire back up at the timing of his comment and say, ah, no, it is no coincidence. Germany’s economic economy is suffering from energy problems while the government is consumed in internal disputes. I’ll tell you what, you can go green or go walk if you would, and be industrialized. If you want to be industrialized, then you’re going to be voted out of office. Green equals voted out. So let’s take a look at the more money that is spent on renewable energy. The more fossil fuels are going to be used. Let’s focus our energy on reducing the methane gases, if you would, in better natural gas plants. The only way that air is going to take off with unlimited power is with natural gas and nuclear. I hate to tell you this. We’re firing up a lot of coal plants around the world just to keep the lights on. [00:11:12][139.7]

Stuart Turley: [00:11:12] Let’s go to Saudi Arabia, then tags right along into this one How Saudi Arabia Turn Back Climate Progress at Cop 29. Saudi Arabia and its allies have two words they didn’t want to see separated at Cop 29 deal fossil fuels. The faction got their way after two weeks of bitter negotiations in Azerbaijan, revising gains made in earlier climate talks and helping knock this proceedings off track. The Gulf States surprised the world at Cop 28 when it joined nearly 200 nations in agreeing to transition transition away from fossil fuels. But it’s trying to walk that historic moment back ever since. The Arab group will not accept any tax that targeted specific sectors, including fossil fuels. You can’t do. You’ve heard me also talk on this podcast. You have to applaud the Saudi government for taking a balanced all the above approach. They’re funding their government with fossil fuels, their funding, their green hydrogen projects and everything else from the profits of the fossil fuels. That makes sense. They’re they are not. And you’ve heard Michael on the podcast, I believe he said it yesterday, The U.S. delivers the cleanest molecules in energy in the planet. We absolutely have it down to a science. Why don’t we export that technology to Africa and really teach people and build the equipment here, teach them how to do that, and then let them run all their natural gas that they can using our clean air technology in our clean power plans. It seems like a really big win because all of a sudden then as an Inuk and Lisa is the African head of the energy chamber there, he said, let’s build it that way so that we have great trading partners and we eliminate energy poverty. So anyway, I thought it was pretty funny. One crucial tactic the Saudis deployed this year was starting from the debate over Cop 29. Agenda itself was to try to take the fossil fuel discussion off the table by arguing that talks in Baku were supposed to focus on a finance deal. Well, the finance deal has turned out to be just absolutely a wealth transfer is all that finance deal is. Let’s totally throw all that crap out on the side. Let’s get everybody the lowest cost kilowatt per hour with the least amount of impact on the environment. And that means running a coal, natural gas, nuclear and wind and solar when it makes sense. If they are fiscally responsible, let’s run them. If not, let’s run the others, but do it appropriately. President Trump Energy agenda will have a heavy natural gas focus. This article is a find on Forbes. It is actually from David Blackmon, The David Blackmon. I mean, not just a David Blackmon. He is the David Blackmon. This is a great article and it kind of folds into the energy theme that we have for today, and that is natural gas good, no energy, bad. The rationale invoked by the White House to justify the permitting interruption was to enable the Department of Energy to study and update economic environmental impact analysis associated with the LNG export business. To that end, the Doe is expected to issue a final report. And I don’t think that really matters because President Trump put out on X, I don’t care. I’m going to open it up. [00:14:58][225.4]

Michael Tanner: [00:14:58] I mean, hey, it’s what needs to happen. I mean, it’s probably part of why you’re seeing natural gas prices spike right now. Obviously, we’ve rolled over into the new contract. Some of that just has to do with us rolling out. Winter, but you know, the world needs LNG. I covered it on my solo show on Monday. Stu It’s about to be cold in Europe. You know, they’re going to be back to burn in the shoes. [00:15:17][19.0]

Stuart Turley: [00:15:18] It’s a horrible thing that’s going on in Europe right now. Michael And I’ve talked to George Macmillan again just as we were getting ready to get on this call. Not only did you and I laugh about charging the German German guy, he next year. [00:15:33][14.8]

Michael Tanner: [00:15:33] I think. [00:15:34][0.2]

Stuart Turley: [00:15:35] He said three calls to Putin begging for gas. Now, there was I mean, this is not a this is a documented thing on. May I please have some gas? So if we watch Oliver and he goes up and goes, may I have some more crew? Holy smokes. All right. So anyway, shout out to David O. Let’s go to Exxon. Don’t expect drill, baby, drill under Trump. And I thought this was a great one. This is ExxonMobil. Upstream President Lee Liam Mellon said we’re not going to see anybody in drill, baby, drill mode. I said at the Energy Intelligence Forum conference in London as it was carried by Reuters, A radical change in production is unlikely because the vast majority, if not everybody, is focused on the economics of what they’re doing. Michael, this is because the ESG newspaper kit, the all of the operators in the forehead all the way and went through their head and came out the back end and they are going to be giving returns to their investors. This is this is where I see this is a good thing. [00:16:40][65.5]

Michael Tanner: [00:16:40] Yeah. I mean, again, prices will only fall as much as oil production comes online. And if producers are signaling, hey, we’re not necessarily going to be drill, baby, drill, we may even pull back a little bit in an effort to sustain prices. Well, then, you know, again, there’s not much the president can do other than signal, hey, I want to drill, baby, drill. How do you incentivize companies to drill? Well, you either have to subsidize them so that they can make up the incremental revenue that they’re going to lose by bringing rigs online, lowering the oil price, or you bring on so much production that the drop in oil price, the net net of it all ends up being more. I don’t see either of those happening right now. So what’s going to happen? I think you’re just going to see a little bit of the status quo. And I think that’s what you’ve seen in the marketplace over the last two weeks, is oil prices get down to that 65 range, spring back up. They’ve fallen a little bit today. We’ll cover mainly why a little bit of a cease fire hopefully going on in in the Israel conflict. But it’ll be very interesting what happens. I do think what Exxon is signaling is kind of the thought among at least the larger mid-caps. I know if you’re a smaller guy, you may thinking about how it might be easier to crank out a few more rigs. It’ll be very interesting to see what happens. [00:17:55][74.9]

Stuart Turley: [00:17:56] Boy, you bet. [00:17:56][0.0][1060.4]

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