Week Recap: Trump’s Coal Stance, AI’s Billion-Dollar Bet, and Europe’s Energy Gamble

[[{“value”:”

Weekly Daily Standup Top Stories

FollowStuart On LinkedIn and Twitter

Follow Michael On LinkedIn and Twitter

ENB Top News

Energy Dashboard

ENB Podcast

ENB Substack

ENB Trading Desk

Oil & Gas Investing In 2024

– Get in Contact With The Show –

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

Stuart Turley: [00:00:10] Hello, everybody. Can the energy news beat daily Stand up. This is the weekly recap. The staff has picked the best stories for the week. And I mean, this is crazy. This is February 1st. I hope you are ready for a fantastic weekend. Michael and I are going to be at Nate this next week and it is just going to be crazy. So buckle up. Hang on. And we’ve got a new sponsor coming on Reese Consulting. We are just really excited about it. So if you want to sponsor other portions of the podcast, let us know. But we sure are glad to have our first big sponsor of 2025 announcement coming up at night. Banks Buckle up and enjoy the show. [00:00:53][42.8]

Stuart Turley: [00:00:54] President Trump reignites coal industry at Davos. I think he lit a fuze under the world elite and said, We don’t need you anymore. [00:01:03][8.0]

Michael Tanner: [00:01:03] So he really was wagging his finger. I mean, the whole speech. And then Harvey Miller, president of Argentina, basically came in and said the same thing. [00:01:11][7.5]

Stuart Turley: [00:01:11] He said what? He said, Unbelievable. In classic Trump fashion, the president declared the World Economic Forum, Nothing can destroy coal. Not the weather, not a bomb. It’s a great backup. What this really means is that in Trump’s stance on coal isn’t new. But let’s be honest, it’s sitting in the back seat as oil and gas steal the energy spotlight. Yet this fresh endorsement, as we’re reminded not just Davos, but the world isn’t ready to get rid of coal. President Trump is actually shining a light on grid stability around the world, saying we have to have baseline electricity. You can’t throw haphazard renewables at a grid and have it function normally. This is it is. We laugh about make coal great again. It’s actually make the grid stable again. [00:02:07][55.3]

Michael Tanner: [00:02:07] Yes. I could not agree more with that analysis. And think about the quote that he said. Go back to what you first said to you. This is the quote out of Davos. Nothing can destroy coal, not weather, not a bomb. It’s a great and here’s the key word, backup, right. Never should be your main supply for a few different reasons, but it’s a great backup to ensure baseload energy supply. China knows it. Some people in the United States know it. Europe certainly doesn’t know it. But, you know, I completely agree. This the Make Coal Great Again movement. I wouldn’t say make coal great again. I would say make coal back up again. That would be my phrase. [00:02:45][37.6]

Stuart Turley: [00:02:46] That’s a good way to do it. I think that that is a great one. Start Gates first data center is underway in Texas. Public filings show how much it will cost to build 500 billion AI project by Stargate. Earlier, the first data center is in Abilene. I’m going to go take a few pictures of it with Oracle CTO Larry Ellison and public filings for Abilene. Matching Ellison’s description shed some light on costs and estimated campus on this is now $1.1 billion. That’s a lot of servers. [00:03:19][33.5]

Michael Tanner: [00:03:20] That’s a lot. So what is Stargate? It’s it’s a joint venture between Oracle Open, AI and SoftBank. I mean if that doesn’t make the the the the hair on your neck stand up a little bit, it gets worse because they’re pledging to spend $500 billion on AI data centers. There was some real spooky stuff that they were talking about specifically being able to create MMR, MRSA vaccines in minutes. Yeah, I’ll probably be avoiding using those a little bit more about this project. Basically, it’s called Project Ludacris. It’s a thousand acre site. Some other things is, is we’ve you know, basically each building is about half 1,000,000ft². There are ten buildings currently being built and we will expand to 20 and other locations beyond Abilene. It is interesting that the owner of Project Ludacris is listed as Abilene, DC one LLC and affiliate data center of startup Caruso Energy, which we we love them. There are there are, you know, ex oil and gas folks who created kind of off grid database solutions using flared gas in North Dakota they’ve since expanded off of they’re super interesting super, super interesting what they’re doing. But on one hand I think, yes, we need to be investing huge amounts of money into this. On the other hand, some of the stuff that’s come out of that, Sam Altman and Larry Ellison have said about the goal of Stargate is absolutely creepy. [00:04:48][87.4]

Stuart Turley: [00:04:48] And scares me. [00:04:49][0.8]

Michael Tanner: [00:04:49] To do least with the release of Deep Seek this week. Having spent basically in the millions of dollars I’m talking less than $10 Million to Train Deep seeks open source model, which is yes, it’s Chinese based, but on par and even better than Chad. Some estimates have said it’s cost over 1.5 billion. Million dollars to develop that algorithm when it comes to the infrastructure and the people that build that and Deep Six now come out with a better AI model for less than $10 Million. It makes you wonder. 500 billion. Wonder what? What Why all that money exactly? [00:05:25][35.4]

Stuart Turley: [00:05:25] A There is close ties to several three letter agencies that I do not trust, so we will just leave it at that. I am not going any further than that because I don’t like those three letter agencies. [00:05:38][12.4]

Michael Tanner: [00:05:39] Let’s jump to the next article. Europe doesn’t need US gas, but it might anyway. Interesting. So what Donald Trump here is talking about is pushing EU countries to buy more US ship gas. There are reasons that Europe is this article says is considering taking the bait, but each of them come at the price high lock you know top line is you know basically it’s a price that could be you know it’s a way for smoother relations with the United States. I kind of read the top line, you know, kind of the big bullets and we’ll dive in each one. So one there saying that this is a price Europe is willing to pay for smooth relations. Interesting. They’re also saying that new dependencies and the lessening climate concern has led them to this and also their de reliance on de reliance on specifically piped gas from Russia. So, you know, you know, at a top line, I think what they’re saying is, hey, yes, Europe would love to take us. Natural gas. And there are reasons for that. But at the end here, what it basically says is, well, there may be more at play than just that because they may not actually need the LNG and that U.S. and specifically EU demand for LNG may have already peaked. So, guys, give you an idea. You know, to this day, the US currently exports about 50% of its LNG that flows through its export facilities to Europe and imports of US LNG has filled all of the factories and allowed them to kind of stay up and running. Since the 2022 invasion. But the EU gas consumption since 2022 has Tumbled 13.3% and 7.4%. You know, leading an analyst to wonder, is this are we seeing peak gas demand in Europe? I actually take the other side of the argument and say, well, it’s because prices have risen so much to where people are cutting back. I mean, you know, it’s so cheap. Energy is so cheap here. Specifically in Texas. I leave my lights on when I leave. I you know, I keep my C on or my heat on depending on what time of year it is. But that’s because I’m paying, you know, $0.06, $0.08 a kilowatt hour. There’s been a dollar per kilowatt hour. Yeah. I’d probably have things shut down. I wouldn’t have nine screens in front of me TV going in the back seat on a, you know, flipping the AC and heat back and forth. You know, I would. Again, the free market, the supply and demand curve, when prices rise so high, we see demand fall, which then shifts price or which then shifts supply down, a.k.a. falling gas consumption. So I don’t necessarily know if this is a trend. I think we need more than two years of data, especially since in 2022 it’s been a little crazy with the war. But we did see in 2020 for the U.S. that LNG imports to the EU did decline to the previous year, which basically there was a network of LNG terminals along Europeans western coastline that went fairly underutilized. We also did see a warm winter in a weakened economy, again, a weakened economy. I come back to the warm weather, some of that’s out of control. So maybe it was just two warmer winters that we need it. We was actually a little cold, not 24, but in 23 and 22 is really cold. So again, interesting counterpoints here, you know, again, you know, and then, you know, the other side of this article points out is the supply side. We talk of the demand side, but the supply side of that, you know, if the IEA is correct, they’re predicting a global glut of gas, which is 50% more LNG. That should be than will be needed around the world by 2030, which is mainly driven by the expansion both in the United States, but also Qatar. So very interesting there. It goes on to talked about I mentioned the counterpoint to the rising demand or the lowering of demand and rising of supply, which is, you know, both highly signals that they may just go back to U.S. LNG specifically for smooth the relations with not just the Trump administration, but with the United States and also the lessening effect of climate and climate concerns. And we’ve known about these LNG deliveries for long. Qatar is signing 30, 50, 100 year deals to supply gas. So I think this is very interesting. It’s a great breakdown in my opinion of, yes, the EU probably does want US gas, but will they need it and for how long? And you know, obviously things change and you need to be planning 30 years in the future. So, you know, some of this stuff taking a lot of the short term data and trying to extrapolate it I think can be interesting. But we will see that. [00:09:40][241.3]

Michael Tanner: [00:09:41] Q4 earnings are here. We always start with oilfield service and today we get Halliburton. They post order on quarter income rise on a net income of $615 million for the fourth quarter. That was actually compared to 571. For the third quarter of the year, though, it was actually below at $667 million quarter reported from a year ago. So they’re actually down year over year but up quarter over quarter usually I like. Comparing a year to year quarters versus, you know, Q3 to Q4 because cyclical in terms of, you know, companies maybe, you know, in the oil and gas space tend to spend more in Q4 than they do in Q3, especially because they find out if there’s a surplus or low on budget or they’re trying to hit production targets. There’s a lot of that stuff there. So generally you’ll see Q3 softer than Q4. So the fact that Q4 2024 was down from Q4 2023 shows me that things have softened a little bit. Total revenue for the year was 22.9, which is actually for 22.8 billion with a B, that was actually flat year over year. Operating income was 3.8 billion. Compare that to 2023 on a full year at 4.1 billion. Net income attributable to Halliburton for the full year landed at 2.5 billion, which was below the 2.64 billion that was reported in 2023. CEO President Chairman Jeff Miller I’m pleased with our performance in 2024. We generated 2.6 billion of free cash flow on a return of 1.6 billion of cash to our shareholders. While we expect 2025 to be sequentially softer in North America. We began the second half of this decade in great position with transformed balance sheet leading returns and strong cash flow. So again, I take out of this oilfield service, does a better job of predicting the demand than oil and gas operators because their revenue in dual field services absolutely depends on it. Yeah. Oil and gas company. You know, they’re what they do this year really affects next year there and they aren’t as accurate as somebody who is in the oilfield service space. So, you know, it’s pretty interesting. Halliburton coming in there, they did drop a little bit in terms of price, in terms of their stock. They’re down about a quarter of a percentage point is the time recording here. So obviously, they’re taking it in the shorts here. [00:11:47][126.0]

Stuart Turley: [00:11:48] Russian LNG exports hit a whole new high. EU purchased more than half of the volumes, despite vows to eliminate dependance on the sanctioned energy country. Russia exported 33 million tons of LNG last year and more than half of that went to the EU market. The figure represents a 4% increase from the previous record of 32.9 million tons set in 2022. And this is even with having a an expansion unit to the Arctic LNG not on line. The EU accounted for approximately 17.4 million tons, or 52% of the Russian total LNG. France, Spain, Belgium and the Netherlands were the largest buyers of Russian LNG. Again, this goes back to we need to have low cost natural gas around the world. And if we realized that the Ukraine war was brought on by the management of the EU and the management of NATO as well as Russia, nobody is I’m not throwing anybody saying anybody’s innocent here, but let’s end this. Let’s end this fight and let’s get it all negotiated. And President Putin, if you’ve listened to my podcast with George Macmillan and everything else, it’s all about land power versus sea power. And what the United States and what the EU tried to negotiate in keep Russia from monetizing their energy wealth. And he was able to anyway. So let’s just end this and let’s everybody get back to it, because if Germany does not get low cost Russian energy, Russian natural gas, soon they will finish. The Green New Party will be extremely happy because they will have been fully industrialized and so goes Germany. So goes the EU. We need honestly for President Trump to be able to say he’s ending the Ukraine war. So the Democrats don’t say, you lost the Ukraine war and now you’ve lost the EU. They’re going to blame this on on President Trump when he inherited an absolute abysmal situation. [00:14:15][147.2]

Stuart Turley: [00:14:17] Planet Earth natural resources are limited to its 8 billion residents. There are four key points that this Ronald Stein article has. Earth has existed for more than 4 billion years without the present day humans. I’m not sure that we actually know our true history. Crude oil consumption is more than 35 billion years per year, with less than 50 years of known oil reserves. I still believe in my heart that there is a lot of oil that is still left to be discovered. Coal consumption is more than 8 billion tons per year, with less than 135 years left of known coal reserves. Natural gas consumption is more than 132,000,000 cubic feet per year, with about 50 years left of natural gas. Reserves. I think there’s a lot more than that. Similar scenarios for the exotic minerals like lithium, Cobalt magazine and copper need to go green with Evie batteries. And this one I thoroughly agree with. There’s a lot of things that we can do and that would be putting in nuclear everywhere. The United States has been running nuclear capable fleet forms ever since 1955. Why don’t we go ahead and start moving everything nuclear ships? There are some real things that we could do with nuclear and protect and expand this out. The new technologies that are coming around the corner, I think could really reduce the amount of fuel, oil and gas that we do use and coal. And there is just but we’ve got to get out of the way of government and we’ve got to take a look at renewable wind and solar and say, wait a minute, they may not actually be the best tools to use. You always want to pick your best tool and use it. Nuclear is by far the best tool, but we can’t get there. And so in the short run, natural gas is our best tool to use for power plants because it is the least pollution out there. So outstanding. Shout out to Ronald Styne for his article there. [00:14:17][0.0][835.3]

The post Week Recap: Trump’s Coal Stance, AI’s Billion-Dollar Bet, and Europe’s Energy Gamble appeared first on Energy News Beat.

“}]] 

​Energy News Beat