Electrifying Raises Consumer Costs

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Electrifying Everything Means Higher Energy Costs For Consumers. These DOE Numbers Prove It (Again)

Highlights of the Podcast

00:00 – Intro

01:38 – Electrifying Everything Means Higher Energy Costs For Consumers. These DOE Numbers Prove It (Again)

05:46 – China fortifies resource security with strategic mineral, energy reserve gains

07:10 – Cuba restores power to one-fifth of population after nationwide blackouts

09:03 – ‘Dark Fleet Oil Tanker Train’ Hauling Russian Crude To Indian Refineries Shows Ineffectiveness Of G7 Sanctions

11:49 – Iran Readies New Oil Outlet To Bypass the Strait of Hormuz

16:35 – Markets Update

20:05 – Rig Count Update

20:34 – Exxon seeks buyers for portion of assets in North Dakota’s Bakken shale

22:28 – Outro

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

Michael Tanner: [00:00:11] What’s going on, everybody? Welcome in to the Monday, October 21st, 2024, edition of the Daily Energy News. Beat Stand up. Here are today’s top headlines. First up, electrifying everything means higher energy costs for consumers. These Doe numbers prove it again. Next up, China fortifies resource security with gains from Strategic Minerals and Energy Reserve. Interesting there. Next up, Cuba. Cuba restores power to one fifth of the population after nationwide blackouts. That sounds fine. Next up, Stu’s favorite topic, the Dark Fleet oil tanker train hauling Russian crude to Indian refineries shows ineffectiveness of G-7 sanctions. If you listen to the show at all, you know, our favorite phrase, sanctions don’t work. And then finally, our buddies over in Iran, they ready new oil output through the to bypass the Strait of Hormuz. Well, some interesting stuff going on there. Stu, then toss it over me. I will quickly cover what happened in the oil and gas markets. Pretty brutal week for oil prices. A lot of that has to do with geopolitical stuff. So it will be interesting to see as you listen to this on Monday, where prices are at. We did see rig counts, not much movement from last week. Then finally, Exxon seeks buyer for portion of its back in North Dakota. Shale assets. [00:01:31][79.9]

Stuart Turley: [00:01:31] Now cover. [00:01:32][0.4]

Michael Tanner: [00:01:32] All of that in a bag of chips guys as always I am Michael Tanner joined by Stuart Turley. Where do you want to begin? [00:01:38][5.3]

Stuart Turley: [00:01:38] Hey, let’s start with our buddies over there. Too doughy. Electrifying. Everything means higher energy costs for consumers. These doughy numbers prove it again. Hey, I’ll tell you what. Robert Bryce is a rock star, and he hit this game off in his substack. I highly recommend. And Michael. Well, let’s tell our listeners that they need to subscribe to our Substack we are going to a paid model on it. We love Substack by the way. Last year, Stacey Abrams, a prominent Democrat who served in Georgia House of Representatives for ten years, joined Rewiring America as a senior counsel. Michael, are you ready? She was joining Dark Money, an NGO because she wants to help promote electrify Everything agenda. How much do you think went back to her, her election campaign or back to her? She’s one of many and non-governmental organizations and politicians who contend they’re trying to electrify everything in the White House, claim that electrifying everything would lower energy costs. One of the richest climate NGOs in the United States Natural Resources Defense Council, annual revenue, 193 million claims, if it’s done right, electrifying, will bring big benefits to Environmental Justice Communities inquiry, including lowering costs. Except Robert puts it won’t. Here’s the chart. This is really pretty funny. The doughy equivalent of equivalent residual residential energy costs in 2024. Look at that number. Electricity is 47% more than just natural gas. When you take a look at that BTU, the D.O.D. says electricity will cost residential users about 47 million BTU this year and and cost around 13 million. Unbelievable. That’s a lot of extra money that they’re talking about. [00:03:35][117.4]

Michael Tanner: [00:03:36] Yeah, it really is. I mean, the whole dark money thing is a little bit spooky and it happens on both sides. So we can’t it’s not necessarily a partizan. It’s one of the few things that’s not a partizan issue when it comes to money in politics. I’d argue the Democrats are probably worse at it than than the Republicans. At least Ellen’s coming out and saying, hey, I’m the one donating $200 million versus it kind of going in these roundabout ways. Absolutely. What’s going on with this Ukraine stuff is, you know, we’ll just leave it at that. I don’t want to I don’t want to venture into your territory. You know. [00:04:09][32.8]

Stuart Turley: [00:04:09] This is for entertainment purposes only. [00:04:11][1.7]

Michael Tanner: [00:04:11] We don’t want to lose. But, I mean, we all know the deal. We, as you know, we covered that article a couple of weeks ago about how the Doe is not wanting to release the cost per kilowatt hour or a lot of these different sources. [00:04:24][13.0]

Stuart Turley: [00:04:25] So it’s either or the jobs market with the numbers being wrong. I mean, if they all go hand in hand. Yeah. [00:04:31][6.1]

Michael Tanner: [00:04:31] I mean, you know, it only takes somebody with half a brain to realize that natural gas at this point is cheaper than solar. I know people will argue that solar is cheaper, but that’s they’re not. This is what oil and gas used to do. Well, it’s really cheap once we drill the well to produce it, it’s like, Yeah, but how much did it cost to drill the well? It cost you $100 million to go get a million missed yesterday. okay. So I’m the idiot here. So I think a lot of people are factoring in a lot of the CapEx that goes into this stuff. You know, obviously this electric off by everything, it’s got nothing to do with energy and in my opinion, everything to do with power. They don’t like the fact that people who are. For oil and gas vote Republican. So what can get oil and gas out of the picture? Renewable. So we’re going to support. Renewable has little to do with climate change. Even our friend of the show, John Kerry. It’s not about climate change for him. It’s about power. [00:05:23][51.9]

Stuart Turley: [00:05:25] He’s a never mind the U.S.. This one chart in here, Michael, take a look at the U.S. producing more than Canada, China, Iran, Norway and Qatar combined. The Permian Basin alone produces a much Canada 18 B, C per day. That is absolutely amazing. Let’s go to the next one here. China fortifies resource security with strategic mineral energy gains. Beijing says drive for self-reliance has led to breakthroughs in oil and gas exploration and progress urgently needed in mineral deposits. They’re drilling in offshore has gone that not Michael. What they’re trying to do China is trying to become energy independent and they are now trying to really beef up their exploration and drilling programs. China is focused on the strategically more important minerals that are in short supply, and they are all in there going after graphite. It is their graphite reserves grew 23.9% to more than 100 million tons. You can’t industrialize without graphite. [00:06:38][73.5]

Michael Tanner: [00:06:39] No, you can’t. And as what that’s what they’re seeing is that it’s not even enough to just be a coal based economy. You have to go to a more efficient source of energy. [00:06:48][9.1]

Stuart Turley: [00:06:49] Exactly. And so I’m not a President Z fan, but hats off. At least he understands high energy security as he circles Taiwan. And I find it I find it very odd that they’ve got war games going on around Taiwan right now and it’s not even being covered in the news. If there’s ever a time it’s going to happen it soon. Let’s go to Cuba, Michael. Cuba restores power to one fifth of the population and their nationwide blackout. This is an interesting story from Reuters. Cuba’s efforts to restore the pilot were derailed for the third time. They have almost the whole island is out. That total disconnection of the national electrical system occurred again. The Havana Electric Company said on Telegram late Saturday. Take a look at the last line in here. The U.S. has denied any role in grid failures. [00:07:42][53.6]

Michael Tanner: [00:07:43] Say that one more time for the people in the back. [00:07:45][1.6]

Stuart Turley: [00:07:46] The U.S. has denied any role in grid failures. New ways. Since when do I trust our government? Now you’ve got to have energy security for your family and your country. Do not rely on the grid. It could go down at any moment. [00:08:02][16.2]

Michael Tanner: [00:08:03] Yeah. I mean, if you think our grid system sucks, I’m sure it’s not much better in Cuba. And again, from an energy security standpoint, this is why we need to invest in grid updates or else we’re going to end up, you know, we’re going to end up like Cuban. And you have to feel for the people who live in Cuba. They’re stuck. They’re stuck living in one of the most fragile energy systems in the world. And really, if you don’t believe what the U.S. is saying are literally a political pawn in a game of cat and mouse. [00:08:32][29.2]

Stuart Turley: [00:08:32] And if you think if you’re getting to the bill, if you have not voted yet and you like you to, like, vote with your heart and do not vote for Kamala, I’m saying that right now. You vote for Kamala. You’re going to have energy policies like Cuba. [00:08:47][14.3]

Michael Tanner: [00:08:47] Yeah, oil will be 120 bucks. So who knows? You know? [00:08:50][2.9]

Stuart Turley: [00:08:51] Well, we’ll make more money so you know, which ones do you want? I mean, I. [00:08:55][4.0]

Michael Tanner: [00:08:55] Talked about this on a few of my solo shows. It’s a very interesting phenomenon and have her win. But we’re going to make a lot of money if she does. What’s next? [00:09:02][7.3]

Stuart Turley: [00:09:03] Let’s go to the dark alley. My buddies over there is building a dark fleet oil tanker train to haul on Russian crude Indian refinery shows the ineffective G7 sanctions. Chinese and oil traders have been responsible for the explosive growth of the Dart fleet tankers hauling Russian and crude and evading Western sanctions. And this has bled over into the LNG market with the sheer volume of the LNG markets. I’m going to compound this with a whole new dilemma coming around the corner, Michael. The Russian natural gas pipeline is set to expire for the transit through Ukraine in December. The EU is dead meat. When that happens, they can’t get enough LNG. So what’s going to happen? The Dart fleet is going to increase again on LNG. I think the war is going to end in the Ukraine and we’re going to see that pipeline start again. And I think that it’s going to get re redone when the g this is out of the article when the G7 countries decided to crush the Russian economy and the energy sector with sanctions. Alternative trade mechanisms, including transportation, insurance and payment for energy, had to be created in a hurry and practically from scratch. That brings up BRICs. That brings up Swift and that brings up our national meeting, all three. You have the U.S., you have BRICs and you have Swiss all having meetings next week. Michael. Yeah. Holy smokes. It’s getting wild out there. [00:10:34][91.7]

Michael Tanner: [00:10:35] It is. Can we show this tweet from Robin Brooks here? India’s imports from Russia are up 900% versus pre-invasion. This is mostly crude that gets refined and shipped back to Europe. It’d be fine if this was happening on Western owned tankers in compliance with the G7 cap. But it happens on shadow fleets that helps Putin. Look at this chart. Sometimes you see a picture is worth a thousand words. This is worth a few. Okay. [00:10:58][23.3]

Stuart Turley: [00:10:59] 900%. Guess what Gavin Newsom did, Governor? Slick oil slick Newsom just signed that bill and he’s and Phillips 66 just put out the thing and they said, Michael, we’re closing down they’re closing down the refinery next year. So what’s going to happen in March? Bookmark this podcast. You will see the United States and California importing diesel and gasoline from either Iran and or China. More expands and more damage to the environment. Absolutely. [00:11:35][36.1]

Michael Tanner: [00:11:35] We got to cover the Phillips 60. We they didn’t quite make the docket on this show. We got to make sure we cover filled up this film tomorrow because there’s a lot to talk about there with our friend, Oil slick. Speaking of Iran, let’s go to the next one. This one spooky. [00:11:47][12.2]

Stuart Turley: [00:11:49] It is. Iran readies new oil outlet to Bypass the Strait of Hormuz. And Michael, this is really, really important. Iran is closer to finding a way to circumvent the Strait of Hormuz when it comes to oil experts. The Jask oil terminal open officially opened a few years ago, but they’re just now got a lot of more activity. And in this one, this post from Tommy Emmer, a GOP majority whip. Iran’s illicit oil revenues swelled at 200 billion since Harris took office. This is critical from the standpoint, Michael, that when we talk about the Strait of Hormuz, the U.S. bully plans of Israel attacking Iran’s oil to Iran. Oops. Then they hand Iran attack and Netanyahu’s house. I’m not sure what’s going to happen, and I don’t think he’s going to tell the Biden administration again. So this is having a nether port open for them to still export. Is either a another target, Michael, or it’s going to have another way for them to bypass a whole shipping area. Pretty wild. What’s going on over there? [00:13:02][73.2]

Michael Tanner: [00:13:02] Yeah, it is. I mean, it’s extremely wild what’s going on over there. And I don’t think anybody really knows. We do know that it’s what we do know is this the United States is complicit in the fact that we are allowing these oil exports to take place. And right, wrong or indifferent, that’s what we’re doing. I’m not going to sit here and say, well, we should be throwing sanctions on them. We know sanctions don’t really work. So if you just let them do what they do, we can then track this stuff. Super, super interesting. Now, if they if they go ahead and shut down the Strait of Hormuz and start using this other stuff, that’s going to cause a complete global turmoil when it comes to the overall pricing structure. So do I think they’re going to do that? No, I don’t think they’re going to do that. Now, if they did do that, I think that’s an insane provocation. And they I think they would only do that if they want to draw the U.S. closer into this conflict right now. I think they want to keep everybody at an arm’s length. And just like Iran, Israel, they maybe feel like they have a little bit of a net and not an edge, but they feel like they’re more level headed that way or even that way. But if they go after the Strait of Hormuz, things will get spicy. [00:14:05][63.0]

Stuart Turley: [00:14:06] I mean, last week, Michael, they had a bid to do a bunker buster on the Houthis. They could have done that eight months ago and saved bazillion gallons of diesel around the world transporting tankers all over the place. So the Biden administration is totally worthless when it comes to geopolitical solutions. [00:14:27][21.1]

Michael Tanner: [00:14:28] It’s it’s just that I bet it’s it’s it’s unbelievable. They’re they’re trying to figure out they’re trying to figure out how to get about this and if they can get around the Strait of Hormuz of it’s only going to help them continue to bring in money and fund all these proxy wars that’s happening. [00:14:43][15.3]

Stuart Turley: [00:14:44] Yeah. I’m an I’m a non war kind of guy. I don’t like war. [00:14:48][3.5]

Michael Tanner: [00:14:48] Now we don’t. Well, let’s go ahead and jump over into finance. And before we do that, guys, as always, we need to pay the bills. Thank you for checking us out here on the world’s greatest website. www.energynewsbeat.com. The best place for all your energy and oil and gas news. Stu and the team do a tremendous job making sure that website stays up to speed everything. You need to know to be the tip of the spear when it comes to the energy and the oil and gas business. Go ahead and hit that description below for links to the timestamps. Links to the articles. You can also check us out on Substack. energy news beat@Substack.com great place to kind of get all of our articles, some of our top articles and some custom articles directly to you. Stew has been been cranking out writing some of that custom content, so we appreciate him doing that. You can also. If you are interested in our direct working interest project, it’s tax season, folks. If you have a tax problem and you’re not dealing with it, why cut the check to the government when you can cut the check into an investment that provides some sort of passive income but also mitigates your tax burden and allows you at parties to say, Hey, I’m an alum there. That that’s the that’s the critical part. Good part. [00:16:00][71.4]

Stuart Turley: [00:16:00] Hey, we’re oil man. Absolutely. [00:16:01][1.0]

Michael Tanner: [00:16:02] I we you know, we got the checks. Sit down right here. So if if if you have a tax problem, if you’re looking for a little extra income, don’t pay the government. Get in on the direct working interest project. We have all the resources and an awesome project. If you’re interested, go and hit the link below in the description to sign up. We will get you all of that information as quick as possible. Do not pay the government a cent in taxes. I promise you that you don’t want to be doing that. Luckily we don’t make any money here so we don’t have to worry about what. [00:16:29][27.3]

Stuart Turley: [00:16:30] We’re paying the government way too much money. [00:16:31][1.4]

Michael Tanner: [00:16:31] Right. I’ve got a plan for you, but let’s go ahead and move over, guys. The overall market’s pretty interesting this week. We did see the S&P 500 on Friday was up about a fourth of a percentage point to finish very close and very near all time highs. Nasdaq was up about three quarters of a percentage point to a ten year. Yields fell a 7/10 of a percentage point, 2/10 of a percentage point. Dollar index was down about 3/10 of a percentage point. Are Bitcoin still at $68,000? It’s up up about 3/10 of a percentage point this week at crude oil. Not a great day on Friday, down 2.8 percentage points, 6869. Brant oil was actually fairly flat, 7329. Natural gas down another three percentage points, back down to $2.25. I mean, kind of the main reason why, you know, for that week oil was down 7%. And think there’s a lot of of interesting stuff happening right now. One obviously you got some info coming out of the Middle East that Israel will not strike some of the oil exports in Iran. And I think that was directly coming from the Biden administration because they don’t want to see prices go to $120. I mean, really, nobody does that. That’s dreadful for the economy. If you really want to talk about how to bring down inflation, you have to go to one of the source and key inputs that is driving inflation is the quote unquote, high cost of energy. So it’s pretty much a you can’t do that. And so I think there was a bunch of lobbying there. You know, we also did see there also is, you know, kind of this macro story coming out of China. Their economy grew at the slowest pace in the latest quarter, which is quarter three since kind of early 2023. So the kind of macro story that’s going on in China of, hey, demand’s going to be down from there. They’re one of the largest consumers of oil and gas is is not going to be good. We also did see OPEC and the IEA both in lockstep cutting their forecasts for global oil demand in 2024 and 2025. When OPEC and the IEA align. I take no because they come they come at things from two different perspectives. So very, very interesting. I think that’s a lot to do with what we’re seeing right now with oil prices. Again, our friend of the show, John Kilduff, partner to gain capital. China’s is key to the demand side of the equation. So that is very much weighing on prices here today when it comes to the fact that their growth was slower than it did. We also did see their refinery output decline for the sixth straight month. We also, you know, again, there’s a lot, lot going on in China. They’re rolling out their own version of monetary easing, pumping about $112 billion or 800 billion into the stock market through newly created monetary policy tools. If you don’t know how this ends, we saw that we saw it happen two years ago when this whole inflation started. So it’s unbelievable on. [00:19:17][165.2]

Stuart Turley: [00:19:17] A time is let’s get the print press. Go on. Let’s just print dead money, baby. [00:19:22][5.2]

Michael Tanner: [00:19:23] Why not? Why not? We also did CIA announced on Thursday that U.S. crude oil production has continued to climb, beating last week’s record output rose by about 100,000 barrels per day, to finish at 13.5 million barrels per day, up from its previous peak, 13.4 million barrels, which was first achieved two months ago. And we also did see crude oil, gasoline distillate inventories, which all fell last week on the kind of the macro US side. We did see US retail sales come in slightly better than expected in September, with investors pricing in a 92.2% chance of a Federal Reserve rate cut in November. So that could help prices. But again, who knows what to see. Speaking of rig counts, guys, we did lose one rig on this throwback. Chart up here on the on the week ending in October 18th, 2024, rig counts dropped one week over week count of 585. That’s down about 39 from last year. You can see them. You can see last year about this time is when we started shedding rigs. So you’re going to see those numbers start converging from the year over year numbers. Canada saw two rigs drop internationally. We actually saw 16 rigs get picked up. The other thing I saw last week, this happened actually about 4 or 5 days ago, but I was gone last week. I was down in our favorite city, Houston, which I’ll actually be in this week. So if you are down there, please let me know. Exxon seeks buyer for portion of assets in North Dakota’s Bakken Shale. I’ll read a little bit straight from the article here. ExxonMobil announced that it plans to sell a portion of its North Dakota Bakken assets. According to sources at router’s, with a quote from the company spokesperson, ExxonMobil is exploring market interest for selected assets in the Bakken, which includes proxy 137 operated wells, 690 or 678 operated and royalty wells across 49,000 net acres in North Dakota. This could fetch upwards of $500 million, according to multiple sources that did talk to Reuters. This is sort of in line, which is kind of its effort to consolidate both in on the Permian and its offshore assets with the highest growth potential after they went ahead and closed their deal with Pioneer back in May. You know, it’s you know, most of the land that they’re selling is a lot of leasehold, undeveloped interest, which actually is fairly attractive to buyers because most of these companies come in and kind of operate with what are called these land banks, where they lease up a bunch of land, they drill a portion of it, and then try to use that bank to go ahead and flip it. You know, Exxon, ironically, is one of the top producers in the Bakken, do about a little over 100,000 barrels of oil per day. They did say they’re going to continue to invest in North Dakota as part of its long term strategy. But, you know, we also did know that in June they launched their conventional they they launched an auction to sell their conventional drilling assets in the Permian. So their move into unconventional offshore, unconventional Permian and some of their highest growth stuff in North Dakota. So if anyone’s got 500 million and wants to go buy their Bakken stuff, let’s do it. We might have to do a little deal spotlight on some of that stuff to see what it looks like. But. Well, I got Stu. What do you have What are you worried about coming up this week? [00:22:29][186.9]

Stuart Turley: [00:22:30] I’ll tell you, just watching oil prices as we really take a look at the big, big thing is, is Israel going to not tell the White House anything and actually bomb Iranian oil? Are they going to bomb a nuclear assets and facility? I have no clue. I don’t blame them if they do. But I’m not I’m not in any position. But holy smokes, Batman. [00:22:56][26.3]

Michael Tanner: [00:22:57] Yeah, obviously would be scary. I think the geopolitical risk seems to have knocked down a little bit relative to what I think we were seeing earlier this week. But with that look from Stu, it might not be so we know as guys stay safe, but we will be back in the chair tomorrow far and away. We appreciate everybody checking it out here on the world’s greatest podcast. For Stuart Turley, I’m Michael Tanner. We’ll see you tomorrow, folks. [00:22:57][0.0][1344.6]

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