Week Recap: Consumer Revolt, BP’s Strategy Shift, and Ford’s Big EV Losses

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

Stuart Turley: [00:00:11] Hello, everybody. Welcome to the Energy News Beat daily. Stand up. This is the weekly recap. Today is November 2nd. Boy, I mean, we are drawn down to an end of the election season. Holy smokes. I can’t wait to find out who won the election. I have a feeling it’s President Trump. But hey, with that, like subscribe share. The staff has put together the best of the stories that people like, and we got some great feedback this week on our story. So thanks. And sit back and share. And by the way, it is tax season coming up. If you are paying too much in taxes and you want an investment. We’ve partnered with Pecos operating and they are drilling oil left and right, and they offer a very good incentive for folks to invest in them. We’re averaging about 30%, 32% on our money back. So if you want information, just give us a shout out. We’ll be glad to send that information your way. Thanks and have an absolutely wonderful day. [00:01:12][61.3]

Stuart Turley: [00:01:14] Biden EV mandate backfires as customers Rebel Against Electric Cars. This is absolutely customers interest in traditional internal combustion engines is rebounding due to the affordability concerns about 75,000 plug in vehicles. Nobody can afford a $75,000 a Tesla. Nobody can. Some 67% of consumers say they prefer an internal combustion engine for their next vehicle, up from 58%. Michael, that’s that’s a lot of people saying, hey, I’m done. I got to have me regular internal combustion. [00:01:53][39.6]

Michael Tanner: [00:01:54] Yeah, It’s I mean, who’s going to go out and spend that type of money on a car that doesn’t perform as well as a combustion vehicle? That is the whole point. I would be all for EVs if not only could you if if they actually perform to the standards at which your natural combustion engine would be. I mean, I was out of the oil field all week and trust me guys, you can’t have an EV out there. It’s really tough. But the one thing that’ll last out there is a cybertruck, but still that, you know, we won’t get into that later again and and again. Where’s all this electricity coming from? Ask yourself that question Just because you plug it into a wall, does it mean that that electricity that’s flowing through the wall was generated by what you would consider in on the lean energy? Because, you know, maybe it came from a coal fired power plant. I remember watching those that famous Michael Moore documentary where they go talk to the they’re opening up a new electric vehicle charging station at some I forget what city it is. And they they quizzed the you know, the guy who was in charge of building it or like the county electrician. He was like, yeah, all this 98% of the electric that’s born here was actually generated from the local coal plant. It’s like, okay. It’s, it’s you’re, you’re, you’re putting yourselves, you know, seven steps away from the source. So you can it’s like a blood diamond. You don’t know where they came from. We didn’t know they were using child labor to get all this stuff. So it really, you know, the father, you can remove yourself from the source, the more quote unquote comfort you feel like you can take. It’s pretty unbelievable. What I what I find funny is that the base scenario that the EPA has for 2032 is that by then 56% of all models must be non-hybrid EVs. I mean, I’m all for hybrid. I think hybrids, if you want to be clear, are probably going to end up being the future of cars because there’s something wrong with batteries. We love. We I love a good battery. If you can if you can tell me, I can increase my efficiency by mixing two technologies. I’m all for that. So that’s pretty unbelievable. [00:03:51][117.2]

Stuart Turley: [00:03:52] But there’s a mistake that the Biden-Harris team did, and that is they messed with a tax break saying you get a tax break. But here’s the formula that you had to use for that tax break. Only 20% of the cars qualified for the tax break. It was absolutely worthless. This one is one line in here, yet one 9190 Democrats in the House recently voted in mass against amendments to ease the unachievable EV mandate. They are still sitting there, Michael, going, hey, wait a minute, we want these EV mandates. [00:04:27][34.8]

Michael Tanner: [00:04:28] Well, i. [00:04:28][0.4]

Stuart Turley: [00:04:28] Think that I think people are going to vote. [00:04:30][1.4]

Michael Tanner: [00:04:30] I think it’s also easier to vote those policies that are 5 or 10 years out in the future because most people are like, well, I won’t be in office, then we’ll let that Congress deal with the fallout and I can vote to show my constituents that, look, I’m on the quote unquote, right side of the argument. So I think a lot of this is show me here and then in ten years, we’ll forget. It’s like the debt ceiling. Everybody cries about the debt on both sides of the aisle. And then when it comes down to it, they just raise the limit. [00:04:55][25.0]

Stuart Turley: [00:04:55] Don’t get me started. Investors turn to fossil fuels as green energy falters on cost and reliability. I thought this was an excellent article from Issues and Insights. And let’s go through a couple of the. Points in here. Despite vast green stimulus packages in the U.S., Europe and China, more hedge funds are average net short batteries, solar electric vehicles and hydrogen then are those that are in more funds are net long fossil fuels and are shorting oil and gas and coal. Bloomberg reports that hedge funds and institutions have concluded that many climate investments haven’t yet posted returns quickly or profitably as they expected. So people are tired of it. They want their money back and they’re putting their money into fossil fuels. [00:05:47][51.8]

Michael Tanner: [00:05:48] Yeah, I mean, I think it’s also smart to point out that most hedge funds perform basically in on par with the S&P 500. So I don’t necessarily look to hedge funds as a source of crude in terms of, this is exactly what’s going on. But what it does is it shows a consensus among people who look at this stuff a lot harder than me and you on investing for the long run. Where are the gains to be had and where are there opportunities to make money on the downside? So I’m not shocked by this. You know, obviously, this is a shift from where it was 4 or 5 years ago because there was all of this money dumping. And what I find surprising is that even with all of the direct money being pumped in via the the Inflation Reduction Act and all of these different green stimulus packages, you’re not seeing better underlying performance from these companies. What that shows you is, you know, it doesn’t matter how much capital you spend, what matters is are you going to make a return? But to talk about that when we come to finances. I mean, it’s energy is a capital intensive business no matter what side of the equation you’re on. And it forces you to think a little bit differently about kind of the underlying stuff. I love this quote from Bloomberg, and I’ll just read from the article Bloomberg report that hedge funds institutions have concluded that, quote, Many climate investments haven’t posted returns as quickly or as profitably as they expected. Now, I could have told you that I could. You could have given me half the money they’re paying these hedge fund guys. And I could’ve told you the exact same thing. Right. So pretty, Pretty unbelievable. So many road blocks. Delayed Journey to zero carbon world. Who would have thought? Trillions of dollars need to get spent. And there’s some. All of a sudden, there’s roadblocks in between. Yeah, absolutely. Here we go. Reading straight from the article here. Our friends over at Bruder’s. The task of decarbonizing the global economy can be split into three parts, electrify as many activities as possible. But remember, doesn’t. Where’s the electrification matters next? Use low carbon processes when it’s not when that’s not possible. And make electricity in ways that do not spew out greenhouse gases. See again, the goalposts are always shifting. There are always used to be electrify everything. Now it’s Wow, we can’t do it. Let’s use low carbon and let’s make sure that we’re not spewing. I mean, the goalposts are constantly moving. You know, they point out that, quote, The good news is this is happening. The bad news, though, is that it’s not happening nearly fast enough. And what’s funny is you’ve got the IEA who, again, if the IEA and Goldman Sachs agree on something, I take that step. Just like if the IEA and OPEC agree on something. You know, I’m the biggest Goldman Sachs guy per se, but they’re generally fairly, I guess, straight up and down with this stuff. They don’t really care one way or the other. The IEA does care. They want to go completely green, but they agree here. They’ve got three charts here, the global power mix. Can we go ahead and throw that chart up here, the global power mix? I mean, look, here’s what it is. In 2023. That’s the orange. 2040 is what it needs to be. And then in 2060, that’s the blue. Okay. So look at how coal’s going to ramp down if you’re listening. Coal ramps down from 2023 to 20 40 to 2060. Gas ramps down, nuclear stays the same. That’s it. True. And renewables. But to drastically increase. And if you actually think we’re goin g to achieve that, it’s pretty unbelievable. The funny part is, is that according to Peter Hill, okay, the problem is that the demand the the the issue with all of this is that the fossil fuel demand is is delaying this eventual switch, of course, because, you know, and he said this in Glasgow at the United Nations back in 2021, I mean, this isn’t something new here, folks. You also have to remember the IEA central, you know, net zero scenario that they’re working with, which is based on government stated policies, have demand for all three major fossil fuels reaching a peak at then falling by 2030. Goldman’s main scenario, which is quote unquote more ambitious, foresees consumption continuing to grow up until 2030, while consumers keep burning more gas until the 2040, which again, is what’s going to happen. We’re not going to just eight. We’re going to get off natural gas. It’s under unbelievable. Well, it’s hilarious. Is Goldman Centrals a scenario three years ago? So if look back three years, because what Goldman said, they think that coal would account for only 23% of the electric the electricity. By 2030. It now expects it to be 28 to work revising upward. Here’s another thing that’s interesting. Three years ago, Goldman and I said that a U.S.. Carbon sequestration in underground storage would capture 140 million tons of carbon dioxide in 2030. As we stand today, it’s barely a 10th of that. So they’re really great at doing projects. So maybe I’m not sure if we should be happy whether or not they think it’s one way or the other. And it’s irrational to think that we’re going to be able to completely rip off as quickly as they want. And again, coming back to all of this, it’s all the politics. It’s not really about the climate because it was about the climate. You would understand that, one, the United States produces the most energy efficient and the most emissions reducing natural gas in the world. So it was all about just emissions. And the and in the end, the intersection between emissions and efficiency. Everybody would be all natural gas. But that’s not politically correct because that would then mean their friends in the environmental business who are trying to build wind farms and solar farms wouldn’t get money and they wouldn’t have any people to vote for. And again, it all comes down to politics, folks. There’s also the whole green hydrogen scam which is going on right now, which we don’t really have time to get into. I’m already too worked up about this in the and the other article we talked about. So just it’s just another example, folks. These these projections are just that they’re projections whether or not they come true. We will find out. [00:11:37][349.2]

Michael Tanner: [00:11:37] BP and Shell brace for profit drops and kind of top headlines here. BP Shell are expected to report lower profits this week due to weak oil prices and falling refining margins. Remember, a lot of these companies make their money on these integrated oil and gas claims, make their money on the refining side, not necessarily on the upstream side. Both companies are facing massive investment pressure. BP’s already come out and said they’re scaling back their energy plans. And Shell CEO has hinted at a potential New York Stock Exchange listing, which is interesting. We’ve also seen activist investors like BlueBell Capital Partners come out and openly criticize BP’s management, calling for the resignation of their chairman. It’s pretty crazy. We will see. Beep Beep is due to publish their earnings on Tuesday while Shell will be on Thursday. You know, they’ve already signaled, hey, we’re going to have a massive slump. But again, going back to the fact that most of these companies make their money on the refining sector side. So we’ll continue to to monitor that. Again, going back to the fact that a CEO of Shell did come out and say that we’re going to probably end up on the New York Stock, and why would you know why you’re an oil and gas company. Why would you end up on the London Stock Exchange, expose yourself to windfall profit taxes. Expose yourself to just all of the capital pressure and investor pressure that happens when you’re in you. I get I get to New York as fast as you can. BP shares going back to them or down 14 percentage points this year. And we already know that their new CEO, Murray hatching Gloss is basically scaling back the renewables business and propping up their oil and gas business. Reuters has also reported that action close mistaken plans, and I’m reading the history of the article, has taken his plans a step further by abandoning a target cut which we have covered to cut oil and gas by 40% by 2030. Pretty unbelievable. But of course, I would get out of the business too. Why would you not? [00:13:29][111.2]

Stuart Turley: [00:13:29] Colonial Pipeline way sale at $10 billion plus the value. Holy smokes. The Alpharetta, Georgia based company is working with advisers to see if it gauges interest from potential buyers. According to the people who asked not to be identified as it could draw interest from financial institutions is infrastructure funds, as well as that colonial pipeline operates the most vital fuel systems in the US, covering more than 5500 miles from Houston to New Jersey. Boy, I don’t know if you remember when the Colonial Pipeline had a cyberattack hit it and it caused some real heartburn. I’ll tell you what. You shut down this diesel and you shut down gasoline. You’re going to have some serious problems. And then building a replacement for this is just not going to happen. Pipelines are a fantastic investment. Reuters report reported in June that some of the Colonial Pipeline owner were exploring, exploring, divesting their stakes. Deliberations are an early stage. There is no certainty that Colonial Pipeline will decide to pursue the sale. There are some conspiracy theories that are already sort of swirling around this. Now, remember, there are big things. Even the Twin Towers sold right before they went down. So you can imagine some of the conspiracy theories that people are saying, wait a minute, if this is going to get sold, is it going to get shut down or permanently harmed? I don’t think so. But you never know. During the summer. One oak agreed to buy a global infrastructure partner’s entire interest in n linked. Mainstream and equity interest in Medallion, the largest closely accrued held gathering transportation system in the Permian Basin. Pipelines are a fantastic investment. So whoever’s looking at this, I think it’s a good buy because gas and gasoline and diesel are not going away anytime soon. [00:15:30][120.5]

Stuart Turley: [00:15:31] Ford lost another 58 K for every V sold and in the third quarter or $1.2 billion, you can’t buy this kind of entertainment. The 1.2 billion Q three loss brings its 2024 hit to $3.7 billion loss. Holy smokes. Demand struggles, high cost and charging issues. Still dodging the heavy push. I think that Tesla and Elon are going to be the last man standing in the eve market in the U.S. we need to go to. I’ll tell you what. We have got to go. Instead of like Thelma and Louise off a cliff. We need to go to the first one that comes out with a good truck. A hybrid model will be the winner in the EV market. I guarantee it, because I consider hybrids pretty close to EVs. And I think that that’s going to be a big difference. The $3.7 billion loss is equal to the gross profit. Ford calls it EBITDA for earnings before interest and taxes it made on Ford Blue, the division that makes internal combustion cars. So internal combustion cars, everything was wiped out by the EV side. Holy smokes, that man. I do want a cybertruck. I just want to go on record because I think when everybody needs a bulletproof car, so take a Ford three 350 internal combustion and make it bulletproof or buy a Cybertruck. I don’t know. I think I’m going to buy a Ford 250 and then buy a cybertruck and be at the same price point. That way I get two vehicles. I feel good for helping the environment. [00:15:31][0.0][912.5]

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