March 2

Daily Energy Standup Episode #320 – Weekly Recap: Challenges Mount: From Net-Zero Risks to Homebuilding Struggles


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Goldman CEO Sees More Uncertainty to Soft-Landing Expectations – Will this impact global oil demand?

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Homebuilders Are Fighting Green Building. Homeowners Will Pay.

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Highlights of the Podcast

00:00 – Intro

01:16 – Net Zero’s days are numbered

04:03 – Research warns net zero policies risk plunging thousands into poverty

07:14 – Saudi Arabia Can No Longer Raise Oil Output For Cash

10:24 – U.S. Electricity Generation by Source in 2023: Natural Gas, Coal, Nuclear, Wind, Hydro, Solar, Geothermal, Biomass, Petroleum

13:30 – Goldman CEO Sees More Uncertainty to Soft-Landing Expectations – Will this impact global oil demand?

15:29 – Homebuilders Are Fighting Green Building. Homeowners Will Pay.

18:39 – Outro

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

Stuart Turley: [00:00:14] Hello, everybody. Welcome to the Energy News Beat podcast. Today is Saturday. I hope you’re ready for a van tastic day out. There it is March 2nd. We have had an absolutely fun week this week. We are ready for another crazy week out there. I’ll tell you what, with as many regulations are out there, as many different things are going on, you’re going to see many people around the world gaining, traction and kind of going, oh, wait a minute, we don’t like these regulatory actions, and you’re going to see some, backlash from the folks that are actually in charge creating even more regulatory actions. So buckle up, sit back and enjoy the rest of this weekly summary that we have for you. The staff has picked the best producing stories and we’re going to have a great weekend. Michael and I will see you Monday morning. Thanks. [00:01:15][60.8]

Stuart Turley: [00:01:16] Let’s start out with net Zero’s days are numbered. I can only hope, is there’s no way we’re going to get there, Michael. And, this one is going to be kind of tough. The public does not believe or has not been made to understand that it’s going to be costly for them. Blanchard. Blanchard is Oliver Blanchard is pouring water on the claim on the House of Lords in the EU. [00:01:42][25.7]

Michael Tanner: [00:01:42] He’s the former IMF chief economist. If you don’t know what the IMF is it, imagine the fed. But for like the entire globe. So they send him to keep it locked up and tight. And for someone like this to be saying this, it’s I mean he’s the former so he’s not currently there. [00:01:59][16.7]

Stuart Turley: [00:01:59] But still but still he says the financial fiscal cost to achieve anything close to net zero. It’s he’s he’s dead on. Right. There’s no way that we can fiscally get there. The wind is this is a quote the wind industry is admitting the ability to generate wind power has been vastly. Michael. Wait for it overestimated with the bursting of the wind. Really? Yeah. The industry’s messaging is switch to crude blackmail. Our W. E’s German boss, Marx Krebs, told the Financial Times. It is, of course, concerning because the UK’s climate targets cannot be achieved without offshore wind. They can’t make it anyway. I mean, offshore wind. We’ve seen an absolute bust. People are bailing out like you wouldn’t believe. [00:02:53][53.7]

Michael Tanner: [00:02:53] Yeah. Projects are getting canceled left and right. I mean, well, the closest thing we’re going to get to to the IMF saying this is the former chief guy over there, because trust me, they’ve got an incentive over there to make sure this net zero stuff hit. So I always like to look at that. You know, this was basically, you know, there was also this interesting German owned electrical producer r w e they briefed the Financial Times that the level of government support funded through the guarantee prices, electricity are forced to pay for wind energy, so they’re forced to pay for it now, even if it costs more. [00:03:29][35.4]

Stuart Turley: [00:03:29] I found this also very interesting. The last, paragraph in here, Michael says the purpose of writing net zero into law is the anti-democratic one. Putting net zero beyond politics. So that, I thought, was very admirable of him to admit that once these things are put in there, it’s they’re trying to appease their base and either the UK or the US. Just because you’re trying to appease the base doesn’t mean it’s right. Yeah, absolutely. But her research warns net zero policies risk plunging thousands into poverty. I didn’t even I didn’t even touch that and put that. I even put more on there. Millions will die. I you see, something like millions will die. You know, that would be me. But new research has been published by the Institute in Community Studies. I went to the website and you have to go through it says, oh, here’s where the study is, but you gotta buy it. So this article is pretty interesting. Local councils and central governments were not trusted to lead sustainable changes, so members of public had no choice but to take matters into their own hands. Whenever we start mentioning the public or the leaders taking things into their own hand, I get nervous. Dude, here’s a quote from Emily Morrison, director of sustainability from the young, Young Foundation, said our research shows there is a will, an appetite and even urgency amongst the public, including the most vulnerable, and poorest households to participate in the transition to net zero. It has to. Be done through climate policy. [00:05:15][105.3]

Michael Tanner: [00:05:16] Yeah, that’s an easy way to drive people to their grave. [00:05:18][2.1]

Stuart Turley: [00:05:19] It is. It’s just I want to be the place where people can come and talk about openness, of talking about physics and reality. Yeah, physics and fiscal reality matter in anyway. Millions upon millions will die. If I was Carl Sagan and I’d say billions upon billions will be dead. [00:05:40][21.2]

Michael Tanner: [00:05:40] Yeah. I mean, the problem is, when you’re to bring somebody out of poverty, you have to provide them with an extremely affordable option that’s also extremely efficient. It’s not just. Yes. In a perfect world, I’d love my car to have zero emissions. But guess what? The most efficient and cost effective option has a trade off of some small amount of emission. And you know, Thomas all said it best. There are no good options. There are only trade offs. So what are we willing to give on one side to give you? Are we willing to basically keep the poor poor in order to make the environment, you know, marginally better? Or do we want to raise everybody out of poverty and have a slightly worse off environment, more on the margins? [00:06:24][43.7]

Stuart Turley: [00:06:25] Well, I’ll. [00:06:25][0.2]

Michael Tanner: [00:06:26] See what I take all day, every day. [00:06:27][1.8]

Stuart Turley: [00:06:28] As is the great as the great and wondrous, I know. Both things can be true. And, and both of these things can be true. You can have. [00:06:39][11.1]

Michael Tanner: [00:06:39] You. That’s, Tisha Schuller. They to me. [00:06:42][3.0]

Stuart Turley: [00:06:43] Today I had a brain cramp. Would love me, Tisha. And both of these things can be true if it is worked out in both sides. You can have your ecologically good energy and your your low cost. It has to be work together. [00:06:59][16.2]

Michael Tanner: [00:07:00] Absolutely. It definitely can. But there is. But we also live in a world of, of of trade offs. And so I think that’s what we have to we have to look here and you know, we may get you need to rewrite the title. [00:07:14][14.1]

Stuart Turley: [00:07:14] Let’s go over to Saudi Arabia. Saudi Arabia can no longer raise oil output for cash. This one I stole from Irina Slav It’s kind of like we had an old folks day here hanging around. Saudi Arabia has been spending heavily, both abroad and at home. But as she points out, also there they are spending $1 trillion in clean energy, supposedly, which you and I both know. That’s kind of a misnomer. But the sovereign wealth fund is now got some issues. And there’s a quote in here that you got a really, why it says, don’t let a good crisis go to waste. We all know what that one is. You know, there’s going to be a pricing thing that she talks about in here. These plans would really need big money if they stand a chance to materialize. And the kingdom is ready to go to great lengths to make all of their plans. Yeah. They’re basically saying they’ve got the reserves, they’re not putting in the CapEx in order to pull those reserves out. And there’s about 16 other articles I’ve been reading all over the place of a massive amount of just general dollars that are needed in order just to meet decline curves. At one time it was $4 trillion. [00:08:36][81.7]

Michael Tanner: [00:08:37] Yeah. I mean, it’s it’s pretty funny that Saudi Aramco, the world’s largest oil corporation, says that they at these prices can’t drill. And what does that tell you about American projects. What did it tell you about the CapEx that’s being spent in America right now? Not to be a Debbie Downer, but if you can’t find profitable projects in Iran, in Saudi Arabia to drill, what are what are we doing? [00:08:59][21.9]

Stuart Turley: [00:08:59] You see, there’s a little bit of difference. If I was if I was holding back and maybe I didn’t explain it quite as well, but if I was sitting there looking at Saudi Aramco, you got a heck of a reserves sitting there. Why the a known reserve. There is no while carrying when you walk out to the the desert and go, I need me some oil and get a spoon and dig it up. There’s no wildcat and going on, so why would you even wait and have extra production come on line until the price goes up? So now they’ve got themselves in a bind with lower prices, because they took the high road with OPEC and cut theirs as the primary, cuts going on to make sense. So all right. We’ll never. [00:09:51][52.0]

Michael Tanner: [00:09:52] Know. It’s a I just I’m sitting here just reading this article. You know, it’s always seems like the CFO. That’s where these quotes are coming from. It’s always seems like the CFOs, the Debbie Downer, because last week, I love the article. Aramco issued a grim warning about the state of global oil production capacity. Of course, that’s come from the finance guy. Oh yeah. [00:10:12][19.6]

Stuart Turley: [00:10:12] Yeah. But he’s. His office is right next to the I our guy now. So he could be the CFO of the week, man. What do you think she could. US electrical generation by source in 2023. Natural gas. Coal. Nuclear. Wind. Solar. Hydro. Geothermal. Biomass and petroleum. Okay. This is by Wolff Richer for the Wall Street. I thought this was great. It used a lot of the EIA data, but it also really kind of put it together in a way that it was generated by source. And so when you take a look at the mix share of renewable wind, solar, geothermal, biomass was 22% share of renewables without hydro was 16.5. So you sit back and take a look. Hydro is big chunk. It is some hydro. But when you take a look at coal, in Miss Producer, if you could fly in the second chart or. Yeah, the second chart, which is in the middle of the. [00:11:19][67.3]

Michael Tanner: [00:11:20] Article electrical generated by source gigawatts per hour. It’s got pull Matt. Gas, nuclear, renewables, petroleum for everybody listening. Right. One thing that’s clear since 2001 or really since 2008, coal’s been on a slight tumble down but white. But it see it a comeback. What’s it is. Is it seeing a comeback in 2020? [00:11:37][17.9]

Stuart Turley: [00:11:39] And we had a dip back. But the world is going coking. Coal ain’t dead yet. So, now, when you take a look, I thought the next chart down, Michael. Gigawatt hours by wind and then, hydro, all solar. So this is just showing. [00:12:01][22.4]

Michael Tanner: [00:12:02] This is just showing the renewable sources. Wind, hydro, solar and then biomass. [00:12:06][3.7]

Stuart Turley: [00:12:07] The thing that I saw this was geothermal. Biomass and hydro were very closer to the, nuclear flatlines. I mean, there are a heck of a lot more, stable. And I sure like them. [00:12:22][15.4]

Michael Tanner: [00:12:22] Well and well stable is in there just not growing because it’s really hard geothermal. We haven’t had much activity happening, so I wouldn’t expect geothermal electrical generation to grow year over year. Hydro is tough because. [00:12:35][12.8]

Stuart Turley: [00:12:36] We’re I’m gonna I’m going to disagree with the almighty one. We are seeing some technology breakthroughs in geothermal. [00:12:42][6.2]

Michael Tanner: [00:12:43] I get that, but it’s not showing up in the data because it’s flying. No, no, electrical just says the amount of gigawatts no was generated. [00:12:49][6.1]

Stuart Turley: [00:12:49] Michael, you said we won’t see any. And I’m saying yes, we will. Technology’s coming around the corner. You said we. [00:12:56][6.7]

Michael Tanner: [00:12:56] Go in this in this data set. We’re not seeing any growth in that. I get why hydro is not growing. It’s a little at some point you just yeah, at some point you’re limited by how much stuff. So yes geothermal. We know there’s some stuff going on. Stu’s talked at nauseam about that. But really interesting research by Wall. [00:13:14][17.5]

Stuart Turley: [00:13:14] Street here at nauseum. I don’t love it. But what gets me is the cost per kilowatt hour is not in this article. I just thought it was great to talk about. Actually the sources this is on energy news. [00:13:28][13.6]

Michael Tanner: [00:13:28] We got leverage, cost of energy. Of course, the Goldman CEO. [00:13:31][2.8]

Stuart Turley: [00:13:33] Sees more uncertainty to soft landing expectations with this impact global oil demand. You can see that I added that last sentence because, I know you were thinking that. But here’s the thing with Goldman Sachs. He says we’re the world is set up for a soft or, landing, said Solomon. The market certainty perceives there’s a very, very high delta to a soft landing. My own view is that it’s a little bit more uncertain than that. I gotta give him here, credit for at least admitting that it’s uncertain rather than, is it Yeltsin? Yeltsin? Whenever she’s always saying, oh, it’s transitory. [00:14:15][42.9]

Michael Tanner: [00:14:17] Well, I find it hilarious that he’s like, we’re set up for a soft landing, but I’m this. But as the CEO of one of the largest organizations that studies financial information, I’m uncertain about. [00:14:29][12.6]

Stuart Turley: [00:14:31] It looks like. [00:14:31][0.7]

Michael Tanner: [00:14:32] About it that you’re analysts. Your aren’t so sure. Your analysts are saying one thing and you think, would you trust your own analysts? Or are you getting different data than what they’re putting out? [00:14:43][11.2]

Stuart Turley: [00:14:44] You see where I’m reading into this? You can read what a CEO says just by that comment. [00:14:51][7.0]

Michael Tanner: [00:14:53] Yeah. No, absolutely. It it. [00:14:54][1.1]

Stuart Turley: [00:14:55] It is, it. [00:14:55][0.4]

Michael Tanner: [00:14:55] Is. And I was like, wait a second. So you’re getting you’re getting side data from your analyst team. But you’re, you know, we’re set up for a soft plane. That’s what you know. It’s what the analysts are saying. But I don’t think so. [00:15:05][10.0]

Stuart Turley: [00:15:06] Whoa, whoa. No. Why. And and I think it’s because of the global printed money. And, it’s sitting. And here it’s kind of funny. Even the NGOs are. Now all the money is dried up for the social programs and stuff. It’s not just energy that’s running out of money, it’s everybody is running out. Yeah. [00:15:26][20.4]

Michael Tanner: [00:15:26] No, absolutely. It’s it’s unbelievable. [00:15:28][1.6]

Stuart Turley: [00:15:29] Home builders are fighting green building. Homeowners will pay. This one is really getting. And it affects all. It is in the energy space as they are trying to force everyone to have high energy, methodology in building their houses and making them more efficient, smaller, to make new houses more efficient and compatible with clean technology that is more expensive. And we’re pushing the prices of houses outside of the average person. Now with this, let’s go through some of it and the EIA, the unbelievable, the energy. Group, their housing climate impact is, carbon emissions in 2022. Residential was a, big part of it. I believe it was 19%. And so when you sit back and go, what was in this 19%? Is you can’t just lump residential in there. Is that the building? Is that, driving to and from work? I’m not sure that I really, think that this is fair. The cost argument that the home builders is, is saying is deeply flawed in two ways. $20,000 figure for increasing on each home. Was only from one survey. It appears to be a wild exaggeration. A federal study found the new standards would actually raise building expenses by 4760 500 for a single family home. Lowering energy bills means homeowners would recoup their upfront cost in just a few years. This one I highly disagree with because it never works that way. And if we had a balanced plan to get from energy, fossil fuels, and you want to go to net zero in a least a cost, cost effective way, it would not matter in people would be able to afford this, which came first, the house that had a lot of, insulation or having any money just to have a roof over your head. And, this is not going to pan out very well for them at all. In fact, Miss Producer, if you can bring up the video, I have a video, that, that some of the folks in the Energy Department sent over. [00:18:16][166.7]

Video: [00:18:17] What we. [00:18:19][2.8]

Stuart Turley: [00:18:22] Did, and he’s he’s swinging it. Boom. And, so when you sit back and that’s a normal meeting in the Energy department trying to make up regulatory actions. So, thank you, Mr. Producer, I appreciate that. [00:18:22][0.0][1055.8]

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