EV Slowdown

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EV Slowdown Steers the World Further Off Course From Net Zero

Highlights of the Podcast

00:00 – Intro

01:36 – EV Slowdown Steers the World Further Off Course From Net Zero

05:00 – API, Coalition Partners File Lawsuit to Protect American Consumers from EPA’s Electric Vehicle Mandate

07:48 – Sweden Rejects New Power Cable to Germany Over Market Inefficiencies

09:46 – World’s first renewable-powered floating LNG import terminal closing in on new partners amid ‘strong’ interest

12:31 – Markets Update

16:23 – TotalEnergies Sells Upstream Business in Brunei

18:50 – State issues Kern’s first oil drilling permits in a year

20:34 – Outro

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

Michael Tanner: [00:00:14] What’s going on, everybody? Welcome into the Monday, June 17th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up, EV slowdown steers the world further off course from net zero. Next up Rumble in the jungle API and coalition partners file lawsuit to protect American consumers from EPA’s electric vehicle mandates. We fly in an overseas to Sweden as they reject new power cables to Germany over market inefficiencies. We do then come and stay abroad. Fly over to Australia, the world’s first renewable powered floating import terminal, closing in on new partners amid, quote, strong interest. Super interesting article. That’s dual cover. Stu will then toss. I will quickly cover what happened in the oil and gas markets over the weekend. We did see breakouts dropped, which continue to show a trend that has been a little bit shocking to myself. And then we’ve got two stories here. TotalEnergies sells its upstream business in Brunei and California, and Gavin Newsom issued new oil permits since May 1st of a couple since May 2023. So we’ll give a little bit of credit where credit is due. I guess we will cover all that and a bag of chips, guys. As always, I am Michael Tanner, joined by Stuart Turley. Where do you want to begin? [00:01:35][80.9]

Stuart Turley: [00:01:36] Hey, let’s get it rolling over here to this story. EV slowdown steers the world further off course from net zero Bloomberg NEF. It’s their research group over their forecast trims its sales forecast by 6.7 million battery electric vehicles for 2026. I don’t know that trim is the right word, Michael. I think amputation sounds a little more like I’m not quite dead yet. The holy smokes, there’s some interesting things in here. And the bear back bear back battery that’s almost like Build Back Better by Biden and have bear back battery electric vehicle forecast is not nothing there. The problem is there also is a world is awash with lithium ion batteries. Look at China, global Europe, US and South Korea. Everybody’s been piling in it. But this last one here, Michael, the estimates are all negative. If we take a look, miss producer, can you bring up the last chart? They’re lowering estimates for electric vehicle sales. Black is in the US, which is actually the best. Germany is in there and it’s getting totally tanked. Then Italy in the UK are like oh, it’s just unbelievable now. [00:02:58][82.3]

Michael Tanner: [00:02:58] But U.S. still leads in all the in all the lower estimates. [00:03:02][3.4]

Stuart Turley: [00:03:03] Oh yeah. But now here’s the thing. Michael Ford just canceled their big deal for high dollar expenses for dealerships on the Ford’s the dealership EV line. They can’t force peop dealers anymore. There’s not enough money to force them to do it. So Ford’s even backing out of forcing their dealers to go to the event. [00:03:25][22.1]

Michael Tanner: [00:03:25] Yeah, pretty pretty crazy, pretty crazy. I mean, here’s the thing. I think this is what happens with a lot of new technologies. People get really, really excited about it. They make all these crazy predictions. It was really cool what Tesla was doing. You know, they seem to have a line. People like the you know, they like the fanciness of it. I think people also forget that Tesla also has full self-driving, which is another, you know, interesting kicker in this whole thing. It’s not just that they’re an electric vehicle company. They also have a legitimate self-driving vehicle capability, which is super interesting. All these other companies seeing the rise of Tesla, kind of forgetting why Tesla rose in the first place. It wasn’t because they were an EV car. It’s because they were new. It’s because of the full self-driving. It was a little bit of Elon. It was a little bit of everything. And not just, oh, they’re EVs, everyone’s going to drive. Because that was a that was very little of their explosive growth. But now what is Ford and GM do. Well they misread not misrepresent. They their team of analysts swing it miss it. Whoa. What’s why is Tesla doing well again. Right. We just we just talked about so they did they think that it’s oh it’s the EV. And they dive all in on EV. We’ve seen them completely again revise revision you know revise guidance downward on the number of cars. They you know what was it last year we saw. Well how much did Ford lose on EVs. [00:04:40][74.8]

Stuart Turley: [00:04:41] It was $80,000 per car. Per car. So, you know, you sit back and kind of go, nah, it’s just not going to just not going to happen. And in the article, they finally had to admit it’s just pretty funny, even the. Anyway, I still think hybrids are the way to go for a while. Let’s go to the next one. Michael. The API American Petroleum Institute teams up with the corn farmers. Go figure this one out API. Filed a lawsuit in the D.C. Court of Appeals challenging the U.S. Environmental Protection Agency’s light duty and medium duty vehicle emission standards. Because they’re coming after it, and they want all the everybody to go to EV trucks. Well, here’s a quote. Today, we’re taking action to protect American consumers, U.S. manufacturing workers in our nation’s hard working energy security from this intrusive government mandate, API Senior Vice President and general Counsel Ryan Myers said EPA exceeded its congressional authority with its regulation that will eliminate most new gas cars and traditional hybrids in the from the U.S. market in less than a decade. Good for them. [00:05:55][73.4]

Michael Tanner: [00:05:55] Yeah, I mean, I’m not, I guess. What am I trying to say? [00:05:59][4.0]

Stuart Turley: [00:06:00] I’m not all I’m not for ethanol. I’m I am I am a non ethanol fan. [00:06:06][5.6]

Michael Tanner: [00:06:06] I am a fan. Ethanol has been used as a subsidy to the farmers of America. And I’m all for supporting our farmers. Don’t get. [00:06:16][9.3]

Stuart Turley: [00:06:16] Me, I am to love my. [00:06:17][1.3]

Michael Tanner: [00:06:17] Food. But ethanol is a direct subsidy towards them. And they’re it really throws off the entire I don’t want to say economics, but it’s been so baked in now for since was it 2004, 2003 when George Bush put them in? [00:06:34][16.6]

Stuart Turley: [00:06:34] George W did us no favors by doing this. [00:06:37][2.8]

Michael Tanner: [00:06:38] And, you know, do I believe that ethanol is going, you know, what’s this quote would I. [00:06:41][3.8]

Stuart Turley: [00:06:42] Rather have ethanol. [00:06:42][0.5]

Michael Tanner: [00:06:43] Association President Harold Wall, by approving tailpipe standards that focus exclusively on electric vehicles, EPA ignored the benefits. Corn ethanol plays in reducing greenhouse gas emissions and combating climate change. You’re almost there. You’re almost. [00:06:56][13.0]

Stuart Turley: [00:06:57] Yeah. Well, he’s. Yeah. Now glad they’re fighting him because somebody got to you and I. [00:07:01][4.3]

Michael Tanner: [00:07:01] Want to fight him. Someone’s got to fight him. And I’m glad the EPA’s at least involved with. It’s going to be interesting to see where ethanol goes from here though, because I think more and more people are coming to the same conclusion that you and I have is while we love the farmers and we should support our farmers in in numerous ways, directly subsidizing them via ethanol seems like an inefficient market reaction time. Well, we should be. [00:07:24][22.4]

Stuart Turley: [00:07:24] Doing we need to do something else, because when we have all of these self combusting food supply places across the U.S., which is not a conspiracy theory when they blow up. And we’ve had 250 food processing plants blow up since Biden took office, we’re going to have some food problems, and we’re going to need that corn in our food supply, not in our cars. [00:07:45][21.5]

Michael Tanner: [00:07:46] Now. Absolutely. What’s next? [00:07:48][1.4]

Stuart Turley: [00:07:48] Let’s go to Sweden. This once tickled me to death. Sweden rejects new power cable to Germany over market inefficiencies. The Hands Up Power Bridge project, a collaboration between grid operators. I can’t even begin to pronounce this as Svenska Connect. Crat and Germany’s 50Hz aim to facilitate the transfer of renewable energy from the Nordics to Germany. The Nordics were the hydro electrics. Well, they’re running out of some hydro up there, so they really didn’t want to do it. They backed away and I thought it was pretty interesting because the development comes against the backdrop to Germany’s broader energy strategy of shooting themselves in the foot in the splatter. Got Dick Cheney. [00:08:36][47.9]

Michael Tanner: [00:08:37] That’s a good one. That was a good one. I mean, they’re waking up all around the world to the idea that energy is security. Security is energy access. And people are taking the a lot of these, you know, these central European countries are taking the, the, the India and the Modi approach, which is we got to look out for us first, this craziness going on, we gotta we’re not going to do deals now that aren’t in our favor. [00:09:00][23.2]

Stuart Turley: [00:09:01] And it shouldn’t be a you should not do that. The the new gas plants which are designed to be hydrogen convertible. Where have we heard that? Two weeks ago you and I were talking about that on this show, talking about how that’s how we’re getting around our new natural gas power plant. Yeah. [00:09:17][16.1]

Michael Tanner: [00:09:18] And I mean, I obviously the EU needs to do it if we’re going to be combative with Russia going forward, you’re going to have to figure out another solution to get your energy that’s not from Russia. So I applaud the activity. What they’re trying to do. The problem is it’s always implementation. We can agree upon the solution. How do we implement that solution. [00:09:37][19.6]

Stuart Turley: [00:09:38] Oh yeah. Well the first thing is get along with Russia. [00:09:40][2.2]

Michael Tanner: [00:09:42] Well, but it doesn’t seem like they want it. [00:09:44][2.1]

Stuart Turley: [00:09:44] So no. And then they don’t want to. Let’s go to the next story. World’s first renewable floating LNG terminal closing in on new parameters amid strong interest. This really pretty cool, Australian headquartered integrated energy company Venice Venice Energy is holding formal talks with multiple potential partners with ties to the US and Asia to secure the future of the proposed. LNG import project in South Australia. World’s first floating LNG terminal, which will run on 100% renewable energy. Excuse me while I inhale as the developer of this 300 harbor in Port Urge, Dale has moved his research. I saw that I like the idea, but it’s I don’t see it’s going to happen. [00:10:34][49.9]

Michael Tanner: [00:10:35] Well, if you read the article, what they tell you is that there’s quote unquote, this carbon free LNG facility. You talked about this three years ago. You said, guys, wait a second. Natural gas will at some point be considered carbon free. Well, it’s exactly what they’re doing here. They’re using low carbon content from LNG to replace coal. So that’s what they’re that’s how they’re going renewable is going from coal to LNG, which I applaud. But I mean, it’s just there’s no but it’s just it’s it’s the bait and switch that’s happening. It’s the bait and switch that’s happening. LNG will become clean because they they know they need it. [00:11:13][38.2]

Stuart Turley: [00:11:13] Oh, and it’s the article that you and I read last week as well too is it’s cheaper or less impact on the environment to ship out U.S. LNG than to have somebody use coal. Yeah. [00:11:26][13.2]

Michael Tanner: [00:11:27] Now China could care less about the environment. They want it is cheaper. Possible. But yes, it’s but it’s just funny how you called this three four years ago. Hey you know watch out. LNG is going to be green here soon. It’s the sleight of hand. It’s the shell. [00:11:40][13.6]

Stuart Turley: [00:11:41] Game. It is. And now it’s becoming green. All right. Hey, let’s go to Toto. [00:11:45][4.2]

Michael Tanner: [00:11:46] Yeah. So we’ll we’ll, let’s let’s quickly cover oil prices and then we’ll get into to rig counts, guys. But before we do that, we got to go ahead and pay the bills here. As always, thanks for checking us out on the world’s greatest website, Energy News Beat.com. All the news and analysis that you just hear is brought to you by that great website. We appreciate everybody who is visit us there, stew in 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. You can hit the description below for all the links to the timestamps links to the articles as well, so you can dive in and read these all on your own as always. Dashboard.EnergyNewsbeat.com. Check us out there guys. Again energy news Beat.com. [00:12:30][43.9]

Michael Tanner: [00:12:31] Let’s let’s go ahead and roll in year two due to overall market skies I mean Friday was was was a little bit choppy. Not much happened. You know on Thursday you know Wednesday, Thursday we really saw the fallout from Jerome Powell coming out and and the US fed deciding to hold interest rates fairly steady. We saw S&P 500 basically trading absolutely flat. Nasdaq up about 4/10 of a percentage point mainly off the back of Tesla shareholders upholding two things. One, remember they were trying to claw back all of his stock from his stock grant because of the shenanigans going on in Delaware. And then the shareholders also approved the new incorporation in Texas. So mainly the S&P or excuse me, the Nasdaq being driven up by Tesla there. We also saw two and ten year yields to you know two year yields up up a ten four percentage point ten year yield down a half a percentage point. So a little bit of a dichotomy there. Dollar index up a quarter of a percentage point. We saw Bitcoin this weekend not having a great overall week down to 66,500. But it’s actually up today as we record this Sunday afternoon here on Father’s Day. Up about 4/10 of a percentage point. Crude oil on Friday down 2/10 of a percentage point 7845. After you know closing up this week we did see Brant Oil only down about a 10th of a percentage point 8260 for natural gas, $2.88. You know on on kind of the the week to week view on oil. You know, we did see prices a little bit lower as I mentioned. But but overall we did see about a 4% week over week gain as again, it just comes back to demand forecasting for 2024. That’s really what everybody’s looking at. We’ve seen you know the EIA came out with their revised estimate. You know we also did see you know they basically what they talked about was an upgrade or an increase in their demand growth estimates for 2024. They kicked it up a little bit over $1 million, bringing them a little bit closer in line with what OPEC is thinking. Obviously we know the IEA is kind of you know, it’s they’re waving their hand over on the other side just trying to say, hey, we’ll still here. Even though nobody’s really believing them. We did see U.S. consumer sentiment on Friday dropped to its seven month low. So that did that did kind of get away a little bit. On what happened with prices. You know we also did see missed producer of you can throw this up here U.S. rig counts. We did see come in minus four 590 I mean the rigs continue to tumble a little bit. And you know it was a really interesting you know, one of the guys I follow on Twitter, WTI bull. If you don’t have it if you haven’t don’t follow him. He’s he’s up. He’s out of Canada. So mainly a lot of the content is is Canadian MP companies. So it’s it’s awesome. But he had a get a you know kind of a post describing the difference between you know what the baker huge rig. Count to showing at then what you’re seeing in the proprietary data. And what you’re seeing in the proprietary data which is following satellite. Following, you know, some of the other sources that you’re seeing a lot of this movement quicker. And it may not it doesn’t look as disastrous as the rig count. Yes, rig counts are going down, but our frac counts have actually spun up a little bit in terms of natural gas pricing. A lot of the rigs are slowing down while we’re seeing production rise a little bit. A lot of that’s due to the inventory of docks. And these you know, tliis is these companies have been calling them. We saw Chesapeake come out three months ago and, and, and, and and basically say we’re postponing a lot of those 30 tracks, you know, with, with oil prices and specifically natural gas prices where they are now, we’re seeing a little bit of that begin to come online. So, you know, while Rig counts down, we’re still seeing okay movement. I mean eventually this stuff will catch up to us. But it was really interesting. I, I will put the link to the thread in the in the description below, but a really interesting look at kind of what you can see when you look at the proprietary versus the public sources. You know, two articles I want to covers. Do you, you you mentioned this right before we started total energy sales up doing brisk business in Brunei. It I mean, it’s an all gas field. Hibiscus petroleum basically agrees to come in and buy TotalEnergies a 35 for 37.5% stake in block B, which is about 52 miles off the coast of Brunei. It was about a $260 million transaction. They are the operator. So hibiscus now becomes the operator. Shell Deepwater also owns 35 percentage points and Brunei Exploration owns the remaining 27.5. You know net back to hibiscus. They’re getting about 900 barrels or 9000 barrels of oil equivalent per day. So whenever you hear BOE per day, it’s heavy gas because that they they were telling you barrels versus MCF because there’s a huge financial difference between natural gas and oil. It’s about people always say it’s a 6 to 1 ratio from a volume to volume. Well, it’s about 20 to 1 when it comes to financials. So when you hear BOE or BOE per day just just, you know, a little trigger in your mind, I wonder what the split is between oil and natural gas, because that could do it. You know, the production rights are available and can be extended up for 15 years. So hibiscus is going to be able to get at least control this if they want. And between up until November 2039, basically what they’re attempting to do. Here’s a quote from them. You know, this is this is expected to bring the gas production share of the group’s portfolio to almost 50%, in line with the group’s energy transition strategy of acquiring gas weighted assets in stable regulatory jurisdictions. Notice their strategy. Their energy transition strategy talks nothing of returns. So, you know, talks nothing of return. So just let that be a warning to everybody, you know. And totally on the other side says this transaction fits with our active with our strategy to actually manage our portfolio, to monetize maturing assets and to allocate our talents to the most promising assets. Interesting. So how would you feel, Stu? Because as part of this, they also the hibiscus acquired the Total energy employees. Okay. So how would you hear this. You’re you’re working in total in Brunei. And the CFO comes out and says, yeah, we like to allocate our talent to the most promising assets. And you just got sold to another company. [00:18:29][358.3]

Stuart Turley: [00:18:30] Considering the success of Total Energy and their failures, I would be happy. [00:18:35][4.9]

Michael Tanner: [00:18:35] I would I know, I just think it’s hilarious. Yeah. We just we don’t really care about these people. We’ll let them go to another company. We’re to allocate our high quality talent to another. I mean, it’s just just. [00:18:44][8.5]

Stuart Turley: [00:18:44] And as an employee, I’d say, yeah. Thank you. [00:18:47][2.4]

Michael Tanner: [00:18:47] Exactly. Give me, give me to somebody that wants to drill oil. Last one here. State of California issues Kern County first oil drilling permit since May 2023. Absolutely unbelievable. I’m going to reiterate from the article here. Back in May 9th and 10th of 2024, Dallas based operator Barry Petroleum received permission from the California Geological Energy Management Division to drill at least 11 new wells in the Midway Sunset oil field near Derby Acres. Prior to that, as I mentioned, the last four permits went to ENB Natural Resources on May 12th, 2023. Give you an idea, Barry applied for these permits a little more than a year ago, and they were approved under a 12 year old environmental analysis covering several hundred acres of 100 wells, such as the. Proves you’re not necessarily just the permits are coming up soon in terms of the fact that they may not actively drill these, but at least they’ve gotten approved and they can’t do that. Adam, a little bit to their inventory. Just keep you guys. Yeah. There’s still over 2700 oil field permits available. About 80% of them are still for plug in abandoning oil wells. You can’t even plug. Well, this is a crazy part. You can’t even plug wells because you got an approval for that, which is kind of funny. 18% are for reworks, but one third of them are for deepening existing wells. And in most of the and then the rest of them. So about a quarter of a percentage point are for Sidetracking wells. This is a this is one of the few few few few many many ones. So. Hey, Newsome’s trying to drill some wells. [00:20:12][84.3]

Stuart Turley: [00:20:13] Can’t hurt. Well, considering they’ve got 34% of their power is natural gas and they are importing in their natural gas, 10% is Diablo Canyon. And now they have another problem with Diablo Canyon coming in around the corner. You can’t buy this kind of entertainment in California. [00:20:30][17.5]

Michael Tanner: [00:20:31] We know you will be all over it. What should people. That’s about all I’ve got to do. What should people be worried about this week? [00:20:36][5.2]

Stuart Turley: [00:20:36] Oh, financials. Just keep watching the news. [00:20:39][2.9]

Michael Tanner: [00:20:40] Keep watching the news. I will be out Wednesday and Thursday. Stu will be rocking solo shows. I’m going to be down at Earth Tech Wednesday. So if you’re down there in Earth tech in Houston come by. If you see me, say hi. I’ll be banging around there with with, with some fun stuff. Stu will be holding down the solo show, so I apologize in advance for that, but we’ll be back and flying next week with that. Guys, we appreciate we’re going to go home. Let’s get out of here. Start your day for Stuart Turley I’m Michael Tanner. We’ll see you tomorrow folks. [00:20:40][0.0][1201.7]

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