Texas Grid Lessons: ERCOT’s Future

ENB Pub Note: The story below about the US Department of the Treasury going after the Iranian LPG market is normally not on the front page. Let’s examine the market size and then review the […]

Highlights of the Podcast

00:00 – Intro

01:43 – How will ERCOT and Texas learn from the past on the grid?

05:13 – Bill looking to permanently ban oil and gas activities off California

07:50 – Woodside assessing tariff impact on Louisiana LNG

09:22 – US targets Iranian LPG magnate

12:37 – Outro

---

Follow Michael On LinkedIn and Twitter

ENB Top News

Energy Dashboard

ENB Podcast

ENB Substack

ENB Trading Desk

Oil & Gas Investing

---

– 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: [00:00:00] Renewable investors will cry foul if 715 passes, but the new lavish subsidies were controversial could be eliminated at any time. They assume the risk. After Senate passage, SB 715 now faces an uncertain path in the Texas House. The stakes are high, and considering the Texas legislation and RINOs that are in there, it may or may not. [00:00:27][27.9]

Stuart Turley: [00:00:35] Hello everybody, welcome to the Energy Newsbeat Daily Standup, my name’s Stu Turley, President of the Sandstone Group. It is just way too much fun out on the news desk today. Let’s go over our top stories for this morning. How will ERCOT in Texas learn from the past on the grid? This is a great one from Doug Sheridan over there at LinkedIn, and I’ve added some information on the background on ERCot. Bill looking to permanently ban oil and gas activities off California. This is really a big one, and holy smokes if you cannot buy this kind of entertainment. Woodside assessing tariff impact on Louisiana LNG. I think the tariffs are about to end and we’re not in, but the tariff negotiation seems like China is willing to start talking. Let’s go to the next one. US targets Iranian LPG and magnet. And I’ll tell you, this is huge. I did not realize that LPG, uh, had such a foothold around the world. And, uh we’ll go through some of that here in a sec,. [00:01:42][67.1]

Stuart Turley: [00:01:43] But let’s start with Ercot and Texas learn from the past on the grid. This is an amazing story from Doug Sheridan on LinkedIn. David Blackman follows him, I follow him, and he is very well respected for his energy knowledge. The Wall Street Journal posted out, Texas is facing a crunch in its electricity supply because of a massive build out of heavily subsidized wind and solar. Wait, you ask how much heavily subsidized? More than $130 billion has flowed into renewable resources and cannot be counted on to produce electricity when in need. Texas found this hard way in 2021. The Texas legislator has responded by requiring renewable energy plants to secure their own firm backup supply. House Bill 1500 passed in 2023 introduced firming requirements that applies only to new power plants starting in 2027. However, that’s too little too late. So there’s a new bill coming out. Our renewable investors will cry foul if 715 passes, but the new lavish subsidies were controversial could be eliminated at any time. They assumed the risk. After Senate passage, SB 715 now faces an uncertain path in the Texas how the stakes are high. And considering the Texas legislation and RINOs that are in there, it may or may not. Doug puts out two big points here. It’s amazing how many Texas leaders have gone along with a bizarre anti-dispatchable that ERCOT and PUCT appear to have a comfortable with. Until the subsidies stop, and then Texans will have to eventually pay up for the state’s unfortunate experiment. Let’s go up to a quote here in the article that I added in, and the quote is, a grid requires fiscal responsibility and physics will require nothing less. Anything less than that will result in failure. That is an amazing point when you sit back and take a look at how the ERCOT grid is broken out. Natural gas is 40 to 4 to 50 percent of ERCot’s grid capacity. Wind is 20 to 26. Coal is about 15 to 20. Nuclear is about 10 to 11% solar is about six to eight and power and storage and other is about 1%. So when you sit back and hydro and biomass is also about less than 1%. When you take a look at how much cost savings the Texans could realize, is if you take a look, at a hundred and thirty billion dollars invested into renewable, non-sustainable energy of wind and solar, that’s a lot of money that you could put into power plants that are natural gas. Low emissions or other types of information. It’s just a mind boggling amount of information here. Excellent story from Doug Sheridan. [00:05:12][209.6]

Stuart Turley: [00:05:13] Let’s go to the next story here. Bill looking to permanently ban oil and gas activities off the California coast. This is an amazing story. And this is from offshore news website, Democrat party representative. I don’t want to butcher the name. I even though they’re, they’re Democrat. I don’ want to butchered her name. Talud called cabal has reintroduced California clean coast act into the U S Congress, the California clean Coast act. Would permanently ban future offshore oil and gas leasing in the areas of the outer continental shelf off the coast of California set quote, Santa Barbara knows firsthand how devastating oil spills can be to our main ecosystems and coastline. I’m proud to lead this bill to fan ban future offshore drilling in our state and insure California. If they only understood how bad the offshore wind and how bad onshore wind is for environment, I think we’d have some different discussions going on. Here’s another quote, the California Clean Coast Act is crucial to protecting our coast and climate from the threat of offshore drilling. And when you want to consider that the bill would also cover almost in several different California, Nevada, and if California would sit back and take a look at how California’s energy policies of totally banning their oil and gas, they are shutting down refineries and where are they going to import diesel and gasoline from, it appears that they may be gearing up. To import from China. And so that might just absolutely make your head explode. When you sit back, this bill could not pass without a majority in there, and it could be vetoed by the president, and there’s not enough votes to overturn the veto. But this does bring up some very huge points. The number one issue. California is a security risk. It’s the fifth largest economy in the world, but yet their energy policies are horrific. And if you want to take a look at who they are planning on buying their diesel and their gasoline from, well, I’ve got two energy experts coming on to the podcast in the next few weeks and we’ll have some serious fun with them. [00:07:50][156.8]

Stuart Turley: [00:07:50] Let’s go to the next story here. Woodside Assessing Tariff Impact on Louisiana’s LNG I really like this story. This is from LNGPrime.com and when you sit back and take a look Louisiana LNG has a foreign trade zone enabling the project to defer payment of tariffs until completion of each LNG train, O’Neill said with Woodside’s quarterly report on Wednesday. We are assessing the potential impacts of recent tariff announcements on potential further trade measures on the Louisiana LNG. This brings up a gigantic burden for the president Trump’s administration, which he is working towards. And that is we need LNG tankers built and owned by the United States. This is a huge issue. Otherwise, tariffs and or other geopolitical influences could stop our LNG trade. We are progressing at a pace towards final investment decision on Louisiana LNG positioning Woodside as a global LNG powerhouse. This is a great win and it’s absolutely wonderful for our trading partners. Woodside said quarterly production of 49 MMBOE was down 4%, but quarterly production increased 9%, pretty exciting story from Woodside in Louisiana. [00:09:21][90.0]

Stuart Turley: [00:09:22] Let’s go to this last story here for today. The U S targets Iranian LPG magnet. And I’ll tell you LPG around the world is very important. LNG is more for industrial size applications. And LPG is more into the home cooking or non-manufacturing world. The department of treasury office of foreign asset control office, not doofus, but office has designated Iranian national and liquefied petroleum gas LPG magnet, Syed. And again, I apologize. I why Texas Oklahoma accent would butcher his name men. Am I in yours? And his corporate network for his role in shipping hundreds of millions of dollars worth of Iranian LPG and crude oil to foreign markets. He might you at meth and his network sought to export thousands of shipments of LPG, including from the United States to evade us sanctions and generate revenue for Iran. I applaud them in doing this, but this brings up, how is he doing it? And what this means to investors from around the world, Iran is the current largest LPG producer in the mid middle East with 12 million metric tons in a that was in a current ex post current volumes as proxy in Iran exported over 1 million barrels per day of petroleum product with LPG propane and butane accounting for a significant portion. Likely over 70% fuel, oil and diesel. Some of the key things and you take a look at the how Iran learned how to avoid sanctions and that was the dark fleet or the shadow fleet. Then you take look and say they called up Russia and said, hey we’ll show you how to get around sanctions and so the sanctions of the dark sleep, older tanker. Some of them are so old you get, you need a tetanus shot just from looking at them. And they are really a hazard to the ecology and the system because they are not insured. And if they have a wreck flesh and not very long ago, we had three, uh, Russian ghost fleet tankers. Who’s paying for that cleanup? So when you sit back and take a look at LPG, that hits the commercial markets and the lower end economic, socioeconomic folks harder. And so this is something to really take into consideration for our ship building and our exports for around the world. President Trump and secretary Wright, as you sit back and take a look at trade imbalances and you take a look at ship building for the next few decades, LPG tankers would be gigantically huge to be building in the United States. And then we could also export to Hawaii, Puerto Rico, and our other folks around the world. This is a huge potential market for the United States. [00:12:36][194.3]

Stuart Turley: [00:12:37] So with that, like, subscribe, share, and I want to give a shout out to Steve Reese, ReeseEnergyConsulting.com. He has done an absolutely phenomenal job. We’ve got got another podcast schedule with him with car Ingram. We’re ready to rumble on that one. And again, go to a Reese energy consult thing.com. If you are building a data center, please reach out because you will want to know where you’re going to find your alternative energy because micro grids matter in the life of the data center. Have a great day. We’ll talk to you all soon. [00:12:37][0.0][745.7]