Daily Energy Standup Episode #269 – Geopolitical Energy Chess: Russian Uranium, Fossil Fuel Fumbles, and Venezuelan Border Dilemma

Daily Standup Top Stories

House passes bill barring imports of Russian uranium for nuclear power

The Geopolitical Problem of the US—a German-Russo-Japanese Connection

Highlights of the Podcast

00:00 – Intro
02:47 – House passes bill barring imports of Russian uranium for nuclear power
05:18 – Greens erupt as fossil fuel ‘phaseout’ is dropped from proposed climate deal
07:42 – The Geopolitical Problem of the US—a German-Russo-Japanese Connection
10:06 – Chevron CEO cautiously optimistic on Venezuelan-Guyanese border dispute, downplays military conflict risks
14:00 – Markets Update
14:28 – Oil falls more than 3% on softening demand, oversupply concerns
17:06 – 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 is going on, everybody? Welcome to another edition of the Daily Energy News Beat Stand up here on this gorgeous Wednesday, December 13th, 2023. As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, joined by the executive producer of the show, the purveyor of the show, and the director and publisher of the world’s greatest website energynewsbeat.com. Stuart Turley, my man, how are we doing today? [00:00:38][24.3]

Stuart Turley: [00:00:38] It’s a beautiful day here in Dallas. I’ll tell you. I’m getting around. Yeah, it. [00:00:42][3.9]

Michael Tanner: [00:00:43] Nice to have you in town for a bit. [00:00:45][1.6]

Stuart Turley: [00:00:45] Yeah, that was in West Texas yesterday. [00:00:47][1.6]

Michael Tanner: [00:00:47] You’re all over the state. Luckily, the menu is fire, as always. First up, House passes bill barring imports of Russian uranium for nuclear power. We’ll follow it up with Greens Europe as fossil fuel phaseout is dropped from proposed climate deal. The cover image. You got to love the cop president flapping over that. But we’ll cover the fallout from that. Next up, the geopolitical problem of the United States. A German Russo Japanese connection. This is a follow up to George McMillan, the third, which Stu interviewed on the one and only Energy News Beat podcast. So we’ll be doing a little bit of a deep dive in there. And then finally, I mean, you got to love this headline. Chevron CEO Cautiously Optimistic on Venezuelan Guyana Border Dispute Downplays Military Conflict Risk. So studio oil will determine if he believes that or not, but he’ll then kick it over to me. I’ll quickly cover what’s happening in the oil and gas finance markets. We saw oil tumble about 3% today. Not good API. Crude oil inventories drop. So it’s good to see there. And then we’ll let you get out of here and start your week. As always, guys, the news and analysis you are about to hear before we dive in is brought to you by the world’s greatest website. www.energynewsbeat.com the best place for all of your energy news to in the team do a tremendous job of keeping it up to speed with everything you need to know to be the tip of the spear when it comes to the energy business, you can check us out again online. You can subscribe to us, Apple Podcasts, Spotify or wherever you get your podcasts at Energy News beat on YouTube. You can hit the description below in the podcast or the YouTube check out all the time Stamps and links to the articles. You can email the show [email protected] and you can check out dashboard.energynewsbeat.com our data news combo product at work. We’re really working hard to push in Q1 2024, so no better time to start on your Q1 goals for next year than now. With that, those two, I’m out of breath. Where do you want to begin? [00:02:44][117.1]

Stuart Turley: [00:02:45] All right, dude. Hey, let’s go over to the house. House passes Bill Barring imports of Russian uranium for nuclear power. Michael, we talk about this. This thread today is pretty amazing, but this is first order, second order. And this is going to have a third order of magnitude of a decision. Okay. We import as the U.S. 20% of our uranium from Russia. Mm hmm. Wow. That is a lot. You lose now in a critical mineral area. Michael, what happens to the price when you lose 20% of your market skyrockets? Yeah, retro. So the house passed it. The measure passed by voice vote with bipartisan support. I don’t get that. People don’t understand that a good chunk of our power in the United States is done. Needless to say, we need uranium for our ships. [00:03:44][59.0]

Michael Tanner: [00:03:45] Yeah. Now, the part where I agree with the two representatives, you know, Republican Cathy McMorris Rodgers and Democrat Frank Pallone, you know, this is one of their quotes here, specifically from Cathy Rogers. She’s from Washington. One of the most urgent security threats to America right now is are dangers reliance on the Russian supply of nuclear fuels or our nuclear fleet, adding that the war in Ukraine, quote, intensified the issue. Right. [00:04:10][25.3]

Stuart Turley: [00:04:10] In what what good is it going to do to sanction Russian? [00:04:13][2.7]

Michael Tanner: [00:04:15] It’s not going to do anything. It’s not a huge revenue source. The question is, do where else do you source nuclear material from? [00:04:20][5.2]

Stuart Turley: [00:04:20] That’s what I mean. You just have to suck it up, buttercup, and leave it alone because sanctions don’t work. The bullet you handle Russia through other means. The only one that’s going to get hurt on this is a consumer. [00:04:34][13.6]

Michael Tanner: [00:04:35] What’s funny is this last quote, The combination of banning Russian and branding imports of Russian uranium and investing in domestic capacity will provide private industry with both the certainty and an incentives it needs to invest in the nuclear fuel supply chain. That could not be wrong. Banning Russian imports will provide the correct incentives. Yeah, I doubt it. [00:04:52][17.4]

Stuart Turley: [00:04:52] No, I doubt it too, because also you have the legislation through regulatory issues with Biden banning here going okay, which came first, the regulatory chicken or the uranium crossing the pond through Russia. You can’t have both eggs and eat them. At the same time. [00:05:11][19.0]

Michael Tanner: [00:05:12] I had to make that into a T-shirt. You can’t have both eggs and eat them at the same time. All right. What’s next? [00:05:16][4.2]

Stuart Turley: [00:05:17] Let’s go to the greens. Erupt as fossil fuel phaseout is drop in proposed climate deal. I’ll tell you what. I had a podcast today with Paula Glover. She’s the CEO over at the Energy Alliance, and they are an advocate for energy savings. Michael, you and I have been doing our podcast for three years. That was the first time I ever talked about saving energy by not using it. And she is energy agnostic. How that plays into here is the the president of Cop is basically an oil man and it has been loop watching all of the other folks not happy with the fact that we’ve got oil folks hanging out there. We got nuclear folks, the 22 countries that signed on to nuclear, it’s leaving Al Gore in the dust. Now, this one says the draft doesn’t really meet the expectations of this cop in terms of the urgently needed transition to clean sources of energy and the phase out of fossil fuels. The US climate Envoy. John, I had a funny name, but I’m going to leave that alone, Kerry said during a fractious closed door meeting late Monday night, Tuesday, which Politico listen to via an unsanctioned feed. Somebody had their phone in the pocket. How cool is that? Sitting next to lurch in somebodies get your pocket open member one idea tweeted the other day. Yeah that little. [00:06:48][91.0]

Michael Tanner: [00:06:48] Extra Heinz 57 on his sandwich charm at lunch. It’s absolutely unbelievable. [00:06:52][3.8]

Stuart Turley: [00:06:54] So and then just saying this is bull crap. [00:06:58][3.9]

Michael Tanner: [00:06:58] Yeah, you see that? Yeah, we’ll. Well, we’ll spare the podcast. [00:07:00][2.2]

Stuart Turley: [00:07:01] When they have because they realize they have to have. [00:07:03][1.7]

Michael Tanner: [00:07:03] It. Nothing better when you can get former US vice president or Vice President Al Gore to unload on the proposal. Here is his quotes. Do hop 28 is now on the verge of a complete failure. That’s I mean, that’s music to my ears. There could be nothing better as an outcome for Cop 28 than to hear Al Gore say that. [00:07:20][17.0]

Stuart Turley: [00:07:21] If Al Gore says that, it means it’s good. Yay. [00:07:24][3.4]

Michael Tanner: [00:07:27] He’s like the anti he’s the Kramer, It’s the anti Kramer. Just do the opposite. [00:07:31][4.1]

Stuart Turley: [00:07:32] The anti Kramer. Oh, absolutely. Let’s talk George. Make Billy’s out. George McNeil. Let’s go to George. I’ll tell you what. This one has been going off around the world. The article is the geopolitical problem of the U.S. a German Russo Japanese connection. He’s talking about some connections in our podcast that George was on. I go listen to that. For some folks, it’s a one hour, 50 minute podcast. And I tell you what, George is a academia, energy geopolitical guru. And what we’re talking about here is energy. You may have a country that you think is your ally. If you can’t support their low cost energy, they are not your ally. We may be losing Japan to Russia in order to get these pipelines done, and the U.S. is not going to allow that to happen. Ah, this is a problem. The reason why Germany is more important that Japan is that Germany world consists of Switzerland, Switzerland, Liechtenstein, Austria, which shares a border with Germany on the Danube River. If the German oil and gas pipeline network is connected to Russia by any pipeline, then it could not only supply all the German world, but the Danube River and Slavic world as well. You see why the Nord Stream was blown up? [00:08:59][87.6]

Michael Tanner: [00:08:59] Yeah. I mean, you this series that you’re rolling out and are and will be rolling out with George Macmillan is is absolutely incredible. I think you highlight some well I thought it was the Ukrainians deals. [00:09:09][9.8]

Stuart Turley: [00:09:10] Yeah and on a sail a sailboat they went out on a three hour cruise to blow up the pipeline and only got three out of the four. So no. And that was such a deep, deep water event. A sailboat ain’t going to get the men there and back. So what are they, kamikaze pipeline bombers? I’m not buying it. So anyway, the background is let’s go to the next one. I see your hand going up. Okay. But anyway, everybody read that letter, you know. Okay. You know, I just got the hook guys for a podcast last year. Michael has a poker table. He leans back and he goes, Whoa, the arm goes up. And so when the arm goes up, I know that this is like my mom in church. She leans back and hits me in the back of the head. Michael would pop out. It’s the look. So I got the look. Folks, We’re going over to Chevron CEO cautiously optimistic on Venezuelan guy and. These border dispute downplays military conflicts. Thank goodness. Now, here’s the thing. I was on the energy transition on Monday talking to Armando. David Blackmon and Tami. That’s a heck of a panel. And you get some Scooby like me on there. It’s pretty much an honor. But here’s the problem. Chevron is the only oil major to have operations in Venezuela. The company recently agreed to buy Hess Corp for 53 billion, which would give it a 30% stake in the Guyana offshore oil development. Michael, as an investor, when you’re playing with your phone, would you sit back and take a look at when you calculate out, is that deal actually going to go a good thing now that this is going on or is it wasted money? Well, that’s a 53 bit dollar retro. Yeah. [00:11:05][114.7]

Michael Tanner: [00:11:06] Here’s the thing. I think clearly Chevron did some due diligence on this. And if they didn’t, shame on them. And they deserve to lose that investment because you should have you know, it’s not hard to hire a couple consultants to map out the geopolitical risk of, you know, purchasing this asset. What did they do? They have boots on the ground. They have that. I would be shocked if they did it necessarily take this into account. I think this is having talked with a few people closer to the situation. I actually have a friend of mine who’s very close who is from Venezuela, and he said this is nothing more. And then I’m quoting him, I’ll leave him anonymous. But the word I got from him is this is nothing more than show from Venezuela. They’ll never actually invade. This is more so that Maduro can come back to his people during a an election and say, well, the reason why we don’t have any electricity is because the Americans cut us out of Guyana, which. Sure. Maybe there’s some territorial dispute there, but that’s not going to change how they will, in my opinion, outside of a military conflict, nothing’s going to change hands. And again, as Mike Wirth, CEO of Chevron, said, that’s unlikely. So I’m with him. But hopefully they did their due diligence on this. [00:12:10][63.8]

Stuart Turley: [00:12:10] I think there’s a little more to this story than your friend is thinking. Right. And you have Venezuela who used to have a gigantic oilfield equipment and everything else. They have destroyed it. And so instead of taking $1 million, the way that he had has kept control the dictator there, he pays his generals extremely well. Million bucks here, million bucks there. The generals then turn around and pay the colonels. Colonels go around there and then the sergeants go out in the street, beat the snot out of the Venezuelans to keep everybody in line. That is how it’s been done. The money has been coming from the Venezuelan oil and they have not been putting CapEx back in. They don’t have the talent. They don’t have the offshore hands. They’ve got rid of everybody. And so this is a problem. They’re just skimming any money that they can do. And that in Guyana, Shell has gotten into Guyana and they’ve got it. You’ve got the old Diamondback out there, you’ve got has Exxon’s there on Anadarko. Exxon’s there. I mean everybody is sitting over in Guyana drilling. This is a big deal. I want to I think. [00:13:29][79.0]

Michael Tanner: [00:13:29] It’s one of the last few unexplored or hot new offshore. [00:13:32][3.2]

Stuart Turley: [00:13:33] Target. Yeah, absolutely. And I think it’s going to be a bigger problem. And it’s because Putin has been to his team, he’s been talking to the Maduro, and there is a bigger statement going on there, and it’s between Bhutan and China. [00:13:50][16.7]

Michael Tanner: [00:13:50] Interesting. As always, you keep that if you got anything else for us. [00:13:53][3.1]

Stuart Turley: [00:13:54] No. I just want to do my Biden imitation. I want to lean into the mic and go. Now. [00:13:58][4.4]

Michael Tanner: [00:13:59] On that scary note, guys will kick it over and cover finance. We saw the S&P 500 up about a half a percentage point. Nasdaq up about 8/10 of a percentage point yield. Ten year yields only up about a 10th of a percentage point. 4.2 on that yield, dollar index drops about a quarter of a percentage point. Crude oil drops about 3.2 percentage points currently sitting as we record this about 530 here on the 1268. 71. Absolutely. Kind of a cratering, really off. You know, a combination of demand feels like it’s softening on the demand side and people are beginning to forecast oversupply. Specifically on the oil side, we also saw natural gas tumbled to our month long low at $2 and 22/10. So this oversupply that we are in is not going to be good. We also saw the consumer price index drop today for November. That that came in higher than expected, which kind of bolsters that view that the Fed is going to continue to raise interest rates into the next year and not cut as maybe what has been expected. The EIA finally came out today, QE2, and lowered their 2024 Brant price forecast. To give you an idea. They’ve lowered it by a whole ten. They said it’s now going to average $83 in 2024 versus last month, where they said it was going to average $93 for the year. Taking a playbook out of out of us a little bit and slashing their price currently. As we talk, Brant was down. Brent’s currently trading 7419. The other interesting thing that happened is we saw the API drop their crude oil inventory estimates. They actually foresee a 2.2 million barrel drop here on the 13th. But again, you know, we keep talking about this number. I don’t know how much it’s impacted. Still work. The fundamentals right now or more specifically on what future supply and demand is going to look like versus what the current supply demand balances are right now. You know, it’s it’s not good when you see soft demand in an oversupply that leads to catering prices. [00:15:51][111.3]

Stuart Turley: [00:15:51] Yeah, but the old pricing norms are not there. And then there was another article that just came out a few minutes ago that said we don’t know when big demand is going to hit. [00:16:02][11.3]

Michael Tanner: [00:16:04] We don’t. So we do. We do. We do. You know, the oil markets deal with the realities that are happening on the ground. So, no, I agree with you. Oil is not going anywhere. But we have entered this interesting soft spot. I think the real question and this is something that we’re going to record a deal spotlight on Crown Quest and Oxy. We’re going to do that later this week. Try to get it out next week for you guys. It’s going to be more of kind of an overview. I don’t think I will deep dive it a little bit, but one of the questions I think we need to grapple with, Stu, is, okay, you have all of these dribble locations. Oil is 69 bucks. That strip price don’t look doesn’t look that good. That’s you know, if you were in yoga would be called downward facing dog. So the real question is what exactly, you know, do the budget plans change for any of these companies? I know budgets are really set, but is it really you know. [00:16:48][43.9]

Stuart Turley: [00:16:48] You don’t know. Yeah, Strip price may be rolling down to the 50s. I mean it’s. [00:16:52][3.8]

Michael Tanner: [00:16:52] The prices in the 56 is when you’re talking about later on getting into you know 34W down to 62, I guess. So what of the matter is to me interesting to see how how how some of these budgets hold up broadly to 2024. What am I missing still? What else should people be scared of? [00:17:07][14.3]

Stuart Turley: [00:17:07] Oh, buckle up. You never know when the tornado, manmade disaster or the grid may blow up according to the f e r c. Buckle up and be care. Be ready to take care of your family. [00:17:20][12.6]

Michael Tanner: [00:17:20] Buckle up, buckaroos. So. All right, guys, with that, we’re going to let you get out of here, get back to work. Thanks for checking us out here on this gorgeous Wednesday. For Stu Turley, I’m Michael Tanner and the rest of the energy news beat team. We’ll see you tomorrow, folks. [00:17:20][0.0][1001.3]

The post Daily Energy Standup Episode #269 – Geopolitical Energy Chess: Russian Uranium, Fossil Fuel Fumbles, and Venezuelan Border Dilemma appeared first on Energy News Beat.