Daily Energy Standup Episode #222 – Switzerland Bans Electric Cars, AI Power Demand Rises, LNG Prices Soften, Biden’s Grid Plan Challenged and OPEC Warns of Underinvestment

OPEC Secretary-General Haitham Al-Ghais warned that energy prices could spike due to underinvestment. At least $12 trillion needs to be invested in the industry through 2045, he told CNN. “By underinvesting, we are actually endangering […]

Highlights of the Podcast

00:00 – Intro
03:18 – Switzerland plans to ban electric cars from the roads in order. Game consoles turned off during power shortages in a bid to reduce energy consumption.
05:20 – We’ll all pay the price of soaring EV insurance.
06:41 – Artificial intelligence, power consumption about to skyrocket, and no one is prepared.
09:28 – LNG prices to soften by end of decade -TotalEnergies CEO
11:15 – A new study zaps Biden’s plan to transform the electrical grid.
14:21 – At least 12 trillion in oil industry investments are needed to prevent a spike in energy prices. OPEC chief says.
15:49 – Market Updates
17:17 – 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 into another edition of the Daily Energy News Beat Standup here on this gorgeous Wednesday, October 4th, 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 we doing today? [00:00:38][23.2]

Stuart Turley: [00:00:38] It is a beautiful day in the neighborhood. We’re having a blast. [00:00:41][2.7]

Michael Tanner: [00:00:42] It’s it’s a great day. And we have an excellent menu lined up. First up, straight out of Switzerland. Switzerland plans to ban electric cars on the roads and orders game consoles to be turned off during power orders in a bid to reduce energy consumption. The only thing that’s left is to start burning shoes, but hopefully we don’t get there yet. But interesting plans out of Switzerland. Stu will cover all. Next up, love a good play on words I owe artificial intelligence power about to skyrocket and nobody is prepared. Very interesting how this loops in with the energy crisis so very excited to cover a little I on this one. Next up, LNG prices do soften by the end of the decade. That’s according to Totalenergies CEO. So interesting. Not sure if I necessarily agree with that one, but still dive into what’s coming out of the total energy CEO’s mouth. And next up, a new study zaps Biden’s energy plan to transform the electrical grid. Next up. And finally, at least 12 trillion in the oil industry will be needed in terms of investments to prevent a spike in energy prices. That’s according to the OPEC chief. Stu will then kick it over to me. I’ll cover what happened in the overall markets. And oil and gas and overall markets got pounded today. Stew oil did see a little bit of reserves. It’s now gas flirting with $3. And then we’ll cover what the API is projecting on the EIA crude oil storage numbers to come into all of that And a bag of chips is coming up, guys. But first, as always, the news and analysis you are about to hear are brought to you by that world’s greatest website, EnergyNewsBeat.com. The best place for all your energy news. Stu does a great job of curating that website, making sure it stays up to speed with everything you need to know about the US and international energy industry. I call these guys people who read Energy News Beat or what I like to call Tip of the Spear people. They’re on the front lines of knowledge, they’re in the front lines of analysis and they’re doing the work. That’s the tip of the spear. People love that phrase. The best way to subscribe to the show and support the show is to subscribe to us on YouTube at Energy News Beat that subscribe button like one of our videos comment. You can also listen to the show via Apple Podcasts, Spotify, or wherever you listen to your podcast, you can email the show [email protected]. Look at the description below. You can also get a hold of the show that way. See all the links to the articles we are about to cover and the individual timestamps. I’m going to breath those too. Where do you want to begin? [00:03:05][142.8]

Stuart Turley: [00:03:05] I mean, this is a whopper of a show, dude. Okay, There’s a whole theme between the how we normally bring the stories together in an artful way that this one is just way too fun. Okay. Switzerland plans to ban electric cars from the roads in order. Game consoles turned off during power shortages in a bid to reduce energy consumption. Holy smokes, Batman. Okay, this is just an amazing piece of information here. Switzerland is really trying to get ahead of this and that goes into some of the other articles. Crisis restrictions could see all sports stadiums and leisure businesses closed in emergency situation Electric vehicles will be banned from all but essential trips to. [00:04:04][59.0]

Michael Tanner: [00:04:04] Find an essential trip, though what’s considered an essential trip. [00:04:08][3.4]

Stuart Turley: [00:04:08] Hospital. You know. [00:04:09][1.1]

Michael Tanner: [00:04:10] What? If what if I’m out of garlic for my pasta? Does that count? [00:04:14][4.6]

Stuart Turley: [00:04:15] If you’re trying to stay away from a vampire, I guess it does. But that was. [00:04:19][3.5]

Michael Tanner: [00:04:19] Exactly, Exactly. So I love this. What essential trips, what classifies as a central trip? What’s interesting is what forced them to draw up these emergency plans was the fact that they are hit by blackouts right now in which are currently causing open shops to close 2 hours early per day. [00:04:36][17.4]

Stuart Turley: [00:04:37] They get 60%, Michael, of their energy from hydro electric power station, such as dams across rivers or generators placed between lakes. Oh, had a great description that was boy, I guess they need a few more. [00:04:51][13.9]

Michael Tanner: [00:04:51] We love that. I mean, we absolutely love the fact that there is already their energy from hydro. It’s just making sure you have enough of that. It’s really hard to ramp up hydro. That’s one of the downsides to it, is it’s really a set. You know, it’s a it’s kind of a set amount. [00:05:05][14.0]

Stuart Turley: [00:05:05] Right. And hey, I got a follow along article with this one and. And that is over here on this screen. But the E you try this one on, there’s a couple developments with eaves. This one is will pay all the price of storing the insurance. The consumers are going to get it in the drive through with this one in the UK. The Guardian published an article which says driving an electric car should be a win win, saving money and the planet. So David was shocked when the insurance on his Tesla model Y came up for renewal and Aviva refused to cover him again while other brands turned him away. David did secure a new deal, but the cost rocketed from £1,200 to more than £5,000. Wow. [00:05:59][53.7]

Michael Tanner: [00:06:01] Yeah. Don’t of of. It’s going to be interesting. The insurance game surrounding all these EVs. [00:06:06][4.9]

Stuart Turley: [00:06:06] And insurance goes off of numbers of replacement. How many are being blowed up as Larry the cable guy would say and there was another bang that came out two days ago from the carriers. They’re refusing to allow car carriers being transported on the oceans by car carriers because they’ve been blowed up there, too. So anyway, okay, let’s get. [00:06:31][24.1]

Michael Tanner: [00:06:31] This all a mess. Let’s talk about AI. [00:06:33][1.7]

Stuart Turley: [00:06:34] AI, AI oh, boy. This is a do but do but do. [00:06:38][4.0]

Michael Tanner: [00:06:39] Doo dancing over. [00:06:40][1.1]

Stuart Turley: [00:06:40] Here. Oh, yeah. Artificial intelligence, power consumption about to skyrocket, and no one is prepared. I got to admit, this is kind of an inner interesting kind of a point. Michael, what is a AI helping you with? [00:06:55][15.3]

Michael Tanner: [00:06:56] A.I. In my opinion, in my day to day job, is it quite helping outside of the chat GTP GitHub copilot plug in, which to be honest, is actually a huge help. So I’m going to reverse the start of my since it’s actually helping me out a lot. Copilot for code writing is absolutely insane. How is it helping the world at large? We’ll see. [00:07:19][22.4]

Stuart Turley: [00:07:19] Okay. All of the energy, the convergence of factors, the way that Susan to explains it is a convergence of factors, including the availability of massive amounts of data, the rise of machine learning algorithms and the emergence of edge computing. That’s the key. And edge computing is the ability for everything to be plugged into the Iot. And I always hate the idea in ways we. [00:07:47][28.1]

Michael Tanner: [00:07:48] All seeing. [00:07:48][0.4]

Stuart Turley: [00:07:48] I the all seeing AI. But the the problem that we’re seeing here is everything’s got to be connected and nobody is really going after cutting the the power down. You know, how do you how do you the NIMBYs don’t want the wind farms in their backyard, but who’s going to actually cut out power? Of course I want to talk. I got ten screens. Ring. [00:08:13][24.9]

Michael Tanner: [00:08:14] Well, it’s Switzerland. Switzerland seems like the ones that’s cutting down. I mean, it’s they’re just preparing for what is probably inevitable fact of a shortfall of electrical generation. [00:08:23][9.4]

Stuart Turley: [00:08:24] Oh, absolutely. Anyway, so I think it’s going to be pretty bad. I do know a little bit about server farms. Michael in servers is a little bit it is a bit is a big range. But I’ll tell you what, they absolutely suck the power down. I was working on one with the DOD and I guarantee you that thing we had to measure out an entire section for an $8 million server. A good chunk, another million was air conditioning. [00:08:54][30.5]

Michael Tanner: [00:08:57] Wow. Yeah. That’s the whole thing about these data farms is you got to you got to slow them down, you know, Where are all the chips coming from? I mean, there’s a lot of alchemy from a power consumption standpoint and from an energy demand standpoint. Air is going to be a large driver of it, specifically with a lot of that high powered computing. Let’s move on to LNG, though. What’s total energy CEO say? [00:09:18][21.0]

Stuart Turley: [00:09:18] Okay, I’ll tell you what, this is going to be kind of interesting and it it is global prices of liquefied natural gas. Michael. They call that LNG are expected to soften by the end of the decade. As CEO is said in at Cutter on Tuesday, he says it’s better for everyone to have more supply in the market to stabilize the price than having a tense market like today. Probably the end of the decade we will see a softening of LNG prices. [00:09:50][31.4]

Michael Tanner: [00:09:51] But that’s probably after a drastic rise in the overall price of LNG due to the fact that demand is kicking up. But he is right. There’s a lot of new LNG supply coming to the market. The problem is a lot of that’s contracted up. So to say prices are softening is is a well, how much excess spare capacity is going to be available at the end of the decade? It’s not all wrapped up in long term contracts as we’ve aptly cover on this show. [00:10:14][23.5]

Stuart Turley: [00:10:15] Well, I think that you’re going to see that the prices are going to remain high. And it’s hard to put a finger on it because we are seeing a resurgence in everybody needing energy. And in the U.S., this other story that we’re going to cover about the new study Zaps. Biden’s grid updates. This is related to that story because we need all types of energy and we’re bringing coal and natural gas plants down before we can actually get them replaced. So I think there’s going to be a long term play for LNG. [00:10:51][37.0]

Michael Tanner: [00:10:52] And countries like Qatar, Saudi Arabia, as we covered yesterday, they all are keenly, keenly aware of this and are positioning themselves much like the Chinese did ten years ago with the critical medical space. They are positioning themselves to be the leaders of LNG. You you already tease it. Let’s talk about this study that just quote unquote, zapped Biden’s plan. [00:11:14][21.3]

Stuart Turley: [00:11:14] Oh, you bet. Hey, a new study zaps Biden’s plan to transform the electrical grid. You know, I do a pretty good Biden imitation. I mean, excuse me. Putin imitation. I can do a pretty good Biden imitation, too, but so can my wall. [00:11:28][14.3]

Michael Tanner: [00:11:29] So sleeping. That was my Biden impression. Take a quick. [00:11:33][3.4]

Stuart Turley: [00:11:33] Nap. There you go. Okay. They believe simply they can implement laws and regulations and executive orders and provide hundreds of billions in subsidies. And while green energy transformation will proceed on schedule with no supply chain disruptions, blackouts, escalating cancer, economic and environmental consequences. [00:11:56][22.4]

Michael Tanner: [00:11:59] Well, what’s this study say? [00:12:00][0.9]

Stuart Turley: [00:12:00] It says absolutely no way. It says there are no there is no data actually supporting concerns about more frequent, intense hurricanes or tornadoes. The U.S. Electric utility industry’s Electric Power Research Institute concludes that the industry simply cannot reach net zero in generating electricity. So-called clean energy sources give the electrification not sufficient by themselves to reach net zero. [00:12:34][33.7]

Michael Tanner: [00:12:35] Now, if you don’t trust the electrical industry’s own lobbying firm, which rightfully so, you know, they’re paid to say electricity is going to be scarce. Listen to what Mark Christy said, who writes the energy commissioner for FERC, which is the Federal Energy Regulatory Commission. He’s recently told quangos and this is a quote, The problem is not the addition of wind and solar. The problem is a subtraction of coal, gas and other dispatchable resources that we need during this transition. The grid has been powered. The grid has to be powered, being fed into every second of every minute of every hour of every day to keep the lights on, which is a, in my opinion, highlights the entire problem that we’ve been dealing with here is that we need more dispatchable things to make sure that the lights are on of every second of every minute of every hour of every day. [00:13:19][44.0]

Stuart Turley: [00:13:20] And the article goes on a little bit earlier in there, Michael did actually say and then all of the coal and natural gas plants were always ready. They were near the population. And like in Texas, they had to spend the $3 billion to bring the the grid from west Texas to East Texas. They didn’t want to have everybody moved from Dallas to Midland. You know, nobody wants to do that. [00:13:45][25.6]

Michael Tanner: [00:13:46] Who wants to do that? All right. Let’s talk about what OPEC’s got to say. [00:13:50][4.3]

Stuart Turley: [00:13:51] Okay, Michael, yesterday I even said, okay, this is the first time I’ve been wrong in three years that you and I have been doing podcast together. [00:13:59][8.8]

Michael Tanner: [00:14:00] I said you’ve been wrong this week. [00:14:01][1.3]

Stuart Turley: [00:14:02] Oh, snap. [00:14:02][0.7]

Michael Tanner: [00:14:04] Bottle. [00:14:04][0.0]

Stuart Turley: [00:14:06] I said, 4 trillion in oil invest in industry investments are needed just to meet decline curves in Biden’s inflation just hit that was as of yesterday. Now this article I found this morning was like at least 12 trillion in oil industry investments are needed to prevent a spike in energy prices. OPEC chief says I’ll organize. OPEC secretary general warned that energy prices could spike due to underinvestment by underinvesting. We actually endangering energy security. [00:14:46][40.4]

Michael Tanner: [00:14:47] I think this is the first time I’ve heard somebody equate the under-investment to damaging energy security. I would say to you, obviously, Stu, you’ve said this somebody on the global stage has finally come out and said what I think has been obvious to this podcast, the underinvestment in the oil and gas business is going to lead to insanely high energy prices, and it’s going to lead to drastically, drastically lower energy security for. Country, supposedly like the United States, who rely so heavily on it. [00:15:14][26.6]

Stuart Turley: [00:15:14] You know what’s funny, Michael, is when you and I were starting the show three years ago, we were sitting here kind of going, what’s a few billion between friends? Now we say, What’s a few trillion between friends? And I sit there and look at decline curves around the corner and go, all of a sudden, you know, I’ve been very comfortable with throwing around $4 trillion to drill up to now. Got up, but Biden struck again. [00:15:38][23.7]

Michael Tanner: [00:15:42] All right. What else you got that had said for today? [00:15:44][1.9]

Stuart Turley: [00:15:44] I had way too much fun. Thanks for letting me play in the sandbox. [00:15:47][2.5]

Michael Tanner: [00:15:47] Absolutely. Well, we’ll cover the finance markets right now, guys. Overall, S&P down 1.3 percentage point. NASDAQ tumbles 1.8 percentage. Really off the back of a few separate things. Obviously, we have we just have the overall market sentiment right now. You know, a stronger dollar comes out. We’ve got darkening global economic signals really leading to a drop in those in stocks today. You know, when we look at oil and gas prices specifically were actually up today, considering the fact we saw a quote unquote, stronger dollar WTI contract settles WTI excuse me, settled at 89 at 23, currently trading 89, a 53 as we record this about 553 here on the third. Again, mainly due to the fact that what we see is a little bit of a tighter supply picture. We were also helped stew by the fact that the U.S. API weekly crude oil stock estimate came out and they think there’s going to be a 4.2 million barrel draw, which actually beat estimates of about basically a 10th or are flat draw. So going to be interesting. That’s really helped. Bouie Prices are going to be interesting to see what the EIA drop. As you’re listening to this on Wednesday, you’ll hear that number about 930 Central Time. Other than that kind of quiet on the on the oil and gas front news and unless you want to break down Apache reducing methane emissions by converting 2000 nomadic devices to lower emitting technologies, we should probably have a quick moment of silence for them. All right, that’s enough. Good job. What else do. What should people be scared about? [00:17:18][90.9]

Stuart Turley: [00:17:19] Well, we have a new speaker of the House as of this morning. [00:17:21][2.4]

Michael Tanner: [00:17:22] So is that official? [00:17:23][1.5]

Stuart Turley: [00:17:24] Yeah, He’s. [00:17:25][0.3]

Michael Tanner: [00:17:25] Gone. It’s you. You finally got the gig, and. [00:17:28][2.9]

Stuart Turley: [00:17:28] Yeah, they’re calling me up. And Trump, they want. You know, it’s between me and Trump right now. But I’ll tell you what. Old Matt Gates is not going to get invited to the McCarthy Christmas party this year. [00:17:39][11.4]

Michael Tanner: [00:17:42] No, I don’t think they’ll be exchanging I exchanging Christmas cards this year. [00:17:46][4.0]

Stuart Turley: [00:17:46] No, but I am interviewing Andy today, which is this is going to be actually out on the fourth. And I’ll be interviewing him and I’m going to turn that episode around real quick. So yeah. [00:17:59][12.4]

Michael Tanner: [00:17:59] Absolutely. So I’d stoop Well, if you don’t got anything, we’ll let everybody get out of here, get back to work. As always, appreciate you checking us out on the World’s greatest podcast. For Stuart Turley, I’m Michael Tanner. We’ll see you tomorrow, folks. [00:17:59][0.0][1020.5]