Daily Energy Standup Episode #227 – ENB 227 – Offshore Wind Challenges, Green Energy Myths, and Geopolitical Tensions

After a fruitful 2023 state legislative session, Gov. Gavin Newsom on Oct. 7 signed every major climate and clean energy bill that came to his desk. They included bills that will speed our way to […]

Highlights of the Podcast

00:00 – Intro
03:08 – Major headwinds threaten offshore wind targets.
08:07 – The Myth of Affordable Green Energy is Over.
09:29 – Oil industry and OPEC will attend. COP 28 Climate Summary.
11:27 – The Peak Oil Demand Debate Is Sure To Dominate COP 28
12:35 – Governor Newsom signs a clean slate of clean energy bills into law
16:03 – Markets Update
18:37 – 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 11th, 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, Energy News Beat, Stuart Turley, my man, how are we doing today? [00:00:39][24.3]

Stuart Turley: [00:00:39] It’s a beautiful day in the neighborhood here. How about you? [00:00:42][2.9]

Michael Tanner: [00:00:43] Yeah, no, it’s it’s good. Again, as I mentioned yesterday, things have cooled down a little bit in Texas, so I’m not dying, which is nice for like normally have six fans on me as we record the show are only down to one, which is nice nonetheless. Guys, great show for you. Lined up. First off, the headlines, major headwinds threaten offshore wind targets. Next up, the myth of affordable green energy is over. Will then kick over and talk a little bit about COP 28. First up on that one, peak oil demand debate is sure to dominate COP 28 and the oil industry and OPEC will attend the COP 28 climate summit. Interesting. The real question is will Stewart Turley attend COP 28 Only listening to this segment, will you find out? And then finally, our favorite state and favorite governor, Governor Gavin Newsom signed a slate of clean energy bills into law. We’ll see what’s going on over in California. Stuart, then toss it over to me. I will quickly cover what happened overall in the finance market, specifically oil and gas prices. We did see $3.40 on natural gas. So things are starting to look a little bit more positive on that side. We’ll also quickly cover what the API predicts the EIA crude oil storage numbers will be and then we will let you get on out of here and get back to work before we do all that. Guys, remember all of the news and analysis you are about to hear is brought to you by that world’s greatest website about energy news beat the best place for all of your energy news. Stu and the team does a great job of curating that site to make sure it stays up to speed with all of your energy needs. You can email the show [email protected]. Go ahead and hit the description below for all timestamps and another way to get in contact with the show, you can listen to us on Apple Podcasts, Spotify, wherever you get your podcasts. The best way to support the show, though, is to go to YouTube, subscribe at Energy News Beat, hit that subscribe button. Comment on an article. Tell tell us what you don’t like about Stu’s opinion, because trust me, we got Stu commenting on our own videos. People. So please go comment on YouTube. We need all the help we can get. We appreciate everybody who is giving us feedback. I mean, we got you commenting, Stu. We’ve got to got to find some other sources of content here. So but we appreciate everybody’s giving us great feedback. Yeah, it’s really it, guys. I’m out of breath. Stu, where do you want to begin? [00:03:05][142.2]

Stuart Turley: [00:03:05] Hey, let’s start with some major headwinds. Major headwinds threaten offshore wind targets we’ve been seeing. Michael, you and I been talking about some of the real problems going on, but I think this is really hopping into some big numbers here. And the last five years, the top four listed turbine producers outside China have lost $7 billion in over $5 billion alone. That’s a lot of billions, even by my standard. [00:03:36][31.0]

Michael Tanner: [00:03:37] What did they say last year? The chief executive of that same turbine maker, Vestas, says that the company lost 8% on every turbine it sold. [00:03:46][8.8]

Stuart Turley: [00:03:47] And that’s with tax incentives. So. Oh, really? Do what? [00:03:52][5.0]

Michael Tanner: [00:03:52] Oh, really? That’s with taxes and. [00:03:54][2.0]

Stuart Turley: [00:03:55] That’s. [00:03:55][0.0]

Michael Tanner: [00:03:55] War subsidy. [00:03:55][0.4]

Stuart Turley: [00:03:56] That’s post deck. Yes, subsidies. So here’s where it gets in here and says warranty issues drive turbine losses. These things were not made to be indestructible. They’re not made. The last 30 years. You and I have talked about my crayon numbers from Oklahoma State University. I mean, my Korean broke four or five times and it is pathetic. They are fiscally unreliable from day one. So, okay, Siemens is now finding some serious problems. Here’s a quote from Dr. Wei Zheng. He’s a senior risk consultant at Natural Resources Construction. This is an offshore outfit. We are quite used to wind turbines with eight megawatts, nine megawatts, but we’re seeing newer models reach 14 megawatts or 18 megawatts a project in Australia, even planning on using 20 megawatts. Inevitably this size creates a corresponding increase in risk and more Wales Michael, that they can kill. Although wind turbines are engineered to pick them up, engineered to work within certain can. There’s a lack of real world data on both performance and long term impacts on these larger turbines and their associated infrastructure. Okay. I’m going to go down to Rob West. I want to read this quote. Physics inherently punishes larger turbines. Larger blades will inherently deflect more, which means they need stiffer spar abs, shear webs and more expensive materials. They will also weigh more, which pushes more stress and strain through the blade, root and nozzle during each rotation. Rob West Thunder said Energy Michael, if our producer will roll this in wind turbine growth power output maximum rotor diameter. This almost reminds me of for our podcast listener. It starts in 1995 with a little tiny little windmill, and then it goes to 2023 and it’s like huge. This almost reminds me of the evolution chart. You see the monkey in the left hand side and he’s walking along and it keeps growing bigger. This is showing size. You hear this a lot, Michael. I know you do. Size matters, right? I know you hear this. [00:06:34][157.6]

Michael Tanner: [00:06:34] I don’t hear it as much as I would like to. [00:06:36][1.7]

Stuart Turley: [00:06:37] I’m not hearing it about your height. [00:06:38][1.8]

Michael Tanner: [00:06:39] Mm hmm. Yes. Okay. Definitely not hearing it as much as I would like. I do find it interesting, though, Stu. Darren, Physics, math and physics is against ESG. I think that’s what I learned out of this. Physics is anti climate. [00:06:54][14.4]

Stuart Turley: [00:06:55] Oh, it is. And it it is unbelievable. Frazier McCain McLane, CEO of G Cube Insurance. This is the other key going in here. The push to rapidly develop more powerful machines is piling pressure on manufacturers. The supply chain and insurance market Scaling up is creating a growth financial risk that pose a fundamental threat to the sector. He’s dead on. Right. And Michael, a few days ago we talked about on this very podcast, if you can remember, and I hang on, this is a moment of silence for your memory. Okay. Thank you. And that is that we talked about the TV, the Emmys, Michael, the insurance companies, when we talked in the UK, was it one guy went from £1,000 of insurance cost to £5,000. Insurance is going to break the ESG moat. I guarantee you it’s the insurance guys and they know the number. [00:08:00][64.9]

Michael Tanner: [00:08:00] Yeah, we’ll charge you for it. Trust me. All right. What’s next? [00:08:03][2.6]

Stuart Turley: [00:08:04] Let’s go to that excellent title of the second article is The Myth of Affordable Green Energy is Over. Michael, this cuts back to the ESG having the problem and it also gets back in to the whole thing. Dude, it’s starting to well up. What do you hear every time when somebody says wind power. [00:08:23][19.4]

Michael Tanner: [00:08:24] I hear a whale going up and rolling up on the rolling up on the. [00:08:30][6.1]

Stuart Turley: [00:08:30] Shore. You’re killing me. Mcfly’s costs are falling and that wind power is cheap. And we just covered that in the previous article here. So we don’t need they they overlap in the article a bit on this. There were two nuggets down here. Long term power contracts for the electricity produced offshore wind farms have been canceled. So this is key. You take a look at our last article. It had insurance. You take a look at the other one. They fiscally are not very sound from day one. You take a look at this next one and then our buddies over there at Duke Energy has dropped offshore wind all together from its long term. So this is like all of a sudden everything is if you’re the wind is about to pile up and it’s going up wind. I mean, they’re picking up wind right now. [00:09:22][52.3]

Michael Tanner: [00:09:23] Oh, my favorite. We’ve got to talk oil demand, though. [00:09:26][2.8]

Stuart Turley: [00:09:26] COP 28 Oh, I got to love these. This is kind of fun. Oil industry and OPEC will attend. COP 28 Climate Summit. That’s kind of like the way my brother and I did in college. We went to a couple of sorority parties that were just absolutely hilarious. You know, we walked in and hobo clothes just for fun. The oil industry will be at comp. We take and we’ll be there. Says our gang is at an energy event in the United Arab Emirates, UAE. The OPEC’s secretary general will also be attending. I hope all voices will be at the table, said our gang is. I think it’s going to be pretty funny, dude. I’m glad to see him. [00:10:09][43.4]

Michael Tanner: [00:10:09] They’re well, because they’re finally realizing that, hey, we might need these. As part of the energy transition because the myth of the affordable green energy, as we just covered in the last article, is just that it’s unfortunately a myth. So the. [00:10:24][14.8]

Stuart Turley: [00:10:24] Last paragraph, Michael, once you read the last paragraph, take a look at. [00:10:28][3.6]

Michael Tanner: [00:10:28] Yeah, I mean, it says the world needs 14 trillion in cumulative investments in the oil sector by 2045 to ensure market stability and avoid long term economic chaos, OPEC said in the report, which basically means to replenish the decline curves because remember, oil’s down. You know, we don’t make the same as we made yesterday. Everything does decline a little bit. They also said they raised its long term demand forecast to 116 million barrels per day in 2045, up 6 million barrels a day based on their 2022 outlook. We covered that on yesterday’s show. I gave my best Chris Berman impression talking about simple moving people, talking about moving the peak oil, line it back. [00:11:11][42.7]

Stuart Turley: [00:11:11] Back, back, back, back, back again. Okay. So the guys the guys are going to have some serious fun at COP 28 because we just talked about whether or not, you know, the oil guys are going to be there. Now, they’re also the other topic they’re going to have on there is peak oil demand is going to be there. So not only that all these heads are going to explode. They’re going to explode because they’re going in. They’re going to need oil in order to be there. [00:11:38][26.4]

Michael Tanner: [00:11:38] So the real question is this do so the IEA believes that global oil demand is going to peak this decade, while as we just covered in the last article, OPEC believes it’ll be 160 million barrels in 2045. Who’s right? [00:11:51][13.2]

Stuart Turley: [00:11:52] OPEC, I trust their cray on it is a heck of a lot more sharp than the other chatter heads. [00:11:59][6.4]

Michael Tanner: [00:11:59] Now I’m completely with you in that would wager on. [00:12:03][4.0]

Stuart Turley: [00:12:04] Green energy dude the Saudis you know what I think of the Saudis. I don’t like their social B I guarantee you they are Saudi version. They’re going green, but they’re paying for it with oil and gas. [00:12:17][12.9]

Michael Tanner: [00:12:17] Yeah, Saudis got a terrible Twitter. So we got to up that game. [00:12:20][2.6]

Stuart Turley: [00:12:21] We mean, they got an ugly Twitter. [00:12:22][1.7]

Michael Tanner: [00:12:23] You just said. You just said you said social. So I was just just making a joke. Stew. [00:12:27][4.4]

Stuart Turley: [00:12:28] Oh, sorry. I’m a little stupid. Okay. Let’s go to Gavin Newsom. Speaking of third world country, we’re going to talk about California now. Governor Newsom signs a clean slate of clean energy bills into law. Michael teeing this, do you remember when we talked about some of the one of our best stories that went out on Energy News Beacon? It got taken off. California puts in the legislation one paragraph in a bill, and then they go back in and then they add in the verbiage later on. It is criminal the way they do legislation. Let’s talk about some of these. Governor Newsom cements California’s climate leadership as it goes off the edge of the cliff like a lemming. Laura Demon Environmental California state director. California, quote unquote, has set ambitious climate goals, but getting there requires innovative thinking, willingness to take risks and action and jumpstart clean energy in the face of staunch opposition from entrenched energy interests. Let me go through some of these list now. All these bills are about one paragraph. You know what they can do? They can go back in and they can go, Well, this is what we meant. Okay. AB 1167 the Orphan Well Prevention Act to make polluters pay. What do you think that means? [00:14:01][93.1]

Michael Tanner: [00:14:02] What I think it means is that. [00:14:04][2.6]

Stuart Turley: [00:14:05] That guess what they’re going after third, They’re okay. You’re ready for that, You know. You know what I’m talking about. Third. [00:14:11][5.8]

Michael Tanner: [00:14:11] Second order effects. [00:14:12][0.7]

Stuart Turley: [00:14:13] Exactly right. Okay, let’s go to speed up the path. By granting the state power to buy clean energy. [00:14:20][6.9]

Michael Tanner: [00:14:21] That seems like a blank subsidy check for the government. [00:14:24][3.1]

Stuart Turley: [00:14:25] Ding boy. You’re reading between the line there. Let’s drop down to SB 49, Senator Becker, to open up highway rights to slower storage transmission. And okay, that is land grab. Let’s come down here. [00:14:45][20.3]

Michael Tanner: [00:14:46] Oh, I didn’t even put in to that one. Okay, you. [00:14:50][4.3]

Stuart Turley: [00:14:50] Can put land grab in that thing. [00:14:52][1.6]

Michael Tanner: [00:14:52] Oh SB 605 tap into offshore wave energy. Oh yeah. That just will be why Now we’re going to say, Hey, that probably really kills the whales. [00:15:03][10.3]

Stuart Turley: [00:15:03] Oh, it’ll do more than that. It’ll kill surfers, even the surfers. [00:15:08][4.6]

Michael Tanner: [00:15:09] Even better. [00:15:09][0.3]

Stuart Turley: [00:15:10] You know. Do you remember Mr. Hand out of our. Spicoli. Mr. Spicoli. I loved him. I was the only I ever liked him in Mr. Hand. You? Oh, yeah. I ordered pizza. Okay, let’s go to AB 126 to re-authorize over 170 million per year in clean transportation funding. Tell me that isn’t going into some politicians pocket. [00:15:37][27.0]

Michael Tanner: [00:15:38] Probably Ukraine. [00:15:39][0.3]

Stuart Turley: [00:15:40] Oh, geez. All right, I’m done. I’m think that. [00:15:43][3.4]

Michael Tanner: [00:15:43] Went in there for. [00:15:44][0.5]

Stuart Turley: [00:15:44] You. Oh, yeah. I had about 900 things in there. I’m exhausted. It’s been crazy. But you can see all of these are intertwined in the Twine is now pointing to green energy heads exploding around the world. [00:16:00][15.9]

Michael Tanner: [00:16:01] Yeah. Now. Awesome. Whoa, whoa, whoa. Kick it over now and cover quickly. So oil and gas finally add stuff. We did see markets rise about a half a percentage point. SPI up about a half a percentage point. NASDAQ trades up about a half a percentage point. Dollar index trades down about a quarter of a percentage point, which did lead to a stabilization of oil prices. 8588 as we record this about 6:00 here on the ten. Natural gas, as I mentioned, the open up about three quarters of a percentage point, all the way to $3.40. So that fall storage fall contract rollover into some cooler weather, we start seeing natural gas prices pop a little bit. Nice to see that. Nothing really on the crude oil side to point out. I think obviously what’s what’s happening right now between Israel and Palestine and the war there after the terrorist attacks. There remains to be seen sort of the long term effects that will have. Obviously, we do know that this will cause that that that that fundamental supply demand imbalance did did to lean one way or the other. Again, if we do start seeing a a more sanctions, actually taking the sanctions seriously from Iran and we start seeing that where, you know, two, 3 million barrels, you know, we can finally start talking with the dark Fleet again because, you know, we may have to be shutting down the dark fleet if if if we end up here. So it’ll be interesting to see, still will be covering and making sure everything stays up to speed there. Not much else on the news fronts do we did see API crude oil inventories dropped though. Remember those go ahead and those those drop today, which is an estimate of what the EIA is going to draw from in terms of the crude oil storage numbers. They actually forecast a 4.2 million barrel draw relative to the forecast of about a 1 million barrel draw. Remember last week the IEA came out with a slight surprise, 1.5 million barrel build. So it’ll be interesting to see what the EIA goes ahead and drops tomorrow. STU But you know hey things you know, everyone’s still waiting hand over fist to see what that Exxon pioneer pioneer deal comes out. Nothing’s dropped so far so we’re we’re kind of waiting on breath there otherwise. You know I did see severe toss. They announced $1 billion worth of new senior notes at eight and a half, eight and six quarters of a percentage point to finance their deal from venture energy. So nothing like dipping into the debt market to go pick up some production. We’ll see if it pays off. [00:18:36][155.5]

Stuart Turley: [00:18:36] Oh, yeah. Get a. [00:18:37][0.7]

Michael Tanner: [00:18:37] Loan. You got anything else do? [00:18:38][1.1]

Stuart Turley: [00:18:39] Yeah, a couple of things. There’s another pipeline that was blown up Sunday, I think, and it is between Estonia and Finland. And I’m trying to find out where Biden was. He was, I think, at a barbecue. So he may have a an alibi. [00:18:55][16.1]

Michael Tanner: [00:18:56] The same guys who got a Nord Stream. [00:18:57][1.5]

Stuart Turley: [00:18:58] Yeah, the same same guys on a yacht, you know, they were pointing that out. The other one is I just want to reiterate that if Iran mines the Strait of Hormuz, we will see prices go up. If Israel bombs the export capability of Iran to eliminate the future, $70 billion that they got this year selling to China and India and some California will leave that alone. But if they do that either way, you got one on one side and you got one on the other side is the only reason I’m mentioning that is that it could get ugly. [00:19:41][42.7]

Michael Tanner: [00:19:41] So it could and it probably will get ugly. So we’ll we’ll keep a sharp eye for that. But with that, guys, we’ll let you get out of here, Get back to work. Appreciate you checking us out here on this Wednesday. For Stuart Turley, I’m Michael Tanner. We’ll see you tomorrow, folks. [00:19:41][0.0][1134.5]

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