Daily Energy Standup Episode #238 – California’s Self-Driving Car Safety Concerns, Clean Energy Stock Woes, and More

Investors in Brazilian state-controlled oil producer Petroleo Brasileiro SA just got another reminder that an industry-leading dividend bonanza is fading. The Rio de Janeiro-based company, known as Petrobras, said on Monday that it proposed changes […]

Stuart Turley: [00:00:15] Hello, everybody, and welcome to Thursday, the ten October 26 The Energy News Beat Daily Standup My name’s Stu Turley, President, CEO, the Sandstone Group. Michael still out on assignment. He is working the midnight oil. So I’ll be covering some fun stories for you here. Let’s take us we’re going to stop at my favorite third world country, California. California hits a pause on GM cruise self-driving cars among safety concerns. And one is pretty interesting. Here’s another one coming around the corner, why the shine has come off clean energy stocks. This one really falls into the investment and people are really struggling with not getting returns. And then we have oil prices fall amid flurry of weak European economic data. There’s a lot to this story. We’ll cover it here in a sec. Petrobras plans on dividend policy change. And I’ll tell you, Brazil is an interesting place. Women are on there and he is just one cool cat. And then the last story coming around the corner is value gap between European U.S. oil and majors stubbornly wide amidst Chevron megadeals. We talk about this a little bit yesterday. I just wanted to hit on this because this is also falling into other investments. So with that, I like to thank all of our listeners and all of our feedback we’re getting. We’re doing phenomenal. Thank you so much for your kind words, your support. Tell your friends, tell your dogs, give your dogs a hug and follow us and give us reviews. Only five star reviews though, and subscribe like I’m not a YouTuber, so you know, I’m not going to hit Smash that button like Michael would. [00:02:25][129.8]

Stuart Turley: [00:02:25] So in the first story coming around the corner, California hits a pause on GM cruise, a self-driving car due to safety concerns. A little while ago we put out a meme and it was all of these cars, self-driving cars decided to on their own. They were delivery cars and they all swarmed around one house and they think it was some somebody hacking into it. I’m not sure that I want a self-driving car right now. So let’s see here the United States state of California and some of us call on a third world country sometimes is suspended testing of cruise self-driving cars that are made by GM, the DMV. California’s DMV said it suspended the deployment of the self-driving cars latest regulatory agency to concern over their day to day, their data and their safety. Let’s see here. It would be a major setback that it would be pausing operations in San Francisco. So when you sit back and take a look, we have to have energy security. We have to have against cyber attacks. You have to be able to trust it. I know there’s a lot of folks that could benefit from a self-driving TV. I’m all for it. I think it’s fabulous. And I do appreciate them stepping in. Even though we joke about California, I am happy that they are taking a look at the safety records of this. But it’s just another concern being brought up on the leaves right now. [00:04:06][101.0]

Stuart Turley: [00:04:07] This article kind of ties everything together. Why the shine has come off of clean energy stocks. Boy, Michael and I have been talking about this for quite a while. Clean energy stocks have fallen out of favor with pressures by rising interest rates outweighing supportive government policies. I’ll tell you what you take a look at. Let’s go through some of these numbers. First solar is a 2.91 decrease. Plug Power is a 1.27 decrease. It has plunged 32% this year. That is significant. Enphase energy has shed 64% in 2023. Enphase, if I remember correctly, is a solar chip manufacturing company and that surprises me. One of its competitors, Solar Edge Technologies, has sunk more than 70%. So I think one of the biggest problems in this is the supply chain and the black eye that the entire market is getting from the regulatory issues of putting in renewables because of the length of time Michael and I talked about this, I believe, on Monday, and we said, you know, it’s one thing when you sit back and say a year to ten years to hook to the grid and get it ready to rumble, when you put in a solar farm or wind farm, they’re past their lifecycle by then. So you sit back and kind of go, this is a real problem. And so the clean energy sector broadly falls into two categories companies that make or deploy capital intensive infrastructure, wind turbines or solar panels and those developing new technology. So the R&D factor, I understand, paying higher prices, we got to get there, the different kind of energy out there. The Federal Reserve lifted its key interest rate to a 22 year high. And yesterday I talked that Fed, I don’t think has it in them to even put a control on that. [00:06:23][136.2]

Stuart Turley: [00:06:24] So let’s go ahead and step into oil and gas here for a sec. The European market has absolutely been taking a beating. I mean, it’s been beat like a rented mule because of their energy policies. Their energy is so expensive that businesses have shut down. We’ve talked about this on the podcast before and I believe be Basayev has shut down in Germany a fertilizer plant. You’ve had VW closing some of their plants and moving them to somewhere else where they have lower cost nuclear or natural gas. And so you take a look at that. It’s a business tied to energy. This is from the CNBC folks. And oil prices fell on Tuesday for the third straight session. Brant futures were down 1.7, six or 2% at 88.7. And when I am taking a look at this, it’s 8525 on Wednesday night when I’m recording this for everyone. And so when you take a look at German reading suggests a recession in that country is underway, I think this couple with Jamie Diamond talking about the banks and the interest rates coming around, all of these different articles mesh together without being in the same categories, but yet they all have tied together an energy inflation recession. So U.S. storage reports are due from the API coming out very soon. Storage reports will give us an indication on the short term. But with Saudi Arabia and all of them saying that it’s going to be 110 before they even think about lowering the price or additional additional increase in production. Okay. So along this theme, investing, changing how they do things. [00:08:41][137.0]

Stuart Turley: [00:08:42] Petrobras out of Brazil plans Dividend policy change. Investors in Brazilian state controlled oil producer petroleum Brazil Hélio just got another reminder that an industry leading dividend bonanza is failing. I almost disagree with this one, and the reason for that is, is the fiscal responsibility of Chevron, of ExxonMobil. And we’re all of the discussions about how the great U.S. oil and gas companies, the two mergers that have just happened between Chevron and Hess and Exxon and the $60 Billion won. And when you sit back in the Permian play, you sit back and take a look at the proposed changes. The bylaws could narrow the potential for future extraordinary dividend payments, according to the analyst and traders. Again, we have to remember, this is Brazil and this is not necessarily comparing it to the U.S. market or that. However, being kind of cognizant of whether or not you’re going to get a decent return, it means when you’re doing an investment, make sure that you understand who’s managing that at that company. If. It is good management. Michael and I have always talked about good management, good numbers, good investment. [00:10:16][94.6]

Stuart Turley: [00:10:17] So with that, let’s go to my last story here, and that is value gap between European, a U.S. oil and majors, stubbornly white amidst Exxon, Chevron, megadeals. This is another story that is from a different source from the ones we talked about yesterday. And when you sit back and kind of talk about total and you take E and I and you take Shell, they took a whole different path and they went all in on renewable energy and they got just whacked by having their investors not happy. Their returns were not there. And now they have had to come around full cycle on this. The moves were dwarfed impact by ExxonMobil, Pioneer Resources taking over and then Chevron to Hess. And this is a quote from Alan Good for investors looking to bet on higher oil and gas prices for longer. Exxon and Chevron are better options, said Alan Good, director of equity research at Morningstar. We continue to think the ESG discount for European firms is playing a role. That’s why I wanted to get this article in here that was different than the other article yesterday. My hat’s off to all of our great American oil and gas companies, our privates, our publics, everything else, and shout out to the Oil and Gas Workers Association in all of our great energy workers, whether you’re on the grid, whether you are in the wind farm business or you’re supporting anything for the grid nuclear, we just really appreciate you providing energy security for the United States so you don’t forget, right, in energy,. [00:12:11][114.1]

Stuart Turley: [00:12:12] Any of your questions? to [email protected]. Michael and I are always answering the questions. If you are a industry thought leader, if you’re a CEO of an energy company, I want to have you on the podcast. We’ve got some fantastic guests coming around the corner and our podcast numbers are going through the roof because of you. Thank you very much. Like subscribe and Michael, I got some great things coming around the corner next week. We are so excited. We got some announcements next week. Hey, have a great one and I’ll talk to you all soon. [00:12:12][0.0][712.7]

– Get in Contact With The Show –