How Will the Trump Tariff War Impact Oil and Gas? [[{“value”:”

How Will the Trump Tariff War Impact Oil and Gas?

You won’t want to miss this episode of the Energy Realities Podcast, where the panel discusses the Trump Tariff wars and their potential impact on energy, oil, and gas. A global reshaping of the financial trade system is underway. What impact will the tariffs have on oil and gas production or even gasoline prices?

Tammy Nemeth, Irina Slav, David Blackmon, and Stu Turley all pile into the podcast to discuss this HUGE issue. Live from Bulgaria, the United States, Canada, or the UK, you will be able to ask the panel questions live. Streamed on X, YouTube, and LinkedIn at 8:00 on March 17th.

Highlights of the Podcast

00:11 – Introduction

02:00 – Topic Introduction: How Will the Trump Tariff War Impact Oil and Gas?

04:51 – Media Sensationalism on Tariffs

06:49 – Understanding the Purpose of Tariffs

10:07 – Tariffs and the Great Depression Parallels

11:27 – Media Misunderstanding of Trump’s Trade Strategy

14:14 – Hypocrisy of EU Trade Policies

19:25 – Challenges of Competing with China

23:36 – Canada’s Role in the Tariff Dispute

29:14 – Unpredictability of Trump’s Tariffs

31:05 – Final Consensus on Tariffs’ Impact on Oil & Gas

35:00 – Smith proves Trudeau wrong with major Japan LNG deal

36:58 – Opinion: Canada must stop delaying resource projects

40:04 – BRUTAL: OPEC Slams IEA Head Faith Birol

42:16 – E&E News Comes Over to the Dark Side at Long Last

45:14 – Saudi Aramco and big oil is on ‘wrong side of history’, says John Kerry

47:59 – British steel industry calls for help with electricity prices

49:55- Wall Street Braces for Oil in $60s Range on Tariff, OPEC+ Risks

51:43 – Canada has identifies five offshore wind areas in Nova Scotia

53:50 – Russia-Ukraine War & Geopolitical Energy Impacts

55:05 – EU War Machine & Defense Industry Expansion

59:30 – Closing Remarks

Irina Slav

International Author writing about energy, mining, and geopolitical issues. Bulgaria

David Blackmon

Principal at DB Energy Advisors, energy author, and podcast host.Principal at DB Energy Advisors, energy author, and podcast host.

Tammy Nemeth

Energy Consulting Specialist

Stuart Turley

President, and CEO, Sandstone Group, Podcast Host

How Will the Trump Tariff War Impact Oil and Gas?

David Blackmon [00:00:11] Well, good morning, everyone. And welcome to the only podcast in existence today that actually begins on time, the energy reality podcast. Now it seems to be endorsed by E&E News of all things, and I will talk about that later in the show. With me today, I’m David Blackmon, and with me today is Dr. Tammy Nemeth from, you’re in the UK today, but you also have a residence in Canada. How are you today?

Tammy Nemeth [00:00:41] I’m doing good. Yeah, everything’s fine.

David Blackmon [00:00:47] I’m glad to hear it. You never know in this world. And with us also today is Irina Slav in Bulgaria. How are you?

Irina Slav [00:00:55] I’m good, David, thank you. I’m a bit worried because we’re expecting an Arctic blast later in the week.

David Blackmon [00:01:00] an arctic blast is it is it a is it an a what do they call them now a official winter storm

Irina Slav [00:01:09] Well, no, it won’t be a storm, but just a very sudden drop in temperature, which is what they’re saying. They have light before, so…

David Blackmon [00:01:17] So they might have to turn the weather maps from red to something more green or blue.

Tammy Nemeth [00:01:22] Orange! It’ll be orange!

David Blackmon [00:01:24] All right, got to keep the alarmism alive. And also with us today in the great state of, well, no, he’s in Oklahoma, is Stuart Turley, the CEO of the Sandstone Group. Stu, how you doing?

Stuart Turley [00:01:40] Oh, it’s a beautiful day in the neighborhood and I’m heading to Texas next week. So you gotta love that Um,.

David Blackmon [00:01:47] Oh what’s going on in texas?

Stuart Turley [00:01:49] Oh, i’m trying to get an appointment. I’ve got uh, Executives at ibm i’m interviewing and then executives over some nuclear folks News and road shows.

David Blackmon [00:02:00] Nuclear. Yes. Good topic. Okay. Today’s topic for our podcast is how will the Trump tariff war impact oil and gas? Uh, Donald Trump is, uh, is setting the world on fire with, uh, invoking tariffs and rescinding them and making deals and invoking more tariffs and rescinding them and making more deals and everything changes from week to week. and what I think. decided, made the decision for us to go to this topic was a piece at Reuters, which made it seem like, anyway, that the Trump’s tariffs on steel and aluminum, which he invoked last week and might rescind today before this show is over, is going to raise costs for U.S. energy firms. and writers want you to believe it’s going to be a huge. cost increase for US energy firms. And I’m not sure it is, and neither is anyone else here, but I want to start the discussion with Tammy Nemeth who raised this for our topic this week.

Tammy Nemeth [00:03:11] I thought this was you who raised this issue.

Irina Slav [00:03:14] It was me. I wrote a story about it.

David Blackmon [00:03:18] Oh, it was Irina.

Tammy Nemeth [00:03:20] Okay, let’s start with Irina.

David Blackmon [00:03:23] Yes, let’s start with Irina.

Irina Slav [00:03:24] Well, I can only talk about this voice or so, which was really funny because they have this, you know, click-baity headline basically suggesting that US oil and gas drillers will be in very, very big trouble because of these tariffs, which will raise their costs. And indeed, they will by less than 10% or something. And it’s not nothing, but it’s not impossible to cope with. at all. So they admit the truth in the story, but the headline was aimed to scare. So yes, tariffs by their very definition make certain goods and commodities and services more expensive, but just how much more expensive and what do you get in return, which is what Trump wants to get in return, you know, better competitiveness for. U.S.-made products. And it’s getting really funny, just like last time he was in the in the White House when they started trading tariffs and now I hear they’re imposing tariffs on liquor and champagne and things like that.

David Blackmon [00:04:51] Oh sure, yeah. Yeah, it’s going to cost a lot more to buy Canadian club whiskey here in the United States for a while.

Irina Slav [00:04:56] Is that really dramatic? Is it a big problem?

David Blackmon [00:05:02] I don’t know. I don’t drink whiskey, so it doesn’t affect me.

Irina Slav [00:05:09] It’s not really essential though, it’s not essential.

David Blackmon [00:05:12] No, it’s not an essential good, hopefully. Well, for some people it is, but not up to…

Irina Slav [00:05:18] But yeah, oil and gas, I think they’ll survive, especially if oil prices rise.

David Blackmon [00:05:27] Yeah, to just let everyone know in the Reuters story, they interview CEO of Patterson UTI, drilling firm, Andrew Hendricks. Here’s what he says, about 14% of what we buy, it comes from, and he’s talking about steel aluminum, comes from countries that will be impacted by tariffs. If you layer on the tariffs, it could affect us in the low single digits in terms of our costs going up from what we do. So it’s not a major increase in price, but of course, everyone gets upset when prices for anything rise after the last four years of pretty significant inflation and not just in the United States, but all across the world, thanks to the world’s insane response to the COVID-19 pandemic, you know, and all the debt spending that all these governments ended up printing so much money and printing too much money always causes inflation. So people are worried about it. I wonder what you think about all this, Tammy, just in terms of whether it’s good or bad. I mean, I don’t know. I think the upset is kind of disturbing for everyone, just the unpredictability of what Trump’s gonna do tomorrow. But I wonder what your view is.

Tammy Nemeth [00:06:49] Tariffs are an interesting tool to use from the toolbox because it’s something in some ways that Europe has been using for a long time in order to protect domestic industries and Ukraine knows about that when they tried to sell their grain into the EU market and everyone was flipping out that oh my gosh it’s going to depress prices and this is bad and we don’t want that kind of competition. So… Maybe it’s useful to think about what is the point of protectionism. Protectionism is to protect your domestic industries so that in certain areas you will ensure that those industries will stay alive in your country otherwise they’ll get outcompeted by jurisdictions that have lower costs, lower income input costs whether that’s through wages or taxes, or lower regulatory burden, or whatever. Or maybe sometimes they’re just better. You know, they have economies of scale that allow them to produce in a cheaper way. I think back to like the 50s and 60s where there was a stockpiling program in the United States because there was always a concern that maybe the Cold War would turn to a hot war and you wanted to make sure that you were able to produce critical things. Like you wanted to make sure you had control over your food supply, that you had control over your steel, that you had control over your aluminum because these are all key things that you need to build military equipment or to defend yourself. And there was a time when they continued that. And I would say after 9-11, there was a renewed interest in this kind of attitude where you got to make sure that things are, key industries are still able to survive in your jurisdiction. And then it disappeared. And we saw this offshoring of like everything, you could argue. So now I understand why you would want to protect. your industries and like with Canada, it’s really difficult because being so close to such a large market like the United States to try and have domestic industries to compete with the American production, it’s really hard. And which is one of the reasons why we had the auto pact in the 1960s to try to rationalize the auto production. It’s why we negotiated the free trade agreement in 1988. and then moved on to NAFTA when Mexico was pulled in. But then that didn’t work out so well either because then production ended up shifting to Mexico or other places. And with respect to oil and gas, the problem with oil and gas now is that it’s a world market for prices. So when you increase the tariffs and because oil and gas, you’re a price taker, you’re not setting the price, you’re taking whatever the world price is. You have to do something with those increased costs. So are you absorbing them? You kind of have to because how else are you going to, you can’t really pass that on to consumers in the way and like factories can.

David Blackmon [00:10:07] No, that’s right. I think that’s all correct. And you know, one thing that worries me about it, of course, is the history of tariffs and trade wars globally is you look back on the Great Depression and how it all came about. The United States was in the process of recovering from the first, you know, the stock market crash at 29. And then I believe it was in 1931 or 32. Congress decided to enact the Smoot-Hawley Tariff Act and imposed pretty big tariffs on basically every imported good into the United States. And that set off a global trade war. And suddenly, the recovery that had just begun ended, and we went into an even deeper recession that turned into a decade-long depression. And so I get nervous every time Trump or anyone else starts talking about terrorists. Stu, isn’t part of the problem with the media and how it gets reported in the United States and everywhere else, is the simple fact that no one in the media has bothered to take the time to understand what Trump’s thought process is behind all this. Don’t you agree with that?

Stuart Turley [00:11:27] I couldn’t agree more, David, I think that the world is not ready for a Trump sizing or right sizing of how to do business with trade with the United States. And when you take a look at I thought Groke was fairly Groke 3.0 is doing a great job with helping me try to look up stuff and I have to fact check Grok and go through things. But President Trump is also taking a look at several key issues. President Trump has opened up the Commerce Division to say and take a look at any choke point, land or sea choke point. And if you are hindering US trade, your ships will no longer be allowed in the United States ports. Holy Smokes Batman, this is beyond. tariffs. This is now, if you, in fact, China is now being upset that they are being forced to sell the two ports in the Panama Canal and they’re now saying, well, we don’t know that we want to. And Trump says, I don’t care. So the, the cost of oil, of tariffs Thanks for watching! on oil to consumers is going to be 15 to 25 cents at the gasoline pump. That is not going to be significant. When you sit back and take a look at long-term, it’s going to be a right sizing and Tammy is a spot on on these things. And I put out a article about, I thought it was a great left wing article from the EU. But yet they prove Trump’s tariffs are actually good. So, you know, you, you, you gotta sit there and, and, and kind of laugh at this entire right sizing. Europe in the EU, you don’t see Dodge trucks. You don’t see Ford trucks. You don’t see all of our products in the EU because of trade barriers. This is not about tariffs. This is about trade barriers.

David Blackmon [00:13:51] But you do see Teslas, right? Tesla.

Irina Slav [00:13:54] Yes, lots of Teslas.

David Blackmon [00:13:56] Right, they got an exemption from those importers to establish a factory there. And I wonder if that’s going to last. Now the EU hates Elon Musk so much because he runs X. You’ve got to wonder if that’s going to start impacting Tesla sales over there.

Irina Slav [00:14:14] Well, as we know, the EU is really hypocritical about its policies because Ursula von der Leyen said that tariffs are like taxes, they’re bad for consumers, but she is the head of the commission that was perfectly fine with imposing import tariffs on Chinese goods to protect local manufacturers. So if you’re doing it, it’s fine, but if someone’s doing exactly the same thing to you, it’s not fine.

Tammy Nemeth [00:14:45] Exactly. But I would add with the price at the pump, I think it depends on where you are in America because, for example, the Midwest refiners are completely reliant on Canadian oil. And if there’s an export tariff that’s put on Canadian oil, then that will have an effect. Refiners can pass those costs on to consumers. But with respect to the steel and aluminum and whatnot, I mean. That’s different. But you’re right. I mean, the EU is is so hypocritical on everything.

Irina Slav [00:15:23] Openly so.

Tammy Nemeth [00:15:25] Openly so.

David Blackmon [00:15:27] Regarding the Canadian oil thing. I just an interesting anecdote last Monday. I did a Segment on Ntd news, which is uh Which is a uh a television news Operation affiliated with epic times.

Stuart Turley [00:15:44] MTV, David?

David Blackmon [00:15:44] NTD.

Stuart Turley [00:15:51] No way, David!

David Blackmon [00:15:55] Well, two o’clock, I go on and do this thing, right? And we talk through the issue, and I say, don’t worry about it. It’s not going to last long, blah, blah, blah. And one minute after I signed off from that interview, the announcement comes down that Trump has rescinded the tariffs, and it’s all over, right? That was the big kerfuffle with Doug Ford in Ontario. And so that, but that just exemplifies. He had put the tariff on on Friday, it was Monday and it’s gone. And, and that’s the thing about all this is people write these stories at Reuters or wherever else, as if these tariffs are going to last forever. And Trump’s just trying to negotiate a deal on something else. And he’s using them as leverage to get something else from the governments he’s, you know, supposedly invoking these tariffs on. That’s usually what’s happening, but I wonder what y’all’s view is about the terrorists with China, because I think it’s a little different with China. Um, and I think those terrorists that Trump is, has already invoked and will continue to involve are, are going to be more long-term, I think, because he views China, unlike Canada and Mexico and Europe as a real existential threat. to the United States. And so I think that’s a kind of a set aside from all of this. But these tariff wars that we’re having with Canada and Mexico are all about immigration. And with the EU, it’s just trying to more equalize the tariff situation. But I do think with Canada, it’s gonna become long-term. And I just wonder what you guys think about that. Nobody yeah, I just put it.

Tammy Nemeth [00:17:49] We’re just jumping

Irina Slav [00:17:51] No, I think that’s true. He has said so himself that he, well, not in so many words, but China is seen as dangerous to the US. But these tariffs will probably save longer. But I wonder if this wouldn’t just motivate the Chinese to bring their costs further down and remain competitive. because what we’ve seen in the past couple of decades, they’ve been working hard to get to where they are now. You know, with big import markets needing to introduce tariffs to protect their own higher cost manufacturers from cheap and good quality Chinese goods because 20 years ago, you know, made in China was a joke. No more. I mean, I just saw a story, I just saw the headline in Woodmark that Chinese wind turbine producers have come to the top place globally for the first time ever.

David Blackmon [00:19:04] And electric vehicle. I mean, the EVs they’re putting out are really nice.

Irina Slav [00:19:07] Oh yeah, obviously. So I think tariffs, I can understand tariffs being used to protect your industry as Tammy explained in detail, but you risk falling behind on actual innovation, on actual which is what you’re… has done because it’s stupid.

Tammy Nemeth [00:19:25] Well, instead of competing, they put up trade barriers, right? But the thing is, okay, so can you compete with a communist nation that has different rules with respect to how employees work, how they’re paid?

Irina Slav [00:19:44] Far on the road to totally.

Tammy Nemeth [00:19:46] I know I know I know I know.

Irina Slav [00:19:46] Sorry, I interrupted you.

Tammy Nemeth [00:19:53] No, that’s okay, I agree. The thing is, so instead of competing, it ends up becoming this, I don’t know, you put up all these trade barriers. But to go back to what David was saying, one of the disturbing things is that Trump, what he’s doing and with respect to Canada is that there’s a what’s been lost in the narrative. is what it’s for. And everybody is getting all fired up about, oh, well, we’re going to take American items off the shelf and da da da. It’s like, OK, but what are you actually doing about the border? What are you doing about foreign interference? Because we had a an inquiry that really said nothing. And every it’s this kind of open secret that there’s a great deal of foreign interference, particularly from China, amongst various and potential candidates running for federal parliament. And that’s really disturbing. So it’s kind of like, all of that is lost in the tariff discussion about what is it supposed to do? Is it supposed to shut Canadian factories down and everything just gets made in the US and we’re supposed to just buy from America? I mean, if it’s about the border, if it’s about foreign interference and that affects the whole fentanyl thing and all that, then they need to be saying that over and over again, but it’s not. All the focus that the air is out of the room, it’s all about the tariffs. And if I could speak to Gail’s comment there, where she mentions that this market is really important and that in Canada to maintain good relations with the US, it should have done the right thing and meet the 2% of GDP for NATO. Mark Carney, the new liberal leader who’s not He said that maybe they’ll reach the 2% by 2030. Today, they’re talking about canceling the Canadian contract for F-35s. We’ve already spent tens of millions of dollars on this contract. Now his first destination today is Paris, where he’s going to be talking to Macron. Macron has been pushing the EU to stop buying American military equipment by French. So what does that mean then for Canada? Is he going over there to say, because the article today was saying that Canada should get rid of the F35 contract and find a different supplier. We’ve already spent so much money. And I said to a friend, well, basically we will reach our 2% of GDP NATO commitment by canceling contracts all the time and we’ll get nothing for it at the end of the day. So it’s like spending money is one thing, but you actually have to get something useful in return. And just want to wrap up with the F-35 comment. This was a contract that they first started in 2010. We’re not expected to see an aircraft until next year. So it’s been 15 years and we’ve got nothing. And they keep changing the contract and changing all this stuff or whatever. And we’ve spent tens of millions, probably hundreds of millions of dollars and got nothing. So it has something to do with how Canada thinks about military spending, how we think about government procurement, and all of that needs to change and Mark Carney’s not really the guy to do it.

David Blackmon [00:23:36] By the way, I had an extreme oversight, a couple of housekeeping items here at the beginning of the show to all of our Irish friends. Happy St. Patrick’s day. I apologize for that oversight and Tammy’s wearing green. I’ve got a military green. There you go.

Tammy Nemeth [00:23:56] It’s green outside. Yeah,.

Irina Slav [00:23:58] Very green.

David Blackmon [00:24:05] thing through my end feed, uh, for whatever reason, the evil sensors at LinkedIn have clamped down on my account this morning. I don’t know why. So you would really have to go actively look for it. Uh, hopefully people can find it, uh, at other social media outlets. I don’t know what’s going on with LinkedIn today.

Stuart Turley [00:24:28] Just kidding. But let me add this to the stage here. President Trump is trying to take a look at balancing the federal deficit, the Treasury, the Fed, which is a privately held crime organization, I mean, company, and then you have the trade deficit by countries. And when you take a look at China. There’s a trade deficit in 2024 of China of $295.4 billion. The EU is $235 billion. Mexico is $171.8 billion. You take a look at this, there’s Germany at 84. All of this is also tied to what President Trump is saying is drill baby drill. but it’s not drill baby drill anymore. It’s drill baby win fiscally responsible, excuse me. And when you take a look at how much LNG, who wants to buy something from the United States? Who wants to buy an auto? Who wants to buy something? Everybody loves European technology. We just mentioned the great new technology from China, but the offsetting value of you look at that list, of how much of a trade deficit President Trump is trying to get back right-sized, his ace in the hole is U.S. energy. What is an export for U.S. LNG capacity? The average estimate load of 160 3.39 BCF from the U.S. in March, we averaged 30,000. loads of LNG per month. And it’s about 28 million per load. It’s 20 million. You start going through the numbers that I’m writing on all of this kind of stuff. It ain’t that much. You got a long way to go in order to say I’m going to drill baby drill and have LNG. But we’re seeing that with with Japan, Japan has already stood up and said, I’ll have a cup of that LNG, you know, and they’re so they’re looking at offsetting their trade balance by contracts. And I think this is what President Trump’s art of the deal is all about.

Tammy Nemeth [00:26:59] Well, you know, for oil and natural gas exports from Canada to the U.S., in 2023, it was 100 billion. So if you take, we have supposedly a 63 billion trade deficit with the, or the United States does with Canada. If you remove the oil and gas, it actually Canada is put into the reverse situation with the United States. So, Canada would actually have a 40. billion trade deficit with the United States. So it’s the oil and natural gas that allows this rationalization of the North American oil and gas market. And without that, there would be less for the United States to be exporting and facilitating changes in the world oil and gas prices. because it’s just more we can’t get it out we can’t get it out um east or west you know maybe a little bit west now once the coastal gas link is online which supposed is supposed to happen this year and the twinning of the trans mountain pipeline has helped um export more oil which California is taking a big chunk of um so which is hilarious given what they did to at the Keystone. And then what I’ll be talking about in one of my news stories is Japan signed an LNG an oil a uranium hydrogen contract with Alberta Nice last week at Ceraweek

David Blackmon [00:28:32] Say it again. I missed part of that. What was the contract?

Tammy Nemeth [00:28:38] They signed some broad agreement for LNG, oil, hydrogen, and there was something else. I can’t remember what the fourth one is. I’ll have to pull up the article.

David Blackmon [00:28:51] Who did, I mean, who was the, who was the contact?

Tammy Nemeth [00:28:52] Japan signed it with Alberta.

David Blackmon [00:28:54] Oh, Japan and Alberta. Okay, okay. I’m sorry, I just missed part of that.

Tammy Nemeth [00:29:00] But given that international trade is supposed to be a federal responsibility, I don’t know if federal officials were part of that arrangement or if Alberta just signed this separately. I don’t know. It was unclear.

David Blackmon [00:29:14] Well, and that was also kind of part of the problem with what Premier Ford was doing last week, trying to implement a tariff at his level of government, which he may or may not have had that authority to do, right?

Tammy Nemeth [00:29:31] Right because there was a Supreme Court case in Canada back in the 70s during the first oil crisis when the province of Saskatchewan tried to put a tariff on oil to recapture what the federal government was taking from them and they wanted to put it on their exports and the Supreme Court ruled they can’t because it violates section 91 of the Canadian constitution but the fact that Nobody talked about it that the federal government didn’t flip out that Doug Ford, Premier Ford of Ontario was basically taking a federal responsibility and pretending he was like Prime Minister or something. If Alberta had done that, I’m sure they’d be flipping out and saying this was a constitutional crisis, but Ontario does it and there’s nary a peak.

David Blackmon [00:30:26] Well, that’s kind of like it is in the United States. You know, it just depends on which party you’re in and how the media covers it. Yeah. Um, we are at eight 30. I think we have kind of had a really nice robust discussion about this issue. And our consensus is if I have it right, yes, there will be a cost impact to energy producers from these aluminum and steel tariffs, but it be much. And whatever they… the impact is for the producers is gonna get passed on to consumers anyway because that’s what happens with tariffs.

Stuart Turley [00:31:05] So I just want to do that. I want to go into a couple things that I’m working on and that is has peak WTI or peak Permian oil coming around the corner. I’m working on that with a few folks and having some interviews coming up. We have that question coming on. Is peak oil even here yet? And that plays into this discussion and I’ll have more information on that.

David Blackmon [00:31:32] That is the longest-running topic on the Permian Basin, right? I mean Mark Pappa, the former CEO of EOG, said in, I think, 2016 that it had peaked in the Permian Basin. So I, you know, it’s probably tripled since then, so we’ll see if this peak is a peak.

Stuart Turley [00:31:51] This is based off of the comments from Scott Sheffield last week and and so all of a sudden, you know, it’s now bringing that that in but what we’re also seeing is OPEC plus is made their cuts. I believe it was 2.2 million bucks or and so there is Tammy’s point that it is a global market is very critical. And I don’t mean to be nice this morning, Tammy. I am so sorry for being nice. Um, but when president Trump last week, uh, polled Chevron out of Venezuela, I want to stand up as an American and say, I want to buy Canadian oil sands before I buy Venezuelan oil. Please president Trump, if you’re listening. Let’s try to figure this bad dog out. Okay, I’m going to shut up. Thank you very much.

Tammy Nemeth [00:32:51] I’ve heard there’s issues with the Saudi oil fields, but that’s kind of been circulating for a long time.

David Blackmon [00:33:00] That goes back to Twilight in the desert.

Stuart Turley [00:33:06] Twilight. Really? With vampires and werewolves?

David Blackmon [00:33:07] Well, remember, oh my God, I’m going to forget the guy’s name, he was a famous oil trader and analyst, 22 years ago wrote Twilight in the Desert and his thesis was, and I’ll think of his name here in the back, I’m sorry, that the Saudi oil fields had peaked at that point, and that was 22 years ago. So peak oil is a tough thing to get right.

Tammy Nemeth [00:33:35] Matthew Simmons.

David Blackmon [00:33:37] Matt Simmons, yes. Oh my God, I can’t believe I couldn’t remember this. Anyway, we were working together on a project back then and had dinner one night and the whole dinner was him explaining to me why he was right about Saudi Arabia and everybody else was wrong and he wrote that book. It was about to come out then. That was in 2003.

Stuart Turley [00:33:56] Was Matt Simmons the guy that said you will have no oil and be happy?

David Blackmon [00:34:01] But he’s a really smart guy. And I’m not trying to demean him at all. What I’m saying is, and you know, the first guy, the first Peacaw guy, or you wouldn’t really- Hubbard? Hubbard, E. King Hubbard. Not E. King Hubbard, but something King Hubbard. You know, he’s a really smart guy too. Brilliant geologist, Shell, and you know, so I’m not demeaning the people who talk about Peacaw from time to time. It’s just that they’re never right about it. And one of these days they’re gonna be right though. So maybe. isolated on the Permian that Stu’s working on. Maybe it has to be. It’s certainly possible. So with that bit of stupidity from me, let’s move on to the articles of the week. Dr. Nemeth.

Tammy Nemeth [00:34:47] I’m first. Okay, so I’ll do the one on the right first and that it’s a headline from true north With uh and juno news which is in a new news organization in canada And the title is smith proves trudeau wrong with major japan lng deal And this is referencing I think two years ago when both japan and germany came to canada begging for lng And trudeau said there’s no business case and so don’t even think about it. We can never build a pipeline and you’re never gonna get it. We want you to say positive things about hydrogen. And so last week at CeraWeek by S&P Global, Daniel Smith, who’s the premier of Alberta, signed a memorandum of understanding with Japan. And it’s for oil, natural gas, hydrogen, and ammonia. So apparently, they had an agreement a few years ago. And this is basically a sort of. affirmation, reaffirmation of this agreement. And, you know, Japan is saying, we will buy what natural gas comes out of Coastal Gas Link when it’s operational, and so on. So, clearly there’s a business case for these things. And Japan, of course, like you mentioned before, David, that they’re looking to diversify. I think right now they, you know, they don’t and Russia and there’s so much competition for Qatari natural gas that it makes sense for them to want to diversify and it’s it makes sense for anybody do you want all your your natural gas from one basket you know um so yay that’s that’s something good proves uh Trudeau wrong of course and and we’ll see if Mark Carney doubles down on his climate thing and and puts more regulatory roadblocks for oil and natural gas development he he says he wants to the emissions cap. which basically is a production cap in Canada. So we’ll see. And then the other one, this is a really interesting article. It’s written by the chief of the Dene nation in Northern Saskatchewan, talking about how Canada must stop delaying resource projects. So there’s this massive uranium project that they want to develop in Saskatchewan. Saskatchewan has like the most best uranium in the world. I know a lot of people claim we have the best, we have the best, but it’s like when you mine it, it’s so there’s so much uranium active in the rock that people have to take precautions when they’re mining. It’s that good quality and so the native groups are in support, they’ve done the environmental assessments, they’ve gone through the whole I think they’re up to year seven, eight, nine now. and it’s been waiting for two years to get final approval and apparently nuclear Canada has been dragging its feet and he’s like you know we’ve done everything what is taking so long can we please have this project everybody agrees it will be great once it’s operational then Canada would be supplying a quarter of the world’s uranium really high quality from a a responsible producer with the cooperation and support of the Native people, which in Canada with Indigenous reconciliation is really important. So he’s like, can we just stop with the red tape and get the darn project going? So that was really good to see Indigenous people who want to have good jobs for their communities and to get out of the cycle of poverty. And it’s great to see him call the government out on this. That’s it.

Stuart Turley [00:38:46] and your Substack?.

Tammy Nemeth [00:38:49] So on my sub stack, I’ve had a couple of, I try to publish once a week, which, you know, as David know, he’s, you and Irina are amazing. You put so much stuff out. I’m so impressed. I wish I could do the same. So last week I did Mark Carney’s climate plan where I tried to break down what’s in it, what it means. And one of the elements there is the carbon border adjustment mechanism, which he’ll probably be talking. to Macron and Starmer and Ursula von der Leyen about today and tomorrow. So I think I might do one on what a carbon border adjustment mechanism is and why it’s not a good idea. And so I got Grok to make me a little picture there.

Irina Slav [00:39:34] It’s really good! It’s really good.

David Blackmon [00:39:35] I love Croc, use it a lot.

Tammy Nemeth [00:39:39] So please, yeah, check it out, TheNemethReport.substack.com and like and subscribe and it’ll come straight to your email box. Thanks

Stuart Turley [00:39:50] Oops, sorry, David, let me get back up here. I got a mouse problem this morning.

Tammy Nemeth [00:39:59] Do you want me to send my pad over?

David Blackmon [00:40:04] We’ll go to the second one first. So last week was the CeraWeek conference in Houston, Texas, the annual gathering of the world’s energy leaders in one big room in Houston. And we had the chief of OPEC speak, and then the head of the IEA spoke after him, Fatih Birol, our beloved leader of the International Energy Agency. who famously told us all and assured us in May of 2021 that we should stop all investments in the finding and development of new oil resources because that won’t be needed in the future. And we needed to stop it immediately to meet net zero by 2050. At the Ceraweek Conference, he told the audience that new investments in oil exploration will definitely be needed for the near future. complete turnaround. And of course, he had turned around within three months in 2021. But OPEC took a special notice of Mr. Birol’s comments at CeraWeek and just blasted it and went through the whole history of his ridiculous, stupid projections about all needs and all demand and peak all and all the nonsense, the IEA. has been putting out over the last three to four years since it in the lead up to, and since it changed its mission from being a respected, reliable disseminator of real information and analysis related to the global energy situation and change that into an advocate, a pusher of the energy transition that everybody now knows is completely off the rails and failing. And so Birol’s changing his talking points and OPEC just went off on him. And it was well-deserved and a real dressing down of this guy who is really kind of a clown. And I was glad to see it. Second one is even better. I mean, I think it’s even better than that because here at the Energy Realities podcast, we have been talking about the real reality of this energy transition for more than three years now. and with the constant theme that this energy transition is not possible and that zero is not attainable. It’s going to fail. It’s destiny and it’s because of physics and thermodynamics and a bunch of laws that aren’t just suggestions about energy. So E&E News is energy and environment news service that is affiliated, was bought out by Politico a few years ago. And it’s a very pro-transition operation, but good people, and they generally do a pretty decent job in their reporting. But I just had to laugh because on Friday, they published a report that’s about CeraWeek that says energy transition goals surrender to energy reality at CeraWeek, literally using our talking point in their headline. And that was gratifying and hilarious in a very unintentional way. And I just want to congratulate the editors and writers at E&E News for coming to the position where we’ve been for more than three years now here at the Energy Realities Podcast. It’s good to see you all coming over to the dark side at last.

Irina Slav [00:43:53] Yes, it takes guts to do this in this day and age. Well done,

David Blackmon [00:44:00] Because you know the editors at Politico didn’t want them to do that.

Tammy Nemeth [00:44:04] They’re trying to get money because they they lost all their USAID money. So now they need to get subscribers.

David Blackmon [00:44:11] they have a real problem with funding. So maybe they’re gonna just turn the whole operation into a fact-based operation like the IEA used to.

Tammy Nemeth [00:44:21] Oh my gosh.

Irina Slav [00:44:22] Imagine that.

Tammy Nemeth [00:44:23] Imagine that.

Stuart Turley [00:44:26] Oops, sorry. Speaking of mouse

David Blackmon [00:44:30] There there’s mine Substack, oh, the energy meaning of the day. Yeah, that’s you are the carbon they want to reduce. We all know that’s true. I’m at DavidBlackmon.substack for politics and Blackmon.substack for energy. Energy transition absurdities is the name of my sub stack and welcome readers there. As Tammy says, I’m prolific if nothing else.

Irina Slav [00:45:06] Okay, these are mine. My favorite story this week, probably my favorite story for the month, Saudi Aramco and Big oil is on the wrong side of history says John Kerry. Of course John Kerry says that. Basically his message is the same as the message of those authors of the Wall Street Journal story that the energy transition is unstoppable. So he’s basically saying the same Thanks. citing some mysterious fundamental forces and technologies that he never names because to my mind the most fundamental forces in any industry are supply and demand. But he probably means some other forces and he even claimed that the transition is failing because Trump obviously and big oil is intimidating everyone else into, you know, wanting more oil and gas. And this man just joined an investment company. a transition focused investment company so obviously you can’t trust anything that comes out of his mouth. But really he’s so public and open about it. I know I sound naive but I have a hard time, you know, wrapping my head around their sheer audacity. I mean they’re talking about this openly. He clearly has a vested interest in the transition succeeding, he stands to make money. from even more subsidies, from doing even more of what doesn’t work and he’s blaming the failure of this transition to the usual suspects. It’s big oil. And by the way, did you read the CeraWeeks speech of Amin Nasser from Morocco?

David Blackmon [00:47:00] It was fantastic.

Irina Slav [00:47:01] Yes, truly fantastic. He really put them in their place. I think this is going to change this rhetoric when they really start losing a lot of money because they already are, which is why these stories appear.

David Blackmon [00:47:19] Can I just poll the group though on this? Does it surprise anyone here that the Financial Times decided to amplify Mr. Carey’s message here?

Irina Slav [00:47:32] Yes, I’m shocked.

David Blackmon [00:47:33] I think it’s the most expected thing possible.

Irina Slav [00:47:37] But to do them justice, they do note some energy realities in their story. Yeah, pointing to the actual reasons for the failure of the transition at the moment. But yeah, they have given him a platform. The other story is equally adorable with British steel industry calling for help with electricity prices, as in literally. We need you, the government, to help us covering our costs because energy prices are too high and we cannot compete. This is the literal gist of the story. And what is the UK government doing? It wants to go to war. Yeah, that would help the steel industry, I expect in a way, but it would do nothing about their energy costs. So I don’t think that’s the kind of help they’re looking for. But they’re openly asking for help. And this is really important because, help me, Tammy, steel was one of the industries that the Stammer government focused on in their recent plan or plan for a plan to support local industries, as in essential industries. Can you hear me? I don’t think she can hear me. But I think the steelmaking was part of their industrial plan, you know, the plan to revitalize local industries. And they’re not really doing anything about it.

Stuart Turley [00:49:21] and you have a wonderful Substack.

Irina Slav [00:49:24] Yeah, it’s been fun recently, lots of good topics, and a chance to quote the IT crowd, which is always a bonus. It’s a Irina Slav on Energy. I try to post every day, three times a day, I send the newsletter out to inboxes, and the other two I just publish on Substack because I don’t want to overwhelm anyone.

Stuart Turley [00:49:50] And my stories, I totally messed up today. So I just, here you go. Wall Street braces for oil at $60 range on tariff, OPEC plus risks. This was an interesting article out of Bloomberg this morning. Oil’s retreat has been cheered by President Trump and offers relief for consumers. Citigroup and JP Morgan Chase have been predicting prices that would end the year in mid-low 60s for some time. We expect Brent, this is Goldman saying that we expect Brent to stay above $70 a barrel in coming months, but we no longer see 70 as the price floor. I thought that was very interesting as well too. I’m still more of a perma bull than I am a bear from the standpoint of that goes back to my earlier comment. We haven’t reached peak oil demand yet and we’ve talked about supply and demand and the artificial implications of some of the modifications of the pricing in the industry. I think that we will see. I’m still around the $80 range if we get the war to stop in Ukraine and we get demand coming back around the world. I think those are going to be positive things. President Trump is slated to talk to President Putin on Tuesday. I think that’s a great thing. And when you take a look at who these are just too stupid. They’re going to get bombed off the planet if they’re going to keep doing those kind of things. But Canada, you can’t buy this kind of entertainment. Canada has identified five more. Hello, Tammy, you’re back. We were just talking about Canada and Canada has now fired up off of Nova Scotia, five offshore wind areas in Nova Scotia. So you cannot buy this kind of entertainment. But what I’m seeing around the world is more and more LNG pipelines. Croatia just put in a LNG pipeline to help out the Slavic countries in that area. It was about several million dollars. And when you take a look at the import facilities for LNG, And then the ships that are being built and power LNG powered It’s very impressive to see the bunkering facilities around the world. LNG is not going away anytime soon I see Ellen. He in compressed natural gas is increasing share

David Blackmon [00:52:48] Oh, sure. Yeah. That situation with shipping fuels really interesting because, you know, they forced everyone to adopt a new cleaner diesel five years ago now, I think. And LNG was having a hard time competing with it initially, but now over time, you’re seeing more and more of these ships being built to be run on LNG. And it seems to be becoming more of a fuel of choice in that sector. So that’s really interesting.

Stuart Turley [00:53:19] I’m looking at the numbers every day on that, but I still think that we will see an end of the war and people still don’t like the idea. I have dear friends that are not liking anything I say positive about Putin.

Irina Slav [00:53:41] It’s a dangerous thing to do, you know. It has been put into demonizing the whole country and mostly its president, so, you know, the athlete has paid off.

Stuart Turley [00:53:50] You have to admit, President Putin, by increasing his GDP to 4% last year, countries would kill for 44% GDP growth. President Putin did not really, he had some, the last three times Russia has been invaded has been through Ukraine. That was a very important point. And then when you sit back and take a look at, I will be glad at the end of the war. But one of the funniest articles was Will that was out there was the cost of ignoring geopolitics got a real big up store off my sub stack. And I guarantee you that I think the EU is so far left that I don’t know that NATO or the EU will survive. They may not survive in their current form. In their current form, yeah.

Irina Slav [00:54:52] Well, they really, really need a war because otherwise all of their citizens will realize just how incompetent and destructive their policies have been. That’s what I think of

Tammy Nemeth [00:55:05] Well, not only that, so all those auto manufacturers that were being put out of business because of the high prices and the EVs coming in from China, they’re being retooled for defense production. Yeah. So that kills two birds with one stone. They make the employees happy in Germany and France or whatever. and they get to become a war machine.

David Blackmon [00:55:39] It’s 1940 all over again, right?

Stuart Turley [00:55:43] We have to sit back and wonder whether or not, is it a cat or is it a dog? Is it the left or is it the right? Who’s picking the fights on all these kinds of things? And I always, I got this great man tagged me on this one. So is it a dog? Is it a cat? Is it left? Is it right?

David Blackmon [00:56:27] We’re gonna get in some cats in a minute. Oh, I love that.

Stuart Turley [00:56:46] I am not getting a husband.

Tammy Nemeth [00:56:57] Oh, hey, no flaws. That was good.

Stuart Turley [00:57:06] That was an Adler’s dog. I got to turn this one down because they swear we don’t want to get anybody banned on YouTube. Okay, there we go. So now, is the left lining over the energy policies like a cat smacking that baby? I mean, is that or is it a dog that is when you’re looking at energy policies, smacking the owner in the glass of wine and then going, hey, I now can have a drink of wine. Well, that was the right approach. Yeah, that was You know, you gotta sit back and kind of go, hey guys, I think the world is gonna wake up that David Blackmon has been right for a very long time. Physics matters. What does it mean? Everybody here. Physics matter to the grid. Fiscal responsibility matters to the grid. And I think that the world. And so, and Irena has always been wonderful about her saying, saying that sanctions don’t work as intended and all of the sanctions that have been placed on all of the countries don’t work. The weaponization of the United States, U S dollar to become the biggest bully on the planet does not do the world any good. And I think president Trump is realizing that. I like President Trump’s style in that he is saying, if you want to do business with us, we want you here. Build your materials here. I like what he’s doing. And it is, now it is frustrating to go tariffs are on, tariffs are off, tariffs are on, tariffs are off. That’s him doing the art of the deal. He is still missing important critical geopolitical information for how to do business in the European Union. and that is frustrating to me to be over here kind of watching what’s going on. He needs some different people in there. Just started to say that.

Tammy Nemeth [00:59:27] Okay.

David Blackmon [00:59:30] Okay, with that, we’re gonna wrap this thing up. We’re 59 minutes and 35 seconds into it. We have 25 seconds for any final thoughts anyone wants to offer. Otherwise, we are gonna call it a day.

Stuart Turley [00:59:48] Outstanding job, David. Great job, Tammy.

Tammy Nemeth [00:59:50] Thank you for all the comments everybody and great show guys and we’ll see you next week.

David Blackmon [00:59:55] Sorry about the the problem on LinkedIn. All right everybody have a great week.

Tammy Nemeth [01:00:02] Bye.