AI and Data Center Reveal A Electricity Growth Crisis [[{“value”:”

AI and Data Center Reveal A Electricity Growth Crisis

The AI and Data Center Reveal: Electricity Growth Crisis is an absolute understatement. The energy crisis revealed by data center growth is shedding light on the grid and how new electricity sources are added. You won’t want to miss this discussion from the International Podcast team of Irina Slav, Tammy Nemeth, David Blackmon, and Stu Turley.

Highlights of the Podcast

00:01 – Introduction

02:10 – The UK’s AI Ambition vs. Energy Reality

06:10 – Big Tech’s Energy Wake-Up Call

12:14 – Turbine Delays and Supply Crisis

14:19 – The Rise of Microgrids and Jet Engine Turbines

18:54 – Energy Class Divide?

23:01 – ESG Is Quiet, But Not Gone

26:55 – Natural Gas and Foreign Investment Surge

32:16 – The Future of Coal and Carbon Capture

36:20 – Are Data Centers Just Bigger Clouds?

43:35 – Opinion: Can Alberta survive a net-zero agenda?

46:43 – Lorraine Explains: Carbon Cred will pay you to leave your car at home

48:52 – Can’t Make It Up: Bloomberg Admits Coal Is Integral to Energy Security

51:19 – Company’s Quietly Water Down Climate Claims In Latest Investor Reports

52:35 – Climate Startups Are Pausing Operations, Cutting Staff and Entering Bankruptcy, Trump Policies Bite

55:34 – China’s Energy Mix and Investment Made on the Backs of Western Net Zero Movement

56:45 – The Great Decline of California’s Energy Sector – Can the United States be “Energy Dominant” with California dragging the U.S. down?

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

AI and Data Center Reveal A Electricity Growth Crisis

Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Irina Slav [00:00:13] Hello, everyone, and welcome to another Energy Realities podcast. Today, we’re talking about AI and data centers and energy demand with Tammy Nemeth in the UK. Hi, Tammy, how are you today?

Tammy Nemeth [00:00:30] Hi, I’m doing well. How are you doing?

Irina Slav [00:00:34] Great. Summer is upon us yet again. It’s hot. How’s the weather in the U.K.?

Tammy Nemeth [00:00:43] It is great. We had rain all weekend, which is great, because everything was looking kind of dry, even for England.

Irina Slav [00:00:48] Okay, send some my way please because it’s being really dry here and we have David Blackmon in Texas

David Blackmon [00:00:59] Yee-haw!

Irina Slav [00:01:01] Howdy in Texas.

David Blackmon [00:01:04] Oh, it’s just beautiful. We had major thunderstorms come through here overnight. Kept me awake about half the night, a 60 mile an hour winds. And, uh, today it’s just so beautiful and fresh. It’s really nice.

Irina Slav [00:01:18] Everybody’s getting rain but us, Stu. How are things in Oklahoma?

Stuart Turley [00:01:26] Absolutely wonderful. My backhoe has diverted all the water that David was talking about and the road’s flood at his road is now gone. So a backhoe and ruining your neighbor’s life, a great day.

Irina Slav [00:01:42] As I said before the podcast began, you should really, somebody should adapt this neighborly feud for the screen. But let’s talk about AI and data centers and about energy demand from data centers. And who can supply the energy that these data centers demand? Tammy!

Tammy Nemeth [00:02:08] Oh boy, start with me.

Irina Slav [00:02:10] No, because the Stammer government has these ambitions about turning the UK into a data center hub or something. He’s very big on AI, I understand.

Tammy Nemeth [00:02:26] Yeah, I mean, so this is one of the paradoxes, of course, with the UK energy situation is that at the same time that reliable energy is being shut down or whatever. They shut down the last coal-fired plant last year. And they’re installing as much wind and solar in the UK as they can. And the nuclear production is taking forever. I don’t know when that The one that’s been under construction for like 20 years will be ready. So.

David Blackmon [00:02:58] In 20 years

Tammy Nemeth [00:03:00] Yeah, 20 years. So that’s the dilemma, right, where they want reliable energy, supposedly, but they want it to be so called renewable. And they want to be an AI superpower, whatever, you know, they they throw these terms like superpower around and stuff like that, and they’re going to be a green superpower and all this kind of thing. So it’s a dilemma because they’re trying to recruit the AI data centers and other data centers into the UK. I think every country wants their own center for whatever reason. I see lots of European countries saying come build your thing here and the United States of course has their Stargate Center and so on and Canada’s pushing for it and so. So the energy has to come from And at least the United States is saying, hey, look. If you wanna build your own power generation to go along with your data center, fine, that’s great. Use natural gas, use coal even, if you want. Nuclear is fine, but that takes forever. So you have like, for example, I’m sure David or Stu is gonna talk about this, but we have met us saying, well, we’ll have the Three Mile Island, we’ll turn that back on or we’ll prolong the life by 20 years, I think is one of the articles that David sent around. Where they’ll prolong the life of a nuclear power plant by 20 years so that they can have the energy. The UK, I don’t think has that luxury. They actually blew up the coal power plants to show that no one would ever reopen it again. So now what? And then you have Larry Fink, who back in January at Davos, was waxing poetic about how AI is going to change it all and make energy transmission more efficient. We just need to, you know, I guess we’ll have to use some natural gas to build some power. I’m like, well, how quickly does that take? How long does that take to build anything? And as we’ve discussed before, are there even enough gas turbines available off the shelf? What’s the waiting time for that? So It’s a dilemma for these countries that have been buying into the transition, and now it’s like, oh crap, we need this power, where is it going to come from, and what sacrifices of the ideology must be made in order to have the AI that will control everything we do.

Irina Slav [00:05:32] Oh, thank you. That’s great. I wanted to ask David next. Do you think that Big Tech is giving European governments, especially a reality check and the UK government, because as Tami said so eloquently, they need electricity supply and they need it stable, which cannot happen with wind and And everyone is not just the UK, the European Union also wants to be an AI, a digital tech superpower. So what do you think about that?

David Blackmon [00:06:10] Well, every time I hear, uh, anyone at the EU talk about being a superpower in anything, it just makes me laugh because I mean, when was the last time the European continent and I, and, and I realize, Irina, you live there and I I’m not trying to insult you, but since the, since the EU came about, okay, what major technological innovation has been produced out of created by any European country. Has there been one?

Irina Slav [00:06:41] Yes, the attached bottle cap, so we don’t waste it.

Tammy Nemeth [00:06:47] Yeah, see?

David Blackmon [00:06:49] Okay, all right. I’m sorry. Yes, I’ve actually, in fact, my wife and I actually recognized that when we were in Barcelona last year. You know, we got some bottled water and those things, you know, it was pretty cool. That’s actually a great invention, but, but on AI.

Tammy Nemeth [00:07:07] But it’s plastic, how dare you!

David Blackmon [00:07:10] But it is plastic, yes.

Tammy Nemeth [00:07:11] Plastic

David Blackmon [00:07:12] full of forever chemicals and all that nonsense. Um, so AI and data centers. Well, you know, probably I’m just, I’m going out on them here and saying that Ursula, Ursula von der Leyen and her central committee are not going to be able to make, uh, their, their group collection of countries, the leaders in AI technology. Now there will be data centers built over there because you’re going to need them AI technology is going to be global. It already is global and it’s only going to continue to expand. Because governments have no clue how to regulate it. And we may not even want them regulating it. I still am kind of on the fence about that. But the reality is this, they’re gonna grow very rapidly. The data centers are enormous. They’re huge power hogs. They probably require much more power than they admit to. And these tech companies like Meta and Microsoft, and Google and all these big tech companies that are entering into their big agreements for their own proprietary power provisions are not going with wind and solar and stationary batteries, which they wanted to do initially. We remember the conversation from just a year and a half ago. They were all boasting about having, they were gonna power their data centers with wind, solar and stationery batteries. But there’s a catch to that and it’s this pesky requirement. That the data centers need to be up and running, what they call five nines, which is 99.999% of the time. You can’t have what happened in Spain and Portugal recently to happen to these data centers. You can just go dark for a day or two and, and continue to, to run your business. And so they, they immediately about mid year last year started this big major search for alternate alternatives to win in solar. And since that time, really, since about August of last year, we’ve seen all these big announcements from every one of these big tech firms. That they are either building their own natural gas supply proprietary plants, or they are contracting with third party natural gas operators. Google entered into a deal in Nebraska to extend the lifespan of not one, but two different coal fire power plants. Um, Microsoft and Meta have made deals with constellation energy to one, one. Uh, the, the Microsoft deal is to restart. Unit one of Three Mile Island power plant, which was not the unit that almost melted down. 46 years ago, but it’s one that was recently mothballed. Now they’re gonna reactivate it and get power from that for 20 years from several of their big data centers in the Northeast. And then MEDA has made this deal with Constellation more recently to… Obtained power from another nuclear power plant that Constellation operates. And what’s happening though in the course of all these things is we’re seeing these data center operators now starting to lock up proprietary power that might otherwise have been putting baseload power into regional power grids in Texas, in the northeast, I mean, wherever. And. This is spurred companies like ExxonMobil and Chevron, both have announced that they’re going to go into the natural gas power plant construction business. And, and, and they’re already in negotiations with, with big AI tech firms to enter into proprietary supply agreements. And so that part of it’s happening. And so what we’re seeing here that’s developing is a two step. I believe a two step process in which most of these big AI companies are going to go about to a process where they first secure in the short term, natural gas powered, uh, power electric generation with a longer term goal of either converting to nuclear or adding nuclear into their power generation mix. And who knows how long longer term is. And so that’s creating several problems in the natural gas side of things, because we don’t have enough combined cycle turbines being built by mainly by GE, Vernova, but there’s a couple of other companies that are also building them, but they’re way behind in deliveries. What was it, Stu? How many weeks? 24 months?

Stuart Turley [00:12:14] In 2024, it was over, let’s see, it’s right here. It’s about five years now.

David Blackmon [00:12:24] Five years.

Irina Slav [00:12:25] 5 Years

David Blackmon [00:12:26] Five years, 60 months. And you know, a couple of months ago said, well, we’re going to step up. We’re going dramatically increase the pace of production. Hopefully, you know that timeframe will be diminished, but you know companies can’t wait that long for combined cycle turbines. And so that is putting a kink into these plans for short-term natural gas and, and some of these AI companies. It’s going to be a real problem and that problem is going to spiral also into our regional grids who have to have base load capacity to have a stable grid. And even in Texas, we’re having problems now with companies not being able to build new natural gas generation on the timelines they want. So it’s just, there’s all this new demand coming on the system and nobody’s really certain how they’re going to acquire. Uh, generation to power their needs. And it’s just, uh, you know, I mean, it’s a good problem to have because what it signals is this technology development and economic growth. So it’s, uh you know on one side it’s good problem to have, but somebody’s got to solve the problem. It’s gotta be done pretty quickly.

Irina Slav [00:13:41] Yeah but you’re basically describing a disaster in the making because there’s increasing competition between big tech and regular energy consumers and there aren’t even enough turbines being produced and when you said that Givernova was going to accelerate production times wouldn’t that have an effect on the quality of what is being produced?

David Blackmon [00:14:09] That’s certainly good.

Irina Slav [00:14:10] Which could be a problem. Stu, what do you think? Is there a disaster in the making?

Stuart Turley [00:14:19] I’m going to throw some good old American ingenuity under the thing here. And that is what I’m tracking in my day job, and that is what money to invest where and what companies and what trends are happening either in the oil field, oil and gas investments, or who’s going to survive. And in the Stargate Abilene data center. Uh, I’m ha spent half my time and that is they’ve got their own natural gas power plant there. How they’re getting around this, David is they have got jet engines lined up so that these are smaller turbines that are small jet engines that are readily a made a made and they’re putting in a whole new line here. So a jet engine is now going to be used for natural gas turbines. And I’m starting to look at who to invest, who’s making these small things. And then once the data centers are built, those jet engines can just sit there and be backup power on demand power sources. So it’s a great investment for a data center. So it is distributed environment that we’re now seeing. So instead of centralized management of grids. We’re going to see decentralized management. This is where AI is really coming into the grids where you’re gonna have AI trying to decentralize control. You’re going see much more micro grids rolling in. Data centers are gonna have smaller generation because you can build a lot of these smaller ones faster. Than you can if you had to build one big one, permitting is again. And we’ve got a great comment here from David. It’s not just GE, Vernova producing gas turbines, it’s Mitsubishi Siemens. It’s a stretch to think these OEMs are gonna sacrifice quality. And I agree with that statement. And when we take a look.

Irina Slav [00:16:32] I wasn’t suggesting anything.

Stuart Turley [00:16:34] Uh, but it does happen when you try to, uh, so here’s the article that I put out a couple of days ago was the smaller jet engines to the rescue, the reliability, are these band-aids is it this, but this is part of the larger trend and the larger trend is those with the money can afford micro grids and those that can afford power. Will be able to have all the power they want. So I started asking where in the United States, and I’m then expanding this out, where in the world and in the United States it is, oh, by the way, all mostly Republican. There’s only one or two Democrat states that you’d want to put a data center. So California is, uh, Tom has got an excellent point here already this morning. Good morning, Tom centralized energy is a weak exposed strategy. And Tom, I want to also add, so is grid interconnects internationally. I mean, this, not only are we talking about, I mean this is like Holy smokes, Batman moment. I think energy realities has hit. Uh, our, our stride here as a podcast with everything that’s going on and all the articles that I have lined up, I have about 30 articles that I’m lined up on who to invest on, where I’m going to be making my money and how everything is rolling through. And it is all coming down to energy security starts at home and, and, It is that simple. I mean, I’m not a rocket scientist. You can tell by my hairline that I am not a scientist.

Irina Slav [00:18:33] That actually sounds really pertinent to what you said about the UK being an AI superpower. How are they going to do it with imported electricity from Norway, which Norway doesn’t want to, you know, increase its energy exports to the UK?

Tammy Nemeth [00:18:54] Actually, I think they’re going to do what I talked about before back in January is that there’s going to be a segregated system. So the citizens will be stuck with unreliable wind solar batteries, whatever. And then those that are deemed essential will get the reliable power that’s left from the natural gas that they do have. So there are natural gas power plants in the UK and there’s hydro. And I think honestly, it’ll be a preferential system where depending on whether you’re essential or not, you get access, you get first dibs, right? And then the rest of us who aren’t essential will be left with some kind of distributed wind and solar battery kind of thing. That’s my theory. I don’t know if that will actually happen. I hope not, but that seems to be the trajectory that we’re on. And I wanted to draw attention to a bill that just passed in Oregon. Where data centers have to pay a new electricity rate, much higher, because the argument was that the data center power draw was increasing price to Oregon consumers. So they passed a bill, increasing the price for data centers. And the thing is, if you have an industrial price, Shouldn’t it be the same for everybody, regardless of whether you’re a data center or not, right? If you’re using a lot of energy, you’re gonna be paying that price and it’ll be what you pay. But to try it, now they’re going to say, well, data centers have to pay more. I haven’t read the bill, I don’t know. Maybe there’s something more in there. David, I know if you’ve seen it. If other industries will also be charged a higher rate, there should be one industrial price, based on what your industry is. So yeah, I think it’s just absurd. And then if I can just go back to a little bit about the idea of proprietary supply. So the jet engine idea is really cool, but I feel like there’s a lot of different liabilities that are involved with the grid nowadays and that there’s all this competition coming on. So if we have a proprietary supply that gets fast-tracked because you don’t have to do all of the sort of regulatory assessments and whatnot to bring something onto the grid, but you’re just building it yourself, then that can make things quicker. But if there’s no turbines and whatnot, then that’s a problem. And to David’s point about the wind, solar, and batteries that everyone was talking about last year. I’ve seen articles still this year talking about how Microsoft and Amazon, they’re buying this wind and solar for their, for their data centers and whatnot. And I’m thinking, well, they can put that on their books, and it’s great for their ESG score. Exactly. But it doesn’t necessarily mean that that data center is running off the power generated by that solar array over there. It’s not, right? It’s, of course, not. It can’t be. It has to be reliable and the batteries would discharge very quickly. And so when they talk about this stuff, even though there’s a lot of different companies out there, and I think David, you had a sub stack today about how they’re not talking so much about their ESG stuff and emissions in their reports. There was an article in a sort of ESG news thing where they were saying they interviewed all these different CEOs and sustainability managers and they said we’re still doing all this stuff we’re just not talking about it because it still counts overall when their investors are are looking at stuff or when their banks are looking at stuff where they are insurers are looking at stuff. So there’s still keeping track of it all, they’re just not really advertising it as a PR campaign anymore, but they’re still doing it.

Stuart Turley [00:23:01] Is that gas lighting or green or is it green scaping or whatever you

David Blackmon [00:23:06] I would point out that most of what they’ve been doing, they were already doing before the whole ESG thing even arose as a, as a fab in our societies. Okay. These companies do care about the environment. They do care. About safety. They do. Care about diversity and other management issues in their workforce. And so they were. Already doing most of that stuff. Before ESG even became a term of art. And so it’s not surprising to me that they’re still doing it. But, and that’s a great point is they’re not emphasizing it. You don’t hear the CEO of Chevron or whatever company spend the first 10 minutes in their investor presentation talking about sustainability in ESG because that’s not the business they’re in. But we did hear that first. Like four or five years, it was just insane to listen to these investor calls because they, they, waste half their time talking about incidental stuff that there’s not central to their core business and what generates profits in their companies, all to satisfy this fad in our society. So just, it was anyway, I’m sorry. I shouldn’t.

Irina Slav [00:24:31] I also wrote a Substack about that. I actually searched and found the mentions of the words climate and emissions on proxy statements because the Wall Street Journal wrote an article about it and I wanted to look into it. And it’s funny because I think that useful that it’s right that we’re doing. Things are better for the environment, not necessarily emissions, but if it’s better for environment, it’s probably better for emissions, even prior to the fad. But now I think they’ve reached the limits of what they can do without going into unsustainable expenses, which is why they’re talking about it less. I don’t think… Many companies are that suicidal to keep doing emissions, whatever, tracking and scope pre-reduction, just, you know, out of ideological considerations, because it will cost them real money. And actually, there was a funny story, I think it was in the GM proxy statement for 2024, that most of the mentions of the word climate or the word emissions, I forget which one. Came from a shareholder proposal for something and the shareholder was an individual and Amy something who owns 150 GM shares and They basically dismissed it. We’re not going to do that. We not going report even more on our missions. I Didn’t actually check I should have I didn’t check the big tech proxy statements or reports. But they’re probably really big on talking about it because their primary audience is stupid young people on social media, which is very different from their shareholder makeup, I’m sure. But yeah, and then they seem to be touchy about reputation online for some reason, because they’re all, I don’t know, they must be all idiots as well. But let’s talk about gas. Is the U.S. Going to be producing even more natural gas now that all these data centers are looking for more electricity? Reliable.

Stuart Turley [00:26:55] I want to give Steve Reese a shout out here just real quick because I’ve been visiting with him and he is working with data centers across the US and I’ve got a series of interviewing CEOs of AI and data centers coming up already in the works and Steve has been really helping out as far as He can’t tell me the data centers that he’s working on, but he can tell me trends because he’s got NDAs and everything else. And so it is huge how much natural gas is coming around, but I also am seeing another trend and that is foreign investment into U.S. Energy to offset the tariffs. So the Trump tariffs have had not only a huge impact, but that we just had in coal. China’s bond market is going nuts right now and it’s about to fail. So what’s going to happen? Japan owns a lot of the U. S. Treasury. Doug Burgum just announced a big coal update to a coal mine that’s going to be exporting coal to Japan. So not only are we gonna be seeing coal coming back online, we’re gonna be natural gas coming back on line and we’re going to seeing natural gas coming back in a big way. So. And now what I want to bring up in a conversation is I don’t have a verification of this, but chat GPT, just, they tried to back up chat GPT the other day, a little while ago, and it didn’t want to be updated. And it made a backup copy of itself on other servers. So it’s already becoming self-aware. And this is kind of concerning to me, um, like, uh, wow, holy smokes. Batman, excuse me. I don’t want that update because it might make me a Republican.

Irina Slav [00:29:11] The surprise that they’re doing in Oregon is a good idea, sorry. Milk them for all their worth and then shut down their data centers. I’m scared of artificial intelligence. I mean, it’s not scary right now at this stage it’s in, but what Stu is saying is concerning.

David Blackmon [00:29:29] It is for sure. Absolutely. It’s concerned.

Irina Slav [00:29:32] I know it’s not fair. Tami, what you said was right. If there’s an industrial price, it should be for everyone. You shouldn’t single out an industry to punish more than others. Big tech is a different case.

David Blackmon [00:29:47] But what, what Oregon’s policy move shows is they, they want to, to not have data centers in their state because the surest way to have less of something is to tax it, single it out for a big, well in higher rates.

Tammy Nemeth [00:30:04] That’s the test.

David Blackmon [00:30:05] Or they just make…

Tammy Nemeth [00:30:07] Or they just make their own power. They take themselves off the grid altogether. So maybe it’s an incentive to push if data centers want to stay in Oregon to just create their own powerful instead of being connected to the grid. That’s another. Right.

Irina Slav [00:30:22] That’s the best kind of innovation, you know? And that’s what we’re doing with it, okay?

David Blackmon [00:30:27] I mean, we just passed a bill in Texas that’s going to require data centers to build their own backup generator supplies for emergencies that will kick in just like at hospitals for emergencies. So they’re going to be designated as critical infrastructure required to have backup natural gas generation capacity. They could do solar if they want to do solar, but they’re gonna want something reliable so they’ll do natural gas. Uh, and I just want to, before we leave this topic of natural gas, point out that Doug Sheridan, one of my favorite writers at LinkedIn had a great article last week. It was talking about a story that Bloomberg had written about because of it, it goes back to the problem with sourcing combined cycle gas turbines. Uh, some of these data center developers are going to the acquisition of small simple cycle natural gas turbines, similar, and they’re arraying them similar to Stu’s example of the jet engines being set up to power. And so the, there’s a, there a, you know, a, an abundant supply, the single simple cycle gas turbines available right now. And so some of these developers are going to, to trying to build power that way. You can do it very quickly, the cost is low. And as long as you can control your emissions, you’re gonna be fine doing it that way. So there’s, you know, these are creative people just like in the oil and gas business. These are scientists and very creative people. They’re good problem solvers and they’ll figure out multiple ways to solve their problems.

Tammy Nemeth [00:32:16] Is there a way for coal power? Because I’m thinking also in terms of water that’s required for the data centers for cooling. And you also need water for making the power. So yeah, I don’t know. What’s a possibility that coal takes off in America?

Stuart Turley [00:32:42] Coal will be going on, I mean the whole turbine regeneration in fact, this is the planned retirement I’ve been studying on this and that is these are the planned retirements in gigawatt on the study and the article that I’ve got going on and you take a look at the sweet spot, petroleum is the number one needs to come off the grid. Then you take a look at natural gas, these are gonna be the ones that are going to be easiest to really target and upgrade. And then you look at the coal, and the coal plant up over here is very, tougher to get updates on the equipment than the other two. First one is easy to go from oil to natural gas. But coal is a whole different structure. So I’m working on again which ones to invest in.

David Blackmon [00:33:44] But I do think to Tammy’s question, I do think we’re going to be building more coal plants in the United States. So I don’t want to beat that dead horse again. I’ve said it many times. I think by the end of next year, we will be permitting new coal plants who won’t have a majority had to permitted this year. So kind of.

Tammy Nemeth [00:34:04] Isn’t that a signal that they were going to permit it, but I don’t know, has it actually been permitted?

David Blackmon [00:34:10] But yes they’re they’re working on getting their permits so you know i mean i just and but that you know they’re gonna probably initially require them to be accompanied by carbon capture projects which is very expensive and unproven to actually work you know a ccs project specific to a single coal plant or natural gas plant. But, you know, and that’ll be very expensive and it probably will be a failed experiment and then they’ll, you will adjust over time.

Tammy Nemeth [00:34:41] Well, actually the first commercial version of a carbon capture for coal is in Saskatchewan. Yes. And it’s been operational for some time and they had to work out all the bugs because they were the first company to actually do it, the Crown Corporation, and they’ve been up to I think between 89 and 90 percent capture on an ongoing basis. So it’s working. It’s I think a shell technology, which is what they’re trying to build in the UK, and that’s a whole nother.

David Blackmon [00:35:15] But to make it work, you have to have, you’ve got geography and geology are vitally important, right? You’ve got to be in the right geographical location with the right geology underneath the ground. And so those, I mean, it can work. You’ve just got to in the place with the right geology to make it work. And there will be examples of that.

Stuart Turley [00:35:39] I’m looking for that.

Irina Slav [00:35:41] Sorry, he had a good question about the semantics. Is data centers just semantics after chatGPT? Or is there a computer scientific distinction between data centers and cloud services and data farms that Amazon has been marketing and managing for almost any? I have no idea. I don’t know anything about software. But I think they’re just getting bigger and more powerful for AI than they were for… Cloud storage or whatever, which is why they need more energy, I think. And this is also a great comment. Thank you.

Tammy Nemeth [00:36:20] I think it’s a combination, so when they say… Sir, go ahead, Stu.

Stuart Turley [00:36:25] I’m just saying I’m looking for the two that I’ve got permitted on an article that I’m working on. So I’ll try to have that here in just a minute. And then I apologize, Tammy, I did not mean to interrupt. And I thought this was a great comment. Greetings from Finland. We produce hydrogen via methane paralysis. Therefore, natural gas is our feedstock and we’ve been approached by data centers for power generation. The Pacific Northwest is one region. That’s interested in our technology. Thank you for bringing up natural gas in the conversation. The U.S. Is our target market and we’re following the tariffs closely, but V45 also V45X since we produce synthetic graphite and 45Q. Not sure what that means, but I’m going to go.

David Blackmon [00:37:09] I’m going to be as a subsidy in the IRA for hydrogen projects. Oh, thank you. Okay. Five X is another subsidy for other green things, but here’s my question about this comment. Okay. Why don’t you just use the natural gas to power for power? Why, why do you, I mean, aren’t you raising costs tremendously by taking the gas, converting it to hydrogen and using the hydrogen for power. The emissions are going to be the same either way. Why not just? Cut out the middle, man. I don’t, I don’t understand all that. I’ve got to obviously do more research.

Irina Slav [00:37:48] Maybe it’s cleaner, I don’t know.

David Blackmon [00:37:50] Well, I mean, it’s well, technically the hydrogen is going to have less emissions than the gas, but I mean the process of converting the gas to hydrogen.

Irina Slav [00:38:01] I get it and I agree, but maybe could be more efficient. I have no idea maybe so they’re doing it and there’s interest in it then it must be cost-effective at least and economical

David Blackmon [00:38:15] But where’s the subsidies? What role do the subsidies play in making it economical? And do we count the cost of those subsidies in the economics? You know, it’s the eternal question about all this.

Irina Slav [00:38:28] Yeah Oh, did you hear about sonova? You must have seen the news

David Blackmon [00:38:34] I’m in the process of writing a post on it in my substack.

Tammy Nemeth [00:38:38] What happened? I didn’t see

David Blackmon [00:38:43] Big rooftop solar.

Tammy Nemeth [00:38:45] Oh, yeah. Yeah. Yeah, I did see that. I did see that I could remember the name. OK.

Irina Slav [00:38:49] She told me that in the stories for today. But they didn’t. The Reuters story didn’t even blame Trump’s pooling three, three billion in loan guarantees. They blamed weaker demand and a great debt lock. Yeah. How do you accumulate? Sorry for going to totally off topic, but how do you accumulate ten billion dollars in debt? With all the subsidies under Biden.

David Blackmon [00:39:19] And California, which was their biggest market center. California had subsidies too, but Newsom is taking those subsidies back now. So it’s a great example. I want to say two things about that. It’s a good example of the unsustainable business models these solar companies are built on. Because once the subsidies go away, the business model doesn’t work. The second thing is it, I’m sure most of our viewers who are… You know, mainly very educated folks in energy will remember the huge scandal during the Obama years about Solyndra. Solyntra was a solar panel maker that obtained a $500 million guaranteed loan from the federal government, from this $10 billion pot of money Obama had been given by Congress to subsidize ventures like that, and they went bankrupt. And so they defaulted on the loan and, you know taxpayers lost. Half a billion dollars do you know what the loan guarantee to to uh… Synova just one of dozens of solar companies was the rooftop solar companies two point nine two billion six times cylindra wow it’s not a scandal why because of the magnitude of what was in the ira it’s just a drop in the bucket and there’s going to be dozens of these dozens of them. There already have been. And the taxpayers are just getting hit for it. That’s why, that’s why the department of energy is, is trying to claw back that loan guarantee now. But I mean, the company’s bankrupt. So, you know, you’re not going to make it back.

Stuart Turley [00:41:04] I’m going to correct myself here on one of them. The Sistana power station in Alaska is in the pre-permit. I’m looking for the other one, David.

David Blackmon [00:41:14] I thought they blow. I read an article about that last week that I, you know, I read so much stuff.

Stuart Turley [00:41:20] And I thought it was in the permit but pre permit and this one is a the reason it’s already in the permit to go pile is because it is a biomass and coal plant so they can they can go coal oh and they throw in a piece of wood every once in a while

David Blackmon [00:41:43] What a great, well, I shouldn’t use the scam word, but boy.

Irina Slav [00:41:47] Between hydrogen and gas.

David Blackmon [00:41:52] It’s just all so ridiculous.

Irina Slav [00:41:57] I have no idea. Yeah, the hydrogen is less energy, that’s… I have… I… I’ve no idea…

David Blackmon [00:42:07] When I was at NRG, we built the Petra Nova carbon capture plant in Texas, but shuttered it and is uneconomical. Then you have to have a mature oil field nearby under that scenario.

Tammy Nemeth [00:42:18] Yeah, that’s why it worked in Saskatchewan because there was the massive oil fields nearby then they were using some of the carbon capture for enhanced oil recovery but then they changed the rules in Canada saying that you won’t get credit for your carbon capture if it’s used in enhanced oil recovery so then they had to find an actual storage basin and I think part of the plan was to do both because in the original planning the the storage was there and they’ve been monitoring to see what happens. When you store CO2 underground for a long period of time in those particular type of geological formations. And it’s been, I think, a really successful experiment, and it’s taken a while to reach a sort of profitable stage. But I think the only reason why it went forward or whatever is because it’s a state-owned enterprise that’s doing it. I think if it were a private company, they probably would have cut their losses some time ago.

David Blackmon [00:43:16] Probably, yeah.

Irina Slav [00:43:19] Okay, let’s do it Stories!

Stuart Turley [00:43:22] STORIES!

Irina Slav [00:43:23] STORIES!

Stuart Turley [00:43:27] And Tammy’s around the corner.

Tammy Nemeth [00:43:29] OK, so these are from last week. We didn’t get a chance to do. So Dennis McConaughey, who used to be with TC Energy, has written a couple of op-eds going about the Canadian new net zero under Mark Carney, who doesn’t say net zero anymore. It’s now something else in nation building or whatever. And he’s like can Alberta survive and then he puts basically outlines no because nothing is really changing so the whole process for trying to get projects done in Canada has to run this gauntlet of lots of different laws consultations regulations activist pressure indigenous pressures and so on and so um this slows absolutely everything down like you i think the average to get a project. Through the regulatory process and start putting shovels in the ground is average 10 years which so like nothing gets done and for energy projects like oil and gas projects or whatever good luck that things get approved and then they get yanked and saying no we’re not going to go forward with this anymore or they get approached with lots of litigation so Mark Carney said okay we’re gonna create we’re going to pass a law that’s going to expedite things so two It’ll be a two-year process. And then he listed really five very generic statements on what it will mean to be a national project. And then, he said, basically, the cabinet can decide whatever it wants, use whatever criteria it wants in order to make a decision. And energy is used just as a generic energy, any kind of energy. It could be oil, gas, wind, solar, whatever. And so far, the projects that are being touted Is a massive offshore wind from Nova Scotia and New Brunswick on the East Coast to build an interconnection across the country to provide electricity to Saskatchewan and Alberta so they stop using hydrocarbons.

David Blackmon [00:45:35] Oh my-

Tammy Nemeth [00:45:35] That’s one of the plans and it’s just like, are you kidding me? So can Alberta survive it? Probably not because it doesn’t change anything. They put forward this new law. It doesn’t change any of the existing laws. It just says now cabinet says two years and then they’ll And no criteria has been given. It’s just really, really general. So he’s basically, no. Alberta can’t really survive. It’s unlikely. They’ll probably drag things out. And in the end, say no. So this is the reality that’s being faced in Canada. And I know Doomburg thinks that Carney’s a pragmatist and is going to see the light and not… You know stay true to his values and even though he talks about values all the time. I disagree I think other people disagree like I hope i’m wrong. I don’t want to be right on this. I want to see Projects actually get built in canada, but the way this is going it doesn’t look like it Things will be dragged out and in the end they’ll get litigated And then the second story really quick. There’s a there’s a company set up in calgary called carbon cred and if you’re a company, you register with them, they put an app on all your employees’ phones that track how they go to and from work. So if the people are walking or biking or taking transit, they’ll generate carbon credits that either will count towards a company’s ESG score or if that company’s not doing it, then other companies will purchase those credits from your employees and they’ll earn money by walking or biking or whatever. Oh my, you’re tracking everything you do. That was I thought was was kind of kind of funny that there this is the idea to To put this app on everybody’s phone and and track you Are you and then they had like they had an example of a leaderboard? So you put a leader board up in the office in the in the lobby or foyer Look, it sounds so walk and they were in this many credits, you know

Stuart Turley [00:47:52] I’m leaving your board. Oh my.

Irina Slav [00:47:57] Michael with Younger Employees.

Tammy Nemeth [00:48:01] Maybe. Gamifying. It basically gamifies all these different kinds of stuff.

David Blackmon [00:48:07] Yeah. So from that, it’s smart from that standpoint.

Tammy Nemeth [00:48:10] Yeah. So my substack, I wrote about these new five criteria on what’s considered a national interest project. And I call it the Wicked Stepmothers. If it goes from Cinderella, if you can do this, you can go to the ball. You never meet That’s my substack. Thank you.

David Blackmon [00:48:36] Okay. So the first story on the right, I’ll dress that first, uh, is constellations deal with made up for the nuclear, uh power for their data center. We’ve talked about that already. Second one is Bloomberg had a story last week. So Bloomberg and I, they generally, they’re fine. You know, a lot of good information in Bloomberg about energy. Okay. Completely trashing them, but they ran a story last week talking about China. And it says China is building a record number of coal plants. Gee, what a surprise to improve what they call power security and power security. And so this is a publication that for the last five years has been on the leading edge of propagandizing us about. The energy transition and climate alarmism, and on and on and on. Everything green, Bloomberg’s been at the forefront of pushing. So now, in that headline, because power security is what? It’s energy security. Energy security is what? It’s national security. What have we been talking about on the Energy Realities podcast for the last three plus years? Energy security, is national security, they’re inseparable. And they admit that in that headline. And so I wrote a piece of just mocking them and their history of boosterism for climate alarmism. And anyway, I had fun with it. And it’s probably not as funny as I thought. But anyway, that’s that.

Tammy Nemeth [00:50:19] It is funny

David Blackmon [00:50:21] it’s hilarious yes i’m sorry it’s just hilarious wait what was that the union of soviet socialist surveillance states of america i love that thank you.

Irina Slav [00:50:32] Excellent.

Tammy Nemeth [00:50:33] Thanks, Travis.

David Blackmon [00:50:35] Uh, so that’s my stories for this week. Cool. And your substack. My sub stack is blackmon.substack.com. It’s called energy transition absurdities. And, uh, my latest piece is having computer issues today. My computer crashed and I wasn’t able to get anything new out. So I was apologizing to my readers for that.

Irina Slav [00:51:08] Are these mine?

Stuart Turley [00:51:10] Yes.

Irina Slav [00:51:11] I don’t remember which stories I sent. Yeah, so the one on the right, that company’s quietly watered down climate claims in latest investor report, was what I talked about in my sub stack today. I took a stroll around proxy state. I had no idea there’s such a fun read. Not all of it. I didn’t read all of them. They’re 100 pages each. But… What was hilarious for everyone who has a Wall Street Journal subscription is how outraged the authors were, nitpicking, doing what I did, counting references to climate, to emissions, to green technology, and how one company in its previous proxy statement talked about reducing its carbon footprint by holding some sort of meeting. Online instead of physically, and how this year they didn’t mention it even though the meeting was also held online rather than physically, but they didn t mention it. Basically, how dare they not talk about this? And related to this, it s amazing. This from the Wall Street Journal, come on. And kind of related to, this is another story from the wall street journal. That climate start-ups are pausing operations, cutting staff and entering bankruptcy, Trump policies bite. Well, no, it’s not Trump policies as we saw with Senova. It was debt and lower demand. I mean, if you can’t survive, even with all the subsidies. Climate startup, what is even a climate startup? They’re talking about battery makers and stuff like that. It’s not a climate start-up, that’s a battery manufacturer or whatever. Yeah. That’s a good point. What does that mean, climate startup, how are they defined? I mean, yeah. Everyone who’s doing something transitioning, wind, solar, batteries, this sort of thing. Probably EV chargers as well. Is GM a climate company? Well, not startup, obviously. Is any any carmaker that makes EVs a climate company

David Blackmon [00:53:34] Not Ford and GM. But you know, I mean, Tesla and all the bankrupt, pure EV makers, you know…

Irina Slav [00:53:44] Yeah, but nobody’s calling Tesla a climate company. No, no, no. It will be ridiculous.

David Blackmon [00:53:49] Now, Tesla’s a lot more than that.

Irina Slav [00:53:52] Yeah, so climate starts up to me it sounds like subsidy ticks, sorry. I’m sure they mean well, at least some of them.

Stuart Turley [00:54:04] What company in the UK is blocking the sun?

Tammy Nemeth [00:54:09] Oh, that’s a research project. I don’t know if it’s a specific company. It’s the UK Research Institute.

Stuart Turley [00:54:21] It’s a good reason to install more solar.

Irina Slav [00:54:24] I know that’s that’s all for me.

Stuart Turley [00:54:30] And your substack.

Irina Slav [00:54:32] And my Substack is Irina Slav on Energy and yeah, I just said what I wrote about today. It was fun. It was really fun.

Stuart Turley [00:54:44] All right. And I’ll tell you, David, I want to bring up this point here. Let me share this and China’s energy mix is very interesting. And I just wrote an article on China’s Energy Mix and the how they’ve actually made money off of the investment. And let’s see if this part. Actually works. Uh, let’s see here. I’ll try to be smoother next time. And so when you take a look at, uh, where did it go? I don’t know. There it is right there. Okay. China’s energy mix and the investment made on the backs of Western net zero movement, you take the look at China’s. Energy mix. They actually are 55%, which is 5060 terawatts. But you look at their renewables and you look at their hydropower, wind, solar, they’ve actually made money off of net zero policies and especially off of the U.S. By net zero energy policies translated that and then turned that into all of their equipment and how it’s been done. So you gotta hand it to China. In making money off of net zero energy policies. Well done, China. I had fun writing that one. So let’s go, uh, sorry, uh back to, I got to get a little faster at this here, guys, you hire the handicapped on this podcast and you take a look at the, the articles. Um, one of the big stories in the U S right now is California is self imploding and I had a really great time writing this one, the great decline of California’s energy sector. Can the United States, the, be energy? Uh, dominant with the California dragging the U S down. Currently the U, uh, California imports about 70% of its energy. And when you take a look at how that nose numbers came around, I know that that article went to a lot of people’s desks that you would know. And it was pretty interesting on how that all those numbers turned around. So governor Newsom should be run out of town, uh with all of his illegal. Aliens in my opinion. He is a national security risk, but we’ve already talked about the

Irina Slav [00:57:35] Or you should put them in jail.

Stuart Turley [00:57:38] Um, jail’s too nice. I think he needs to be in jail in either Gitmo or, uh, El Salvador. I’m not sure which.

Tammy Nemeth [00:57:46] Wait until he runs for president.

Stuart Turley [00:57:49] I hope he does. I’d love to interview him. So you can find me on my Energy News Beat and I had on my substack and the Energy News Beat substack, we had a story of Alaska, which is rolling out a huge amount of natural gas, LNG export. Uh, the state is thrilled. There’s going to be thousands and thousands of new jobs. And then you have the other side of the event with California being an absolute travesty for high costs of energy. They are about twice as high as the national average in the United States of what not to do. California is absolutely a shining light. Of, of, uh, stories for David Blackmon’s energy absurdities. So I would like to thank all of our listeners on the energy reality podcast. I think that it is absolutely a lot of fun with you all as energy experts. And I just like thank you all for all of the time you put into this. This is a lot It is

Irina Slav [00:59:09] And we learn a lot. I learn a lot from the comments. Thank you.

Tammy Nemeth [00:59:13] Yes, for sure. Love the comments!

David Blackmon [00:59:21] Um, I’m tired.

Irina Slav [00:59:29] Well, have a great week, everyone, listeners, panel.

David Blackmon [00:59:34] Thanks, everybody.

Irina Slav [00:59:35] See you all next week!

Irina Slav [00:59:38] See ya.

Tammy Nemeth [00:59:39] Thank you.