Oil Prices Fall

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Highlights of the Podcast

00:00 – Intro

02:16 – Data Center Boom Sparks Utility Spending—But How Real Is the Demand?

04:41 – How will the President Trump Executive Orders Make Coal Beautiful 08:00 – Again?

5 environmental facts about the beautiful American clean coal comeback

10:35 – Oil Prices Drop to Lowest Level Since Pandemic as Trade War Accelerates

22:10 – Outro

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

Michael Tanner: [00:00:00] I laid out the case of there’s really two things drive in the market. Ultimately, what’s driving the market is a future forecasted demand that is much, much lower than expected. Everybody is revising demand numbers down. We saw the EIA, the IEA come out. API has all said OPEC has come out and said to expect lower demand. And what’s striving at is twofold. One, obviously, is tariffs, but not because of the reason why I think people think so. It’s not just that there’s tariffs. It’s that people believe that these tariffs are going to lead to a recession and that a recession people drive less. They travel less. [00:00:35][35.7]

Stuart Turley: [00:00:43] Hello everybody, welcome to the Energy Newsbeat Daily Standup. Today is April 10th, and what a day on the news desk. Holy smokes, Batman. It is crazy out there. We got some stories, and Michael’s gonna be joining us halfway through the show here from Mexico, so I had a great conversation with him, so let’s get ready to rumble here. Let’s go through the stories. Data center boom, sparks, utility spending, but how real is the demand? Let’s got to the next story. How will President Trump’s executive orders make coal beautiful again? Five environmental facts about the beautiful American clean coal comeback. And then Michael and I will be covering this story, oil price drops to its lowest level since pandemic as trade war accelerates, and on that front, at the time that I am recording this. President Trump just put out on his truth social based on the lack of respect that China has shown the world’s market I’m hereby raising the tariff charge to China by the United States to 125 percent holy smokes and then the the fact that 75 other countries called Representatives United States including the Commerce Treasury to negotiate solutions. They’ve got a 90-day pause on And I mean, the whole market’s went nuts. This is kind of crazy. Oil is back up over 60, so buckle up. This what art of the deal is all about. [00:02:15][91.9]

Stuart Turley: [00:02:16] So let’s get to our first story here. Data center boom sparks utility spending, but how real is the demand? US utilities are raising capital investments in view of data center power demands This follows along with yesterday’s information about President Trump and Secretary Wright, Secretary Burgum and Secretary Zeldin about talking about the clean coal and everything else. U.S. power utilities have announced billions of U. S. dollars in capital plans for the next few years and are getting lots of requests from big tech for new power in certain areas. Here’s where you can watch and take this to the bank. look for natural gas pipelines or near a coal plant now. Those have suddenly opened up and it’s now kind of wild. Encore and its subsidiaries operate the largest transmission and distribution system in Texas, delivering electricity but of more than 4 million homes and businesses. Their interconnection queue of customer requests, including requests with outside agreements, exceed 137 gigawatts. This is a 250% surge over the amount of potential load in the queue at the end of 2023. Holy smokes, Batman, that’s a lot of extra power. In Pennsylvania, PPL has as many as 48 gigawatts of active data center requests for the period in 2026 through 2024, but those are in advanced stages. projects that have signed agreements with developers are 9 gigawatts. This new capacity in advanced stages more than doubles the PPL’s current regulated generation of 7.5 gigawatts. All this is going to come into, just like the Stargate data center in Abilene, Texas, it’s got its own natural gas power plant. You’re going to be able to see with the new regulatory issues, your own coal plant or your own natural-gas plant. And I think this is all fantastic. When I wrote the Substack article this morning as well, Alaska has a brand new Go plant. didn’t take long for a new coal plant to get approved in the United States. We’re talking a day. So hang on, buckle up and you’re going to see some more of them. [00:04:40][144.6]

Stuart Turley: [00:04:41] And so let’s go to this next story here. How will president Trump’s executive order make coal beautiful again? And I’ll tell you these executive orders, as I talked about this yesterday, preventing coal plant closures. This is critical. One key order uses emergency authority to keep older coal fire power plants previously slated for retirement operational. This could be 16% of the grid and when you’ve got unreliable wind or solar and you’ve a wind, no wind, it makes a difference having an older coal plant that you can fire up and spin up. It doesn’t cost anything and as far as coal storage is a wonderful storage and as Chris Wright has said, coal is one of the best sources for fuel and when you consider the clean United States technology, it cuts out the particulate matter that is the pollution better than anybody else on the planet. Increasing coal utilization, the orders encourage existing coal plants which typically operates it. 40% capacity to ramp up production potentially to 70 or 90. This could increase the available or dispatchable 24 by 7 power which is critical for grid stability. Holy smokes Batman! This is a huge answer when you consider that we are years away and decades away from building our nuclear plant. and that is the ultimate goal and solution. We need nuclear. This is an absolutely wonderful way to do that. Taking a look at the energy-intensive industries, streamlining grid reliability measures, reducing regulatory pressure. Holy smokes, Lee Zeldin is running on all cylinders. Emergency powers for plants. President Trump invoked emergency powers under the Defense Production Act to prevent the closure of the aging plant. This is huge. He also has $200 billion made available through the energy department loan program to support coal technologies such as building materials and batteries. This is just huge. Now, the one in the, like I said, sustaining a power station in Alaska is brand new and it’s in a free permit approved. So rock and roll. Here we are day, day one and president Trump’s already getting a coal plant in Alaska approved. There’s 401 operating coal plants in the United States currently producing with 45 of them being canceled. Those are the guys that just got a little bit of extra life on them. Don’t know the makeup of which ones are going to be saved or not. So there’s a total of 3,499 megawatts. We would be in a rolling blackout or as bad as Pakistan. If we did not have these. So when you take a look, this is actually a great thing going on in this. Well done to the entire team of president Trump, Lee Zeldin, Doug Burgum, and Chris Wright. [00:08:00][199.0]

Stuart Turley: [00:08:00] Let’s talk about the clean coal technology. We’ve got a great friend of the show, we’ve got Nathan Hammer. Nathan Hammer’s Substack. I highly recommend going out and subscribing to them. He’s got several different key points to make out here. And when you take a look at this, Sulfur dioxide is down nearly 93% from 1990 to 2022. Blue gas. Desulfurization, aka scrubbers, use limestone slurry to trap the CO2 cutting emissions up to 98% per plant. Suddenly, coal is not as dirty as it is made out to be. Nitrogen oxides, NOx has been reduced by 87% by the same period. Particulate matter That’s the real pollution has dropped 94% from 1970 to 2022. Mercury has been slashed by 96%. CO2 has been decreased by 42%, by 40%. But again, plants love CO2, so plant a tree and that carbon dioxide is the least of the issue. And it’s the particulate matter and then when you take a look at the ponds near kansas’s jeffrey energy center or indiana’s gibson generating station local fishermen swear by clean coal is not just a phrase it is absolutely outstanding well done nathan and i highly recommend his his link is in the notes there and as we talk about this let’s get ready to visit with michael we’ll bring him in on this part of it,. [00:09:44][103.5]

[00:09:44] But before we do that, I’m gonna give. Steve Reese, a shout out. Steve again, I’m getting to interview Steve this week and he is a very, very great sponsor and friend of the show. One of the key things about Reese Energy Consulting is their ability to take molecules from the Haynesville, load them up into an LNG facility and get them all the way to Germany. They are one of the few industries that understands Bitcoin mining. They understand LNG. They under midstream. You got a project. You need Reese Consulting. Highly recommend. Go to ReeseEnergyConsulting.com. And they also have training. We have a lot of new energy jobs coming around the corner. This is a critical time to be in the energy industry. [00:10:34][49.9]

Stuart Turley: [00:10:35] This is such a crazy time right now about oil and gas. I had to call Michael while he is on vacation visiting with some flounders down there in Mexico. Michael, hey, I want your opinion on what the hell’s going on in oil and gasoline here, buddy. I was planning. [00:10:49][13.7]

Michael Tanner: [00:10:50] on taking a few days off. We had even I announced it on my solo show on Sunday. I said, Hey, I got to take a few day’s off in Mexico and then holy smokes oil actions down to $55. And then about 15 minutes ago, Trump decided, you know, as we record this about 1pm central time, Trump comes out and says it’s pause on all parrots oils now 60 at 6188 probably by the time you listen to this will be over 62 absolutely unbelievable wild time. So I said, Stu, I got to come on, pop in, and we got to talk about what in the heck is going on in the oil and gas markets right now. [00:11:24][34.5]

Stuart Turley: [00:11:24] Well, let’s let’s tee this up. President Trump’s tariffs have been paused for the 70 countries or basically everybody, but China, China. He’s going to 124% on their tariffs. And I applaud his move because he says they have been stealing from the United States. They’ve been doing things. I called it right. Also on Panama canal, Panama canal Pete, our secretary of defense is there. We’ve got lots of marines in there patrolling the skies they’ve got more airplanes in there. China is now waking up realizing going holy smokes Batman the dollar Michael is the highest between the Chinese Yuan and since 2007. There’s a lot going on right now and let’s talk about OPEC plus and their cuts and then how that kind of fans out. Goldman Sachs in this The article that we want to talk about, Michael, is from Irena Slav. Oil prices dropped to the lowest since pandemic as trade war accelerates. Goldman Sachs analysts, which we, you and I joke about, you and I will never be hired by Goldman Sach’s. [00:12:32][67.3]

Michael Tanner: [00:12:32] We’re not foolish enough, we’re not bullish enough! [00:12:34][2.0]

Stuart Turley: [00:12:35] 2026 forecast by $4 to 58 bucks for Brent and 55 for the benchmark. And I don’t agree with that at all. So let me hear your thoughts. [00:12:46][10.2]

Michael Tanner: [00:12:46] I think there’s a couple things here, obviously with, you know, there’s obviously, as I talked about on Saturday or Sunday when I recorded my solo show, the episode that dropped on Monday. You know, I laid out the case of there’s really two things driving the market. Ultimately, what’s driving the market is a future forecasted demand that is much, much lower than expected. Everybody is revising demand numbers down. We saw the EIA, the IEA come out. API has all said OPEC has come out and said to expect lower demand. And what’s striving at is twofold. One, obviously, is tariffs, but not because of the reason why I think people think so. It’s not just that there’s tariffs. is that people believe that these tariffs are going to lead to a recession and that a recession people drive less. They travel less. They don’t get to come to Mexico, which I, you know, talk about a crazy time to be on vacation but I’m getting lit up left and right. I don’t feel like I’m on vacation, but at least I can take my phone calls looking at the beach. But so it’s because the tariffs theoretically are going to cause a recession, which is why everybody was kind of freaking out at this point. But then the real second driver was the fact that OPEC has decided to add in even more barrels. And that was kind of the nail in the coffin of this really weak demand side to the equation. It’s not a supply issue. It is a demand side. Their supply is relatively in line with where I think everybody expected it to be. But it’s the fact there’s cratering future demand or theoretically cratering future demand that I think is forcing the And, you know, really what I want to hear from you is because obviously pump came out, you know we had a whole show lined up, I was going to pop on and it was going to be a little bit of a funeral. We are going to have a quick moment of silence for oil and gas producers. [00:14:35][108.8]

Stuart Turley: [00:14:36] We’re not quite dead yet. [00:14:36][0.8]

Michael Tanner: [00:14:37] Well, yeah, exactly. It’s a little this is a little bit of a princess bride. He’s mostly dead. They’re mostly it’s mostly debt. Trump has now come in and reverse this tariff. And, you know, we run down the gamut here. S&P 500 is up seven point eight percentage points. Nasdaq’s up over seven and a half. The two year yields is up six point two percentage points. So, I mean, you’ve talked about massive flips here. The rotation is crazy. Oil just went above sixty two dollars. It’s not sixty one ninety two. why the change, why the flip flop? And this is what just somebody who is, you know, follows the markets, who I wouldn’t call myself a macro economist, but understanding the dynamics at play, maybe more than some, this flip flop seems to be short sighted. And so I guess that the question is, and why, why make the pause if this was just a two week play? I mean, What’s the end game here? Are we just gonna keep going back and forth? [00:15:36][59.0]

Stuart Turley: [00:15:36] No, I, the end game is to get people to the table. That has always been the way president Trump has been working on this. And I, I think that he is doing it right. You take Italy, let’s take a look at four key points. First point. Let’s take. A look at India, India, if it is, it’s really in this, they have already got a team coming to the United States to talk about trade barriers and things like that. India is. critical in the price of global oil because they are going to be the largest importer of oil around the world. Boom. They’re off the table. They are coming in to trade. China. China is on the table at a 124% tariff. This is going to kill their economy. If China, and I had written this this week, Michael, if China remained stable. if they just remain stable we would still see 75 to 80 dollar oil just with those two things right there because you nailed it in a recession people don’t travel or anything else but when you take a look at the number one world importer india is starting to boom you take a look at china the number-one manufacturing one is now starting to waffle If India can then take in more and kind of counterbalance us out. we will see the $70 oil and the $80 oil and here’s why. Because we still need $4 trillion of investment to meet decline curves. So if you just kind of get a general, I don’t wanna use the word Moab or mother of all bombs close to the target, that usually gets what the job done is and I’m gonna get kind of close and that is if we get and avoid a global recession of these these tariffs are right. sizing trade. This is going to be a short lived issue with the exception of China. Bookmark this podcast. You will see China fold by the end of the month. It how they fold i’m still working on that one. [00:17:51][134.9]

Michael Tanner: [00:17:51] Yeah, I mean, it’s it’s really crazy prices now from the oil side. We’re sitting at at sixty one fifty now. So we’re you know, you spike up to sixty two. We fall down and it’s wild. [00:18:02][10.9]

Stuart Turley: [00:18:03] I got two more things. The last two pieces of this critical puzzle is NATO in the EU, and I’m throwing in the UK in there with that as well. We could see the end of the EU as we know it now. This is absolutely critical because the EU was advertised and started out as a trade association. Holy smokes! guess what this is doing? all countries are coming to the United States and saying we want to start trading. All of a sudden they’re all mad at China. They’re all coming around the corner and I think this is not going to be a global recession. This is a global right sizing. But NATO is in trouble, NATO, and there’s already a big rift going on. There’s a lot of geopolitical stuff in here. And I feel sorry for the poor folks in the UK, the UK Brexit may be over and they may be joining that sinking ship jumping and they may be the first rats back into the sinking EU. I go figure this one out, but I wouldn’t want to be in the. [00:19:11][67.9]

Michael Tanner: [00:19:12] No, markets are are absolutely wild right now. What a week, to be honest. It’s been an absolute, absolute roller coaster. But but yeah, so Edna Swivel, you know, I mean, the talk of the town yesterday in the oil business was shut the rigs down. You know, there’s a quote from Brian Sheffield, who’s CEO over for Formentera Partners, obviously the famous son of Scott Sheffeld, who said his quote was it’s a bloodbath right now and, you, know, they’re winding down rigs. You know this does come back to the, you if you’re in the oil and gas business, you can’t you have to make sure the underwriting that you do is solid. Because if you don’t, now all of a sudden at 55, you may not have needed a rig, but now at 61, you’re like, maybe I do. If that swing is causing you to change your investment, and your go forward drill plan, you are in big, big trouble. So this is a this is when you need to, if you are an oil company, you need to make sure that your underwriting mechanics can withstand these type of price swings because you don’t want to be panicking right now. Yes, we love prices to be $80. Don’t get me wrong. But if oil going to 55, it constrains you. Maybe you shouldn’t have been drilling at 65. Maybe you should have been, you need make sure that obviously there’s a threshold at which you throw your under writing metrics because if oil is 75 and you’re underwriting at 40, that’s you’re not going to find much that’s economic at 40. but it’s making sure, you know, it’s one of the things that PECOS that we’re really good at, Stu, is part of the reason why we focus on shallow, vertical, conventional drilling is that it’s, you’re less beholden to today’s oil price and more dependent on the longer term price of oil because we don’t get the huge IPs. We just get long, long-term production. And under that scope, yeah, oil will definitely, you know it’s gonna cut out, but it gonna rise eventually. Like it’s- [00:21:05][113.0]

Stuart Turley: [00:21:05] peak and valley, baby. [00:21:06][0.6]

Michael Tanner: [00:21:07] Absolutely. So, well, all right, is our last show of the week. What’s what do you got dropping tomorrow on the podcast? Who you got interviewed? [00:21:12][5.7]

Stuart Turley: [00:21:13] Well, I got several of them here. [00:21:14][1.3]

Michael Tanner: [00:21:15] It’s been a long week that interview you did with Caroline over at IBM was awesome [00:21:18][3.3]

Stuart Turley: [00:21:19] Isn’t she great? [00:21:19][0.6]

Michael Tanner: [00:21:20] Yeah, I had a great chance to listen to it. [00:21:21][1.4]

Stuart Turley: [00:21:21] I absolutely thoroughly enjoy looking to have her back on the podcast. And I think that that’s going to be absolutely outstanding. I am recording another podcast with Steve Reese tomorrow. So that one will go out next week. I’ve got Doug Sandridge with California nuclear issues. Got John Rogers coming out. Both of those are coming out this weekend. And then we also have one from, let’s see here. It is from the university of Oklahoma when I went out there. So we got one of those. [00:21:52][30.4]

Michael Tanner: [00:21:52] Oh, yes. Lot coming up, lot coming up. It’s going to be it’s going to be an absolutely crazy weekend. Who knows what will happen when we’re back in the saddle stew on Monday? Who knows? I will. [00:22:01][9.5]

Stuart Turley: [00:22:01] who knows well if not just check out energy newsbeat.co and energy news beat.com the energy newsbeat dot substag and you’ll find out. [00:22:09][8.6]

Michael Tanner: [00:22:10] Yes, definitely follow us on Substack. Great way to stay sane in these crazy times. But with that, guys, we appreciate you checking us out, sticking with us all week. Like I said, you’ll hear one of our long-form podcasts tomorrow. You will then hear our weekly recap on Friday and we will be back in the saddle in our home bases here on Monday. So with that guys, that’s Stuart Turley. I’m Michael Tanner, from Mexico. We’ll see you guys next week. Thanks for sticking with. [00:22:34][24.2]

Stuart Turley: [00:22:34] Don’t have a margarita for me. We say hi to the flowers . [00:22:34][0.0][1333.0]

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