You will not want to miss this episode of the Energy Realities Podcast with Irina Slav, Tammy Nemeth, David Blackmon, and Stu Turley as they discuss the looming EU and China alliance on the horizon. Why is this happening, and how will this impact consumers globally? We would like to thank all our regular viewers and those who add great comments each week. Those comments are very enlightening, and many are just downright fun! Have a safe and fun 4th of July!
Highlights of the Podcast
00:01 - Introduction
02:35 - EU-China 50th Anniversary & Partnership Talks
05:32 - EU Hypocrisy on China
09:54 - Searching for a “New Sugar Daddy”
17:52 - BRICS and Geopolitical Realignment
24:43 - Desperation or Strategy? EU's China Dependency
33:24 - Climate Policy Zealotry and Militarization
38:24 - EU Methane Monitoring Rules
42:31 - Supply Chains, Trump, and Global Security
48:51 - Wind, Solar, and the End of a Green Illusion
50:48 - Germany’s North Sea Drilling & Green Virtue Signaling
54:12 - Floating Solar Panels on UK Lakes
56:20 - Solar in the Arctic: Canada’s Futile Subsidies
58:11 - Endless Promise of Breakthrough Solar Tech
International Author writing about energy, mining, and geopolitical issues. Bulgaria
Principal at DB Energy Advisors, energy author, and podcast host.Principal at DB Energy Advisors, energy author, and podcast host.
Energy Consulting Specialist
President, and CEO, Sandstone Group, Podcast Host
EU and China Alliance Rising?
Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Tammy Nemeth [00:00:43] Hello, we had an extended introduction today. That was great, loved the little
David Blackmon [00:00:50] We had to play it once for all of us
Tammy Nemeth [00:00:53] Good point. So, hello everybody. Welcome to the Energy Realities podcast. I'm Tammy Nemeth. I'm one of the hosts. We have four amazing people on our Energy Realties podcast and today we have Irina Slav in Bulgaria. Hi Irina, how are you today?
Irina Slav [00:01:14] I'm great. Thank you. It's really hot outside because of climate change, but we're surviving somehow haven't roasted yet
David Blackmon [00:01:22] It's never been hot there before, has it?
Irina Slav [00:01:24] No no never in July.
Tammy Nemeth [00:01:26] Yeah we used to call that summer.
Irina Slav [00:01:29] time
Tammy Nemeth [00:01:33] Uh, and today we also have Mr. David Blackman, who's in his bunker in Texas. So how are you today, David?
David Blackmon [00:01:43] I am just lovely. It's a beautiful day, rainy day up here in North Texas. And, uh, man, we've had a lot of rain this year. It's awesome.
Tammy Nemeth [00:01:52] Yeah, and there's some flooding that happened some flash floods, which is pretty terrible.
David Blackmon [00:01:56] Yeah, we had way too much of it down around Kerrville and it's such a tragedy. Just one of the worst things that's ever happened. I tell you, it's hard to even talk about it without tearing up. It's so awful.
Tammy Nemeth [00:02:08] Yeah, that's pretty tragic, and hopefully they'll be able to solve the situation and find the people, some that are missing. And today we've got also Stu Turley, who's at his truck somewhere in an undisclosed location.
Stuart Turley [00:02:27] Uh, no, actually in Shreveport, Louisiana. So the, and the truck is my star link. So I'm very mobile today.
Tammy Nemeth [00:02:35] Wow, you probably have a better connection than I have with stories. Okay, so today we're talking about EU and China, and is it an alliance rising? Now, people may not know this, but it's the 50th anniversary of EU or European and Chinese relations where it was formalized back in May 1975. And so this is the one of these milestone years that the EU and everybody loves to talk about. And so what they've done is, last week there was some meetings and they shook hands on some new kind of partnership. And it's interesting that we have a former Portuguese socialist leader in charge of the European Commission, and we have former socialist Portuguese leader in-charge of the UN. I'm not really sure what the implications are there, but the socialists seem to get around. One of the things that we were talking about in the email chain leading up to this episode today was will China's alliance with Russia affect its relations with the EU, which views Russia as a hostile nation. There seems to be a few conflicting takes on what the EU-China relationship should be. Last week we had Costa meeting with his counterpart from China saying all happy things about partnerships and they're gonna work together on climate change. And then this morning there was a Financial Times article saying that EU wants a firm commitment for China to tangibly reduce emissions. And China said, yeah, we're doing lots already. I don't think we need to do anymore. So it'll be interesting to see how that goes. And then in a bizarre twist over the weekend, NATO head Mark Rutte, the former prime minister of the Netherlands, made this bizarre comment that the EU could be facing a red dawn scenario where China attacks Taiwan but has Russia distract the EU by launching an invasion of a NATO or EU country. And the Russians replied and said, maybe Ruta is on mushrooms or something, because that's a crazy idea. And for those who may not know, Red Dawn refers to the 1984 movie starring Patrick Swayze and Charlie Sheen, one of my favorite movies, about a Soviet invasion of the USA, utilizing Cuban and communist South American troops. So, you know, it's interesting that he's taking that view. So. With all that in mind, what do our panelists today think about EU and China? Is there an alliance rising? Are they just making commemorations, sort of talk or noises because it's the 50th anniversary? Irina, I start with you.
Irina Slav [00:05:32] Of course you would, because I'm the closest, thank you. This Reddit comment is really amusing, I hadn't seen it. It's just adorable, it would have been adorable if they weren't in politics, these people who think that real life and real geopolitics is a Hollywood blockbuster movie. But apparently that's where we are. We have people running the show who think they live in a movie. Remember Kaya Callas posing like a Bond girl or something, another guy like this?
Tammy Nemeth [00:06:14] Really?
Irina Slav [00:06:16] So sweet. But I think the EU is realizing that if it really wants to go to net zero, it can't do it without China. I mean, various analysts have been saying, you cannot do it on your own. You have to, there's no transition. What was it? Was it with McKinsey or someone else, probably McKinsey, I don't know, who literally said There can be no energy transition without China because it's got the cheap panels and the cheap turbines and cheap everything. And the reason it has all these cheap things is because its energy costs a lot. We've talked about this so many times, it's embarrassing to even mention it, but what I find particularly frustrating is that the EU has been, you know, has been caring with this rather belligerent talk that we're going to build our own supply chains, we're going to decouple from China, we are going to stop relying on them to depend on them so heavily and what are they doing now? They're talking about partnership, about cooperation. Can you get any more hypocritical than the EU right now?
Tammy Nemeth [00:07:39] Hippocritical or schizophrenic because it's like one slide is like, oh, we have to.
David Blackmon [00:07:47] Yeah, I'm over it.
Irina Slav [00:07:49] Yeah, and as for Russia, clearly the EU is being run by people with the mental age of below 10. Russia and China are run by the people who are mentally adult. So they have their interests, they pursue their interests. Both countries. I don't know if the EU can really put a wedge between them. But in the end... It's the geopolitical, the economic interests of these countries that will influence their foreign policies. While in the EU we have the kids. No, seriously, these are not serious people. I'm totally fed up with all of them. I need to see some adults in the room in Europe.
Tammy Nemeth [00:08:44] Good Luck. Yeah, I don't know who, like I'm thinking of the various EU political leaders and I can't think of any that act like adults. I know. That's really sad. So David, I was thinking when we first talked about this topic and it seemed to me like the EU was fully aligned with the United States under Biden and the progressives. Yeah and I was think of it in terms of a dance card and now I'm thinking maybe they're looking for a new sugar daddy given Rutte's comments at the NATO conference but You know, it's like when the progressives were there, there was this new global order, they were, there were this bifurcation, and it was EU America and the West, and then there was China and the BRICS, and that there was this division happening. And now the EU is kind of like, America's going off doing something. Can they be part of the BRICS? What's the EU to do? Are they just looking for someone who can help them do their military or what? What is your take on this?
David Blackmon [00:09:54] Yeah, they should be careful looking for a new sugar daddy because Xi Jinping is more like a sugar grizzly, right? I mean, China, well, of course the United States is, as much as we like to talk about our friendly relations overseas, the United State is pretty aggressive too, about protecting its own interests. When we have a president, a real president in office, for the last four years, we had a fake president in office and the administration was run. By the same kind of emotional children that are running the EU. And so, yes, we were fully aligned on all the green stuff and the global climate alarm stuff. And we were in the process of beginning to de-industrialize our economy here in the US, just as is happening across much of the EU and in the UK, unfortunately, it's really sad. But one of the ironic things is to watch how The same EU leaders who greet Donald Trump as a hero at NATO, consider him to be this social outcast at the EU and it's really kind of amusing. We had in the United States for the previous four years and, and eight years prior to that with, with the Barack Obama administration, uh, we were, you know, fully comfortable with having our supply chains controlled by China. Uh, and it's the, the prime example in the U S under Biden was that, what was it? July is either June or July of 2021. Biden makes this or reads this speech from his teleprompter committing his his administration to a whole of government effort to free supply chains for critical energy minerals and rare earth minerals from Chinese control. We were going to work with our allies in South America and other parts of the world to obtain our mineral needs, which are not just for green energy. They're also crucial to our energy. Every weapon system has to have those magnets made with rare earth minerals to function. So, you know, he committed this whole government approach to doing all that and didn't do a damn thing for the next three and a half years to actually accomplish any of it. And so Trump comes in, he's working and focused on accomplishing it. It's, it's what motivates him to want to acquire Greenland or at least engage them in a strategic partnership on those rare earth minerals. Uh, it is what motivates the talking points about Canada becoming the 51st state. It's what motivates, uh, him wanting to retake us control of the Panama Canal. All of that is about controlling those supply chains for rare earth minerals and ensuring the freefall of shipping through the Panama canal. And, um, that's not popular at the European commission or with the ministers at the EU. And so, I mean, I just think it's just inevitable that Europe is not going to get back into the hard rock mining business. They're just not. They gave that up 40 years ago in the mid eighties, just like the United States did. And, and said, we're going to turn that all over to China and other countries to mine and to process these kinds of things because it's dirty and we're clean and we're green and we've pretty, you know, in the West. And so we don't want to do any of that dirty stuff. And Trump isn't real worried about being clean and green, he's worried about national security and energy security. And so, there's a separation here between the US and the EU and UK that's just inevitable. It's going to happen, the best I think the EU can hope for is to keep NATO together. If they really truly believe Putin's going try to conquer all of Europe, even though he's having to borrow. 100,000 soldiers now from North Korea just to keep trying to hold his ground in Ukraine. So I'm not really sure how he's going to conquer the rest of Europe with that particular military establishment, but we'll see, I guess. It's just, it's an inevitable progression, and the United States is... You know, maybe in the future it may be a more natural ally of Russia than it is of countries like Germany and the UK, if the UK is going to continue down this road. I mean to outright communism, that's what this Labor government is. It's a communist revolution. It's progressing extremely rapidly, which is why they're about bankrupt. As we see if you mentioned that treasury minister crying in parliament last Friday about it all, because she can't manage the budget now. Um, and you know, it was a, that's what that speech, the vice president made over at the security conference in, uh, was it in Brussels in April, Munich in April that's, what that was really about the United States is, is going to have a hard time. Remaining committed ally of a country that arrests, discriminates against its native people and arrest them for posting memes on Facebook and sentences them to prison terms. This is not a free democracy as we have known it anymore. And America was well down that same road, so I'm not casting stones here. We were about to go down, fully down that same path. Until Elon Musk purchased X and that changed everything. So as angry as many of us are at Elon Musk right now for mounting this idiotic third party, what a clown show that's gonna be. We must remain eternally grateful to him for literally changing the course of history with a single $40 billion investment out of his own pocket, so. I've got, no, this has been a hell of a filibuster, hasn't it? Anyway, to summarize, it's my rant for today, everybody. To summarize, this is inevitable. It's the natural progression, unfortunately, of geopolitical considerations between a country, the United States that has now had a sea change election and is about to move back down a path towards more traditional energy sources and a continent in Europe and the UK that remains committed to this WEF program where we're all going to live tiny lives and never be able to travel and have a digital currency that's about to be rolled out there in Europe. It has digital currency already and yeah yeah so you know it's inevitable
Tammy Nemeth [00:17:23] Yeah, there's the there's these similarities between the path of the EU and what China is doing and So, you know, they're they're similar partners in some ways and Stu what's your take on? You know, is the EU looking for a new sugar daddy? Do you think they become part of bricks? Um Is there is this just a bunch of rhetoric that they talk about because it's the 50th anniversary or do you think this? There's more meat on this
Stuart Turley [00:17:52] I think that BRICS is not going to happen. I think China will not invade Taiwan. They will have a better chance of invading Mongolia. I didn't see this on my bingo card, and I'm serious because honestly, Russia has lost some leadership with Mongolia and there are great assets. This is all about, right now, the Bank of London is broke. Absolutely broke. They have been going around trying to acquire mineral deals around the world. They are trying to their balance sheet just like the United States has been adding in to their balance sheets. We are about to see a complete realignment of trading blocks. We're going to the United States, Russia. Saudi Arabia, the UAE, India becoming a major trading block, the EU is going to wither and die, the UK is going absolutely collapse financially, and this is now going to be a horrific situation when you sit back and think that in China, China has got some serious financial flaws going on right now. So 400 of their 500 manufacturers that support their car industry just went bankrupt in the last 30 to 60 days because of the tariffs. So you have now 100 manufacturing group in that. So you had the EU needing to re-weaponize and they've made commitments. And Tammy, you point this out that Canada is saying, oh, we're going to count roads as part of our NATO security, right. We're gonna have creative crayon accounting. Boo-hockey, that does not work in Texas. So when you sit back and take a look at how all this is going to see, BRICS is gonna fall off on the side and your question is very valid, Tammy. We have a regime change that's about to happen in China. President Xi is being set aside and they're putting in the next guy. Is he worse than president Z? I don't know, but they are getting ready to put a whole new guy in. President Z had a mild stroke that doesn't set. Well, they are not like the United States and just watch. And I see Tammy typing away going is Stuart right. Right about this. Yes, Tammy, please double check me. And you're going to see some of this go on right now. So when you take a look at Saudi Arabia The UAE and the Siberia 2 pipeline has been approved and is now starting to go through. But what is even more critical and has not been on mainstream media is the completion of several railroad lines around the world. Those railroad lines carry a lot of tanker oil to India from Iran. You have I rat you have Syria now looking at some serious pipelines because now Uh, we've taken, uh, off of that. So I have never seen such a global reshifting of everything. And it's because the bank of London, the bank, of Paris, and actually the Vatican is in a situation where they're bankrupt and I've never seen a realignment of people trying to get their, um, balance sheets back online and president Trump, the one thing that those people don't have. They don't have a President Trump and his team. Now, is President Trump perfect? Heck no, but is he on target? I think he is. And as David said, I cannot wait for a political midterm next year in the United States with a third party when you have a traitor like Mike Pence is now stepping up to be in this political party. And you have-
David Blackmon [00:22:16] That's a rumor, that isn't official.
Stuart Turley [00:22:18] And if you get somebody like Mark Cuban, who is absolutely a bozo waiting to happen. Holy smokes. He is a clown. This is going to be a clown show like you wouldn't believe. Even I could not have made this up. So how's that Tammy? Did I get pretty close?
Tammy Nemeth [00:22:42] So, you made an interesting point there about the rail lines, because one of the big things that China did is they created this massive rail line throughout the EU. And it goes from China down to, I think, when there was a port in Germany, and I think they were extending it to a port, in France and maybe one in Italy. And talking to people in the European Union in various countries, I know that there is significant. Increase in the Chinese population at the different ports and whatever, and it's raised some concern amongst certain people. So here we have this massive rail line. China's extending part of the Belt and Road Initiative throughout all different regions, including the European Union. The European Union says that they want to, you know, friend shore and do all this stuff to separate themselves from critical minerals and processing from China. But then in this discussion last week. The EU was saying to China, we need more certainty on getting these critical minerals from you. So I understand that right now they don't have the capacity to replace what China has provided. But, you know, now they want to cut these. Deals with China regarding the critical minerals, at the same time they're saying we want to build up our own supply chain. And I know that there's a Brussels-based or Belgian-based chemical company called Solvay, which has increased their critical mineral processing facilities in France. But there's also, you know, One of the reasons why I think Canada has been recruited to have these tighter relationships with the EU, not just to upset America and everything else, but because Canada actually has a lot of these critical minerals. So Irina, what do you make of all that and does it go back to the kind of schizophrenia of the European Union?
Irina Slav [00:24:43] Absolutely. What you described is bipolar disorder at the political level. But I'm wondering how they will swing it so, or rather spin it so it doesn't seem bipolar. Because they really are big on the talk against China, against Chinese dominance in raw materials. But I was actually I wrote a feature story today for oil price about Chinese companies snapping up mines around the world. They've been doing it for years, they have been securing their supply chains and now Western companies, this is so funny guys, so the FT reported this about the snapping up of mines by Chinese companies and then it publishes an in Albania, the South African Minor. Who's calling on Western governments to start subsidizing mining companies so they can compete with Chinese miners on a global scale. So basically, let's even the playing field by being like China.
Tammy Nemeth [00:25:58] Who can compete with that? I mean, really, because China, you know, they subsidize their own production and they wait for companies to make all these investments. And when they start to put their things on the market, China floods the market.
Irina Slav [00:26:13] Because it subsidized it all and because it has been thinking long-term and strategically of which apparently our brave leaders in Brussels and across national capitals are currently incapable. I mean they are 20 years late to this party of building supply chains for critical materials. Basically, what they're doing with China right now, I think, is partly desperation and partly acknowledging the reality of how things are. But instead of, you know, once again, stopping and perhaps reprioritizing that whole transition business and first thinking about energy independence and stuff like that, perhaps even energy affordability. They're not doing this, no, they're trying to compete with China by trying to be more like China and trying to play more with China.
David Blackmon [00:27:21] It's not possible.
Irina Slav [00:27:23] It's not, it's not but they will try to do it. I don't know what to say.
Tammy Nemeth [00:27:28] Yeah, at the same time, they're complaining about Chinese emissions and a lot of the solar panels and wind component, wind turbine components that come from China are made with coal power, which the EU is upset about because it has these high emissions. And wants you know China to take more action on that. So once again it puts the sort of EU energy security even if they're going to go forward with the transition into some difficulty if they want to insist that China take more actions on emissions because I'm thinking China will increase the price and say oh okay you want us to lower emissions you want to buy our It goes to lower emissions.
Irina Slav [00:28:08] Nobody knows better than the EU, after all. Yes, exactly. After all. I just refuse to acknowledge it.
Tammy Nemeth [00:28:19] David, what do you think of what Irina commented on there?
David Blackmon [00:28:29] I mean, I think she's absolutely right. This is all just, you know, I mean I try not to be cynical. I really do. I don't like being a cynical person. But I don t know that there's any way for any of this to be avoided, really, in the EU or in the UK. You know, I was watching a, I saw a great documentary yesterday, a four-part. Netflix documentary about the 7-7 attacks in 2005 on the subways and in in London and then again on right and the busses subway in the tube in London, and then their follow-up attacks on the 21st that failed because they didn't make the explosives right. But I found myself absolutely nostalgic for the leadership qualities. Of Tony Blair.
David Blackmon [00:29:36] it what i'd be yes i understand but but when you compare him to the leadership in, not just the UK, but all across Europe now, it's night and day. Just in terms of real leadership qualities and the ability to make decisions that actually make sense. It's so sad to me to watch, especially what's happening in the UK because I do believe this government is a communist government. And, and it's just all falling apart now. And that's not good for anybody. It's like, you know, I don't, I don't want anyone to think I'm celebrating any of this stuff that's happening because the Europe, United States, and all these European countries that have had such a positive, a, you know, mainly positive relationship, uh, for over a century now and Alliance, and that has done a lot of good in the world in addition to a lot of bad. Um, and so now we're, we're kind of embarked on this, um, brave new world in which these alliances are in the process of realigning and, um. You know, the, the one thing we can know and easily predict is that none of it is going to be predictable. And we don't really know what the, what the negative or positive impacts of these alliance ships is going to have on all of us and our families. And, um, I'm afraid we lost Stu.
David Blackmon [00:31:21] He was battling to keep his, uh, star link online. And now I'm going to have to figure out how to load our slides. So you ladies take it away while I try to figure it out, how to reload those slides here.
Tammy Nemeth [00:31:33] Well, you know, with respect to what you said about Tony Blair, what's interesting is that he's still there behind the scenes, putting forward policy ideas and doing all these things, you know, trying to explain to Keir Starmer and the Labor Party how to do these different things. And in particular, the the Blair Institute, and he partnered with, I think I forget what his name is, is a former conservative guy. I can see his face, but I can't remember his name, Hague or something? William Hague. Yeah, so last year I think it was they produced a report together about how Britain absolutely needs a digital ID in order to address all the illegal immigrants coming in because somehow illegal immigrants need you know are going to comply with the digital ID and then and then tied to that would be a central bank digital currency. And they need to get a grip on AI so that it can be used for the benefit of government and the people and you know whenever they word things like that it always you know causes my little spidey senses to to perk up and say well maybe that's not such a good idea. So, You know, if we, to sum up what we've talked about so far with respect to the EU and China, is there this new alliance coming about, Stu says we're in the middle of a churn where things are changing, David agrees, we're not really sure what form this is going to take going forward, I found it interesting that China and the EU were talking about how they both believe in a rules-based order, but everybody agrees that China kind of manipulates the rules- based order for its benefit. And the EU, exactly. All the countries. All countries try to weaponize that or manipulate it.
Irina Slav [00:33:24] Order is is of the sort rules will be but not for me right right it's not going to work in the long term but may I just note that William Hague notoriously said a few years ago at some op-ed somewhere that Britain will have to go to war with other countries to make sure they are cutting their emissions
David Blackmon [00:33:52] Holy cow.
Irina Slav [00:33:53] What's the kind of brain we're dealing with?
David Blackmon [00:33:56] That's insane.
Irina Slav [00:33:58] But that's what the new guy... More solution-cutting efforts in other countries.
Tammy Nemeth [00:34:03] But that's what that new climate institute at the Council of Foreign Relations said. They came out and said that we absolutely that America needs to prepare that war might be needed in order to lower emissions.
Irina Slav [00:34:20] War is very energy-intensive and emission-intensity, but these are different, I'm sure these are different emissions. I'm, sure. I'm. It means something else. Better emissions.
David Blackmon [00:34:35] That's just nuts. Guys, I don't have these slides, unfortunately. I thought Stu had sent them to me. He didn't. So we're kind of on our own just in terms of, you know, doing our.
Irina Slav [00:34:51] Well, I only remember one of my stories where it was in tune with the topic. Bruegel published this paper suggesting, you'll never guess what they suggested. They suggested that Europe outsources certain things like ammonia to countries with lower energy costs because it doesn't have to produce all these things. They mentioned ammonia, specifically. As one of these things that Europe could outsource because that's a completely novel idea and not at all at odds with Europe's plans to produce more of what it needs at home in order to reduce its dependence on China. Of course.
David Blackmon [00:35:43] Let's see here, Irina, I think I've got your email, the other ones that you wanted.
Tammy Nemeth [00:35:48] The Financial Times one, which is Berlin Explores 4 billion subsidy for German heavy industry.
Tammy Nemeth [00:36:00] How sweet.
Irina Slav [00:36:02] The headline says it all, really, doesn't it?
David Blackmon [00:36:07] It really does.
Tammy Nemeth [00:36:08] What what are they subsidizing in order to make up for the high electricity costs and the lack of natural gas?
Irina Slav [00:36:15] Yes, I'll be quoting directly because I can't paraphrase, it's too delicious. The measure is part of efforts to reduce electricity costs for industrial groups, to revitalize the Eurozone's largest economy after its longest post-war period of stagnation. Yeah, I mean, you know, the industry has been crying for help for a very long time. Well, relatively, I mean, two years and they've said, basically, you're on your own. We'll just tax you more for your carbon emissions. Now, after how many quarters of negative growth or around zero? Changes in GDP growth now they're realizing they will have to start spending billions on the heavy industries as well Because they cannot survive on their own
Tammy Nemeth [00:37:11] Because they're moving to China. Anything heavy industry that requires a lot of energy inputs, like the chemical companies have been shifting to China, so.
Irina Slav [00:37:22] Yeah, but. They'll be losing jobs. And by the way, bankruptcies in Germany are at the highest in 10 years, but I'm sure it's all right. And more subsidies will fix it.
David Blackmon [00:37:35] I'm sure it is.
Tammy Nemeth [00:37:35] Yeah, for sure. Well, I'm interested to know what you think, Irina, about the EU's methane regulations where it's they're supposed to. They're creating a massive database where companies that are exporting to the EU oil, natural gas or coal, they have to provide what their methane emissions are if there's leaks and all this kind of thing. So they're going to require all this monitoring. They have to provide a report. Then the EU is going to create this massive database so that companies can can prioritize, importing companies can prioritize from where they receive their oil, natural gas and cool. What do you think? I know that's a bit of a digression, but what do you think about that?
Irina Slav [00:38:24] I think energy is going to get even more expensive in Europe because this monitoring costs money and exposes to Europe will probably add more to these costs because it will be a hassle. Didn't we just lose, when I say we I mean humankind, didn't we lose a methane tracking Satellite? What are we going to do now? How are these companies going to monitor their emissions? This is just more of the same. Energy will get even more expensive in Europe and the German government and every other government in Europe will have to start subsidizing fuel again.
Tammy Nemeth [00:39:06] Right, that's why I mentioned it because I thought they might end up having to do the subsidization route. Absolutely, they will end up doing this. So David, just to stick with this for just a second, do you think America will comply with those rules? Do you think Qatar will comply?
David Blackmon [00:39:29] Well, I mean, they're going to have to, to some extent, right? Otherwise they're gonna be facing penalties and potential, you know, inability to do business in some countries. And, uh, so I, I, uh I know the United States, I know Trump is, uh. You know, in his, uh tariff negotiations with the EU and, and, and UK has made those regulations a topic of priority in, in those negotiations, but you know how strongly he's going to stand up for that I'm not sure cutter I don't know you know what their real leverage is geopolitically other than you know they have a lot of gas
Irina Slav [00:40:11] They said they wouldn't do it. They already said they're not doing anything, monitoring things, so. Right, and so that's the thing. They have not, it's just not going to sell to Europe. Good luck.
David Blackmon [00:40:22] And so the question then becomes, right, is Europe going to be willing to cut off its nose to defend those, uh, regulations? And I, who knows? I mean, this is a religious exercise, right? And so there is a, a religious zealotry behind all of this. And, and so these are not, you know, always talk about China being a rational actor as a, as a government. The government acts rationally to protect its country's interests and its energy and national security. The EU and the Biden administration that we had in office for the past four years were not rational actors. And, and so there is a religious zealotry driving so much of this that you really don't know. It's, it's almost impossible to predict. How far they're going to be willing to go to defend this kind of thing. And, um, because I mean, if you really do believe that the world's going to burn up and we're all going to die by, you know, in just 25 years, if we, if Ed Miliband doesn't get his way, um. With all the insanity he wants, uh, then, then you're gonna, you're gonna defend this stuff with your life. And the guy that's talking about, we're going to need to go war. To cut emissions, he's serious that he's not joking. That's not me. We laugh at him, but those are the people who are in power now in Europe. And so countries like, like the Trump administration in the United States that are not willing to, to go along with that stuff, you know, we're gonna, gonna say, well, okay, you want to enforce that then find your LNG from somewhere else, go back to taking your gas. From Russia and Putin, but wait, you're afraid of Russia and Putin too. So who aren't you afraid of? Right? It just, it's, it's a really awful situation, uh, geopolitically now.
Tammy Nemeth [00:42:31] Okay, so go into your stories. Do you remember what stories you put forward, David?
David Blackmon [00:42:38] Oh, I do. I actually have those, you know, I know my stuff, right? I just don't have the slides for everybody else. Uh, the first story was a piece at Reuters saying OPEC plus speeds up oil output, Ike's adds 538,000 barrels a day of additional production in August, right. And so nominally that's true, right, OPEC did agree to say, well, we're going to put another foreign 548,000, barrels a Back onto the market. But, you know, they, in the last ever many months, it's been, I've kind of lost count, they were claiming they were putting, what, 411,000 back on the market, and in reality, I think they've averaged about 130,000 additional barrels on the mark during that time. So, you now, we read those things and you think, oh my gosh, half a million barrels a day, the price is gonna collapse. What'd the price do this morning? It opened up. Right. It went higher, not, not radically higher, but, you know, 50 cents a barrel higher because nobody believes those numbers. First of all, and apparently, you know, the global economy is doing significantly better in China and, and most other parts of the world than the IEA and these other experts have predicted it would. And so demands higher. We're, we're seeing inventories all over the world dropping. As a result, because the market is not nearly as oversupplied as people continue to talk about. It's just not, obviously.
Irina Slav [00:44:13] I keep harping on about it oversupply
David Blackmon [00:44:17] They do. Yes. I mean, and supposedly we've got a 2 million barrel a day oversupplied market and yet the inventory is everywhere or falling and the price goes up. Uh, so who knows what's reality anymore? I don't, we can't even trust. I mean we, it's unfortunately it's really sad, but we go back to the climate, Zella tree, it even impacted, you know, things like the IEA, which we used to be able to rely upon for accurate information. Now, intentionally putting out inaccurate information to support a narrative of climate alarm. And so that has big impacts to everybody, folks. It really does. And unfortunately, we need to figure out a way to correct that. Second one was, and Stu just said his laptop died. The OBBA, well, this was one I wrote, so I can't attribute it to anyone else. And so. Nobody else probably shares this opinion, but my opinion about the one big, beautiful bill act is that it basically reset the energy policy playing field back to 2019 in the United States before, you know, before the COVID pandemic and all the climate madness took hold here in the united States. We've, we've rolled back, you, you and I know, um, Alex Epstein and others are furious at Congress for not just outright repealing the subsidies for wind and solar electric vehicles, they're phasing them out instead. But when you look at how that all works, and I have nothing but respect for Alex and the others. When you look how that provision really works, those projects have to be under construction a year from last Friday, so July 4th, 2026. If the project's not under construction, then it's going to see steadily diminishing ability over the following three years to access even parts of those subsidies. And that's going mean, you know, these are companies that all have to borrow essentially all of their capital because none of them has a workable, sustainable business plan in place without the subsidies. What's capital going to do? What are private investments firms going to do? What's BlackRock going to do? You know, what are the banks going to do? Well, they're going to take a look and see that, well, gee, our rates of return are going to diminish on a stair step manager over the following three years and then be less than zero after that. And these are all long term projects, you know, that claim they're going to be in a business for 25 years or more. And so the capital flight that's going to take place out of the wind and solar businesses is going to be astonishing after next July 4th, it's going to be a flood and where's it going to go? It's going go into the fossil fuel industries because you know, they're sighted while this is we haven't invested nearly enough in new reserve finding in oil and gas and we've, we've intentionally tried to kill our coal industry in the Western world. Over the past 15 years. And so we need hundreds of billions of additional dollars of investment going into those industries just to keep the damn lights on now, because you're not going to see, you know, a big flood of solar after next year. So I think even though Congress did blink and the, the white house did blink, the net effect of what they've done is they're going to kill those, those industries. And then same thing on the EV industry can, can, can even Tesla compete against internal combustion cars in the United States without that $7,500 federal subsidy per unit. I don't believe they can. That goes away at the end of September. Uh, it's going to be a bloodbath in America's EV industry after that. And, um, so whether they intended to, or not, I think Congress, the business realities of how capital acquisition in the business world really works, is going to dictate that all of those industries are gonna be struggling just to hang on very quickly.
Tammy Nemeth [00:48:48] Those are very interesting points.
Irina Slav [00:48:51] It will kill more than these industries, it will kill a central theme of the transition narrative that says that wind and solar are cheaper than everything and profitable even without the subsidies. This is going to die so loud.
David Blackmon [00:49:12] It will prove the lie, that it's always been a lie, that narrative, and it's going to become reality very quickly, everyone's.
Irina Slav [00:49:22] It's going to be brutal.
David Blackmon [00:49:23] Yes, it's gonna be brutal
Tammy Nemeth [00:49:25] I guess it depends on how they define construction.
David Blackmon [00:49:29] Well, you know, it's the most liberal definition possible. You just got to got to begin acquiring the materials and turn a little dirt and you're under construction. How many are they really gonna be able to start in the next year that will allow them to even qualify for parts of those subsidies?
Tammy Nemeth [00:49:52] Will they risk it? Yeah, that's a good point. Speaking of Blackrock, I just want to throw in here that they withdrew their Ukraine fund. So Blackrock was going to be part of the central component of the reconstruction of Ukraine and they were trying to get all these investors in there to do so and they just withdrew that fund. I guess they couldn't get enough uptick.
Irina Slav [00:50:20] Yeah, well, that's because Russia is losing so badly, it's advancing and it's just getting control over the largest lithium deposit in eastern Ukraine, so that's why.
Tammy Nemeth [00:50:31] Ah, very interesting.
Irina Slav [00:50:35] Apparently, BlackRock couldn't find any takers for this massive reconstruction fund because they're not sure it's even going to be Ukraine in a couple of years.
David Blackmon [00:50:44] Right, right.
Tammy Nemeth [00:50:48] Um, so my stories today, uh, the first one was in the, a publication called offshore technology, and I love this one. I was thinking of Irina when I read it because they're like, this is so cute for Germany, Germany approves North sea gas drilling. So Germany has approved. North Sea Gastro League. And when I read this story, I just laughed because the company involved is trying to be so virtuous and saying, we're ready to pull the plug once demand is met. When we don't need it anymore, we'll stop producing. Oh, okay. Isn't that normally how it works?
David Blackmon [00:51:39] Oh, God.
Tammy Nemeth [00:51:40] Yeah. So the drilling is to be conducted by a company I've never heard of called One Dias, which I guess is it a Norwegian company? No, maybe I'm thinking of a different story, but I just thought it was really funny and they have to make a final business decision on whether or not they go forward. They're partnering with the Netherlands, even though the Netherlands had and offshore natural gas production. Because of earthquakes or something. So it's interesting that now the Netherlands will partner with Germany in order to develop offshore natural gas. So energy reality bites Germany.
Irina Slav [00:52:25] Oh, and don't forget the part about sourcing the energy for the drilling operation from wind turbine. In a marine protected area.
Tammy Nemeth [00:52:42] Area, that's right. The marine protected area, they're going to use wind.
David Blackmon [00:52:45] And when do they think demand is going to run out? I mean, that's what kills me about it all.
Tammy Nemeth [00:52:52] Like, who were pressing to pull the plug, they said.
David Blackmon [00:52:56] Sure there are, yeah.
Tammy Nemeth [00:52:57] Sure. Yeah, so environmental action in Germany is really angry and they warned that it will have a catastrophic effect on biodiversity in the North Sea. And I'm like, well, how many other rigs are out there in the north sea? And I think Equinor also makes this case that, you know, they're sustainable because their offshore platforms also use renewable energy or something, I don't know, but. Yeah, so that's Germany with energy reality biting them in the butt. And then my next article is from the Telegraph UK and the headline was Miliband to cover Britain's lakes in floating solar panels. So, uh, they plan to
David Blackmon [00:53:47] This man hates mother nature, doesn't he? He does! He hates mother... Anyway, sorry.
Tammy Nemeth [00:53:52] And I'm like, you know, the UK doesn't have a whole lot of lakes, and the ones that they do, they're often used for recreation and whatnot. So I'm trying to imagine, like, would they consider doing this on Lake Windermere, which is like this massive kind of tourist draw near the Peak District and the Lake District?
Irina Slav [00:54:12] Not the lake district is it going to be the floating solar district soon? I know
Tammy Nemeth [00:54:19] I was thinking, and on our boats gonna dodge the solar panels, I mean, are they gonna cover the whole thing? What does that do to the life within the lake? As you know, it just, anyway, he wants to, he want to quadruple the use of solar in the UK, which has the second worst. It's the second worse place in the world for solar power. Number one is Ireland and it's like It's a terrible situation in the UK for solar because it's often gray, it's often overcast and kind of makes no sense. But yeah, they're going to quadruple it and they published a new solar roadmap.
David Blackmon [00:55:04] That's solar roadmap. So Minnesota, the state of Minnesota here in the United States, which is where our former vice presidential candidate, Tim waltz is governor is called the land of a thousand lakes. So now we're giving Tim walsh a terrible idea to turn his state into the land of a 1000 big ass solar arrays. Floating solar, floating solar.
Irina Slav [00:55:26] There are pretty long winters in Minnesota, I believe.
David Blackmon [00:55:32] Yes, they all freeze over in winter
Tammy Nemeth [00:55:35] I don't think they could do that.
David Blackmon [00:55:37] That won't stop them. That won't t stop them
Tammy Nemeth [00:55:40] But I can up that one. So in Canada, in the Arctic territory of Nunavut and the Northwest Territories, the government has announced subsidies to put solar panels in the arctic to help with the power supply of the Inuit up in the Arctic. I'm like, so half the year you get no sun. How does that work? So for half the year, you'll have, you know, I guess the solar panels will provide some electricity, but what do you do for the other half of the year?
Irina Slav [00:56:20] And huge massive batteries, they have the space.
David Blackmon [00:56:25] Sure. The technology is just around the corner for batteries with a six month discharge life, right? So we'll tell you.
Tammy Nemeth [00:56:33] In in minus 40 for sure for sure
David Blackmon [00:56:42] And then you got to account though. The other problem is you got account for all those days when it's cloudy, right? So it's really not even half the year because it's cloudy a lot of the time up there.
Tammy Nemeth [00:56:52] Yeah.
David Blackmon [00:56:53] Just it's all
Tammy Nemeth [00:56:56] It is insane, but I'm waiting for the energy realities to hit Canada. I don't think we're there yet and you know, Germany's starting to, I don't know, be hit by it, but whether or not anything comes of their North Sea natural gas development, I don't know. I think it probably still has to run the gauntlet of various approvals and whatnot. So they may make this announcement, but who knows when it will actually happen. That's,
Irina Slav [00:57:29] Doing it.
Tammy Nemeth [00:57:30] Yeah, they're considering it.
David Blackmon [00:57:33] It's amazing, absolutely amazing. Guys, I'm sorry I was not able to load up those slides anyway.
Tammy Nemeth [00:57:41] That's okay. We got to talk about it anyway, so.
David Blackmon [00:57:44] Yeah, we did fine.
Tammy Nemeth [00:57:45] It's all good. I think that's it for today. And I'm really sorry that we lost to to a dead battery. So you know, exactly, exactly. Even a laptop battery can seem to last more than a
David Blackmon [00:58:00] I'll tell ya, but the new generation of batteries is just around the corner as it always has been for the last 50 years.
Tammy Nemeth [00:58:11] Well, apparently, Japan has developed a new kind of solar panel that they've been researching and developing for many years now. I think the Department of Energy had also given some money towards it, and they're just at the point of commercialization. And how often have we heard that?
Irina Slav [00:58:27] Every week.
Tammy Nemeth [00:58:29] Almost there.
David Blackmon [00:58:30] Almost there.
Tammy Nemeth [00:58:32] Almost there. Okay, well, I think that's it for today. We're gonna end early, a minute early or so. So thank you. Thank you to everybody who are probably on holiday but have still tuned in. We appreciate you.
Irina Slav [00:58:47] Thanks Robert for being here.
David Blackmon [00:58:49] Thank you, Robert.
Irina Slav [00:58:50] Thanks, guys. This was fun.
David Blackmon [00:58:52] All right.
Tammy Nemeth [00:58:52] Thanks everybody. See you next week.
Irina Slav [00:58:55] Bye-bye.
Tammy Nemeth [00:58:57] Bye.
Sponsorships are available or get your own corporate brand produced by Sandstone Media.
David Blackmon LinkedIn
The Crude Truth with Rey Trevino
Rey Trevino LinkedIn
Energy Transition Weekly Conversation
David Blackmon LinkedIn
Irina Slav LinkedIn
Armando Cavanha LinkedIn
Our Podcast Sponsor
Share this post