Week Recap: Trade Tensions, Oil Trends & Reconciliation

US oil producers are struggling to defend margins at $60 WTI due to additional corporate costs that raise the all-in breakeven price. Trade policies and market volatility are threatening US oil production growth, particularly in […]

The steep learning curve America faces if it wants to return to previous shipyard glory days

April 15, 2025 Stu Turley

Highlights of the Podcast

00:00 – Intro

01:52 – DAVID BLACKMON: Reconciliation Permitting Reform Will Make America Go Big Again OPINION

06:59 – Why Falling Oil Prices Are Not Always Good News

11:34 – U.N. Maritime Agency Slaps First-Ever Emissions Tax On Shipping In Latest Money Grab

14:48 – China Halts Critical Exports as Trade War Intensifies

17:14 – Lower Oil Prices Threaten Permian Basin Growth

20:23 – The steep learning curve America faces if it wants to return to previous shipyard glory days

23:49 – How to Strike Trade Deals in Record Time

26:55 – Outro

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

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Stuart Turley: [00:00:00] Oil is a huge boon for the Texas economy. In fact, how many billions of dollars did we have in surplus because of the great oil and gas environment out there? Why is Texas half the price of the electricity than the other states? It’s because they have a balanced grid. And so when we take a look at the US, and as this article points out that Robert points out. We are looking from net importer to net exporter for right now. The US was importing 12.5 million barrels of oil and finished products per day. At that time, dropping oil prices translate to major savings, but in 2025 the picture. [00:00:44][44.1]

[00:00:52] Hello everybody, welcome to the Energy Newsbeat Podcast. This is the weekend edition. It has been a crazy week here on the news desk. The staff is picking out the best stories of the week, and we are off and rolling. Have a great Saturday. If you’ve written a book, I want to visit with you. If you’re a politician and you’re getting into politics, if you’re trying to run against rhinos or you’re Democrat and you think you know energy, reach out. We want to talk to you on the podcast and I want give Steve Reese and everybody over there at Reese Energy Consulting Uh, go to recent energy consulting.com. They are phenomenal. If you want to buy a load of LNG, or if you want too, uh, buy oil and gas, or if your an AI data center and you want a scratch in your head going, where do I put a data center in the United States? Talk to Steve and thank you all. Enjoy the show. Have a great day. [00:01:51][59.4]

Stuart Turley: [00:01:52] Hey let’s start with our buddy David Blackman. What a cool cat he is. Reconciliation permitting reform will make America big again. I’ll tell you what, this is really critical because either we’re going to have low-cost energy or we’re not going to having low- cost energy and the only way to get there is through the regulatory issues and he outlines it really well. NEPA, which was the National Environmental Policy Act in 1970, I believe, yes in 1970 with good intentions, has morphed to a bureaucratic quagmire, environmental reviews can drag on for years. Serving as fodder for endless litigation from activist groups. Take the Keystone XL pipeline canceled after a decade of Nepa-induced delays. I think if we can get this done, and what he’s talking about is putting it into the bill for funding through reconciliation rather than have to go through this Good news, bad news thing. I think if Congress would actually do their frigging job, we wouldn’t have to go through this shenanigans, but I think it’s one way to do it. [00:03:07][74.7]

Michael Tanner: [00:03:07] Yeah, and reconciliation has always confused me. And basically, as a layman’s term for what reconciliation is, it’s a way for an, basically, is Congress has the power of the purse. So if you want to spend money, you’ve got to go through Congress. It’s one of the interesting parts about what Doge is doing, and I think why there’s a lot of pushback on Doge, because it’s coming from the executive branch and not necessarily Congress. How can you? Get rid of funding that congress has as approved and that really screams while congress should have approved in the first place but well that’s not [00:03:41][33.5]

Stuart Turley: [00:03:41] doing their job. [00:03:41][0.6]

Michael Tanner: [00:03:42] We’ll leave that elsewhere, but basically what reconciliation allows is for an expedited process in order to consider bills that would implement policies that go within the Congressional Basically, it’s a way to almost streamline the whole, I mean, because we haven’t passed a budget in 20 years, I think Bill Clinton, ironically, was the last person that actually past a budget. More and more sounds like a Republican every day if you go back and listen to the stuff he talked about in the mid 90s It’s kind of funny. You know, it’s even Hillary [00:04:14][31.9]

Stuart Turley: [00:04:15] Hillary and Bernie sounded a lot like President Trump. They got the clips that are comparing them. It’s hilarious. [00:04:23][7.3]

Michael Tanner: [00:04:23] Yeah, well, in Clinton’s defense, he did balance the budget. But we’ll leave it there. We will leave it. But the point is, so in all of this, reconciliation can be used for good, can also be used bad. Specifically within, and what David Blackman’s bringing up, is within this NEPA policy, which, if you’re in the mining space, you know about NEPAs not your enemy, but it’s your quagmire. You’ll spend years and years in these, in these environmental reviews about sagebrush grass, and you know, making sure that you don’t, you don’ step on a squid in the middle of Idaho, and finally after 10 years, you’ll get a final ruling from NEPA, and boom, you can build a This is good, I like what- David Blackman points out that while this was in, when this was enacted in 1970, there was great reasons for it, and it was a good bill. Much like the Clean Air and Water Act, when it was enacted in the mid-70s, it was great thing. We needed it. I mean, you could light the Ohio River on fire, and it would burn because of all the stuff you were pumping into it. Now, is that what we need today? Well, maybe what worked today, maybe doesn’t work 10 years ago or 20 years ago. What worked 20 years doesn’t today. It’s not to get off track here, but it’s a little bit of my argument with tariffs. Everyone says, well, they worked in 1913. Great, well let’s just get rid of all the cars and we’ll go back to the horse and buggy. [00:05:49][85.2]

Stuart Turley: [00:05:48] Horse and buggy. Did you say you’re on crack? No, I am not on crack. You said, oh, not to get off track. [00:05:54][5.8]

Michael Tanner: [00:05:55] Not to get off track. Some people might think I’m on crack, but no, it’s just caffeine and water is usually what I’m consuming. But again, oh, it worked in 1913. Okay, great. Well, let’s just go back and go, let’s go live in 19 13 then. Let’s get rid of the car. Let’s go ahead and, you know, let’s get of plumbing and indoor plumbing. You can go use the outhouse outside if you want. Where are you going with this? I’m not sure. What I’m saying is, what he’s bringing up is that the fact that when NEPA was enacted, it was good, and today it’s bad. And so being able to use things like reconciliation to go after NEPAs is critical because we need to be able to be nimble with our laws. A law shouldn’t be static. To a point they should mold with what’s going on now obviously there are some things like that are in the constitution of the bill of rights that shouldn’t be as malleable but some some law that was passed in 1970 should be malleability work with the times and i really like what he’s pointing out there is that yes this was good but now it’s bad and here’s how we got to go changing it. [00:06:58][63.5]

Stuart Turley: [00:06:59] Cool. Why oil prices are not always good news? And I thought this was a great one from Robert Rapier. Oil is a huge boon for the Texas economy. In fact, how many billions of dollars did we have in surplus because of the great oil and gas environment out there? Why is Texas half the price of the electricity than the other states? It’s because they have a balanced grid. And so when we take a look at The U.S. And as this article points out that Robert points out, we are looking from net importer to net exporter for right now. The U S was importing 12.5 million barrels of oil and finished products per day. At that time, dropping oil prices translate to major savings. But in 2025, the picture is reversed. The U.S. Is a net exporter of about 2.3 million barrels per day in oil-refined products. When oil prices fall, the U. S. Now loses more on exports than it does on its imports. And I was like, holy smokes, that’s a huge impact on the budget. [00:08:09][70.3]

Michael Tanner: [00:08:09] No, this is a great, great article when talking about the reason why low oil prices aren’t always good. I mean, they are good from a cheap gasoline price. Now, there is a little bit of, well, the price of oil is not quite as tied, as this article talks about, to gas prices. If oil prices drop… You may not see gasoline prices drop as much as it used to be, mainly because we’re a huge net importer of oil. And obviously, net oil or oil traded on the global market trades at a premium. You have to add in transportation costs and add in all this other stuff to where it may not actually fallen out. We actually know that this article, I think, points out very keenly that falling oil actually worsen the U.S. Trade deficit. You know, I was on vacation last week, and I was having this talk with my brother, and I was just trying to get an answer to the question, do we have to be a net exporter? Obviously, there are certain things we need to export, energy, technology, things like that, but do we actually have to, on a net basis, actually be a Net Exporter? [00:09:21][71.4]

Stuart Turley: [00:09:22] What it is, what was your brother’s response? [00:09:23][1.7]

Michael Tanner: [00:09:24] Well he didn’t really have one because we just you know no one knows but you just hear from well if you hear from paul krugman that all we need to be a net exporter of everything’s like but do we we need make sure we export the right stuff but he’s a report certain stuff because guess what that’s the free market working [00:09:41][16.8]

Stuart Turley: [00:09:41] Well, here’s where I’m going to throw this ugly baby squirrel on our doorstep. And an ugly baby would look like in EPA regulations, why have we not updated our refineries to run off of our own sweet light crude, as opposed to having to blend and mix. We wouldn’t even have to worry about importing oil per se if we didn’t have to blend it. In order to be able to run into our refineries. And now we are the light sweet crude being blended is our exports are down in oil because people don’t have their refinerys set up for that. So it’s an EPA issue and Lee Zeldin needs to make sure we get some new budgets enabled or put. Better refineries that are better for the environment. And we wouldn’t have that problem. [00:10:37][56.1]

Michael Tanner: [00:10:38] And obviously the Jones Act makes it difficult to take oil. And I was actually having a really interesting conversation. I got a call a couple of weeks ago from a, from an old buddy of mine, who now works at the Hawaii state energy department. Oh, man, they get pounded with the Jones act because they have to buy all their oil overseas. They are a 90% of their economy and energy is, is oil based, not even natural gas based oil based. So the Jones acts kills them. And it’s one of the big reasons why their energy prices are so [00:11:10][32.3]

Stuart Turley: [00:11:11] 63% of the electricity generated in Hawaii is by oil. Heating oil is basically what it is. It is the worst for the environment. Here we have… Did they get it from the Middle East? [00:11:24][12.3]

Michael Tanner: [00:11:24] They don’t even get it from America! [00:11:25][1.1]

Stuart Turley: [00:11:26] Well, it’s actually disgusting. [00:11:27][1.3]

Michael Tanner: [00:11:29] It is. So this is a great article. I’d highly recommend everybody go checking it out. You can hit the description. [00:11:33][4.6]

Stuart Turley: [00:11:34] U.N. Maritime Agency slaps first-time-ever emissions tax on shipping in the latest money grab. I think that this is really pretty interesting when you consider the U. N.’s International Maritime Organization held a meeting in London on Friday at which Member nations agreed to impose the first global carbon tax a fee of $380 per metric ton on greenhouse gasses emitted by ships of certain and limit in a hundred dollars per ton beyond that. This to me is absolutely disgusting is that all this carbon tax is going to do nothing to solve any kind of pollution. Car and Gregory right stone is a great friend of the show. And if you sit back and take a look, CO2 is actually plant food, but let’s go to the particles and the particulate matter that go into exhaust and those things, those are pollution. The IMO estimated the new tax would bring about $10 billion per year into the organization’s net zero fund for green energy transition. You know what that sounds like to me? Hang on, a slush fund for corruption. And there is nothing that the UN can tell me that they’ve done good in the world right now. Carbon tax was a consensus agreement that did not seem to please anyone is a line out of this article. There’s a group of about 60 developing countries wanted the income from the carbon tax to go into a general climate fund, not a fund reserved solely for the shipping industry. Well, it’s a shipping industry meeting run by the UN, which has been pilfering money and trying to actually cause global migration to take down the West. Doesn’t make much sense to give this organization any more money whatsoever. So with that, I think that the UN needs to be shut down financially. And I would even vote to throw it out of the United States. And some of our readers have said, keep them in the United States so that we can veto anything that they do. But if you’re not a member, throw them out, Trump admit, but this brings up a huge point to president Trump. He’s got to build up his ships because of the UN maritime agency gets involved in anything, you know, that there are further regulatory issues possibly coming around down the corner. That’s why there is a huge migration. And I’ve been watching the shipping. New builds and everything else lng is coming on very strong into cruise lines and all of these other ships that are a cargo carriers that are new builds being made and to use lng as a fuel which means lng bunkering and lng here to stay. Also a lot better than just regular fuel oil. China halts critical exports as trade war intensifies. This story is from the New York Times and China has suspended exports of a wide range of critical minerals and magnets. That’s huge. Threatening to choke off supplies and components of central automakers and aerospace manufacturers. Shipments of the magnets essential for everything from cars and drones, robots, and missiles. Have been halted at many Chinese ports while the Chinese government drafts a new regulatory system. This is very much a huge issue and it does bring up a great point. We need to, we, we’ve got more minerals than we know what to do with the regulatory process and the mining takes 20 years to get a mine operational because of regulations, but it’s also the mining and processing. Business that China actually owns 90 percent of the market share for what we need in that mining processing of the material. We can get the materials elsewhere, but it’s that processing that we’ve got to change. And I have to hand it to Robert the Builder on X. You can see in this article, China retaliates against tariffs by putting worse fortunes than the cookie. I thought that was cute. But then I also have to hand it to, and I, he says, you know, he’s got a report out there, you nice, the says the U S relies heavily on rare earth imports. And you can see that 70% of our rare earth minerals come from China, but they also, 13% comes from Malaysia, Japan, Estonia, and 6% come from others. So we, we do rely on them. And there’s a lot of things that we rely on. I think that we will see by the end of the month China caving in or they are going to retaliate a much more of this rare earth antimony which is we need it bad for munitions and wartime things 63 percent gallium and germanium 54 percent graphite 42 percent that’s used in a ton of stuff. Trade values of 378 billion in 2022 in critical minerals. [00:17:11][337.7]

Michael Tanner: [00:17:13] Be pretty interesting. Lower oil prices threaten Hermian basin growth. This is a great, great piece for my friends over at Rice. Everybody is asking the question, okay, with this whole drill baby drill, are companies actually going to drill? And not just are companies going to drill, but at what price are they going to drilling higher? And everybody has their own idea. And some people use half cycle economics, some people’s use full cycle. For those wondering half cycle is just the cost of the well itself. Full cycle is including the road you had to build to go get there. Tank battery that you had throw up in all the corporate engineering time that you have to spend to get into that. And so most people, when they talk about breakeven oil prices, they’re using half cycle economics, which from my world of finance is a big no-no because everything’s full cycle. I don’t get, you know, I can make something look good in a spreadsheet, but at the end of the day, the bank account does not lie. Okay. And so basically what RiceDed has done is estimated the all in corporate cash flow WTI breakevn for a new well in US oil. Basically these, these are the metrics. This is the lowest number for an all-in-well that you’re going to need. And I think something interesting that they did is they, and let’s, so let’s just work through it here. Can we throw up this chart here on the screen? All in corporate cashflow, W2I breakeven places for a US shale oil place. You’ve got well head break even your half cycle economics, $32 and 50 cents. Overhead. Now we’re adding in a few more of that, what we would call full cycle stuff. $14 and six cents. All right, so now we’re at, you know, $56. Okay, or $46. Add in PV-18. We got a discount. And one of the reasons why they do PV- 18 is they talk about in this article about their, the shift from Shell 3.0 to Shell 4.0 is really this idea of higher hurdle rates that are applied to new activity, meaning the historical kind of 10% discount rate probably is more like 18. That adds another $4 and 50 barrel. When you include these public oil and gas companies, provide a dividend. You break that dividend down. It’s about $8.50 to cover debt service. It’s $2.92. All that being is the all in breakeven cost is $62 at 50 cents and what are we trading at today? We are trading at $61.37. So the all-in breakevenue cost is higher than what I’m trading at now. So what that tells you is this, everybody who’s running a rig is okay losing money. Now, this is a broad generalization. This doesn’t apply to everybody. But if you are drilling a well in US shale oil plays, you need to be cognizant of this short. There are m- m- what somebody like me on the finance side would say, we should expect a drop in US oil production in 2025. And if we don’t, that means people are just drilling wells for the fun of it. And okay, maybe you have a rig contract, maybe you half to drill this next four-well pad, but keeping a continuous rig running in this environment is kind of incredible. And this is a great piece, highly recommend everybody go ahead and read this via Ristad. [00:20:22][189.3]

Stuart Turley: [00:20:23] The steep learning curve America faces if it wants to return to the previous shipyard glory days. And we take a look at what the actual shipbuilding capacity is. The United States has numerous shipyards around various states. As of recent data, it has approximately 154 private shipyards actively engaged in shipbuilding that are very small. And there’s only four public shipyards dedicated to naval vessel maintenance and repair. We’re in a world of hurt. When you consider the number of vessels that China builds in a year is about a thousand and we build three. So you’re talking a huge number of ships. Unbelievable. And we’ve got a list in here of all the different ones that are out there. The article that’s also in the story is from America’s shipyards. The stats around the surrounding steep learning curve want to claw back any market share and shipbuilding are astonishing. And the, but we are way, way behind. We are way way behind as a cross between a president Trump and Fonzie. So we’ll just leave that alone. The U S accounts for less than 1% of global output. How do you go attack? You got 99% you can go after, but you’re gonna have to face a really big employed ship building. Today it’s around one in every thousand. It’s just amazing when you take a look at that chart. It is really amazing. And so one of the things that I was really kind of trying to bring up to this point. The U S Navy has nuclear reactors down to a science and we could branch that expertise out into the commercial sector and keep the control and licensing under the U S military framework. What about reactivating the merchant Marines and building an entire business process around selling a ship? But having the United States maintain ownership of that nuclear plant on that ship, their LNG carriers are being built all over the place. So having a small nuclear reactor and a contract for 30 years to maintain it sounds like a pretty good deal because you have zero emissions. The United States has a trading partner and you got the merchant marines reactivated and controlling this i would say that would be some pretty cool things to think about instead of just creating ships that are going to be around for 10 years 20 years build a ship that’ll be around for a long time put a nuclear reactor in the environment’s better have the u.s marine Merchant Marines maintain control of those reactors, then you could even leave the ships out if you wanted to, or sign long-term contracts. I’ve got a bad little idea, but the steep learning curve America faces is about also all the workers getting rid of the Jones Act, all the steel mills that go with it, all of the engine components. This is a huge undertaking. How to strike trade deals in record time. This is story is from Wendy Cutler at foreign policy.com. She has some very interesting points and I disagree with some of them, but I agree with some her points as well too. And I’d love to have Wendy on the podcast to have her go forth and describe some of her solutions and things, her statement that the dollar is falling instead of rising a defiance of. Tariff theory shows investors are losing faith in America. I totally disagree with that and what we are seeing is more a shift in fundamentals. The EU and the UK are following a path to decouple from the US and embrace China while individual countries in the EU are looking to negotiate their own trade deals with the President Trump’s team. If those trade deals line up like they appear, the EU may have some real stability issues, and the sale of the US dollar is through bond sales and currency holding for trade. It is too early to see what the dollar has fallen under. It’s too early see what it’s doing because the dollar has actually been lower under COVID. And so Wendy points out though, in her article, and she is the vice president, the Asia society policy Institute, countries around the world are scrambling to pull together their best teams and develop strategies and offers on trade negotiations. Thus far, the Trump administration has referenced a long list of requests from their foreign counterparts. And I think that president Trump is on the right track and go for it. Energynewsbeat.com and take a look at the full rest of this story here. But I think Scott is doing a bang up job, Scott Besson, and he is really running around trying to solve the problem. We are seeing a right sizing in trade. President Xi is meeting and he’s trying to work out more strength in Asia partners and he’s meeting with Malaysia and you take a look at Malaysia. I’ve been looking up how much Malaysia is capable of drilling in natural gas and in oil and you look at the amount of oil that Malaysia exports to China and then the amount of oil that they are capable of producing and refining. And they’re shipping a lot more oil to China than they are. So I think you just found one of the avenues for Iranian or Venezuelan or any of the other dark fleet oil going to China is through Malaysia because the numbers don’t add up. Don’t have proof on that, but the numbers don’t add up and when the numbers in the oil market don’t add up you can generally find it on a dart. Tankers. [00:26:53][389.9]

Michael Tanner: [00:26:54] Somewhere. [00:26:54][0.0][1590.9]