Big Digital Energy

0:00 I got the new Elon Musk book, it's actually I was going to send you this excerpt because I read about a hundred pages of it, but I'm kind of skipping around the book and there's just one part of

0:10 when Elon takes over Twitter and there is the head of policy, you know, Roth, who like I was hitting on you. Well, Roth bad during that because he looked like the sensor police and the Twitter

0:26 files Yeah, yeah, yeah, he was the one. Yeah, but when you read that book, it actually like humanizes him. And, you know, Elon comes in and they're like, Bring in, you will. And Elon's

0:40 like, I want to see Twitter's tools. He's like, Who has access to these? His, Elon was super worried about a rogue employee, just taking down everything. And he's like, There only needs to be

0:52 one person that has access to those tools And he's like, deleted everyone else and you all is like, I already did that two days ago. And Elon, like, he's kind of like taken back by that. He's

1:03 like, Okay. He's like, I like how this guy's thinking. And then he just like point Blake's ass. He was like, Can you be trusted? And he's kind of like taken back, but then he gets a call.

1:14 He's at lunch and

1:17 it's Elon's attorney. And he's like, Hey, Elon said reinstate Babylon B. And he's like, Okay, hold on. He's like, you know, they went against policy Our misgendering policies, that's why

1:32 they were banned. And the attorney came down and talked to him and they ended up, there's a lot of nuance to this because if you open up that floodgate of, we're not enforcing our rules, there's

1:45 all these second, third order effects. And the attorney's like, Shit, you're right, okay, let's talk to Elon. And tells it to Elon, Elon's like, yeah, but it's like a part of it. He's like,

1:54 this was written in the Constitution. It's like a presidential pardon. And you all, I didn't know if he's being serious. And he's like, yes, he's like, but he's like, this is social media.

2:03 And he's like, if we let up here, it's like everyone's gonna be asking like, hey, do we actually uphold our policies? And then I'm gonna be pushing. He's like, you can change the rule and say

2:11 that we won't ban people for misgendering things. And you know, Elon like sat there and thought about it because I didn't know this, but Elon, one of his kids transitioned. And Elon was like,

2:26 look, he's like, I want to be clear. I don't think that attacking people or misgendering people is cool, but I also don't think that it sticks and stones and violent hurting people. And he was

2:38 like, I actually like really agreed with him on that. And he's like, we started setting in these policies. Like I was actually very vocal about, hey, I think we're stripping too much free speech.

2:50 And so you see like behind the scenes of all this. And like, I was like, actually, Your world doesn't sound like a half-bed. Dude, but like I didn't hate them throughout that whole thing. Yeah,

3:02 it's so easy to black and white folks without - Oh, super, yeah. You know, without new nuance and context. It was like when the girlfriend and I were doing the birthday party on who you invite

3:15 and I'm just like, I have to invite the entire city of Richmond. She goes, What are you talking about? I go, I don't invite Lindley. And I'm

3:23 like, Oh, you know, it's just like you could add the lights. Yeah. So yeah,

3:28 no. Yeah Everybody's coming. Yeah, let me get a few seconds. Sure, Basel, how was your week? We could have just rolled that in the BDE.

3:44 I thought we were gonna be quiet. I wouldn't be asking you to jump. Basel here, fucking herself. Come on, Basel. I was thinking about that. You know how I told you about, what's the fantasy

3:48 football at Matt Berry? Yeah. He's like, Man, he's like, my newsletter. He's like, No one comes to me for fantasy football picks. They want to know, like, what's life like with my son, like

3:58 even just like interesting things like that. Like, hey, we read something like we should just like talk about that stuff. So, so one of the greatest things Matthew Berry ever wrote was an article

4:08 called this time. I said, yes. And you know, his, his wife has three boys with the first husband. And one of the boys came to Matthew Berry and said, Hey, you know, can we start a fantasy

4:24 football league. And everybody asked Matthew Berry to do that all the time. And he always says, no, because he didn't have enough time. Yeah, when his step sign came in and said, he said, this

4:34 time I said, yes. So they were at a soccer game. And he went up to the first husband, they'd always been respectful to each other and just said, Hey, you know, me and I forget the son's name,

4:43 John, or putting a team together for famous football league, you and Paul want to put one together. And so they wound up having this draft at their house. And the first husband shows up with the

4:55 longtime girlfriend, he and his wife. there. And he printed out rules and half the kids that had played before half the kids hadn't. And they just had this great time. I mean, somebody drafted,

5:09 you know, pick a Mark Sanchez in the first round. Yeah. They did all that. And it supposedly just totally reduced the tensions around everywhere. Because all the friends and the parents were like,

5:22 Oh, I can invite them both to a party. It won't be a big deal. Yeah. And he said, even he and the first husband started sitting next to each other at games. They started texting each other. Hey,

5:33 you missed the soccer game. Here's some video of it. Yeah. Yeah. And the whole point of the article was this time, I said, yes. Yeah, that's, um, one shows like, if you find common ground

5:47 on things, it's just like what it sounded like you're all there. It's like, Oh, like, actually, it doesn't sound like the person that you thought he was. And there's just a lot of nuance. But

5:56 if you can,

5:58 something like fantasy football is great for that, you know? Any kind of commonality, like to your point, right? Like the internet's so weird because it's like people fight about a single one

6:08 tiny microcosm of a topic, but then they don't ever talk about all the other things that they may or may not have. We can see it in energy all the time, like all the fighting, beach and renewables,

6:18 all the gas, the nuclear, but we've seen that here at Digital Walk Adders and we've done it in things like Fuse where if you get everyone together in the same room, you actually find out that you

6:28 have more common ground than what you think. Well, and this is, I think the Founding Fathers missed one big item in the Constitution. And you're gonna laugh at this, but I truly believe this.

6:38 Political opponents running in a race should have to eat dinner together once every two weeks for two hours with their families, no media. And if I ever ran for office, I would say that to my

6:50 opponent because it just, when you're sitting there with your families for two hours, no media, no grants standing. Yeah, it's real. Yeah, it's real. You're gonna find a lot more talking

7:02 points. Yeah, so something else I don't understand. And it's too bad. Mark and Kirk aren't with us. I think they have a joint prostate exam today, maybe.

7:15 We need a skid of all BDE hosts going to get the doctor together to get our prostate for one next time I do it. I will record it because it's actually an important thing for men All right. Here's

7:27 the deal. Crude's been hanging out. Please don't record. You're getting your prosthetics.

7:34 I can't let that go before. It took a second. It took a second to record what he said. But all right. All right. Crude's

7:41 over 90. I've been hanging out over 90. But if you look at any of the indexes, they're all down 5, 3. So the public stocks are not tracking with the run up and crude.

7:56 I think is going on, and this is Mark's area, not mine, but the public stocks are just tracking the major stock indexes, the NASDAQ's down four, the SPE's down minus three. I think what's

8:12 happening is you've had treasury yields on the 30 year go above four and a half percent. So this whole notion of a soft landing, what's gonna happen is a lot of doubt being cast there Stocks are

8:26 hurting, blah, blah, blah.

8:30 I don't know what to do anymore with the public stocks. We've been talking about how there's so much run here and it just, it ain't happening. Yeah, I mean, I've never personally invested in any

8:43 public oil and gas equities because I always, well, and I just don't want to, but I always just find it so interesting how they don't necessarily just track with. commodity prices. Even if you're

8:59 there and you're really thoughtful about what's happening on a macro level and you're tracking molecules and supply and demand, there's just so much that goes into public equity stock. What does

9:10 their hedge book look like? What does their drilling program look like? What is their ESG? And markets just sometimes don't make sense in the first place either So, well, I found they actually

9:22 tracked more with spot prices. And I never understood that because arguably you've got 40 years worth of production at an EB company. Why doesn't it track the three-year strip, the five-year strip,

9:36 something like that? Yeah, yeah. And it just doesn't. Yeah, always. You know what I really enjoy though is like I enjoy watching

9:45 people go through the mental gymnastics on Twitter and you know try to explain why this or that's happening and I'm like within like 20 minutes. Yeah, so I just accept that, hey, maybe nothing

9:58 makes sense, but there is

10:02 some interesting geopolitical backdrop, which I know nothing about, but we brought in, I guess we should have ventured John in on the show. We didn't have Kirk and Mark here today,

10:17 so we brought him our substitute Armenian expert. What are you talking about? We traded up I don't know, we traded up, yeah. So John, lay it on us. What's going on in Armenia and Azerbaijan?

10:31 Yeah, so I'm gonna do my best to be concise here, but you gotta have some, a little bit of history to kind of understand it. First we had to, you know, we were talking about this in the office,

10:40 and Chuck had brought it up, and I'm really just very impressed with Chuck's pronunciation of Azerbaijan. I can't say it, so I'm glad Chuck Check in, but we're talking about that's my bar. Yeah.

10:56 That's something

10:58 I drew by John. I drew by John and John chimed in and it's like, hey, if that's my people, you know, John's got Armenian heritage. So anyways, didn't mean to interrupt you, John, you could

11:09 take it. Yeah. So both my grandparents in some way are former or from Armenia, so I'm 50 Armenian But

11:19 yeah, so dating back to 189 BC, this area, there's a name that the Azer by Johnny's call it. And there's a name that our Armenians call it being Armenian. I'm going to call it the Armenian name.

11:32 It's called art sock with a nice on the end of it. But Armenia is the oldest Christian nation in the world dating back to literally BC

11:43 And this area has been in that in Armenia or part of Armenia for over a thousand years. Of course, the Ottoman Empire came through. World War I happened,

11:55 the Soviet Empire fell during World War I, so there were some conflict back and forth, then the Soviet Union rose and basically declared this area an autonomous oblast, so kind of just like these

12:07 loose caucus area.

12:11 Then when the Soviet Union fell in the early 90s, conflict started popping back up again, generally speaking, it's been fairly peaceful over the last 30 or so years, but a majority of the

12:24 population is, it's like 95 plus percent as Armenian, but in 92 when the Soviet Union fell, they both claimed it as their own.

12:39 It was now, it was then just kind of given to the Azerbaijanis on an international level, But last week or in 20 at the end of 2022. The Azer by Johnny's actually set up a blockade on the only

12:54 route from Artsok to Armenia, effectively blocking anybody trying to flee. And so there was a lot of tension and worry, of course. I think there were some shots. Yes, no, there was definitely

13:08 legitimate conflicts. Of course, both sides say that the other was targeting civilians and children and stuff. I tend to lean towards the Armenian side of that, but the big thing there is that

13:24 Armenians basically are one of the first documented genocides on history, even Hitler referred to the Armenian genocide when talking about the Jews. And so any kind of blockade or attempt to kind of

13:37 block off that region brought up this whole like, hey, we've been through this before, like we're not gonna do this again. Finally, last week, I believe the Azerbaijanis came in in and took over

13:50 the area. this gets even more complicated because Armenia has a treaty agreement with Russia that Russia basically has a standing army in this area, Azerbaijan has a treaty with Turkey, and of

14:03 course Turkey and Russia have been going back and forth over a bunch of stuff in Syria. All of this is important to the energy space because there are a bunch of pipelines that run from Baku over on

14:15 the, was that the Caspian on the east side? Yeah, the east. On the eastern sea to over into Turkey, which also then goes out into Europe and the EU. But one of those pipelines carries over a

14:30 billion barrels per day, most of it going to Europe and Israel. Another one carries 9 billion cubic meters of gas from Azerbaijan to Turkey. And so of course, you've got ties to Russia, ties to

14:41 Turkey, and then also the EU downstream of all of this potentially being impacted if there's any kind of major conflict in this region because these pipelines run right next to it. And so - Well,

14:51 and don't forget that Azerbaijan is producing 800, 000 barrels a day. Whoa. Mm-hmm. So that's not insignificant. Yeah, that's material. Over 100 million barrels a day. Yeah. Yeah. And then

15:02 it's compounded by, of course, the whole EU trying to reduce their reliance on Russian crude and all that stuff, but if this gets interrupted or has to shut down, how do they do that when the sort

15:14 gets away? So does this conflict been, has it been increasing over - Yeah, the last few years. Couple months, couple of years. It's gotten worse. There was, I think, a direct offensive in

15:28 2020 that kind of went back and forth. And then, like I said, most recently, in the end of 2022, they set up this blockade. And then since then, it's kind of been back and forth with this most

15:39 recent activity being last week. Finally, it sounds like an update to that as of earlier today as they are finally letting Armenians leave and flee to Armenia, They're not letting them go back and

15:52 get any of their stuff and all this stuff. So you now you're gonna have Tens of thousands if not hundreds of thousands of rest refugees coming from Their homeland essentially going back to Armenia

16:02 with essentially nothing and so the the key to this is I understand It is the Russians are clearly distracted right now. Yes, and so this is giving azure bajan their their Window. Yeah, I mean

16:17 listening to john talk. That was like my next question because he said Russian supposed to have a military present presence there to Prevent this but obviously russias. Yeah, they didn't put up

16:28 much of a fight apparently last week from what all the records are and Most of the fighting was from actual Armenians in the area. Just kind of pushing back but Um now it I believe there is a

16:38 ceasefire and they are letting people flee just not You know being able to go get any of their stuff a lot of people have been at like Russian military bases sleeping outside Really crappy horrible

16:49 conditions are calling for Red Cross and other aides to start ramping things up if they're going to actually let people start leaving now. But yeah, it's kind of a similar situation to the Crimea,

17:02 Russia, Ukraine, stuff where it's this area of a region of dispute between two different countries. But to your point, of course, Russia has other things going on geopolitically that they're kind

17:14 of more focused on. And so

17:17 it's an interesting thing Well, it's something we have to watch because it's one of those things that could wind up with much broader implications. And, you know, we wind up taking a million

17:30 barrels a day of oil out of circulation because the pipeline blows up. I mean, eventually that gets diverted someplace else by ships and all, but that's not an overnighty event. Yeah, you start

17:42 blowing up oil fields. I mean, we've seen that in the Ukraine-Russian conflict. You'll blow up a pipeline as I like. to say the Nordstrom's pipeline. Oh yeah. So here we saw that. The

17:53 Nordstrom's. Y'all want an interesting fact that's completely irrelevant to this, but I'm just looking at, I'm looking at a map right now. I saw Kuwait on here. Kuwait produces three million

18:06 barrels of oil a day. So roughly 3 of the world's oil production. And you can drive across Kuwait in two hours. Like I didn't realize that until someone came on my podcast that was from Kuwait and

18:17 I didn't realize how geographically small Kuwait is. But it's just interesting like how energy dense some of these areas are. Yeah, I mean, Kuwait, Iran, Syria, Turkey, Azerbaijan, Russia,

18:29 like it's all. And then it's, if you actually just start thinking about it of the social unrest and

18:39 just the amount of war and instability in that region for all of

18:46 recent human civilization. History, I mean, it's just always been like that, right? And so it's a much different life than what we live over here in the United States. No, go read the Old

18:58 Testament. That's been going on for a while. Yeah, let me, even to John's point, just in recorded history, this is, it's conflict's been going on in the three-gen first. Two thousand fours

19:08 years, yeah. So. Well, hat tip to Doug Green for pointing that out this morning, and we'll watch it as it goes. All right, John, you're on the spot when those, for this story, United Kingdom

19:19 has pushed back on the internal combustion engine ban. So now they were gonna ban them by 2030. Now they're talking 2035, and the Prime Minister, this is kind of cool. Prime Minister Sunok of the

19:36 United Kingdom said, this is an unacceptable cost to hard-pressed British families. Oh, that's actually, that's a stand. That's the hottest take I've heard in a minute from a prime from somebody

19:50 at that level about a practical approach to energy it's my gum bro would sail over on Twitter. This is a boomerang of You know policy coming back, but I mean look when all those 2030 targets started

20:04 getting set which was just like two years ago, you know three years ago. I mean think about it It's like it's only eight Ten years away. That's not a lot of time in the grand scheme of things and

20:15 so I mean there are only Year-to-day EV sales are only 23 of the market in

20:23 In UK so yeah, if you're talking to get to a hundred percent in eight years That ain't happened. Well, I mean there's just so many so many different

20:33 Variables to it one the pricing of EVs Charging infrastructure just the infrastructure problem alone. Yeah, it's like, okay, even if you have the infrastructure We are seeing this in the US now

20:45 Okay, well, who's charger is it? Is it working? Is it available? Like all of those things? Well, which is interesting because what you're, I mean, you're starting to see the Tesla

20:53 superchargers start dominate, you know, Elon, I mean, had a ton, Elon had big brain moves there and just understanding how big of a problem charging would be and, you know, no one outside of

21:03 Tesla's been able to make a reliable charging up, straight Just network

21:12 everyone hates all the charging networks 'cause you go show up to one and they don't work and they're inoperable. And so anyways, it's, I think that we're at this inflection point, at least in the

21:24 United States of charging to where we're starting to see what the path forward is in commercially viable charging, but I mean, that doesn't happen by 2030, right? Well, I mean, it's a corollary

21:40 to a lot of things, right? Like you look at the tech industry, you look at the standards that have - come out of it, like USB and Bluetooth and Wi-Fi and stuff. And that's going to have to happen

21:50 at some point in the charging industry. Like each company has their charger type and their ratings and stuff for that. But like

21:58 that's way over the average person's head out of the gate. That's forward. I mean, see this forward partnering up with Tesla for charging. They're either going to end up partnering like that or

22:08 they're going to come up with some industry standard or nationwide standard or something like that that we, you know But I want to, I want to say one last point on this and I'm asked the girlfriend

22:18 to close her ears and not listen to this, but the subtle point here that's happening, and I'll say it this way, if you took London out of the United Kingdom, they are poorer than Mississippi, our

22:36 poorest state. And I think this is a growing recognition of we are damning those people That's a pretty bad. life if we're saying you got to drop a hundred thousand bucks on the Tesla. Yeah. And,

22:50 and, and again, where that comes to, and I've said it many times on podcast, but I'll say it again, is if our solution to climate change is, hey, poor people, y'all can take, that's not going

23:02 to end well for anyone. No, I mean, that, that just leads to civil unrest, right? And look, superior technology and economics always win. And

23:14 I think I've said this many times, I believe that electric vehicles can be superior products in certain circumstances. You know, I think that long haul trucking, I think that's a pipe dream for

23:28 Elon. I don't think that'll happen. I think that even long haul commercial passenger vehicles like going on road trips is an ideal, but, you know, hey, driving within the city from, you know,

23:39 office to home is definitely a use case where, you know, EVs are fun to drive. The acceleration on them is quick. And just a great user experience. Yeah, but Tesla is an amazing car. Yeah, I

23:51 mean, yeah. But, you know what the great -

23:58 That's the greatest part about that Tesla was, it had a program where on the dashboard, every seat in the car would come on. If you push a button, it would make a fart noise in that seat. Of

24:04 course, that was your favorite. That was so cool. Yeah, yeah, yeah, quick acceleration. Yeah, dad, I didn't do that Oh, Chuck's just playing with the fart button the whole time. But, you

24:15 know, you look at it and like, I look at it from like my personal perspective. Like, you know, I'm better off than most people. And, you know, I'm not rich by any means, but better off than

24:27 most people. And still, I'm like, it's hard to justify it. Maybe I'm just cheap, you know? I like my 2015, 200, 200 that's paid off, but it's like it's hard to justify going and buying an EV,

24:41 especially worth I'm like. you know, if I want to drive to Midland, well, I'm going to need another ice vehicle to do that. And just the price of them, it's just cost prohibitive and, you know,

24:51 there's reliability issues. And so I think over time, you know, the

24:59 theoretically, the price should come down. But you need time to allow that to happen and technological innovation for that to happen You can't set these arbitrary time limits like this has to happen

25:13 by 2030. That's, I mean, you're just setting yourself up for failure at that point. Yeah. Show me the roadmap and all the studies that y'all did that showed that this was a feasible thing to

25:25 accomplish by 2030. I think it was Goldman Sachs in

25:31 '97 or '98 that said by the year 2020, 98 of the market would be hybrid cars. And what are hybrid cars? One person. Well, that's also bringing up another point too, is that, you know, so

25:44 sometimes I talk about often that I feel like we're kind of leapfrogging over hybrids, when that should really be the next step, in my opinion, because you get the best of both worlds, the

26:00 technologies proven, and I'd buy a hybrid. I'd buy a hybrid. Could you imagine it forward instead of the lightning being all electric if it was a hybrid? I would buy that in a minute. Well, you

26:11 look at their EcoBoost. Tundra just came out. Toyota just came out with a hybrid Tundra. And I was actually super interested in the dealership's been hounded me to buy them as they come in. But

26:26 there's some issues with that one, where I'm not sure if it's a better value prop than their gas engines Toyota's problem is like their gas truck is just such a fucking good truck that it's hard to

26:39 justify going to an EV over it.

26:42 Um, yeah, you know, I, I, I would be interested to see if there's in Mike Ambrose words, if there's some boomerang effect to where you see some of these manufacturers start going deeper in on,

26:55 on hybrids and I already kind of get the feeling that that's where Toyota is positioning themselves. They've been very clear

27:06 that they're not going down the EV trail, but I mean, they were the, the trend setter in hybrids So it's going to say the new Prius also looks pretty good. I think that's not a problem with the

27:15 Prius. That was always the problem with the Prius and the original

27:20 time was that it just looked dorky. Yeah. You know, I'm like, man, if you would have just made that a normal car, I think that you would have got even more buy in it wouldn't just spend some

27:30 hippie car, you know, they added some nice curves and stuff to it. The most recent one that they came out with, I think it's going to do well because of that I'd like to rely on a hybrid hundred

27:40 percent the cars purposes to woo women. That's a very nice close. Hey, Colin, you sent out a cool tweet this weekend that I think I saw last night in between my hangover and losing it poker in

27:56 Vegas about manufacturing recount what you said because I thought that was good stuff. Yeah, and it kind of plays into this TV battery discussion. You know, I saw a conversation over on Twitter

28:08 that was kind of heating up our friend Craig Fuller, CEO of Freightways, you know, very knowledgeable and supply chain and logistics was in a conversation with someone that I think the original

28:21 poster said something along the lines of manufacturing wasn't coming back to North America and Craig chimed in there and said he disagreed and I also disagreed and someone's like, you know, name one

28:34 thing that's

28:37 being manufactured in the United States and I just kind of

28:39 went off the top of my head. I'm familiar with a lot of the battery plants and semiconductor plants but I'll just read some of these off of here because I don't think a lot of people know how much

28:52 manufacturing and building is being done right now but Intel spending 20 billion building two chip factories in Ohio, Samsung building a 20 billion chip factory in Texas. Since the chips act in 2022,

29:08 60 semiconductor plants have been announced in the United States. I mean, this is a federal initiative to take dependency off of China and other parts of Asia to produce our

29:22 Taiwan basically said China's taking Taiwan. We need to get just built here. LG's building a 5 billion battery plant in Arizona and also spending a ton of money expanding their plant in Michigan and

29:35 they have plans for six more plants in the United States. Panasonic building a five billion dollar battery plant in South Carolina and then, you know, I've got, you know, there's there's all

29:45 these startups I also mentioned a firehawk because I just love firehawk They're based up in Dallas, but do all their testing out in Midland and they build in manufacturer rocket engines and rocket

29:58 fuel and so it's a Super exciting time

30:05 Not just an energy, but in manufacturing and I think That there is this thesis that a lot of these Manufacturers are going to co-locate with energy assets or at least be built an energy dense Areas

30:21 and you know you already see this one of my friends. He's a petroleum engineer Moved up to Ohio and took a job for a Google working for their data centers and in other up in Ohio because they've got.

30:35 Great weather. They've got cheap natural gas and, you know, solar up there as well. And so I think that this is a broad theme that obviously the government has had a hand in with the chips act and

30:51 with IRA. But, you know, to be honest, I'm perfectly fine with tax dollars that are being spent on infrastructure in the United States If it's spent on health care, if it's spent on education,

31:04 you know, I don't like sending money over to Ukraine or, well, it was misplaced call. If you ever follow Rando or Phil Rando on Twitter, I mean, he's like, we're sending money to Israel to

31:19 train journalists on, you know, like South America's sensitivity

31:25 and so anyways, you know, I'll even go a step further. I've historically always been the biggest free trader on the planet, you know, I thought that was good for humanity and all, you got

31:34 through one pandemic where you can't get an N95 mask or you can't get anything profan. I mean, I'm still waiting on the chip for Sarah's car that we bought last year. Yeah, exactly. So we're

31:47 selling brand new cars without parts because they literally can't get them and they're gonna screw it. We'll just do a recall and just like that's easier somehow than actually making it look great,

31:58 right? And I'm not a Trump fan, but at the end of the day, Trump and his protection is on radar generally in the right direction. I mean, we've got to build stuff here. I don't think we're gonna

32:10 be able to put this photo up on a BDE, but I'm looking at one right now of all the

32:19 gigafactories that have been announced or are being built, it kind of follows the chili belt, if you will, you know, they talk about kind of New Mexico. through Texas all the way up through the

32:30 Midwest, through Cincinnati, and I still don't believe Skyline Chile is actually Chile, but they say it is. But I mean, you're just, you're having gigafactories built all along there, you know,

32:41 in Kentucky. And what is that overlap with? You know, it overlaps with cheap gas. Cheap gas and then - Stable power and - Lower regulated states that are more friendly to business and so, you

32:57 know, that's just kind of some of the - Right to work states, yeah, yeah. Well, I mean, people think about manufacturing from the perspective of, you know, reducing costs and the logistics of

33:08 getting it, whatever you are manufacturing here, but the other part of that is, guess what? Energy is a big component of manufacturing and the cheaper your energy costs, the money - That's true,

33:18 that's literally - You're gonna be able to make - That's literally your input, you know? I took these, I took this three month program, on a Harvard Business School online. And one of the

33:30 case studies was you were looking at manufacturing plants and their marginal cost to operate. And it was all a power input. And then they're looking at that. And it's like, hey, what's our

33:40 electricity costs? And

33:43 you know, really just understand like, hey, when you have a semiconductor facility, like that's, it's just like one with gas. But your highest cost to operate, it's electricity They go out and

33:53 they get contract futures contracts and stuff, their utilities too, just like the oil and gas company. Which, this, well, and while we're here just real quick, 'cause I've been talking about it

34:02 on a Chuck job podcast, we just are in no way, shape or form, capable of generating and transmitting and distributing the power we're gonna need in the United States with AI embedded in everything.

34:17 And the Xbox network and Bitcoin mining and data centers, all that we're in no way. This is a good thing. This is technological advancement that will progress society forward. And so it's a good

34:31 thing. Right now, the current problems that we have, especially in ARCHOT, is really a distribution and transmission problem. It's not as much of a power production problem that people like to

34:40 make it. But as we start bringing on more things, that problem can be multifaceted, it can be both a power production problem and a transmission and distribution problem And ERCOT is not a unique

34:54 mess. It foreshadow stuff. Yeah. Two years later, MISO's gonna be there, et cetera. Yeah, everyone loves to pick on ERCOT, but it's because you have transparency into what's happening and it's

35:09 more of a free market. And talking about all these data centers, one thing I wanted to just kind of add on to here was, I was watching this video from Steve Jobs, And this is like in the 90s and

35:22 he's just He's talking to this room full of people, and Steve starts talking about, he's like, we're on the wave of the last technological revolution. He's like, and that revolution was free

35:35 energy in the form of petrochemicals. He's like, petrochemicals have transformed society and allowed us to do all of these things. He's like, and I think we're on the cusp of the next

35:45 technological revolution, which is the personal computer. And he's like, again, it's free energy He's like, this Macintosh consumes less energy than what this entire room costs to light it up.

35:57 He's like, and what that allows is humans to become exponentially more productive and efficient to where someday, like if I wanna ask a question, it'll give me an answer and it takes very little

36:07 energy to do that. And so I thought it was fascinating to hear Steve Jobs talking about one, how revolutionary oil and gas was to society and then at how it plays into computing and the future and.

36:22 creating even more abundant energy efficiency through making humans more efficient. And so that's something that I've never really thought about a lot of

36:35 Bitcoin mining gets a lot of flack. AI data centers get a lot of flack, but when we think about it, it's like, let's actually look at those as power draws, but what's the net positive for it

36:48 making society more efficient and freeing up energy and bandwidth for us to develop metasons, et cetera. Or even just like with the earthbound stuff, the on-demand,

37:02 when they pay the Bitcoin buyers to shut down and - Yeah, they're in salary program. It's like, that increases the base load as much as people wanna argue that Bitcoin mining is wasteful. It helps

37:12 make the grid more sustainable and flexible Yeah, and just where battery storage is today if if if you've got to have an economic use for power at other times for it to be built to your point. Well,

37:26 that's the thing, people look at it as like, oh, they're just wasting energy. It's like, well, that energy's there whether you're using it or not. So, like, if you really understand the

37:34 market, it's not, oh, they, you know, or just stealing, they're not stealing anything. Like the energy's there. They're providing a service that's there to buy electrons, right? That's

37:43 actually better for the whole market. So, one last thing on this point, 'cause it came out this week too, and I want to do a deep dive on it over the next two to three weeks, is Microsoft came

37:56 out and said, they're powering their data centers in the future with micro-nuclear. Well, they're looking to hire. And they're hiring. They're looking to hire nuclear engineers because that's

38:07 where they want to go. And I mean, if you look at that, it makes sense with Bill Gates and Breakthrough, you know, they're investing heavily into nuclear fusion and these small modular reactors

38:17 And so, you know, there's a, there's a. group of people out there that think that in the future, these micro grids will be ran by nuclear, these SMRs, and people are like, oh, you can have

38:30 one at your house. I don't know if we'll ever get that granular that you have this little small new reactor at your house, but yeah, but you look at Microsoft, I mean years ago, I remember them

38:43 taking their data servers offshore and putting them underwater to cool them in the ocean. They're very forward thinking when it comes to energy efficiency. And these are businesses that are very

38:58 high margin business that have free cash flow to invest. Lots of it. We've talked about this on the show of how much of energy policy these big tech companies are driving right now by mandating that,

39:10 hey, we want our power to be 100 renewable and clean energy You know, there's. a case to be made that these tech companies end up becoming semi-quasi energy companies and themselves, right? I

39:26 mean, they're gonna have to be - At the end of the day, energy's upstream from everything. It's all a point of singularity, it all comes back. It's gonna be fascinating to see the nimby effect of

39:36 that on wherever they decide to put those, because that's, I mean, it's the same thing with when I get my master's in energy, right? Like, you have to go through all these studies, the

39:46 environmental, the political, the local, geographical stuff, and it's most of the time, that's where things get hung up, is at the local or regional level where some group doesn't want that in

39:58 their backyard, or they disagree with it. Well, let's see, then. I learned this, I didn't know this, but out in

40:06 between Andrews, Texas, and Hobbes, New Mexico, there's a nuclear facility, and I was talking to a guy that worked there, I remember a couple years ago, there was this big. They were gonna

40:18 bring all those nuclear waste out to West Texas and there was this big push and had people asking me like hey You need to post about this and tell them that you know We don't want nuclear waste on

40:26 West Texas and I was like I don't actually don't think that that's that big of a deal It's a fucking desert and nuclear waste isn't that dangerous like it's actually a perfect place for it to be

40:35 honest

40:37 All the nuclear stuff. Yeah, and so but even I just thought it was very fascinating to have this nimby effect from people in Midland And I'm like you literally live in the middle of industry and oil

40:48 and gas and but it's always the prettiest place on the planet Yeah, no, no, that's what I'm saying. Yeah, like you can say that like I'm from there I'm like it's just kind of a good place for

40:58 industrial things like that But you know speaking of let's do this yeah speaking of Midland. I want to give a shout out to my good friend case fan Hoff over at Diamondback Energy wrote this op-ed in

41:12 the Midland Reporter Telegram, and there's a bond in Midland for 14 billion. And this includes building two new modern high schools, you know, the high schools in Midland or over 60 years old and

41:27 updating the junior highs, building a new elementary. And it's got a ton of support from Diamondback Pioneer, Chevron, Endeavour, Conoco, Permian resources, Propetro, you know, I see Sam,

41:40 see over at Propetro being really vocal about this. And, you know, the thing is, is Midland has had an extreme lack of investment in

41:54 infrastructure in the community over the last several decades. Despite

42:00 a massive rise in prosperity and oil and gas. And, you know, it's pretty sad to see the state has some of the poorest performing schools in the state. And, you know, you look at it from

42:12 Diamondbacks perspective. It's like how are we supposed to attract the best talent here if the city won't invest in itself and provide good schools for our kids? And you know there there was a big

42:23 ordeal around this 20 million park that was being built and a lot of it was donor money getting shut down and just this mindset of not Not investing into the community and you know, we're talking

42:37 about we just talked about this this manufacturing way that's happening, you know, the the future of West Texas isn't just oiling gas. I mean it is prime spot for manufacturing for

42:51 aerospace and Data centers. I mean the future of West Texas is super bright and it needs to stop being treated like an extraction calls colony and being treated like a energy export hub, and I was

43:04 telling Chuck earlier is like, you know, Momeno Dessa should be like to buy America that's that's the level that it should be on and you know, if you go watch, you know, Friday Night Lights, the

43:14 reason Friday Night Lights movie was able to look so realistic from, you know, a timeframe in the 80s is 'cause shit hasn't changed, so. I was gonna say, if you've never been to Midland, it is

43:25 just like abruptly shocking at how old all the houses are, for the most part, right? Like, and it took me forever to figure it out. I was like, oh shit, that was like, that was when the last

43:33 bust was, you know? And then you get into the 20, you know, and they're selling for what houses here are selling for, and they need all this work I mean, you know, it's crazy. I graduated from

43:44 Mivelin Lee in 2008, so I was 15 years ago, and then my dad graduated from that school 30 years ago. Chuck was saying, this is the same thing down in Richmond, and it's like the same building,

43:56 and Julie's like, yeah, well, things have changed. I'm like, it's the same building, yeah. It's like all the same building that I passed this. Yeah, in anyways, you know, it's just an area

44:08 that actually, I didn't even know this the other day, I was looking at GDP on. localized areas in Midland, Odessa as the highest

44:18 GDP per capita in the United States. And the infrastructure and the education system should be a representation of that, right? And so, you know, Case brought up a really interesting thing in

44:31 this piece that he wrote was, you know, he joked because he's 37, he's like the average age in Midland House 32 He's like, that puts me in the old garden now and really, I've never thought about

44:45 this, but we talk about the great crew change a lot and digital wall catters only exist because of the great crew change. And I didn't think about this extrapolating out to actually geographical

44:53 location out in Midland. But that's what's happening is that the new generations coming up and that's what Case's article was, you know, kind of this plea to like, hey, it's time for the young

45:04 generation to step up and let's change this place and, you know, make it a place that we actually want to live and, you know, I actually find it pretty cool because I was in this round table in

45:14 discussion with a couple of EMP execs and some of like, case, he's not from Midland. USC. Yeah, you know, some of these other people, they weren't from Midland in just hearing like their love

45:29 for the city and like we're never moving here. Like this is a perfect place to raise our family. And so people see the potential in Midland and in West Texas and all they're asking for is like, can

45:42 we invest in this and make this a community that's

45:47 prosperous for our kids and our grandkids. So two good points about that case brings up is number one, you've got this weird Robinhood recapture legislation in Texas and I'm not fully vested on

46:04 how it works, but basically in effect, profits of a school district can be. taken by the state legislature. And I think last year it was 5 billion that was taken away from local education. So if

46:19 you can create fixed cost, ie. interest and payback on bonds, then that's not money that's subject to recapture by the Texas legislature. So there is a financial element to this. The other great

46:33 point I think case made is, he was quick to say, hey, this isn't a perfect bond A lot of issues there, but net net, it's, we're better off if we do it. So I still fundamentally have a problem

46:46 with the public education system that we deliver at the same way we have for the last 200 years, 'cause nobody else does that. I think we need competition, private enterprise. That said, I have a

46:57 tendency to kind of buy his argument of, hey, net net, this is gonna be good. You can't let perfection get in the way of progress, right? Yeah. And so anyways, if you're out in Midland And.

47:08 interested in hearing more about this. There's actually a young leader's roundtable on October 2nd, 4pm at Bush Convention Center. Speakers take the stage at 5pm. Speakers are Case, President CFO

47:22 of Diamondback, Tyson Taylor, SVP of

47:25 HR and comms at Pioneer, Sam Sledge, the CEO of Pro-Petro Services, and then Will Hickey, co-CEO of Permian Resources. I'll actually probably come in town for this as well. And so, I mean,

47:39 find information on that online. So Colin, I'm so convinced that Midland's going to become the next Dubai. I'm going to go buy the Benagan's franchise down in Monahan's. That's how I'm going to

47:53 play this opportunity. Yeah, Huddle House is always the spot in Monahan's for me. But it's, I mean, it's ridiculous though, in all honesty is someone I was born here. I grew up in Memphis. I

48:07 came back here, but I Every single person that you, generally speaking, that you talk to that isn't from Midland, that is potentially going to have to be in Midland, one of the first things they

48:18 talk about is, well, the schools suck, and it's like, how are you gonna attract more people to stay there if you don't invest in the most basic thing, which is education? Yeah. Like, it's

48:29 unbelievable. Well, you know, I saw in Chuck, what's even just, it's kind of mind-blowing is, when I graduated, there were no technical elements of school or education, and you live in the

48:42 most prolific oil and gas basin, in the United States, and one of the most prolific in the world, and there's a lot of kids that don't want to go to college by myself, and there's no preparation

48:52 for going out, going out to the field, right? Or just learning any traits. And so, you know, Chuck had a great point earlier, before we started recording, he was talking

49:05 about, Was it telly red? Tell you're out Colorado. Yeah, and how they, I mean, go ahead. Basically, Telluride Colorado wanted to have really good schools, and so they basically, everybody

49:18 wants to live and telluride, but it's really expensive. So they went out and built, in effect, free housing for the teachers. There's a great summer camp in Telluride where teachers can earn

49:29 extra money, being camp counselors and the like, and they made it such that a teacher can live there, and they know if it's even close, they win because of their geography. It's just the most

49:41 beautiful place on the planet. And, you know, if you have really good teachers and a really good principal, you can teach in a tent. I mean, I understand you need facilities and I get that

49:54 argument. You don't actually, so. Yeah, I mean, I will say something on that. You know, I agree with you. It's always about people, right? I mean, everything, whether it's education,

50:04 building a company like It's about people, you know, here in a digital all caters, we have a really shitty office. It's not about the office. It's about the people that are in the office, right?

50:12 And so, but with that said, you know, we live in Sinko Ranch and got some of the best schools in the state. And every time Julie and I go up to our kids' schools where, I mean, every time we're

50:22 like, man, this place is just so nice and like the attention to detail on certain things. And so there is, there's, there's an argument on both sides of the so But what's important in me telling

50:35 that about Telluride is, is

50:39 they have geography. They don't need something to attract. Oh, yeah. If you're down at Richmond, Texas, you probably want to have the nicest school buildings on the planet to be able to attract

50:51 teachers and all. So what I meant by that was its situation. Yeah, both of those You know, and the problem just specifically to Midland Odessa is that, you know, one salary

51:06 or teachers are underpaid across the board, across all districts. I mean, it's bizarre to me that we don't invest more to get better talent. So the people that are teaching our kids really helps

51:17 when they take away the increase and pay for, you know, master's degrees and doctorates and stuff to. Yeah. Yeah. And

51:26 then, I mean, you know, Midland Odessa is not a very attractive place to go work if you are not there for the energy industry already, right? And so, um, but one thing that you brought up while

51:40 you were telling me about Telluride was like, the Leno Dessa should really focus on like becoming the place where, you know, if you want your kids to learn like technical things around trades or

51:51 engineering, like that should be like the destination for that, right? Like that's what that's what they should be known for is, um, you know, pumping up the most engineers out of any location

52:04 in the United States. I can guarantee you too. You pull enough in engineers like myself and one of the biggest pushbacks, things we wish we had was more hands-on experience. Instead of sitting in

52:16 a lab and doing these theoretical things, take me to a thing that we're learning about and show me. And it's like, oh, guess what? It's all literally in your backyard. Yeah, five minute drive

52:25 it away. Literally, yeah. On top of that, what drives real estate prices? Most of it is the school, like you and I both live in Katie because the school districts are some of the best in the

52:35 country or state, right? Like, if you had better school districts, 'cause what, people would build more, people would stay, you wouldn't have this boom bust issue that Midland has always been

52:44 fighting because there would be incentive for people to say there whether the industry was there or not. Yeah, I mean, I don't know a set of parents that wouldn't move to Midland if they had the

52:54 best schools and the best opportunity for their kids. Yeah, exactly. Everybody knows that, it becomes a draw. So anyways, yeah, if you're in Midland, Definitely go check this out. RSVP or

53:06 they're asking for RSVPs, I don't know. Maybe you can just show a Bush Convention Center for a PM. But with that said, we'll wrap up the show. John, thank you for subbing in, that was perfect,

53:16 man. I actually learned a lot today, so appreciate you subbing in. If you enjoyed the show, make sure to share it. Always appreciate the comments that we're getting over on

53:26 YouTube, read every single one of them.