Big Digital Energy

0:00 All right, we're kicking off digital wildcatters. First of all, I want to say that we have a birthday a month, one of our founders. It's his birthday tomorrow. Our founders, are we, are we

0:13 employees? BDE founders or? No, no, no, no, no, digital wildcatters founder. It's Frank Slab's birthday tomorrow. Yeah, our day. Yeah, he bailed on us and decided to go on a trip to New

0:25 York instead. Is he doing it for personal reasons or is it business? I have no clue why they're up there to be honest with you. All right, I have a bone to pick. As Houstonians, as a Houstonian

0:35 bone to pick. There's a lot of those. Why is the Tennessee Titans showing up in Euler's uniform? Man, that pisses me off so much every single time. It makes me so mad. I mean, it's worse than

0:48 the downhorns. It is. For me. I mean, yeah, so I was born here. So, and when we left, when we left, and when

0:57 I was in elementary school, we move to Memphis with. the Titans who became the, yeah, they were the Tennessee Oilers their first year while they were building the stadium and they played a Memphis

1:06 Liberty Bowl. Yep. They played in a Liberty Bowl that had no business hosting and still doesn't in the NFL team. But, and then they finally moved Nashville and stuff and it's like, I've never,

1:18 like it's purely out of spite that they, that the owner held on to those rights and all that stuff and continues to to sit on them in my opinion. I mean, there's business at that as well, right?

1:29 Like, all the licensing that comes with the Euler stuff. And I guarantee you, Euler stuff probably sells just as well as the Titan stuff and the Texan stuff does by itself, just because I'm old

1:38 enough to remember, at the end of the Euler's era in Houston, you remember the canceled preseason game because the afternoon turf was so bad that they literally stopped a game in the middle and

1:51 canceled the remainder of the game. But I will say, I almost tweeted out last night. For those of you on DirecTV,

2:02 you're not able to get CBS because they're having an ongoing dispute with Techna. So not only did the iconic Oilers not make an appearance, of course you can see it streaming on Paramount Plus, but

2:13 that Paramount Plus, oh you gotta have Paramount Plus with the Showtime package, no thanks.

2:19 Missed Willie Nelson's 90th birthday broadcast as well. Yes, that's correct. So two Texas icons yesterday were broadcast on CBS and got to see neither of them. Well, I think there's a couple

2:32 things that we learned yesterday. I mean, directly we learned Texas. We learned that if you show up and play the Texans with Oilers outfits, you're gonna lose. That was delicious. It was. And

2:44 secondly, if you're gonna throw the down horns against the lady long horns, they're gonna beat you. They're gonna sweep you. So congratulations to you.

2:54 The University of Texas, Lady Longhorns, who won the National Championship in volleyball. Can't you just be happy with being in the

2:60 CFP? I know. Hey, as someone said, buddy of mine said to me, he says, hey, you know, take this victory lap all you can because you'll be the next next 10 years will be 10 years of six and five

3:13 seasons and the

3:16 SEC has like one last funny thing in the Oilers saga or the the rights JJ what tweeted out yesterday.

3:23 We win. We get it back. Those are the rules. Sorry, not sorry.

3:30 They should do that. Well, we got some real energy news now, I think stuff's going on. A lot of stuff's going on. What do you want to kick off with, Mark? What's bothering you the most about

3:41 the world of energy? It's not bothering. It's just kind of geopolitical reality. And I think the biggest headline related to it is BP announcing they are ceasing.

3:54 tanker traffic through the Red Sea, which has become somewhat of a problem area for both tankers and container ships with the Houthis being aggressive and essentially hijacking container ships and

4:08 harassing traffic in that area. It's becoming, has become a pretty significant security situation, just a quick reminder. The Houthis are the Yemen-based rebel group aligned with Iran, mostly

4:20 Shia, although the organizational and the population structure is a lot more complex. They've been together and a bit of a burr in Yemen and Saudi Arabia's side since the early mid-90s, if you

4:38 recall some of the drone attacks in Saudi Arabia, damage to facilities, et cetera. So BP is, I think the first crude oil shipper, crude product shipper to announce they're going to not traverse

4:52 the Red Sea. they will monitor it and then

4:56 adjust accordingly. Crewds up a couple of bucks this morning to WTI's almost 74 last I looked. So just some numbers on what it means for the amount of maritime

5:09 crewed natural gas traffic and form of LNG. It's about 12 of global maritime crewed transport and about 8 of global LNG, a lot of which is going to North America and Europe. That's significant I

5:21 mean, as we said, we're on the verge if this winter actually becomes cold AF, a lot of people are screwed. Yeah, I mean, the geopolitical stuff is just one of those unknowns that no one thinks

5:36 about until it's there and you're like, Oh shit, we can't ship crude. 'Cause I mean, that significantly changes routes if people stop going through there, right? Yeah, I forget who it was

5:45 announced that they were, I guess they had gotten approval to peel off and go around

5:52 the Cape. and southern part of Africa. So

5:58 I think like with the Russian invasion of Ukraine and global crude movements, we will see some adjustment. You were talking about it or conjecturing earlier about, do some of the private players

6:12 take up the slack and figure out ways to maneuver traffic through that area to take up the slack. It doesn't adjust overnight. Yeah. I mean, I was reading this article this morning about gunburg

6:23 and how they anticipated that Russia was going to invade Ukraine and they had some long-term contracts for LNG that were a lot cheaper than if gas prices spiked. So they figured out, well, shit,

6:44 we need to get out from underneath these contracts. Who do we screw first? So they actually cut off supply to Pakistan.

6:52 Five shipments equated to about200 million worth of natural guy, LNG. Well, they turned around and sold it for 600 million. So that covers their legal fees 'cause Pakistan's pissed. But what's

7:04 interesting is I was playing golf yesterday with a guy that works for one of these Swiss-based commodity firms. He's one of their sort of top traders. They love the volatility. I mean, it's

7:19 interesting in a world where we're like, man, this is a big news about BP stopping shipments around through the Red Sea. These private commodity traders, they love this shit. So if I'm putting in

7:36 a bit of a plug for Javier Bloss with Bloomberg wrote a book called The World for Sale, and it's about all about the world of commodity trading and really the personality of exactly what you were

7:49 just talking about Let's just say it's an intrepid botch.

7:53 Well, that has a different risk calculus than - I would have to say that it was a pros versus the Joe's yesterday. It was me and another guy. We're the pros, you know, 'cause we're our handicaps

8:03 and we played these guys. One of them on the other side was this trader. Not as good of a golfer, but when it came time for pressure and there was some cash, a lot of cash, totally deadly. I was

8:17 so upset, but I was like, of course Yeah. You know, it's a 210 yard, par three, he stripes it to three feet. I'm like, that's impossible. Unless you're really good at handling stress and

8:30 pressure like this.

8:33 Yeah, no, I mean, I think the crazy part I watched the, I took a commodities trading class when I was getting my master. So I started watching just US based commodities mostly then, but you know,

8:46 the crazy part about commodities trading There's a lot of the actual, I think my professor even said this. It's like something like 90 of the contracts never get filled, even though, which is

8:57 incredibly ironic considering the fact that they opened up global commodity trading so that you would have a true world market and for people actually trading the commodity, and now it's gone back

9:07 the other way to where, okay, well, there's no single person that controls the price or the supply of something, but the algorithms and the traders can control the volatility or, you know,

9:17 you've got these like waterfall effects when it starts going up or down regardless of even what commodity it is, really, right? Like, they just trigger those kind of like, oh, shit, you've got

9:27 all this automatic trading happening and then prices just fall for no reason. Yeah, something happens, it changes, prices are going to spike, long-term contracts become negotiation points, right?

9:37 Right. Yeah, but I mean, it's hard to make money without volatility, a lot of times, too. You need volatility. You need it. And we have a lot of - Well, even the equity side of it's been

9:44 described now by someone who's been in a long time, large and murky. He doesn't talk about the super cycle. talks about Supervall. And I think that is the appropriate way to think about. The

9:56 backdrop of all this that's commodity related, both on the commodity and the equity side.

10:02 So in others matters, in other matters crude, on the flip side, Goldman took down its 2024 Brent forecast

10:11 by about 10 bucks, which is not trivial on a prior kind of point forecast for 2024 of '92, they're now saying 80 to 81 is the average with a range of 70 to 90. And that headline in Reuters was on

10:26 the basis of what we've been talking about here lately, and that is surprising to the upside as US production. Now, expecting growth of around 900, 000 barrels a day, a number that's, I think,

10:36 been out there a while, but they, I guess, made it official. Yeah. And so I just find it interesting that this coincides with we've got a little upset going on geopolitically, which is actually

10:48 doing. What geopolitical events you used to do, which is drive crude higher? We'll see how long that lasts. They do say in that note that they do not expect, in fact, they expect Saudis to hold

11:02 the base level of cuts through 2025 and these additional cuts through at least the fourth quarter of this year. So don't expect the Saudis to flush the market. So basically what you're saying is

11:14 with all the volatility going on, you've still got Russia, Ukraine, you've got Yemen, Yemenese and Yemenese. Yemenese. Yemenese. Yemenese. Yemenese. Creating some stress. You would think

11:27 prices go up, but prices are now forecast to go down. Now this is Goldman Sachs. Others could think otherwise because the US is stepping up production.

11:38 Well, that's, you know, we're seeing kind of an organic creep if in US production because there is no explicit coordination.

11:48 concerted effort by dozens and dozens and dozens of players in the US. market, high grading,

11:56 doing better, a more efficient job of drilling completion. And we're seeing the effects of that. How long that lasts. Yeah, that was going to be my question. Do you know, like of that new

12:07 projected or current crude, how much of that is onshore, offshore, unconventional versus conventional by any chance? I think it's predominantly unconventional, but I don't, I don't recall or

12:19 have not seen that breakdown. It's predominantly unconventional and predominantly Permian. I'd be curious to just bring that up just because I'd be curious to see what some of the major players do

12:29 with, you know, a lot of their bigger offshore stuff. Now that prices seem to kind of have a pseudo floor here in that 70 to 80 range. Yeah, I mean, we're, we're seeing other pressure points to

12:41 the upside in terms of production growth that are, that are routinely cited along with, with US production growth and both Guyana. in Brazil. So if we, if we've put a70

12:53 for

12:56 under crude, does that change the long term? Right. Because those are long cycle by definition. It remains to be seen. I think both Chevron or particularly Exxon and others taking on more short

13:10 cycle gives them a bit more of a toggle cap. Actually, a cap X year I mean, I'm thinking about leasing some dirt in the perman. What do you think? You and everybody else.

13:21 Am I late? Got 30 billion. You can just buy it. I was going to say, I could do that. Be perfect time for a major. I'm an entrepreneur. I want to do everything myself, you know?

13:32 So let's stay on fossil fuels and hydrocarbons. And this was actually nailed down and signed after last week's show. And we don't want to spend too much more time on it. But cop 28 ended with, I

13:45 believe, 196 countries. agreeing to the language really essentially, and this is the stock take relative to the 2015 seminal cop, can't do the arithmetic to figure out which one that was, but the

14:04 language is stopping short of a phase out of fossil fuels talking about an equitable and just transition from fossil fuels. And we also got the things like the tripling of renewables, you know, I

14:19 guess a successful outcome is when nobody's happy. Yeah. Maybe that's the definition of this, but there's just a lot, a lot of, a lot of nonspecific language left to interpretation.

14:35 And so just wanted to button that up in terms of what actually was the closing note of cop 28. So you feel like that's a, generally speaking, do you feel like it's almost like they've taken their

14:50 foot off the pedal a little bit because they didn't explicitly define it? Or do you think that this is still kind of in that same, like do you think people are pulling back a little bit after the

14:60 last couple years on this speed to transition mentality? I think

15:09 as we

15:12 summarize with Dan Pickering's tweet last week, everybody just goes back and not much changes. So if you look at what is happening in political outcomes here recently, I do think that there is some

15:27 merit to the notion that at least in the West,

15:31 certain election outcomes and the prospect of more of the same, meaning moving a little more slowly or maybe walking back some of the accelerated timeline, if not outright. undoing some of the

15:46 transition mandates and policies. I do think that there is an element of

15:53 that. I think Algebra had to, I don't know, save a little face is the right term, but they needed to come out with something consequential and explicit as it relates to fossil fuels, but you and

16:09 I both know, maybe it's cynicism, maybe it's reality or a combination of both And those two usually intersect. There's a lot of maneuverability. I mean, the reality is this. I think people

16:22 aren't, people are starving and people are in massive debt. I mean, today it just broke. That British consumer energy debt hits a record three billion pounds. Like British consumers can't make -

16:36 That's consumer debt. Consumer debt. They cannot afford their bills, their energy bills at home And why is that? because the UK has been on this massive terror to build out renewables at the

16:51 expense of costs. And people are saying, wait, I can't afford it. So it's actually the utility, the retailers holding all this debt because people can't pay. And that's happening around the

17:03 world. So I'm like, at the end of the day, something's gotta go, do I want clean versus I wanna be able to have food on the table? People are gonna pick food every single time And they have. And

17:15 they are. Well, I mean, it compounds too, really. Everyone thinks about inflation around groceries and your average stuff. But then it's like, hey, but then the materials for the house that

17:28 you're trying to build go up and the cost to transport all of those things go, like everything is affected at the root of it pretty much by the cost of energy at the whole, right? Like, 'cause

17:38 you've gotta move the stuff from A to B. You've gotta move the materials. You've gotta move all the groceries on the house appointment this morning I was asking. Uh, one of the nurses about, you

17:47 know, what are you doing for Christmas? Have you done your shopping and two nurses both said, one said, um, well, the, my Christmas presents this year is me. Like I'm not buying presents and

17:59 the other ones like, man, we were trying not to do a big Christmas this year. But the overall tone was pretty, like pretty bleak. People aren't feeling great about the economy They, we all know

18:12 it. So who, who cares about COP 28 right now? I think, you know, the, the environmentalists are taking them are going to have to take a backseat and they are because there's too much momentum

18:24 against them right now. So I think the acceleration side of this whole

18:32 gathering, the other part of the agreement or the other agreement coming out that was heralded was a tripling of renewables and all that that entails China sign that one too. Very serious, as they

18:46 have all their nuclear plants being and nuke and coal plants being built. There was a thread and we'll post it that was actually reposted. Really the only reason I don't follow this,

19:03 this person who tweeted it, but was talking about

19:08 not only what it means to replace 61 of electric power that is fossil fuel related. But what about the installed base of renewables today, wind and solar? And if you put 25 and 30 year lives on

19:29 those respectively, wind 25 solar 30, then by 2050, a significant chunk, if not the majority close to all of it, under those assumptions in a renewable, And the current renewable segment will

19:46 have to undergo replacement. And then tripling on top of that implies

19:54 just to replace hydrocarbons. So the 61 percent, so I'm maybe back and forth between tripling and I guess that would effectively be a tripling. Right. To get to that 61 percent of the electricity

20:05 pie, the estimate is at current manufacturing capacity and supply chain situation, it would take 67 years of manufacturing.

20:17 I mean, I think when you put all the

20:20 sorts of dots together and COVID drove this in a massive way, you see large corporations moving from very expensive states with very expensive energy to very cheap states with very inexpensive energy.

20:40 I don't think this is going to last. I mean, you just can't. artificially promote

20:47 a business. At some point, if it doesn't make money, people are gonna say, Wait a minute, this doesn't make sense. And that's what we're, I think we're seeing is, there is a place for

20:58 renewables, it's happening, but it's not gonna happen at this pace and the speed that everyone wants it to happen because it just doesn't make any economic sense. So this goes to the kind of the

21:08 fundamental, what do they want? Is it actually a reduction of emissions or an elimination of fossil fuels? Yeah. Is it renewables defined as wind and solar because they're low carbon or is it low

21:22 carbon? Mm-hmm. Well, I think this, I personally think we've talked about this before as well. I think this just, is it going to be a growing catalyst that really starts to move nuclear forward?

21:35 Yeah, I mean, it's. I was talking to Ryan Rice, actually, the other day, and we were talking about it. And I was like saying something to the effect of, yeah, until, you know, they realize

21:47 that nuclear is the best option and it's cheaper, it's way safer than anyone actually thinks it is. And it's been around for decades. And if we wanted to actually do that, nuclear makes a ton of

21:59 sense. But nobody, you know, everyone thinks worst case scenario in nuclear, even though that has literally the worst possible case scenarios recently, at least closer to the states, weren't

22:11 like, there were no deaths. There were no individuals that died from Fukushima. And it was a natural disaster that they designed for and it still didn't blow up. And Japan is scrambling to restart

22:25 a bunch of nuclear. Why? Because it's getting. Cheap base load energy. Well, they're heavily dependent on gas imports from Russia Yeah, there was a good piece out. on dimberg recently talking

22:42 about

22:44 this notion of

22:48 how do you hurt? It was a little along those lines as the way I read it. How do you hurt a bad actor like Russia? You don't impair

23:00 the market or constrict the market. You allow the market to flood with those commodities because what the Russians depend on more than anything right now for their economic well-being. And things

23:13 are actually pretty good to estimate in Russia. They're generating a lot more revenue because prices are relatively elevated, whereas if the Saudis flooded the market, OPEC didn't have its

23:25 discipline, then we're looking at crude prices that are much lower. I think not only. I mean, we're past around article, a couple articles that we've been talking about we're gonna wait for Chuck

23:36 and maybe Frank Slack to talk through it in detail, it's not only supply from other places, but if Russia gets these pipelines built

23:47 to get more into Europe, I mean, there could be some serious issues in terms of just global, sort of the global power dominance changes. Yeah. And Russia has the capability. I know the US,

23:58 we've been against it for a long time because once Russia gets pipelines, our LNG business in Europe is going to dry up, we have less influence. We're in a really interesting sort of

24:11 politicalenergy path that we need to probably unpack more. We in the US and more broadly in North America have the gas potential to really, really play geopolitical strategic offense and be the

24:29 supplier. We do. That displaces. But we're not doing that That's the fear, I think, that's driving a lot of the. pseudo NATO or

24:41 NATO adjacent, kind of the buffer between Russia and the NATO states, is do we allow the resumption or traversing of new natural gas supplies in the Arctic LNG on the Siberian coast in Russia? Do

25:01 we allow those things to essentially come out and take market share? Yeah, right. So even with all the policies in place to block Russian oil and stuff, right? You look at what they've kind of

25:17 done, right? Like, so ironically, their output to Azure by John went up and Azure by John's output went up, but Russia isn't smuggling their resources through Baku and like they find ways to get

25:30 it on the market. They have people who are willing to do that, right? to look to Switzerland for that Right if there's a follow the money. If there's anything that's close to permanently cheap and

25:44 I borrowed that term from the late great Steve Chazen who said years ago at a conference and a kickoff as to why he was still running Oxy at the time as to why Oxy was so bullish on Gulf Coast,

25:59 Petkin and Steve and his usual kind of dry genius said we just love permanently cheap natural gas.

26:10 No doubt. It is something that provides I think unparalleled energy density at value now that we've gotten most of the transport. It's still not as easy to transport as coal or fuel oil and crude

26:29 oil, but you essentially have half the CO2 signature of coal, all things equal. The track record that we've achieved over the last 15 to 20 years, and I know EQT talks a lot about this, is the

26:44 replacement and retirement of coal in favor of natural gas, that substitution has made a real absolute impact. Yeah, that's the crazy part, is you can clearly look at the CO2 emissions from the US

26:56 over the years, you can look at it right on top of natural gas production, oil production, and the GDP too, because that's another thing, right, like emissions can go down if the GDP goes down

27:09 because the economy isn't growing and people aren't doing as much. What happened during COVID? But we did that, like the economy grew over the last 10, 20 years, very, you know, heartily and

27:21 pregnant, generally speaking, energy prices were relatively low here in the US and we reduced our carbon emissions because we moved away from coal It's like how the power of that is still not talked

27:35 about, in my opinion, a lot. nationally or internationally because they don't want that narrative to get out, right? And I think uniquely, and hopefully I'm not speaking out of turn from an

27:46 understanding geologically or from a reservoir standpoint, but just putting some numbers out there. The world is a 377 BCF a day, the US. produces over a hundred now, 17 BCF a day that comes from

28:00 the Permian in the form of associated gas associated. Which is right Which is really free,

28:08 or a byproduct. And if that is not

28:13 a quiver full of arrows, I'm not sure what is. I think once the US. realizes that only oil and gas can produce pickleball equipment, that's going to change everything

28:30 I mean, I do think genuinely though, and we've seen it here in Houston even, but you start forcing one, higher energy costs on people, and then two, less reliability. And we have another winter

28:44 like that again. Like, people are gonna lose their shit. And that's not just, in Texas, we can blame Urkot, right? Because we have that. Literally. Outside of Texas, when you're on the

28:53 national grid and stuff, like when that starts happening more and more in areas that that hasn't happened to it in the past. It's happening, right? And we see it in California. That's gonna be

29:01 the big. I mean, it's happening. Yeah, I'm gonna stay on the MISO Island I mean, the southern part of MISO is still - I mean, there's a lot of talk about it.

29:11 There's a lot of talk about it. It's happening, but it's just happening in its organic way. Yeah, but I mean, the fastest way to get people off of that mindset is for them to have to - To go

29:18 through a hard core, right? Yeah, go through a few days without matter. You tend to reflect on one of the things when you go to the ballot box to stand there by yourself and the quiet. True,

29:28 true. All right, Kirk. I mean, news not as exciting, interesting for me Octopus energy just raised 800 million. whose octopus, some of you in Texas might actually have octopus energy as your

29:40 retailer. They're a British based retailer. They're actually, I don't know, 10 years old or very young, but they solved a problem that I've been talking about. They created a software, it's

29:51 called Kraken. That is an integrated modern software package. Now

29:58 octopus is the second largest retailer in the UK, but they've had an interesting strategy They've been actually raising equity from other retailers. They came to Shell, we looked at the deal, but

30:12 their whole idea is quid pro quo. I'm gonna license you Kraken, you use my software, you give us some equity to help us grow. They're now about an8 billion company. They have the Japanese, they

30:25 have the Canadians, they have a lot of money, but they have global money. And they're in three or four countries in Europe, in the US. now they bought a small retailer. in Austin and now it's

30:37 called Octopus Energy here in Texas, but there's someone to watch out for because if there's a model of sort of trying to make retail electricity actually profitable, the only real way to do it is

30:51 to drop the cost down to almost zero and to do that, you need software that's actually really good at analyzing where to get your energy, trading and making the right hedges and then being able to

31:08 help your customers hedge and use energy effectively and wisely, cut power when

31:21 there's maybe events, et cetera. But I'm pretty bullish on Octopus, interesting that they've raised more money, they're just sort of taking over the world in a market that almost most retailers

31:25 don't know how to play. Yeah, I mean, the infrastructure grid side, I feel like is one of those areas too where there's just so much opportunity for disruption, especially around like. connected,

31:35 and distributed loads, and all of that stuff. Because there was - I know Colin had talked about it a bunch, but Gritty was a retailer here, where you could buy wholesale every 15 minutes, right?

31:49 And whether people realize that or not, and the implications of that or not is one thing. But the idea of that, you have the Bitcoin miners on the grid that get paid to turn off and allow people to

32:04 redirect their base load, well, you know, my Honeywell app asked me when, you know, Hurkott's putting out their stuff, hey, do you wanna, you know, sign up for the program where they can

32:12 control when I get my stuff bumped up or down? And it's like, well, give me some incentive for me to let you do that, right? Like, am I gonna get a discount? Am I gonna get, you know, a

32:22 discount on my rate? Am I gonna get quoted, you know, the amount that I didn't use back to me and added to my bill so that I get some kind of net benefit to that? Otherwise, no one is going to do

32:33 that, right? There's so many things like that where it's like the simplicity of just having, you know, understanding user behavior and incentives and having the technology to bring along with that

32:43 and saying like, hey guys, we now have this whole thing set up and we'll also pay you the consumer X cents per kilowatt hour that you don't use during this time period or something. My retail

32:54 startup was called and we didn't actually raise the money we needed. It was called Blackbeard, you know, like, and it wasn't stealing from the, it wasn't the idea of like stealing It was

33:04 Blackbeard more than Robin Hood, but the idea was really like, let's take from the grid and distribute it in a more equitable way, but in a capitalistic way. Yeah. The thing about GoGritty that I

33:18 always struggled with was they were putting the risk, they actually gave you the risk as the consumer and that's where they, I was like, that model just doesn't work in a market like ERCOT that's

33:29 now New Zealand there's a company that, and I can't. Blinking on the name they actually did the same thing as gritty. They were the model and they worked but they worked in a small market where

33:39 they have Hydro power to there's sort of no, you know12, 000 a megawatt hour not the

33:47 problem in New Zealand But it's interesting. I think it octopus is someone to watch. I don't know what their prices are but Interesting interesting development

34:01 What else we got in the world

34:04 We have We have a revisit of the Venezuela Guyana issue mainly for the sake of corrections and thank you to our Subject matter expert for pointing out some mistakes that we made our listeners our

34:20 listeners. I mean, thank you. Fundamentally

34:24 Yeah, this is a person has a lot of expertise in the area and a lot of historical knowledge and and Mm.

34:31 I think I misspoke and said that the dispute was originally in the 1800s between the Venezuelan's and the French, but Guyana was a British territory, British Guyana. Venezuela gained its

34:44 independence in 1830, which set up

34:50 the British commissioning a German naturalist to establish the borders, and basically the outcome of that was to establish the western border of British Guyana at that time as the Orinoco River on

35:06 the eastern border of what is today Venezuela. The territory between, and Venezuela protested that, the territory between the Orinoco River on the west and the Isquibo River, which really runs

35:20 through the the eastern, kind of divides the eastern third of the present day, Guyana, was under agreement not to be colonized by either. the British or Venezuela. Gold was discovered there later

35:35 on. The Monroe Doctrine was invoked and then you have an enforcement of the Western boundary of British Guiana as the Orinoco River. Well, now we've got a significant parallel to that going on

35:53 with discovery and what would be territorial waters of the disputed area according to Venezuela in the form of the Stabrock block and then the other discoveries that have been made. A lot of

36:03 different theories and opinions out there on who lines up with whom. But Chevron is now in the Stabrock block. They've had a long history with the heavy oil development and the benefits of all that

36:19 with respect to Venezuela, how that plays out in terms of political dynamics. I think more recently parties are on record saying we don't want, we don't want Uh, uh, military action, we don't,

36:33 you know, we, we want to resolve this diplomatically. Don't know where Surinam stands because I think, you know, in, in one piece that I saw out there, forget what the source was, conjecturing

36:44 that maybe they have something to gain even more if, you know, if they allow it with the side of the Venezuelans, I'm not saying that that's what they have done. It's just, it's a fairly

36:56 increasingly complex issue, but just want to clarify some of those, particularly historical errors that, that I made on the last show. Well, finally, I've been listening to a podcast and not

37:08 finished with it by David Blackman. He interviewed Megan Lap fisheries liaison for C free shore side. They are fishing company, mainly off Atlantic, some Gulf of Mexico. And really about the

37:23 lawsuits that they're, they're suing both on the federal and state level. about all these wind farms that have been green-lighted by the Biden administration. What's interesting is for over 40

37:38 years, NOAA, which sort of manages the leases, has said seismic, just seismic surveying is way too difficult on marine life. And there's a, I've seen a few, which is kind of amazing in

37:58 Nantucket, but the North Atlantic right whale is endangered. And the Endangered Species Act sort of trumps everything. But didn't realize this, that seismic surveying temporarily deafens whales.

38:16 Construction permanently can deafen whales. And so that's why oil and gases had, you can't do any surveying off North Atlantic. It's been 40 years, they're sort of green lighting. Now they're out

38:28 there surveying from wind farms. What's the difference between the impact of why is seismic temporary and construction? I don't know, but actually the surveying for wind, just to be clear, the

38:42 surveying for wind is actually not as harmful as for oil and gas. I think the charges aren't as big maybe. You're probably trying to map subsurface for more subsurface for oil and gas than for oil

38:54 and gas Right, so what's interesting is - Yes, it's dope. What's interesting is the podcast is interesting because it goes on to quite a few issues, but one is if you work for the federal

39:05 government that oversees these leases, you have a history of getting good jobs with the wind companies. But secondly, they're pretty much ignoring, they're doing seismic surveys anyway 'cause the

39:19 federal government says you can and they're ignoring the fact that they have these sort of rules around like. If there's a whale in the vicinity, you can't be serving or you can't do construction.

39:31 But the way to find the whales, they have sight seers and they're like, we'll look an hour a day. And right whales are actually pretty quiet. You don't, they're not very communicative. So you

39:41 have to be serving like 24 hours a day with subsonic sound systems and you can pick 'em up, but they're choosing not to do that. And that's why we've seen a lot of these whales

39:55 show up on the shore's dead 'cause it's killing these whales. But it's interesting because it further goes, there's been some debate, we've talked about this before on the show about how these

40:05 whales are dying and people are saying, wait, it's not the wind farms, we know it's not. And according to Megan on this podcast, she is saying that a lot of the people in charge of running these

40:19 studies for the government have actually been hired by the wind industry. they somehow the study results come out in favor of course, it has nothing to do with when, but it's an interesting

40:31 development. Taking a play out of the big pharma playbook. It's like, oh, hey, you do this for us, then you can come get a job for us after the - And that happens in oil and gas. I mean,

40:42 there's quite a few oil and gas engineers that have gone to the railroad commission, but not at the same level. So we're not seeing this level of, you know, crony-ism. I mean, could you imagine

40:55 if it was an oil and gas company, though, that was not - Not today, no way. Yeah, like

41:01 the irony of all of it too, is Chuck's got his

41:06 big spiel on health. Whales are huge carbon sinks and we need more whales. And so it's like the irony of renewables killing whales

41:14 that is also now. She also said there's like one right whale in like the Gulf of Mexico. Like the Gulf of Mexico has very few whales I mean, animals. Marine mammals, thank you. But the North

41:28 Atlantic is like the super highway. Yeah. They're everywhere. And we're killing them all. And I care about that. For when? That's the best part. It's too bad, for when? As a lover of the

41:39 ocean and ocean activities. As a surfer, I love the ocean and I don't wanna see big, you know, ceiling fans that are creepy ever been in West Texas and seeing all those wind farms. It is scary I

41:52 drove around Germany, France and Holland this summer and it just - You feel good. I hadn't driven around that part of the world in 20 plus years. And now seeing that everywhere in the countryside

42:07 and just, you know, the sight lines as you're driving, it's just, you know, kind of jars you a little bit when you first see it. Yeah, every time we drive by I might make sure to take pictures

42:17 of all the oil leaking down from the nacelles because it's guaranteed fine on every single one. And you're like, hey guys. If you're so green, I've got one that I'll throw in here that caught EFTs

42:30 attention this weekend, but the Battalion Oil Corp announced on the 15th that it had plans to enter agreement to merge with fury resources. It's, I think, 100 stock merger, 450 million

42:46 in value, but

42:49 the part that, that really made everybody really excited was by offering the ability to drill locations with higher H2S volumes, this joint venture will allow the company to exploit additional

43:01 drilling and acquisition opportunities, which may not be available to others in the region. So I'm very curious as the, as an ex Apache engineer,

43:11 what your thoughts are on that statement out in West Texas that on H2S, well, first of all, it wasn't, was it was never an Apache engineer.

43:23 your your time at Apache. Excuse me. Yeah, I look, I think

43:29 I think H2S is is going to continue to be kind of a niche oriented play, particularly with, you know, the levels of production and some of the mainstream areas that aren't as H2S aren't as H2S

43:45 heavy. You've got, I think, quite a bit of of scrutiny already on just general Things like water disposal, methane emissions, et cetera, and when we introduce more and more H2S and to the

44:01 equation,

44:03 I don't expect it to be a kind of a wave of a thing. Yeah, me neither.

44:09 Oh, there are technologies out there that have emerged that, you know, allow on-site treating, I can't remember off the top of my head some of the things that we did see when I was.

44:23 Evaluating technologies there, a couple of them were H2S related because there were, you know, there were operators that were one-off that did have some H2S-prone areas and it, you know, it made

44:34 sense to try and do that effectively and efficiently on site from a cost perspective and, you know, boost the economics, right, you know, the more impurities and things that you have to deal with

44:42 the higher the the breakeven cost more

44:47 is. Yeah, no, I thought that was funny to be in there like, you know, an announcement in the merger and acquisition that that was going to be one of their their knobs that they were going to

44:59 twist. I think what's going to become more widespread in terms of bad things that come from underground along with mining and extraction processes is all the things that we're going to have to deal

45:10 with with this theoretical explosion and surface and pet mining that we're going to undertake in an addition to and more importantly to that that some of the really. nasty processes you have to

45:25 undertake to get purity, minerals, and metals out of those. In some cases, decreasing or quality type of things, so

45:38 that's a subject for probably another show

45:42 or a show unto itself. But we've talked about things like the nickel processing and refining in Indonesia, which is increasingly toward a process called HPAL, which is high pressure, acid leaching,

45:57 which introduces sulfuric acid under high temperatures and pressures, which then require a lot more energy and thermal energy inputs and a lot of what's being built to support that process or that

46:13 increase in the proportion of HPAL. And the processes of nickel refining is just call for our generation.

46:24 Yeah, I think it's, you know, most people would see H2S as like a negative thing and it costs more money because all your pipe has to be special and you have to treat it. And then it's also, you

46:35 have to have people under oxygen in most of those situations. And like, it's just dangerous all around. And so finding that in the merger and acquisition announcement is their differentiator. EFT

46:45 had a fun field day with that. I'm like, my first job, real job, offshore, I was when Rig Count went to near zero.

46:57 And the Greenhand got to do night company man duty. We're drilling in a main pass area that was H2S prone. And so we had all the monitors, alarms, drills, et cetera. And the senior guy that was

47:14 out there with me decided to let me breakfast after I came off There's a luxury to have two company men on a rig as you could. actually split it up into 12 hour. Right. Just otherwise you're out

47:25 there for 247. You don't know when you're gonna sleep. And I was,

47:32 whatever the deepest part of sleep is, he decided to hold a drill.

47:37 And I come scrambling out with no mechs, kind of half on, half off, got my Scott air pack on. We all go to the muster point and we have a workboat tied up, this is a jack up. We have a workboat

47:47 tied up. And all the work boats that we're servicing, all the work boats and crew boats that services rigs had those cascade units with the air bottles strapped onto the deck. And everybody had

47:58 hoses and masks that they were supposed to. You could hear the alarms way down on the surface of the sea or the golf. They were tied up and they were fishing. I don't have their mask on.

48:14 Oh, we thought it was a drill. Yeah, okay. H2S goes to the bottom, it sinks. Yep, it's heavy What are y'all doing for Christmas boys? go first. A little, a little trip. Scottsdale. Oh,

48:27 yeah. Awesome. Nice. Some big of weather out there. I hope so. It's true. No, it should be good. How about you? I mean, I think I'm going to pick a fine bourbon, sip it during the holidays.

48:42 Kids come in, maybe play a little golf. Drink some good wine. Golfs can be pretty good. This next couple weeks. Oh, a little hunting as well, but that's after in Scottsdale. No, the only

48:54 hunting in Scottsdale is for mountain lions

48:59 is for ex wives, but hopefully you're not doing that mountain lions. Got it. We're going to be we're doing Christmas Eve here with my side of the family and then leaving the day after Christmas to

49:10 go up to Shreveport to swing it with hers. So I was talking to this morning said, she's like, you know, I'm one of the few people that I tell people I don't like.

49:22 the food in Houston and she's like, people get so mad at me. I'm like, then you must be from, from like, south Louisiana. She's like, I am from, I am from Baton Rouge, but, but a small town.

49:35 So far south, you wouldn't even be able to pronounce pronounce pronounce it. Houston is vastly underrated. I was like, she's like, I love the Mexican text max. Love the barbecue, but is there a

49:48 good Cajun restaurant in Houston? Oh, I mean, she nailed it. I was like, pretty good, good point. That's

49:57 a pretty good point. If you're a listener out there, Merry Christmas, Happy New Year, happy belated Hanukkah. Happy belated Hanukkah.

50:06 We will be off for the next two weeks, but if we decide to throw an audible, if something big happens, like the horns win the national championship, like they should, we might have to come back

50:17 and just talk about it. But that's not until January the 8th. Yeah, you'll be back We'll be back anyway. That's good point. Um, but you'll have one. Yeah, you might have to be on on the first

50:27 if you're ambulatory after the game on the 31st, if they went to handicap, that's true. Handicap, which is in the world, which is, um, nonetheless. Oh, we have to give another closing shout

50:41 out to Frank's lap tomorrow is his birthday. So everyone on, uh, Twitter. Yeah, go blow them up tomorrow. Go blow them up today Uh, please like this, subscribe, uh, give away. So that

50:56 announcement to, yes, to digital wildcatters on Twitter. Uh, we're selected. So fantastic. All right, guys, good way to cap it off. And somebody's getting an extra merry Christmas from that.

51:09 So that's right. Thanks for stepping in, John. Absolutely. Me any time always, always welcome on this. Makes us a lot smarter. That's right. a lie. Definitely a lot younger. Cheers everybody.

51:21 Cheers have better. You'll have a holiday season.