Big Digital Energy

0:00 I'm in a house, little three bedroom, you know, ranch, 70, what part of the world are you in the in the woodlands for until you're woodlands, but you have so many houses around. He wore out as

0:11 welcome at the Richmond else. I'm like other other side of the county go away. But

0:20 you know, fitting my son's car in my truck in the driveway. Forget about the two car garage. There's just no fucking way. But you sold the 40, 000 square foot mansion, didn't you? I did. Okay,

0:31 December, which which now in retrospect looks like pretty decent timing given. I think you you hit it. That was good timing. I may have top ticked it because I've seen days on market. I monitor a

0:42 lot of areas, but days on market. And I've got triggers for price cuts. And there are a lot of them.

0:52 And people aren't cutting enough. We're about to cut. All right, well, give us the spiel on the house. Are we recording? Maybe a viewer wants to buy it. Like, 'cause I, you know how you

0:59 always wanna go spend the night in a famous people's house? Like they've turned Paisley Park in Minneapolis into Airbnb and stuff, man. I would think one of our fans would wanna come buy your house.

1:11 Is Paisley parking an Airbnb? It is now. We have a house for sale in River Oaks. It's an entry level for the neighborhood It's on the right side. It's on the north side of San Felipe. Okay, yeah,

1:26 so. Where River Oaks Country Club is. So like, this is prime real estate for anyone that's trying to get into town and be somebody. I'm a nobody, so I'm just trying to get out. Yeah. And we'll

1:38 make a deal. I'm trying to get up north.

1:43 So the move is eminent? Dude, week out, I'm moving in and tuck it and we're not coming back. Now, we'll come back to warm weather after Thanksgiving. We just don't know where yet. Yeah. And so,

1:56 if anyone listening wants to give us, we're thinking Dallas or Florida, but I'm always open to suggestions. My sweetheart went to SMU. So it's hard to pull her from Dallas. And Dallas is actually

2:09 a great golf town. They're great people there. They dress nicer than Houstonians. The food might not be as good, but Can you negotiate Fort Worth out of her instead of Dallas? Or does it have to

2:21 be Dallas proper? It's almost like one time I told her, I was like, Hey, I'm in Dallas. She goes, Where are you? I said, Frisco. She goes, Frisco is not Dallas. I was like, I sort of

2:33 learned that Fort Worth is a completely separate town. I like Fort Worth. I love Fort Worth. Colonial's there. In fact, the colonial's going on right now. Scotty Scheffler's there. A lot of the

2:41 top 10. Who pulled up in the '65

2:46 Stingray, that's all that Scotty does it Scotty? I don't know. But I mean, it's a great golf town also. And it's sort of like a oil town. Yeah, no, it's cow town. It's, so I lived in Dallas

2:58 for a year, figured out I wasn't cool enough to live in Dallas. You have to be cool. And I'm not cool. So I couldn't live there, but we spent a lot of time over at Billy Bobs. And I was kind of

3:09 like, I could live in Fort Worth, but just couldn't figure out how to make that work. So - Our daughter's graduating. So this, speaking of cool, she's graduating and it's like one of these,

3:20 private schools in the middle of Houston, you know, the type. And

3:26 some families are having this hush hush after graduation party. And they don't want anyone to know. And we find out and we're like, we absolutely don't wanna go to this because it's not cool to us.

3:42 And they're like, oh my goodness. I'm like, please do not invite us 'cause we won't go. I just think it's so funny what people think cool is. Cool is being with Chuck and Mark on an episode of

3:56 BDE. We lived in Southlake for about three, three and a half years right after I got out of grad school before Southlake really exploded and spent a lot of time in Fort Worth. I'm a fan of him. So

4:07 Holly, if you're listening, Fort Worth is cool. I mean, we'll see what happens.

4:14 That sounded like no fucking way.

4:18 Not does anything. I guess a like named Possum Kingdom would be a non-starter. Non-starter, she just think SMU and the campus, she loves that area. So I think that's probably what we'll be close

4:31 to. There you go. You got Tolway

4:34 75, we're in between, inside the six. And by the way, as a Eustonian, I hate to say this, but Mikasina is a good tax max for Dallas. It is. It doesn't, didn't work in Houston, didn't work in

4:45 the woodlands, but it works in Dallas. places is a nine iron from central SMU campus, which is Javier's. Oh, yeah, dude. Javier's, man. Conti-floss. And I will say - Cigars. And I'm not -

5:01 Conti-floss. I'm a foodie kind of snob and stuff and look down on Dallas, but it's hard not to love a fearings meal. Oh, I mean - And Dean is the nicest guy he comes to table. Yeah. And he gives

5:15 you that super warm, great seeing you. And you don't have to see him that much and he remembers your name. He remembers your name. Yeah, which is impressive. Well, when you have your own jet

5:26 chuck, I guess everyone remembers Chuck, right? Yeah, so he went to the file cabinet and said, Chuck, okay, we can get rid of that card. At least until collide takes off. All right, what do

5:35 you guys wanna talk about? All right, so we do this periodically on the podcast. I'll start it off with, guess who's back, back again?

5:46 I mean, he was hitting record high unfavorabilities. He goes to the mid east by all intensive purposes. Looks like a home run. Mark, what happened? How many trillions of dollars? Yeah. Yeah,

5:59 I think, what was it somewhere between - A gazillion minimum out of the sorties of what, 600 billion? Yeah. And upwards of combined hard and soft commitments, 4 trillion? He got 440 billion out

6:15 of UAE So, I mean, damn. So, was it a coincidence that EOG announced last week that they've signed a 900, 000 acre exploration agreement in the UAE? I mean, my view is,

6:35 I don't want the government negotiating on my behalf, but it happens, and it's diplomacy So we have a president that's. doing a really good job of getting foreign investment in the US.

6:50 We go to EOG, EOG, you have to be smart. You have to be in the political arena. You need somebody with ears perked up. I think they're just riding the Trump wave. Like when things are good,

7:02 they rode in and said, Let's get some good deals while we can. That's my view. I think this is emblematic of how EOG has pivoted over

7:13 life since '99 separation from Enron. Man, you had to say it. As a public company, they've been out in front. They were the gas microguys. And

7:27 until we hit unconventional, you remember they famously used to update the North American gas supply graph and gas is really tough to grow Well, then shale hits and then they pivoted. to oil,

7:46 which started off for them, really, in the Eagleford. I think this is just another pivot, fundamentally. Yes, I do think there's a lot of -

7:56 I don't mean this in a pejorative way, political opportunism or - You have to take it. Political synergy. But if you look at, you know, all the talk now is plateauing. Chuck's predicted US oil

8:10 production peak a couple of weeks ago. Wow. You even said it before Diamondback said it. You heard it here I said it before Travis said it. And we've seen fits and start. We always break news

8:20 before anyone else does. We've seen we've seen fits and starts internationally on shale. OK. Yeah. And I forget where I saw it several years ago. Let's look at the scoreboard. We looked at a

8:31 Poland deal. We were going to frack in Poland back in the day. Remember GOB gas in the UK and all these. Argentina is probably the best example of a lot of potential. for above ground reasons has

8:45 struggled to really hit it stride. Now, you've got the political table set with this administration. And certainly the UAE is a good place to do business. Kim Rijo just opened their offices in Abu

9:01 Dhabi, I believe. And

9:05 so, I think, you know, they've got a three-year term on this thing They're 100 of the equity in cost until such time that there would be a development decision than ad knock, and it's in other

9:20 related affiliates, or like affiliates, have the option to participate. I'm sure there would be, you know, typical international PSC-type cost recovery for EOG

9:36 on the exploration appraisal side One of the things that's interesting in, in. reading a little bit deeper. There's not a lot of detail. There's not kind of well commitments or work programs or

9:47 how much, but what's fairly explicit in there is that they are obligated to basically let Ed not go along for the ride technology transfer, knowledge transfer type of things. So this is something,

10:05 you know, I know the Saudis have been watching for a long time in trying to really climb learning curve of what's going on in conventional because they do have, Saudi does have some unconventional

10:17 potential. Quite a lot from what I've talked about. But who's best to go and apply it? I mean, is this drill baby drill just not within the confines of the US, right? And so it was just an

10:33 interesting coincidence relative to the timing of the investment curve I'm sure this has been in. discussions and negotiation for much longer than certainly even contemplated well before we even knew

10:50 Trump was going to get a second term. But I mean, I think there are two points to make here that I think are really important. And we talked about this numerous times on BDE, Trump's a low oil

11:01 price guy. He just is. That being said, everything else is on the table, including Barron. I mean, if he had to throw Barron into a deal, he probably would. Sure, Barron. Sorry. It's a good

11:13 deal. And so these are the types of things that the industry needs to be focused on because we're just going to have50 oil. I'm sorry. It's going to happen. I'm not cheering for it. It's a

11:26 reality. What can we get? Can you get us concessions with foreign countries? Can you get us foreign investment here? Can you get us permitting all that sort of stuff? So we've talked about that a

11:39 lot and. Kind of disappointed that Chris Wright isn't leading that discussion. I know over at DOE, he's not in charge of the oil and gas business, but he knows it. And he could be making this

11:53 case much better than, drill baby, drill it 50. You're good, you know? I mean, he could be laying this out. Hey, sorry we're screwing you on price. Here's what we're doing for you. The

12:03 second thing is, I think this trip, and I hate to get, you know, verbose about this and grandiose about this. But this felt like Marshall planned for the Middle East. It really did. I mean,

12:17 we've been at war over there. I feel like my whole lifetime, right? And this kind of felt like, okay, guys, World War II is over. There's a lot of reason for everybody to hate each other.

12:30 Let's put it past each other, you know, let's put it all in the past and let's start doing business together. And that's very much what this felt like in terms of, you know,

12:42 the NeoCon designed to redo the Middle East as dead now. We're just gonna start doing commerce together. And at the end of the day, that's how we're gonna wind up stop shooting each other. Then

12:52 you had the lightning rod, the distraction of the Katari gift of the400 million, some 47. Let me go through some technical points on that, just so we're all saying the same thing. The offer from

13:06 the Kataris is here's an airplane to the Department of Defense, it's not to Trump personally, it's the Department of Defense. And then Trump suggested when Boeing finally gets around to building

13:21 the planes that he ordered in the first term and we get those, you dedicate, you donate it to the Trump Museum. The key to these, the Trump library, the key to these presidential libraries is

13:35 they get privately funded and built. and then they're donated to the federal government. So the federal government will own this the entire time. It's not gonna be owned by Trump personally. There

13:49 are a whole reason, a lot of reasons not to like this deal. I mean, hey, they're trying to curry favor bad appearances. Hey, it's gonna cost a billion dollars in three years to retrofit it just

14:01 to make sure it doesn't have bugs on it. There are a whole lot of reasons like, but again, we go back to the dishonesty of oh, Trump's getting a plane, he's not getting a plane. The US

14:10 government is getting a plane. And there's probably been no more aggressive or prominent participant in US investment from the Middle East and Qatar, right? They're all over endowments, et cetera.

14:28 And so that whole kind of political quid pro quo, I don't think it certainly stands the.

14:40 the kind of analogy test, just given where else they've put in billions and billions of capital.

14:50 I don't think that, you know, he's only got three and a half years left. What is, how long does it take to get the library built after the president leaves office at times? A day, years, it

15:01 feels like. That brand new aircraft has a much longer service line He's still letting him have his built, but - Right, how old is the, and there's more than one, but how old is, are the existing

15:11 aircraft that make up? So, supposedly, I think the one he's flying around on right now is 35 years old. Yeah, somewhere around there. And so there are safety concerns. And he's a new one. Yeah,

15:23 and he ordered one when he was his first term. I think the big story here is Boeing hasn't delivered it yet. That's an interesting comment. That to me is the big story. What we should be talking

15:35 about is what the hell? Speaking of Boeing, what was the order that the Qataris put in? It was over400 billion. Of airplanes. Of new aircraft. Single largest order in Boeing's history. I wonder

15:40 what the

15:48 commission's like on the sales rep who left that deal.

15:53 Exactly. So I do think the EOG announcement was mostly coincidental, but it's relevant to talk about in terms of the new dynamic between

16:10 the US

16:12 and the Middle East and the power players there that is, let's focus on economic partnerships. Right. And they'll do their requisite amount of defense spending, et cetera. But this is all good

16:26 for the US. Well, as a shareholder, I mean, if you can get a better deal because of other things happening, wouldn't you do it? And I think that's ultimately, this is, this looks like a pretty

16:40 good deal for EOG,

16:44 especially if they strike, you know, what they think is underneath the ground there. It looks like it could be favorable for the owners. And let's use it as a model Guys out there thinking through,

17:00 what do you want to do? If you had your eyes on any other country, I'm sure Trump will go over there with you and help negotiate it. Let's use what we can get out of Trump. I mean, EOG is a 100

17:12 equity in the operator. I mean, that's just of the exploration license. So if they discover something that is commercial and ultimately gets developed at ad knock and others will be able to jump in.

17:23 Jump in. Right.

17:28 This is a lot about knowledge and technology transfer from

17:34 the Emirates as well, which I think has been part of the

17:41 attention that they've been paying, the observations they've been making as they've watched, and don't kid yourself. They've been watching what's been going on in US. jail for a long time, and

17:53 what better way to accelerate the capability than ride shotgun on one of the best operators and most knowledgeable about how to do this and unconventional.

18:08 So I just know 900, 000 acres is a lot to explore and appraise in a three-year timeline.

18:18 One thing that I don't think was a coincidence, and we talked about it last time we were on is, I think it was the same day he was starting in Saudi was, I bet there's going to be some shadow or

18:35 backroom type of discussions with the Saudis about, okay, we're hanging in here at 60. You guys have announced a tripling of the, quote, or the cut restoration for

18:50 April and May, their meeting on June 1st and speculation is popping up that are we going to get another 411, 000 barrel a day acceleration for July? And so I do think that there was some discussion.

19:04 Look, and I think you're right, got to have 50. And the closer we get to November of 2026, the more he can point to that as a big win for all the other things that are seemingly bogged down like

19:18 Russia, Ukraine, what's going on with Iran, Gaza, et cetera Um,

19:25 what do you guys think? Totally, I'm sure that's happened, you know? And, you know, hey guys, I need low oil prices. Tell me what I need to do. Where do you start? You start with OPEC and

19:36 you start with the number one king of OPEC is the Saudis, is the first place I've got. And I always said for years, you know, call it 2015 to pre-COVID, I always said the Saudis don't have their

19:50 excess capacity. They really don't. They were pushing it and producing over 10 million barrels a day And if you look at it, their highs, they never really did it more than 120 days or six months

20:04 at a time. So if they had excess capacity, BS, they've been producing what is low as seven and a half million over the last couple of years. I think they're at eight and a half right now. They've

20:16 got it now. They can turn it on, so it's real. There was some announcement where they adjusted their Their long range.

20:27 capital plan with, you know, it has an upper limit capacity target that went from 13 and a half to 12 and a half. You know, I think some of that is partly a function of what, what, uh, what

20:40 you've been talking about Chuck. And one thing this, bringing it back to near term, one thing this does is, you know, we put those barrels real or imagined back on the market. The cushion is

20:54 less in terms of what's shut in Or spare capacity and, you know, the economy reaches more of a, an equilibrium or steady state. We've got 104 million barrel a day market that has a pretty thin,

21:13 reliable spare capacity margin, particularly if, if US shale cannot step in quickly and fill the gap. And, you know, I was on a TikTok last night, some oil filled guys. one of their groups just

21:24 paying me and saying, Hey man, will you go live and chat with us? I was like, Sure. So I'm sitting there talking with

21:30 a bunch of oil field guys. And one of the points I made, 'cause we were talking about Saudi Arabia and just what is the true kind of variable cost for the next barrel out of Saudi Arabia? It's way

21:43 different when they're at eight million barrels a day versus when they're at 10 and a half million barrels a day. 100. Or whatever. Yeah, and so kind of hanging out at eight and a half, that next

21:53 barrel doesn't cost Saudi Arabia anything. So, you know, one other thing that I noticed, I was playing around with some numbers and I'm probably messing these numbers totally up, but as I have a

22:08 tendency to do, if you look at imports as a percent of GDP, it's a little under 14.

22:17 You know, it's - It's total imports.

22:21 goods and services and products, it's a commodity. It's 14 of our GDP. So if you're gonna slap a 10 tariff on that, on

22:31 the remaining

22:34 86 of GDP, you gotta have prices come down, kinda call it one and a half to level those things out just 'cause of the magnitude. Oil, and it depends on who you look at, but estimated, call it

22:49 eight to 10 of GDP. So if you're gonna slap a 10 tariff on imports and drop oil, call it 12, you've broken even. That's it. Of prices. And at the end of the day, Trump is about, I mean, Trump

23:05 is eyeing November of 2026 as inflation. What's the lowest price you've seen for regular unleaded?

23:14 I mean, I've driven a lot lately, so I - Yeah, I was about to say, I mean, don't you only buy premium? Mark, I don't know what regular is. One of the cutest charlie - Well, it's what's

23:26 displayed on the sign. Yeah, fair enough. One of the cutest Charlie Yates stories is, Charlie just started talking when she was eight months old. I mean, like, and by the time she was a year

23:39 old sentences, 18 months paragraphs, very susceptible to advertising. And so one time we're like stopping to get gas and Charlie's, you know,

23:52 in the back of the car, all strapped into the car seat. And I'm getting out. Dad, be sure to use premium.

23:59 So fantastic. Yeah, exactly. If I can find one of my oil tracker. Now that you're having - Recent searches. Life on the road. Do you actually search when you're on the road for the lowest price?

24:12 No, I just, in these conversations about, you know, what's a reasonable, reasonably low gasoline price for the US. consumer. It's been a. Gasoline has been a tremendous bargain for almost its

24:29 entire history. The 2024. Compared to Europe, for sure. Yeah, the 2024 price

24:38 or the 2004 price

24:41 adjusted for

24:46 2024 was312. 2024 was330 The high over the last 20 years occurred on an annual basis in 2012 at497.

24:59 Wow. So you're exactly right. It is the proportionate impact on that component of the individual consumer's budget that has gotten a really big break when, especially today when crude prices are

25:15 farting

25:18 and the resulting gasoline prices. I saw,

25:22 I paid as high as330 for mid-grade in kind of the Memphis

25:28 St. Louis corridor last weekend. Won't get into all that, but saw249 here on Britmore just this morning. So, there you go. Meaningfully below three on a nominal basis and on the signboards, the

25:43 consumers are gonna look at that and say, Pretty good deal And what is energy as a percentage of, I mean, not only - A household budget? Yeah, a household budget 'cause that includes electricity,

25:53 which again - Is going up. Is going up.

25:59 That can make a huge difference if prices are low.

26:03 I'm giggling, so y'all keep talking. I'm actually perplexing and - Yeah, yeah, let's be honest here. Energy is a percent of household budget. Well, you find that and we'll go to the next story

26:15 'cause what do we got, Mark?

26:19 This is saying it's 3 and some estimates get as high as 6. That

26:25 feels low to me. Does that include power? Yeah, I think

26:32 that feels kinda low to me, but at the same time,

26:37 it's very visible, right? You fill up once a week. Yeah, you do. And so you get true feedback there Groceries,

26:47 nothing's changed any of my social conversations with different peer groups over the last 20 years. Gasoline prices are always too

26:58 high. It is a high profile. It's something I see when I pull in. I mean, shit, I was out in LA and that conversation is a lot different than it is here, for sure. Well, it's a gasoline and

27:08 they're losing two more refineries. I know. As I drove by one, I'm like, Wow right here on the ocean, that's crazy. I forget what California's post. those closures. And we're not talking about

27:22 years down the road, we're talking about 2026. I mean, there have been no shells. And what's the other one? I don't remember. There's one in the in the LA basin. I mean, they took a cue from

27:34 Germany, who's coming back. So that's another story for another day. Yeah, we had it on the list a few weeks ago, the new, the one who took the energy and economics minister for the incoming

27:46 administration She's all about natural gas. Yeah, well. So yeah, this is saying 6 about half of that's gasoline and half of its home heating,

27:58 which, you know, that might be about right for me. Although my house electric bill is, is higher than it should be because I have the old house and so I'm literally down air conditioning downtown

28:11 Richmond. Yeah, sure. Yes, you are. Exactly. Well, half of Downtown Richmond is under your roof line too. Yeah, well, that's true. You get good value back in houses built in the 1897. Love

28:28 it. There we go. Good brick, man. All right, so we're jumping onto Texas and - The energy fund? And trying to re-power it. So that was passed by the legislature in 2023, and it was, we talked

28:40 a little bit about it before, and there was a flurry of project nominations for new gas fire generation to the tune of, I think the nominations totaled something like 38 billion dollars worth of

28:55 projects and forget what the capacity associated with that was. They ultimately selected 17 projects for just under 10 gigawatts and about 54 billion of loan guarantees. And the loan guarantees were

29:10 3 loans, 3 20 year loans, I believe. Ah, the American dream Right, for up to 60 of. the project cost. And so that's pretty good use of leverage in your project financing. But eight of those

29:29 projects, eight of those 17 have either canceled or been withdrawn here in the last few months. So it may not be an outright implosion of the deal, but I think it's also, the obvious realities are

29:44 costs, construction material costs And then two, the critical components, the guest turbines, they need to call, I guess they need to call for a act. Guest turbines have put out

30:02 timelines. It's like Boeing, they're hard to make and take forever. Yeah, I mean, that a G - People just can't meet. Although, you know what I heard yesterday? I had lunch with what I'll call

30:12 one of my power buddies. And his thing was, yeah, you wanna pay retail price for a turban. It's. 38 months wait, you want to pay 200 I'll get you on tomorrow. That's where the market is today.

30:27 So you can jump up in the queue and that they've really ramped it up and there is a bit of trepidation where people are going, oh my God, we're building too many of these. Well, so the whole

30:38 purpose of the Texas Energy Fund is it was in response, correct? To Yuri. And getting an ERCOT, having a dispatchable power. Having a dispatchable power Isn't there a guarantee behind it?

30:52 'Cause I mean. Well, so here's the issue with ERCOT that's unique to the

30:57 other grids. ERCOT's deal, like most

31:04 of the time, any other place in the grid in America, you wanna build a project. They come in and they look at supply and demand in the area. Are we gonna need it? They slouch in. ERCOT's deal is,

31:14 hey, dude, you wanna build power generation?

31:18 Good luck throwing in there. We can shut you off whenever we get inbound. That's exactly the point I'm glad you made it is. Great, there's this one part of the government saying Texas Energy Fund

31:31 saying, Hey, we'll give you all these really nice loans. Go build shit. You've got another side that's saying, Hey, this is at risk and if you build this project, it might fail. Good luck.

31:42 And the big players aren't stepping in or have withdrawn Well, and you've compounded your power pricing risk by really building a flurry of intermittent and negative pricing and certainly - These are

31:58 peakers, it's not base load. What is it? It's a combination. But it's, you know, have you looked at ERCOT's kind of real-time power stack and seen - They used to follow daily, but now it's not

32:13 as interesting Yeah, I mean, wire and Texas-wise. you know, gas, which is, I forget the nameplate numbers are the available monthly capacity, but we're running natural gas. A lot of times when

32:26 it's windy and sunny, we're running them at much, much lower effective utilization. Right. And so I'm a new gas plant developer. I'm gonna expose myself where I've essentially been subordinated

32:39 in the grid from a generation standpoint that places a huge risk premium on my economics And it's harder for me to get debt these days outside of Texas. It's harder for me to get insurance these days.

32:53 There are a whole other host of thanks, Pao, and all of that. So in the world of the regulated utility, you've got the rate base and you're guaranteed a rate of return on essentially the book

33:05 value of the assets. I don't know if that fluctuates, I think, in regulated utility since somewhere between seven and nine percent

33:15 But you don't have that where you're -

33:18 you're kind of at the whim of capacity and power auctions on

33:26 a deregulated situation. I mean, I've heard, and I'm not a power guy, but I've heard there's a lot of talk of the better fix instead of just loaning cheap money for power generation is put some

33:43 sort of fee on capacity in some way, shape or form I mean, you get paid something for putting capacity onto the system, as opposed to right now, you just get paid for power. So what does that

33:57 mean for the rate payer?

34:00 So ultimately, you know, you still, to some way, shape or form have a free market. It's just if I build a natural gas power plant, baseline return of something coming back, as opposed to right

34:20 now, it's like, man, on a sunny day, I'm not gonna run this. This is a regulatory issue, by

34:27 the way. And it's, if you look at what they're trying to do at like University of Colorado at Boulder, where they're building these microgrids and they're trying to share power between homes and

34:42 businesses that have excess capacity and it almost settles locally. There's ways that you can sort of fix the capacity issue in Texas. But I think it's the regulatory issue that's gonna take a long

34:56 time to figure out. I wrote a whole paper on this about sort of this theory of microgrids and why at the time I was at Shell, we took a pretty hard position going towards that But I think just this

35:11 is a regulation problem and the issues haven't been completely worked out. The ego, at the ego capital of Texas, Austin, where there's a company called Tesla, why don't we just plug in all those

35:24 extra Teslas to power? Yeah, so, and one thing we should say in fairness is ERCOT's definitely better. I mean, the steps they've taken, I think, have made it better. Is it? I think we used to

35:38 say that. Back in 2010, I would have said sure, ERCOT's the model. But since that time, there's been a lot of, well, ERCOT's, I mean, the interconnectivity between other states is happening,

35:53 but there's some issues there.

35:58 There's this, which I'm for a market, and a lot of people made money coming into Texas, building power plants, but now you can't really do that as we're seeing with the Texas Energy Fund and the

36:08 implosion behind it, is 'cause people can't run the numbers and say, I'm not taking this risk. This risk of capital is way too high. I'm canceling a project 'cause I can't make the numbers work.

36:20 So what do you do? And other, you know, aggravating factors, supply chain related, et cetera, so. Sure, but I mean, yeah, I'll give you that. But by the way, if people are gonna pay market

36:35 for turbines, I bet there's gonna be some turbines available. Yeah, and I mean, the landscape, the economic landscape is the major driver here. Exactly what you were saying. It's just that

36:48 uncertainty. Well, in my understanding, and I'm gonna do back the envelope economics, is if you wanna buy a gas turbine today and go stick it in the grid, you can model out like 12, 13, 14 year

37:04 paybacks, which is just sub-economic. None of us would do that Thus, the Texas government saying we'll loan it to you at 3.

37:14 you really have to be able to lean into, we're gonna have a winter storm, Yuri type spike in pricing. And if I've got base load that's dispatchable, that's where I'm gonna make my money. And so

37:28 we haven't really seen that from the investing world that they're willing to in effect that on volatility. And so - Well, climate change is gonna fix all this. So mark my words Well, and staring

37:46 at the prospect of 130 gigawatt market and by 2030 in Texas is something's gotta happen or it won't happen. Yeah, and I do come back to AI as existential threat type stuff. We have to win this. I

38:03 mean, look, we can't let China win this.

38:06 Going back to our, conversation earlier about the UAE, they made a14 trillion commitment to invest in AI and other related technologies in the United States, which goes back to I think those are

38:21 microprocessors or fabs and AI and data centers, which needs power Yeah, so natural gas currently on our cut is generating just over a third of the power on the grid, combined solar and

38:44 wind right now or right at 49. Well, it's pretty damn hot in Texas right now And did you know that storage, which has grown from, I looked a few months ago, it was like seven or eight gigawatts,

39:03 it's now monthly capacity of storage is just over 11 gigawatts and that is twice, over twice nuclear monthly capacity in the state. Really? And what kind of storage are we talking about? Battery.

39:19 Because there's, yeah, there's gas storage. No, it's just, this is generation stack. This is just - Okay. Installed battery storage. Good to see you. Good to see you. Can we talk about nukes?

39:31 Let's talk about nukes. I love nukes. By the way, Chuck Yates needs a job having a guy on this afternoon. We're talking all about nukes. So maybe - Well, what a segue. Yeah, exactly. We can

39:42 make some predictions. Yeah, so when the viewers notice that I'm wearing a blue shirt and BDE and next week's or two weeks from now, Chuck Yates needs a job, let's go to the record on the same day.

39:53 Don't tell the fans this, Chuck, you need to be more real-time. Ah, there we go. Yeah, I need a new phone case. What the hell did you do there? Hell no, no, it's beat up. Yeah, and people

40:03 that watch Power Hour Live just a little while ago, See me in the same shirt. Same shirt. It's not the Jerry Seinfeld black and white, you know, the black and white dress-ups. Actually, my dear

40:13 friend, Joel. Birthday tomorrow, by the way. Happy birthday, Joel. Happy birthday, Joel. Happy birthday, Joel. Yeah, cool. At one point, according to the FBI, I had more stalkers than

40:23 anyone else on the planet. Just, you know,

40:28 folks, singers, sensitive type, lyrics, et cetera. She had a lot of stalkers. So one tip I learned from her, anytime you're traveling and stuff, you're posting three days delayed. So like,

40:42 if you go to the beach tomorrow, you don't post live, Hey, I'm in Miami Beach. 'Cause everybody knows you're not in that beautiful house. People track my jet, and they know where I'm going.

40:54 'Cause of the tail number. Yeah. That's the problem. Yeah, and there's nothing you can do to get around that one. United tail number is, they just know. Now, by the way, Speaking of Joel,

41:05 great music, great musician. I sort of, I'm heading off to Nantucket. I'm listening to Yacht Rock, which I was totally against, totally against this whole genre, but it's kind of grown on me.

41:18 It kind of puts me in the island. You kind of got the hair for Yacht Rock. I mean, I'm digging the glasses. But this song came on, I'm dating all of us, but this had a profound impact on us

41:30 musically in our lifetime

41:34 This song came on, looking for love in all the wrong places. When you hear that song, what do you think about? I think Gillies. Yeah. No, no, no, I'm thinking - Hold on, who rewrote the song,

41:50 put it on a skit, and now everyone can only hear that version. Eddie Murphy. Eddie Murphy, sorry, I live. Nook and Penob. Nook and Penob. Nook and Penob What can Pena, dude, I cannot hear

42:06 looking for love anymore.

42:08 And then just like I can't see, Mr. Rodger, he didn't know it. And then a few years later, he went on back onSaturday Night Live and was the fifth beetle. Yeah. Clarence. Clarence. I mean,

42:19 he. Man. Did that change? Let's kick Clarence out of the band and steal all his good ideas. Buns. That sounds great, Paul. T times a baby. I mean, just classic grief. The night who shot

42:33 Gumby, that was awesome All right. We'll only let you go that far off the cool rock guy path. If I hear you've been sampling mom jeans, that's a station on Sirius. I listened to a lot of MLB in

42:53 the tray. What is it? There's a station called Mom Genes. Really? Yeah. Who knew I ran into? Well, that's a longer story about my XM days, but let's get back to Nukes. You can make weapons or

43:08 you can power homes. I mean, it's like the best technology of all time. So we've had a resurgence in nuke advocacy, certainly from the cop group, but also there's been pretty explicit

43:24 pronouncements that the US is back on the nuke train, the notion of quadrupling capacity between now and 2050 or 2070 And Dunberg put out a piece this morning called it Actuarial Examinations. And

43:40 it was really talking about

43:44 what Eisenhower's original vision was, at least that's how it starts. And Eisenhower created the Atomic Energy Commission, which was,

43:53 I think, a very helpful and advocacy oriented regulatory type of structure in philosophy And then in 1974,

44:06 forward sign the creation of the Nuclear Regulatory Commission, which essentially became kind of the rampart to any type of progress. And there's just some interesting detail in there. And we've

44:22 talked about the NRC when we had Bob Coons on last year, and, you know, the Microsoft deal to restart three mile island unit one and some of the timelines that are out there, just given how

44:36 obstructive the NRC has been, you know, how do we get it back to an agency that behaves more like the AEC versus something that says no to everything. And I got to go look at essentially what

44:51 facilities these are since 1974 since the

44:55 creation of the NRC, we've actually built two new greenfield

45:01 nucleogen that almost doesn't sound right So I'll go back and. check the context of that. But the NRC, I'd never heard of this before, operates on what's called a linear no threshold model where

45:16 it treats any radiation exposure. It's kind of lifetime cumulative. So if you're above that threshold, you can't do

45:26 it. And we're talking about throughout the course of history, nuclear Navy, you get exposures when you're flying, you get exposures when you go to the doctor or radiologist, et cetera. According

45:37 to the son of a radiologist. By the way, it does not glow at night at age 85, so. But he might be still alive because of it. Yeah, fair enough. There is data in there that suggests that the

45:54 radiological obstruction that has taken place over the last 50 years has resulted in millions of otherwise preventable cancer deaths. For example, so, you know, their hope or the hope that's

46:10 expressed in this piece is that we're going to get this breakthrough where we completely turn the NRC no model completely on its head because that's what we have to do to get to the type of of

46:24 additions of nuclear capacity And I think it's, you know, hopefully that momentum continues to build. We actually start seeing some projects get sanctioned because it is a tremendous win for safety,

46:36 reliability, land use,

46:40 carbon, carbon, I mean, every time I go down to Surfside, when there's a good swell, I'm sure I'm getting radiation from the South Texas Nuke plant, you just feel like, I mean, the water glows

46:54 there I mean, but haven't we figured out that we can just surround that with concrete? Yeah. Yeah If something melts down, you shut it down and. five, five work, but remember a lot of this is

47:07 driven by politics and politicians aren't scientists nor engineers. They listen to people and like, think about what happened to nuclear because of Japan. Everyone said, don't even talk about it.

47:23 I mean, 10 years went by before anyone would even talk about it, which seems like a major oxymoron. It just doesn't make any sense. And finally, people were talking about it again because as you

47:37 think about economics and the lowest cost of levelized energy, you're going to go to Nuke. You're going to talk about it. Damn, we can make this safe. The French have figured it out. I mean,

47:49 talk about oxymoron. The French are leaders in Nuke.

47:54 Right Well, and I'm blanking on the guy's name. I don't think it was Heisenberg. But one of the German, maybe it was Carl Friedrich von Weisensacker, but remember when we used to give finger of

48:11 the week? Yeah. We gave finger of the week to that guy because he was a German. He felt incredibly guilty about developing nuclear and the bombs going off, and probably rightfully so. But he's

48:24 the one that really started all the rhetoric around how dangerous nuclear waste is, and it's just not You know, and so we gave him the finger of the week. But Heisenberg invented crystal blue,

48:41 if you're a breaking bat. Yes, exactly. Incredible. Say my name. Say my name. Exactly. So, yeah, we, you know, and to his credit, old Richard Nixon wanted, you know, whatever, hundreds

48:53 of nukes everywhere, and it probably is a good solution. And I always come back to it every time we talk about nukes. If the freaking French can do it, I'm pretty sure we can figure it out. I

49:04 mean, the French. Yeah. Love their food, love going to Paris, but damn. And like the hurry up and build a lot of natural gas because we need more dispatchable power in ERCOT because we're

49:17 getting hit with not only a wave of prospective AI and data center demand, but we've over the last five years, we've had waves of people moving here, right? So there's not all these people either.

49:32 So now and we are building the data, the data centers, AI of the future and habling, we need more power. No doubt. Need more power. 500 billion Stargate facility, amazing. Yeah,

49:54 the rumor is what you might call it, Caruso, who's involved in that just raised12 billion.

49:60 Amazing,

50:02 it's inevitable. Hey, I mean AI is that big a thing. I truly, yeah, I truly believe that. Well, good to all be back in the studio. Yeah, great seeing you guys. What's - Likewise, welcome to

50:12 the new digs. This is, I mean, I guess you raised a little capital and you upgrade, huh? Sorry Blair, you screwed up, you trusted us. Don't, Blair, I mean, Blair just doesn't want to hear

50:23 on this episode that you're getting paid a huge salary now. There is not that happening Maybe you should, you know, does Collide need a clubhouse?

50:34 Maybe we should talk to Frack. Oh, we can't, we can't. River Oaks Clubhouse. Yeah, we're not there yet. I'm still, I'm still cheap. I mean, it's closer to the Mercury offices in Greenway. I

50:47 mean, maybe they're open to it. That being said, you know, we're spending a lot of money, but it's going into product and there. I know, I mean, Todd Bush and the team that are now involved.

50:59 I'm like, these guys are. Kinesis are real upside. The real deal. Clay, who's worked with Kinesis whole bunch, just basically was like, I'll show up. He's been here all week just writing code.

51:11 I don't know if he's going to come work here or not, but it's been cool We have substantially upgraded the technical DNA around here. No doubt. It's like real stuff. We have a software system

51:25 architecture plan now. You didn't even know what that is. It sounds good. It's got a lot of pretty pictures on it and made sense. We'll miss you guys. We'll see you guys soon. We'll see you

51:37 virtually. You're not getting out of this. Yeah, good luck. Good luck selling the house. Oh, thank you and just a serendipitous partner. It just, I mean, I'll just be dialing in from

51:48 Nantucket and I'll give you the latest. We'll stick you right there on a box. Love it. And in my nomadic wonderings, I could find myself on the island. What Chuck and I want you to do is find a

52:01 spot that has reliable internet. Vlad was very disturbed by that. Where was Mark? Was he being held captive? Mark? Blink if you're a. Alright guys, if you like the show, please send it to a

52:16 friend, subscribe, say nice thoughts about it, and we'll see you next week.