Big Digital Energy

0:17 Alright, what's up? Everyone welcome to big digital energy. This is the first time in a while, though we've had everyone here in studio that the Mala man Kirk from damned to Nantucket hair, but

0:30 let's let's have a quick moment here in your absence, just to make note of the fact that when Kirk I did this solo two, X the downloads of a normal Bt Ee. Viewing of just for the record, Have we

0:42 verified this number Mark Anyone verify this information from Tribal. They're never going to find the fact that I paid a bunch of bots. But it's alright, Fake news itself Bad data. Whatever so

0:59 Mark spin out. Where were you Mark Murray, traveling Tennessee, Tennessee, So twenty degrees cooler Tennessee. It's our first time I'll been in the studio. Us back ready for business. Sell me

1:11 to another much Eckstein Sing entire business from. Party in the back. It's like a shola. I'm actually kind of upset that I saw the saw the video of the smaller and sunglasses. I thought that

1:24 looks should be permanent. Not a one time thing, I mean, when it's one hundred and five degrees, and when I when I'm outside playing golf or doing something, it really is hot

1:36 that lettuce is hard made. Made an actual difference. I'm not what Vlad's quote was. I sure hope Kirk didn't pay a lot for those glasses. Yeah, thanks, lad, Leave it's allies. It did talk some

1:51 trash. Alright What we got this weekend energy news, His kicking it off mark, and just a little more about this morning, T Ph was commenting on something we've been talking a little bit As you

2:04 know where where the stock's valuation wise? What are their reflecting? But they had a piece on upstream stocks in their coverage group, and what what what implied price tag based upon where the?

2:15 Yeah, stocks are where valuation looks to be in that somewhere in the sixty to seventy dollar range, and not kind of blinding insight at least for for this audience, but you know basically talking

2:33 about how you know the market seems to be working. Pass the demand concerns a recession, recession concerns that kind of show me stuff we had been talking about a few months ago, and you know

2:43 suggesting that if you believe we're in more of an eighty to ninety dollar worlders, pretty meaningful upside from here in a in a group. This just now starting to play catch -up with the rest of the

2:53 market. I act at, want to ask you a question on this mark because I was always a private company guy and never really understood public stocks, and all add. I'll say these a statement that really

3:06 just question for you is whenever they would say they would work backwards. You know it implies sixty dollar oil or whatever. Implicit in that is some sort of valuation, multiple or discount rate

3:20 or something, and always thought. Maybe they're getting the discount rate wrong. Now It's just riskier. The discount rich be higher. Maybe it's discounting eighty oil, so that was kind of a

3:34 number one thought I had on the on the public's of, and then the number two thought that I'll let you run with is Have we gotten to the point where public equities are such a small piece of the

3:47 overall market, Shouldn't there be some selection bias in that? If I believe in one hundred and twenty dollar oil, I should be able to buy the stock, and there's not enough stock. So it it. I

3:60 guess where I'm going with this kind of shocks me. It implies sixty dollar oil when you would think the bulls out there with the limited amount of supply should be dominating, but anyway, Yeah, I

4:11 think that's you know we're still.

4:14 Five ish percent of the Snp. I don't know what the precise weighting as that is dominated by ear the majors in upstream companies, for sure, but to to get back to your point about you know this

4:27 derivation of price tax, or what the stocks are discounting, at least in distant past practice, there there wasn't much work done to to update or modify cost capital assumptions. That's one The

4:42 other thing that is usually the case, and I'm not saying it was in this case is that everything else remains static, so you, you're not changing cost structures as you move prices up and down, and

4:54 and then there are those other factors at you you raise, That are you know, potentially certainly in in the kind of phantom discounting If you will, because of the risk of the the different types

5:06 of risks that are you know kind of new to the sector In the way we think about investors thinking about August. Ok, so is it because I would think. The firestorm we went through over the last call

5:19 it, you know, five years, or maybe in the last fifteen years, the day of reckoning should have hit that. Maybe we need greater returns to be an M P than historically, Pdp P, V eight and pids

5:33 for Pv fifteen, or whatever the valuation metrics metrics are, but anyway, Well, there's there's a lot of crosswinds now that you didn't have as of an energy, P. M at some of these bigger shops

5:45 that you know you're not going to go to your C. I stick your neck out if you've missed a bit of a move in the sector. If it's you know back in the day when it was turned four percent of the Us

5:57 appear didn't matter, right, so. Yeah, where are you going to move the money. If you still want to be an energy. Right now. I mean where do you put it there Because nobody's going to go trade

6:06 commodities. I mean you're not going to 'em into your board and seventy to post more margin on a try. And orange juice, as we've spoken before, as those that actually have heavy trading arms like

6:17 the the shells of the world versus the Exons. Is there actually traded a lower multiple. Now, Some claim it's because they're They're listed in Europe, but many claim it's because of the riskiness

6:28 of their commodities divisions because they're trading on margin, and and so would he would he think Mark well, I. I. I'm going to not answer that question, but I love that perfect. I. I was in

6:43 analysis the single greatest things ever see that assist from like one of the greatest single legs ever told to me in my career is John Jacoby, the crusty old guy that managed all the Stevens family

6:56 money. At one point I was talking about gone to a meeting. I was nervous, and all that, and he goes all hail investment bank, just the artist, stating the obvious with an air of discovery, Yeah.

7:08 I think that's a rerun on Bt. But it's a good one. Apparently every check. I've got five stores. Yeah, now, I was thinking about you know something we'll talk about later and it's not directly

7:21 related, but it is in the same category, which is this notion of Sg factors, and and how investment decisions are being made, and whether or not you know certain stocks are certain sectors or

7:35 subsectors of the investable bucket, and I think that has more of a pronounced that effect even today than we like to think that it does because we've seen quite a bit of pushback on this front right

7:48 across the board, while there's a few actually interesting timely stories mark that you're probably alluding to one is the fact that the Un. The United Nations, for some of us are investigating a

8:00 ramco, and expect others to receive strongly worded letters and because of. How climate change is linked and is linked to human rights violations? Because so they eventually sent notice to Ramco

8:20 and not only did they said notice aramco, but they actually written letter. The United Nations have written letters to a Ram Coast, Key stakeholders, their banks, their partner, saying we're

8:31 investigating them for violating human rights because of climate change, and even though the United Nations is not a legal arm and there's really nothing that they can do legally to Aramco. It does

8:43 send shockwaves and potentially opens Aramco for other lawsuits. That that's a pretty big story. I think I've got another one to go right on top of Abdullah's first. Just throw that out. I just

8:55 imagined Ram code getting a letter opening up in this tone in the chess match. They haven't responded. Apparently the letter was was sent on June twenty six then. Waters was just reporting on at

9:07 least the story I picked up, and there are four unnamed quote unquote experts on a committee or a special working group that issued this letter of concerns, and I don't even know if it qualifies

9:22 after reading more into it as a strongly worded letter, but you know very quick to point out it's non -binding Ramco hasn't responded in. It's unusual for the Un to do these things that target or

9:36 are addressed, accompanies and not nation states or countries, and so may be because Aramco is a state, partially estate entity, and it was you know they've got the higher responsibility they've

9:50 set explicitly Net zero. Aramco has set it explicitly net zero by twenty fifty, so this is. I think this is the tip of the iceberg of more of the same coming for. Are Amcos peers both on the Nfc

10:05 side or on the super major side, but essentially the profiles at twenty twenty one requests by the Un special procedures human rights system, Which is a. I guess a subgroup within you, and and it

10:17 was really been spearheaded by an environmental advocacy group called Client Earth, So the U N is getting outside pressure from from groups to go investigate these companies. Now, I think it says

10:30 story, but but at the same time there's a great article this week and the financial Times about investors warn fluffy. E S. G, metrics are being gamed to boost alone essence back to the U. And

10:44 wrote closed. Go back there. Have they done anything in their history, besides, like produce a marginally attractive holiday card. I mean they do holiday card, great, You know, I've been there

10:56 issues, but seriously. We wanted to, I mean Human Rights commission, right or while one of their committees, I mean gimme a break that said a thing as far as Saudi Arabia, just in prisons.

11:11 People from other countries to come do very bottom of the barrel work for them and we send a letter about climate change, Pink, Linkedin, right right.

11:23 That's what. Yeah. What did they do like get? The letter got cut off. Journalists have said. That's what I find that the posturing. So it's interesting at the same time you've got you know the

11:36 hand over here, saying it's all you know climate changes linked humans as a human rights problem, and Aramco, the big Sam met her. On the other hand, You've got all these ies G metrics, and

11:48 growing now, as I've done, done some research. That's interesting. Three quarters of the S and P. Five hundred have disclosed the influence of E, S G metrics an executive executive pay. If the

11:59 people that make the decisions, yeah, arise from two thirds in twenty twenty one. At the same time, profitability metrics are going down, so a great example. This is just the cream of the crop

12:11 at Southwest Airlines Ceo Robert Jordan's pay increase seventy six percent last year to five point three million by the way, even though the airline and angered passengers by canceling more than

12:24 sixteen hundred flights during the holiday season, So what's happening is if you're an executive at these fortune five hundred, you are getting paid more to hit these E S. G metrics, then bake

12:37 even though your profit bill is go out, and as shocked Pa for profitability metrics have gone from over sixty percent as part of their executive pay to almost forty per cent over the law, Since

12:48 twenty fifteen to today, mushy kind of surprised that the software Ceo makes only five million dollars a year. I thought it'd be higher than that on airlines don't make any money and there.

12:59 Probably the An airline, but they've hit the metric the metro, or did they delineate what specific he she metric, performance boost or incentive boost. That The problem is. There's few, like

13:15 actually, speaking of, I mean strike management, The Vec Ramaswamy. His firm has been very critical, because as I know, having been inside of one of these big beasts, S G metrics are a total

13:27 scam and fraud, Like what is nice geometric. There are many metrics We could talk about them, and in specifics, but the reality is there are those out there, especially hedge funds that are

13:39 saying. Wait a minute. We don't understand what these metrics are. They're fluffy. Profitability is something you can track and you can earn. Yeah, but an E S G metric is like we. You know we

13:49 hired. You know we're ninety per cent diverse. We you know lowered our carbon emission Kumbaya twelve times as a thriving target as well, but what I know is like. Whatever you're paid to do,

14:00 you're going to do. Charlie Munger show me a man's incentives. I'll show use. But Hey, Well, absolutely what Vac and and Strive have basically said over the entirety of the entirety of their

14:13 existence, and is very consistent that you know the rules are that. If you are a publicly traded corporation in the U, S, the off for limited liability is a singular focus on shareholder primacy

14:28 and profitability, and so we're starting to supplant that with this creep an absolute non financials, non financial and non

14:40 performance factors related to things other than profitability maximization, so the stores are directly related, The Un. I mean the, The it's interesting time that we're in, because it's it's a.

14:52 It's basically. It's wealth redistribution is what's going on and. It, it's also a cottage industries around things like

15:02 shareholder ranking and scoring. It's certainly the legal profession that that specializes in this growing kind of mushroom cloud of you know, I. I find the the conversations with investors and

15:16 worth analysts who are increasingly at least the last five years dealing with trying to sort through all this. I find those conversations to be no less ambiguous than they were five years ago. Right,

15:29 there's not a lot of clarity in it. It's kind of a whack -a -mole game or moving target, and there's just not a lot of tangible specificity speaking to the ability to kind of see, you know, set

15:42 easy hurdles or game, The system.

15:46 I you know routine flaring for to use a specific upstream upstream example, O, Fundamentally, why do you get paid incentive to? Reduce or eliminate your routine flaring that you shouldn't have

15:59 been doing in the first place, right, absolutely, but let's go back to my favorite one of my favorite companies. Southwest. Cause Herb Keller was kind of a fan of Tesla fanboy. Because my dad

16:11 used to drive to Dallas. From here. He owned a business. Start a business and eat, and in Southwest really went after him, and at one point Herb Keller, the ceo and founder co -founder Founder.

16:24 He was one of the largest distributors of whiskey in the entire world because they gave whiskey as a promotion for Flying Southwest. How I bet Herb Keller. Who the only guy I've ever seen smoke

16:37 inside of them become school business. When I was at business school. You're not allowed to smoke in there, but herbs smoked at least two packs of cigarettes when he came and talked to our class.

16:47 That guy must be rolling in his grave that the new Ceo is getting a bonus for hitting some metrics about Ies. G. While the airline profitability and anger to their customers are going with essay,

17:03 even test the bigger thing outside of their P N L. His the user experience like over the last year and a half to two years. Every one that was like super loyal Southwest fliers. I mean you go there,

17:15 and it's flight cancellations, and just the quality of customer service has gone down, so you spin generations decades building up a brand and reputation like that, and then just piss it away and

17:27 two years is pretty cause this is to to your point, The reason he was given those bottles away is Braniff. Was the big airline they went head to head with Braniff and Bran of came out, and

17:40 basically said we're going to cut the ticket price to twelve dollars. A ticket Southwest ran the numbers and they would be out of business in six months if they match that, if they went from

17:50 eighteen dollars to twelve an herb. Actually came out and just did an ad where he just said. Hey. I got a stick at eighteen. I can't match Bran have for twelve, but if you like those guys, mean

18:03 the only guy in town fly 'em If you want me around, I'll give you your bottle of whiskey and my dad did it with a violent. Another bit of the South was Trivia? Why was gate one at Love Field.

18:18 Always The San Antonio flight was at flight Number one. Nope, Okay, I dunno, no say, Because when Herb started the airline, it was headquartered in Dallas, but he lived in San Antonio, and he

18:33 never moved, so the first gas for his commute was the first gate at Love Field was the flight to San Antonio has had just one last one last her a fanboy thing, so they had nowhere.

18:50 Inside, suggest fuel or consumer of alcohol gotta go, and you probably used to smoke. At some point. I never did I going to go. Teen. Withdraw. So like if I ever, if you give me a cigar like

19:07 thirty minutes later, I'm puking. But anyway I know this was great, so there was some brouhaha where they each changed the name of their frequent Flyer program and they didn't have the copyright on

19:19 it and some trucking company or something had the rights to it, and for whatever reason this a lawsuit happens and Herb finally hears about like what the hell's going on. It's like well, we kind of

19:33 use this name. This guy has the name. We think we can use it for being an airline and trucking company or whatever and her calls the other ceo. It says, Hey, we screwed up. I'm really sorry.

19:46 Can we arm wrestle for the area?

19:50 Are you serious? Cause? Yeah, let's just arm wrestle for the name. Anyway, wink, wink, Nod, Nod, I'm gonna lose, but there was so much publicity about it. Herb was training by smoking three

19:60 packs.

20:02 Comes out. They have like the Rocky theme song plan. He loses. They changed the name, but the free media he got from just handling it that way.

20:12 Man that he was a male. I must have taken that playbook with his fight against or Miss Eichelberger. I mean, Yeah, he's a man. Dude. Yeah, he was awesome, Speaking of Elon. Exigency. This

20:22 Twitter posts I made the other day about the wildfires in Greece. Now See this is no the arsonists, or aren't you mixing terms or two away post? It's arson, but the artist wouldn't have started

20:34 the fires if it wasn't for climate change. Is that where you're so? Yeah, So Bbc News for South as news article, and the headline is Greece wildfires seventy nine people arrested for arson, and

20:46 then you get into the article. And it's got some coats and there so listen to this real quick, All right The quotes, I said that arsonists scammer setting fires that threatened forest property.

20:57 Most of all human lives. Mr. Some Greek named Kick it kick, Leah, Keighley, Us. I dunno. How to say that sounds like a great God. It's a great. It's a great name to Greeks, during a

21:07 televised emergency briefing on Thursday. You will not get away with it. We will find you and you will be held accountable. So let's quotes from Greek official, and then this Bbc article Right

21:17 under it says summer wildfires are common in Greece, and scientists have linked the increasing frequency and intensity of extreme weather events, including heat wave to climate change Mark what the

21:27 fuck does that have to do with seventy nine people that they've arrested already. This is a spirit. You know that a coordinated group that Scott conspiracy to set wildfires and are we at the point

21:39 now where we're seeing? Attempted arson in the name of climate change and you would think like on surface gy Kei. Climate coal isn't that that brash. They're not going to do that, But honestly I

21:55 don't put anything past them. Now. I mean climate terrorism has been a thing. There's been a lot of and podcasts of how to blow up pipelines and things of this nature Is this something that we're

22:06 going to keep seeing his forest fires being set on purpose to illustrate the point of climate change, which just for everyone's knowledge, I mean fires, forest fires can happen regardless of dry

22:20 vegetation, or whether agitation, I mean fires fire, and what do y'all think this like the new trend, Climate terrorism, starting fires, one convinced by you reading that the Ai helped write the

22:35 Bbc article, So yeah, which use five watts, which now tells the Bbc. Are not very the nano zero, zero, those bastards.

22:47 Yeah, the first one what they can present. The first. There were some arson related arrests simultaneous with the Canadian fires earlier in the year. I guess I'm just blown away by the amount of

23:01 people that they virus At seventy nine. I mean that's a coordinated effort as a coordinated effort. That's not a gaggle of people. Yet it's not isolated. It's not isolated people and coincidental

23:13 timing and effort of starting fires. I mean seventy nine people is something you know that's half the people that come to new energy technique. That's that's a good size, not a people. So I. I

23:26 dunno you know the the Greek official presented his response in attacking the arsonists, directly, but in this Bbc article, like just nonchalantly does advise since you were a young man. Have you

23:39 seen the movie Quest for fire now? Alright, so now we get fires all the time. Now it's like it's obvious you you can buy a lighter in a in a grocery store, but this movie before there are tools

23:50 back in the old old days. When it's just cave Men run around. It was all about the quest for fire, because the only way they knew how to make fire was enlightening struck in something burn. So

24:01 Yeah, you gotta go back. This is an exercise for all of us. Go watch quest for fire, great movie. The Sentinel movies that he asked me, Cause it's so old

24:14 that cause her fired. I never heard of that. Will you know what's interesting about That is that I mean there's been periods and in the earth's history, where the entire world is on fire. I mean

24:28 way before humans got here, and maybe as a result of climate change in climate change for a long fucking time when Chuck hit Middle age. I think was in the seventies they used to at during a nap

24:40 decade they're talking about, and he was going to be a. A and was going to fruit, though Earth was going to free. Yeah, I mean as as she was common browser, and send that in a tweet today's that

24:52 is humankind going to live with climate anxiety, and I mean for the rest of of human civilization, because the climate will always be changing Always has always will, and you know, maybe we find

25:09 ways to reduce you two and manmade emissions, and second order effects and climate change, but even if we do that, the climate changes and I don't think we'll ever had the ability to control. I

25:22 liked the shuttle one You said something to me last week that I was like. Was pretty profound in the episode that was so highly rated. Yeah, What did I say That was superb. Brown? Well, I think

25:34 you said show me data that proves climate change, and show me data that doesn't prove climate change. Show me how weather is. Actually. Yes change. That. That's always the thing you ask. Oh,

25:48 this data means climate change is happening. Hypothetically. Tell me the data. What would the fact pattern look like If we didn't have climate change and everybody's like well, I dunno and I go,

25:59 Then you can't have one side of a coin. Right, Yeah, If data proves it great, Show me that what the case would look like and that's that that's pointed out by many others and the Vatican strive

26:14 that we talked about earlier. Alex Epstein has talked quite a bit about the positive ledger side that has never accounted for when we go through the negative consequences of fossil fuels, as it

26:28 relates to emissions and climate change and forest fires we put out Now we have the capability of putting the fires out back way back in the day, I mean them forest that burned all to the ground,

26:41 you know. Well, for one Harrison attended a little Hatch said that just popped up in my Twitter feed says Darpa research investigated how to weaponize fires all over the world, including Greece,

26:52 And they put the schematics from Darpa on weaponizing forest fires. Really, I just thought it came from a laser beam from from satellite. The dark side of the moon. I've seen weird. So was it

27:07 weird, Not weird science was the one about caltech great movie, Real genius, when metal laser beam that there was a big laser beam that created a fire. Anytime you have our laser beams like I'm a

27:18 treat, the laser beams and aliens, sneaking of anxiety and laser beams. We have an. I mean we've talked last week about the L E V stacking up and the problem. The The Y'all heard about this. We

27:35 have some data right Mario by the whale was on last week. I just wasn't here, so we know, but but.

27:42 Very, a little of that, Margaret. That line

27:48 was three hours early every week to make sure what's the day to mark what do we got and wrap in there. How your pictures never on the

27:58 good need to retrain the model. Yeah, and business insider had a piece out on. Just generally. What's happening at the dealer level with respect to Abcs, and customer demand is cooling. We have

28:16 direct experience among the

28:20 panel here on Bt. Ee. With reasons for cooling customer experience, despite the fact that Uribe was probably in a little bit different stratosphere, But nonetheless I you an hour to Kirk you and I

28:34 were talking about for the show that you know dealers are the leading edge and there's this growing. Tension and friction between the automakers themselves and dealers, because the automakers are

28:49 incentivized to keep cranking out a vase in the markets, saying no, and a lot of cases or pushing way back, so inventories are building one one interesting datapoint earlier the summer are going

29:01 into the summer dealer inventory for all vehicles measured about fifty four days. If you parsed out, Evie Is that number of in Tory duration was twice that. So as a reason Ie owner?

29:18 Do we did you read anything in there about price data? Have we seen them starting to slash prices on it yet and selfishly. I'm asking, because the girlfriends talking about gone and getting a new

29:32 car. While there's two, there's a couple problems I know from this article and a few others is that some dealers are refusing inventory and they can. Until they can move the existing inventory,

29:43 okay, but but dealer's the dealer model. Unlike Tesla's we talked about. Doesn't they don't make a lot of money, so they're not slashing prices at this point, but they're sort of stuck in a sort

29:55 of like we're going to move other cars to make money, and we're going to try to sell these eve ease, and the realizing this is coming from the dealers that there's a shift in demographics. Like all

30:06 the early adopters that bought the premium cars have, sir. We've we've hit that. Now it's to the mainstream to the mass adoption level. Which is it interesting Article Bloomberg about the five

30:18 percent the magic five per cent number which I'll talk about, but the answer is that's coming, but there's no supply of a he vs that. Maybe your Gf wants that sort of fit her mainstream mentality

30:33 If she wants a good deal with it, cause I mean what and these numbers are somewhat dated cause I haven't looked him up recently, but. We sell about seven eight million cars a year in America. Now

30:43 that's pre pandemic type stuff, six million to to seven million of those cars were forty five thousand dollars and cheaper, right, so that's your five per cent number. Right there. It's It's

30:57 until we had an eevee that was functional, blah, blah, blah, blah, blah below forty five thousand. It was going to be the the land of rich people, so if you recall, we talked about last week,

31:09 the Vietnamese was five years Twig five Cedar competitor, I was her, Virtually five Cedar competitor was priced. I think somewhere like twelve to fifteen hundred over the Tesla Model Y was its

31:25 direct competitor, But the difference with the Tesla Model Y in the I forget the name of the Vietnamese manufacturer didn't see their stock was up like forty percent this morning and I dunno if

31:37 that's come back, but. The difference in the Tesla Model Y and the further advantage it has is that it meets the criteria of the inflation reduction Act, so there is that seventy five hundred

31:48 dollar. Yeah, give back a rebate in a car dealership guy on Twitter, had this tweet and he said a monocle right now with an exact from a multibillion dollar Automotive automotive company asked him

32:01 about an electric vehicle sells his response. Tesla's the Apple of V. These everyone else's Android, and said, Let's keep it real customers that come in specifically looking for an easier buying a

32:11 Tesla. Ninety nine percent of the time. The rest don't give a shit Whether their car runs on electric color wind, as long as they can afford it

32:19 just singing owl. Maybe your your specific case was the aggravation of a lot of things, not the least of which was range anxiety, and and you can never get access convenient latitude, Ga this ride

32:33 enough of 'em and they're all taken up by cruise, you arguably have. A little more flexibility in your day to day than somebody who's depending on cause. They'll have a real job. Thanks. Monitors

32:45 do, yeah, but that being said. If I'm critically dependent upon something being charged and ready to go, that gets me to work with the consequences getting fired. If I don't get there, that's an

32:57 order of magnitude, Greater kind of absolutely snouts as a book called Crossing the chasm, and it talks about how you have your early adopters and products in it. Really the cover his head just a

33:08 normal distribution curve, and you can always get early adopters People using the product, actually getting over that hump to the mass market is a different iteration of product adoption, and I

33:22 look at my neighborhood at as thing about the senate, as as I was walking, because there's this little subset of my neighborhood where my house is, and there's probably caught thirty other houses,

33:34 and none of the houses have an eevee. Except for one house in the skies, God enough on fifty lightning, and one of the Rivian, as you have, like his fucking garages, decked out two hundred

33:47 thousand dollars worth of jewels, Grover Ii Vs, And so you got that one guy that kind of compensates for the rest of the neighbourhood. Everyone else has gas pickup trucks, and you know I've lived

33:57 in a neighborhood. That's you know upper middle class while diversified, and so I look at it. It's a pretty good sample set of at least in Hughson. Of kind of what the future looks like for people

34:08 in the burbs, and right now it's all ice vehicles are some that I mean we're seeing so dealer inventories real, We're seeing that the stock up. They're not taking a lot of them are refusing to take

34:19 more. He Bs. We talked about the fact that you know crossing the chasm that the price points still too high. Yeah prices to fall, there is range anxiety, which is real issue. Enders increased

34:31 costs that. As we're heading into potentially a big recession, so the economy's not. We have inflation. Things aren't going great. If your require dependent upon a car to get to work every day.

34:44 This is not necessarily a smart choice. Yeah and Bloomberg had some interesting and entering and their. Their analysis and forecasts is once a society estate reaches five percent penetration of ease.

34:57 Then the adoptee vs is almost like it's It's a stair step function. Change your growth. The U S reached over five per cent and twenty twenty one, So we're already above that. Now Their analysis is

35:14 well when when technology, when products like mass adoption products like the microwave hits five percent adoption, then everyone gets one will guess what the microwave. I remember. Because when

35:26 when my, my, my dad gave my mom a plastic microwave as a joke, want when Christmas that? Was was uncomfortable for for the whole family because she was so mad, he went to a week later and bought

35:40 her a new one, but a real one, but microwaves were expensive, but microwaves fell and cough, but a microwave. A cost of a microwave is very different from your second or first largest purchase.

35:51 Yeah, so Bloomberg, saying hey, when you see products hit five percent adoption. Then the whole market's gonna buy it. I'm like well and cars are much different thing, But what also? What am I

36:02 to one of microwaves? Replace? The quote was what were they replacing toaster oven? The formerly a lot of us used to have this thing called gas ovens, but they're now electric Bill. Talk about

36:14 the difference, but button up, but it's he was arguably better. Performance was born an Alec that what it is replacing wasn't even analogous. Like we still use ovens today, right, but like a

36:25 microwave was a new type of technology and concept like as a material step -change in question. So, I don't even see it as like placing something electric vehicles not replace. Replace a competitor.

36:38 Yes, it's an aerosol, replacing Bibi's. Have a different framework from come the physics problems. You're trying to solve the physical world problems. You're trying to solve that something that's

36:53 more simplistic and straightforward as a microwave, Doesn't you know the physical world around mining and metallurgy, absolutely, and infrastructure, and all those things you know, I'm I'm a bit

37:05 skeptical of you know, the proponents of an S curve type of profile happening with Evie is just because the physical world as proven time and again that it doesn't work that way, and and this hasn't

37:18 hit the consciousness of thought on it, but I truly believe this power prices going to double or triple over the next five. They just have to. There are two of the grid constraints. Yet we've

37:31 talked about all of it. I had Tim Cramer on the podcast. We talked about it. A main power prices gone up, so it's not even going to be that. Well. You know I can have a payback. Because I'm not

37:41 buying gasoline out there. You heard it here. Brow You heard it here, our, I mean, when power prices increase, I mean just the price of energy increases across the board, right and so I've

37:52 never looked at it like I don't think that it's fair to look at it like I'm gonna get my payback from using electricity over gasoline. I think that's a very poor argument, But you know it was real.

38:02 At one point. I you can actually see dollars. Do. Yeah, Bud, but in January actually wrote an article on us, which is interesting about like electricity vs gas, but I think he. I think the

38:14 point was, but I think that's a short term Arb. Essentially like I don't think that that last over long terms, and so you know when I look at a Vs. I think he these. Can win part of the market

38:25 based off of being a better product than ice vehicles in certain situations like you know for me, I could get away with an E V all day driving back and forth from work and charging at my house

38:36 overnight, no problem, but even still the I bought a new vehicle. Asher. How about a fucking Toyota camry? Why? Because a price point notice reliable know, go down, go down the list, and

38:49 instead of you know pinning, are you know really putting up and buying a Tesla enough one fifty lightning like it's hard to justify buying those things right now. If you're looking at it from a pure

39:01 pragmatic. I need to use a vehicle to get to point A to point B. Like it's hard to justify buying any V over some gas cars. Then I will say this and I won't belabor the point. I won't go on my

39:14 diatribe like a normally do about it. The end of the day. The break over point on the carbon footprint. It's not like a one year. Payback Go to the Volvo website. Read the hundred and fifty page

39:27 report. They're talking. You know seventy five thousand miles. As the break over. That's you know three to

39:36 five years, so we're going to spend trillions to do all this for three to five years. Yes, marginally better for the climate. Although people could argue it's not once you get into disposal costs

39:48 all that, but no brainer, and here, though Oregon and maybe Michigan sand were charging, I won't eat per mile. I won't even say that, but when I was moderating my panel at Koga, we had an extra

40:01 three minutes and I said they're tracking you an interesting claim not allowing any more copper mining. Lay that on us. That's a good while. Now that's actually good for you get into that. I wanna

40:14 talk about tires on the visual quick Cause I saw an interesting point a few days ago that someone brought up like I've already known that he. A lot of tussaud's will burn through tires, just based

40:23 on the weight of the the vehicle and the profile of the tire, but one thing I didn't think about was the lifespan of tires on E visas shorter because people are finding new found lead foots with the

40:37 acceleration. Yeah everywhere, and just wearing out their tires, and so I, I just think that's a super interesting point of like tire churn. It's like when people buy those little sport bikes

40:50 motorcycles. Yeah, they figure out they get. They started going like ninety one hundred on that cause they die. But yeah, cause cause, I mean the the the point that people always find

41:01 fascinating that I say is the amount of energy stored in a barrel of oil weighs about three hundred pounds. That same amount of energy stored in lithium was twenty thousand pounds, and that's just

41:14 God. God made that when he started, he or she started the Earth, and that's just that.

41:21 Yeah, it's kind of crazy. Alright, Take us to Alaska. But back to the physical world constraints, the deals with copper mining. Doom Berg came out. I think it was last Sunday. It was their

41:32 bent. There's been another one sense, but this one was titled Pebble Beach and it was named after a proposed mining development in upstream of Bristol Bay, in Alaska, which you can imagine is a

41:43 very sensitive area for good reason, and both marine and in freshwater streams, and in the salmon fisheries, etc, and so this has been a multiyear battle and with a lot of opposition to developing

41:59 the mine, and ultimately it was killed at the federal level by the by the administration, so in in Denver, given admit, it said, look if we lived there, we probably wouldn't want a copper mine

42:10 in you know, in and amongst our natural beauty, and in habitat, but the interesting really domino effect of this. They then talked about the difficulties that are emerging in Chile and Peru, both

42:27 on the cost and delay sigh, but also the political and environmental opposition side, which is then caused a further domino to fall, or now, the Democratic Republic of Congo is going neck and neck

42:43 with Peru, as the number two copper producer in the world, and we all know because we've talked about the Cobalt issue in Congo that mining there is kind of hands off by U. S and Western companies

42:56 for a lot of reasons, not the least of which are for foreign corrupt practices act chives They're laughing, and we buy from China in China, has as predictably swooped in over the years and secured

43:09 a lot of the mineral rights, including copper by investing billions of dollars because they really just keep keep turning straight ahead to to to dominate. Raw materials, copper is just another.

43:21 You know another in the chain of things that need to get sorted out. If we're really going to hit that Esker curve of adoption of an electrification of a lot of things, including A vs. So

43:35 as her mba, the man himself now, I mean, and and at the end of the day I mean we need to be intellectually honest and consistent. Forget to mandate electric vehicles. We sure as hell out of mind

43:48 for the stuff in the United States. You know. Yeah, I mean we're going to be. We're going to be unreal. Try and and I used to be the biggest free trade on the planet. You know, so protectionism

44:00 was the evil word and all that you go through a pandemic where you can't get medicine. You can't get the freaking toilet paper. It was kind of out of china. I'm willing to pay a little bit of a

44:10 higher price to do stuff here and have some protectionism. Yeah, You know it's funny that our grandparents great grandparents kind of built up this. Mindset in March have built in America or button

44:22 the Usa, and that didn't really carry over to like my generation, for example, but then you get in coven, and all of a sudden supply chains, in spite, anger read for a long time, like you know,

44:33 gone at twenty, twenty, one, twenty twenty, so can go on the stores, and you get certain electronics and things of that nature and kind of puts, and puts it into perspective of how fragile

44:44 supply chains are and become dependent on one country. For something

44:49 puts you puts you at risk, so one quick thing I want to talk about before we get to the end of the show. Something exciting energy exciting to me. At least is that Ah last week, Texas had to

45:01 virtual power plants that kicked on and started diverting energy to the grid. So this this project in Texas is called aggregate distributed energy resource. The acronym is aider, a D E r. So

45:21 there's currently a reef Eight resources referred to as aiders, and right now there's two of 'em that have qualified and act. There's one in Dallas, and there's one in Houston, and says at the

45:32 bundles have to be less than one megawatt, so put that in perspective, that can be anywhere from three hundred to six hundred homes, and essentially the way this works is, if you have battery

45:41 storage at your house, He have like the Tesla battery powerwall and her caught, will either I dunno, If are caught doing this assault, Pi, Jini and Tesla do this for P. G and E texts all the

45:53 homeowners at noon and said Hey, we're expecting peak demands tonight. At six P M. We're going to charge your batteries right now and then we're going to draw that power later and pay you a premium

46:03 for it. I'm not sure if Texas is doing this exact thing, but regardless what else what I saw in one of the articles and I may get this wrong, but it was something like we'll pay you X dollars per

46:15 month for us to have control of your batteries. Okay, maybe I, either the local utility or maybe it's are caught directed to have to look up, and you know what the what the incentive plans are

46:30 around that, but still pretty cool because I think that the future's having these virtual power plants and especially homes. If you have solar and yeah batteries, and you have electric vehicle

46:41 battery capacity, and maybe have a Nat gas generator. All of a sudden. You're running the subtle mini power plant that can put power back into the grid. You know, even like we're talking about

46:51 diesel generators earlier, Like you know, say that there's peak demand on electricity and you got a Nat gas generator that tucked into the gas lines, kick that thing on, and sin sin electricity

47:03 back into the grown -up run of United have had gas generators for every house. It doesn't make financial sense as an individual to run on gas prices the only time as if the grid. In cinema, which

47:18 is not a word, I know, but incentivized you individuals by paying what it would cost if the grid went out, so you need that frequency regulation, or whatever however demand regulation, you need

47:32 individuals to be paid extra premium. Yeah for that and I think it's I think of that should include. There's a lot of natural gas generator Sharon Houston. Yeah, duh suckers. Think of the at him

47:43 produce of which Mia, head of our cotton. I'm showing my fuck you fuck this shirt, so I'm disqualified, but probably the the thing that needs to happen, cause almost invested in the company back

47:56 in the late nineties when I was with Stevens, and they created inverters that allowed in effect that back then it was a diesel genset that you had for backup power would allow you to sell that

48:09 electricity. The grid. They never made it, unfortunately, but the The. Pushback was always the owner of the wires, sang. Hey, centerpoint You're going us. Yeah, you're going to blow this all

48:24 up if we allow people to do that, so as head of Urquhart, I will create an engineering commission, and the presumption is that any individual with generating capacity is going to be allowed to sell

48:38 to the grid unless his commission says no, I. The default is the science works. The engineering works come on, guys, and then the second thing I'm going to do is enough and I dunno. If it's it's

48:53 probably not one hundred percent of either, but it's a little bit of carrot, little bit of stick. Hey, If you're rich, and you have a natural gas genset. I'm going to be able to kick you on.

49:03 You know Monday at noon and turn you off at nine. You get a little bit of a property tax break for this or something, but there's just and there's no reason to be out there. Not utilizing the

49:16 generating capacity we have software will be able to figure all this out. Yeah, Yeah, and I. I just learned that I've never owned a generac. That they go through a normal or regular exercise

49:27 cycle once a week. Mondays, always. So What are you? What are you doing with that exercise generated power is just go to waste, or Yeah, you burn it. You just make sure. I mean the so if he

49:37 had, if he had capacity for storing, that, Think about all the gent generac said are out absolutely exercise, but in Houston in Houston, it is. I mean until the battery prices still come down,

49:48 It makes sense to have natural gas genset back. Oh, no one hundred per se Because it number one is natural gas. Almost never goes down. There are exceptions as we found out a little bit over a

49:59 year ago pipelines buried by the Iran. So do you know a thing to Chuck's always got a good story about this A Tesla. His dad spend all this money on getting solar and battery at the house and Chuck.

50:13 If the person his dad's balls, and you're never going to get payback on this and then Winter storm, Yuri, His Chuck loses power at his house. He has to go bunk up at Dad's house, and you know

50:22 there's a premium that you pay for self. Sovereignty him of three year payback sound so bad all the emotional return of the emotional hedge. So you know, I think that when you talk about these

50:35 things like solar battery, and if he stacked on Nat gas generator on top of that, I mean doesn't make sense if you put it into an excel spreadsheet, probably not, but does it pay to for when you

50:46 do have blackouts and absolutely, and you look like the King pin in the neighborhood when you're your own and Hurricane parties are really fun. Yeah, well, and in the, in the other thing that I'm

50:56 coming to learn, could have been spending a lot of time on power. We always talk about how crappy are caught is, and all the problems it has. It's just a leading indicator. The other grids catch

51:07 up two years later, so every problem we've seen in Ercot over the last little bit. It's starting to creep in on the other grids. Yeah, stacks, eighty per cent coal, natural gas, nuclear.

51:18 You're retiring way more coal than you think you are and you used to be at fifteen percent excess generating capacity. You're at about to write

51:29 or or having power seminars and Uci

51:33 Mark lives in South Dallas. So I mean it's it's just a Southwest flight out to your house.

51:41 We'll talk. That guy followed. Twitter. Always talking about the Woodlands of South Dallas, and I just like him every time he has that comment, rounding out the show the off finger The week. I

51:51 have the finger of the way, This week's finger of the week goes to brain cancer In the this past weekend was the tenth anniversary of the passing of James brooch. James Brooch. Was the most amazing

52:03 human being that has ever graced the energy business. I hired him out of school. He worked for me for caught twelve out of his fifteen. Professional years, literally the best person on the planet

52:16 and the the biggest compliment I can give to him and it's so true. Is you always wanted to be a better person when you are around him and I'm a shit and I don't feel that with many people at all,

52:28 but I always felt that with James, and if you look at brain cancer, Unfortunately, it's always terminal. The standard of care has an improved in the last thirty years. Survivability rates have

52:40 gone up like a month, and and it just doesn't happen to enough people, so there's not enough in the way of dollars to do research there that being said Dr. Lang at Md. Anderson's doing a lot of

52:53 amazing work there to advance the cause, and it's not just James. It took Ken Peak with A from Us, who was ceo of Contango, It took Holly Hardy from Us, who is in charge of energy investing at

53:06 Rice, and it's just a really shitty shitty disease, so finger the weeks, not even a. Strong enough term to use, but fuck you brain cancer, cigarette, finger the leak. Amen. Thanks Chuck.

53:22 Alright guys was good to have everyone back in the studio and I'm glad that marks President felt more extended. Kirk, and I'll be anxiously watching Ratings want to go pump this one.

53:36 I feel. Enjoy the show. Make sure to share it with a friend and we will catch you all next week.