Big Digital Energy

0:00 Julie, real quick, come tell us about Scott

0:06 yeah come on this is gonna go on BDE it's Wednesday what time are we doing and what are we doing okay we're doing talking the mic so okay Scott Tinker will be coming on live with Chuck and maybe mark

0:26 Wednesday at 10 am. central time he'll be answering questions live y'all have a great discussion very excited about it so do we on collide though we've got AMA open forum for questions and so I'm

0:39 gonna kind of facilitate whatever those questions are while we're trying it's more of a like webinar so y'all will have a talk just like a podcast yep and then yeah questions will come in 10 minutes

0:52 10 minutes yeah we'll do questions and yeah that it's already up so you can already go and ask questions if you have any you want to ask you want to ask Scott you know hit it up because I will be

1:02 doing my detailed research tomorrow, so I'll be prepared.

1:06 It sounds like Mark's got it, you should let him take it. Oh, you're firing me now? If you haven't yet seen Switch and Switch on, his feature length documentaries from a few years ago, they are

1:23 good pre-reading material, so to speak, for Wednesday. Scott's also just started a show on PBS. That's the watching, at least what appears to me to be the first episode where he's got Ernie Moniz

1:39 and Dan Jurgen as his guest talking oil and geopolitics of oil, which is pretty cool. Yeah, it's gonna be fascinating 'cause he's such a smart dude. And a nice dude. Yeah, no, he's been great.

1:43 I mean, how we talked him into coming on

1:55 collide to do

1:60 a webinar is pretty impressive. Crystal and Julie get big props for that.

2:05 But we're not gonna start with oil. Yay, thanks for the hurricanes. I've been so totally wrong. Actually, you know what we're gonna start with? Today, 1997, what happened? Today, 1997, was

2:20 that where I'm gonna start at the Asian financial crisis?

2:25 Actually, maybe not. More importantly, Steve are all released, telephone road. Awesome Oh, yeah, all righty. So we'll start hurricanes. The, I had Chris Marks on the, as I like to say, the

2:41 Chuck Yates needs a job, official climatologist, weatherman. And for those of you who aren't following Chris on X, he's a must follow. He's a senior in college, getting a degree in climatology,

2:58 and it's just amazing in terms of facts and figures. And so I had him on to talk about last week's hurricane. And I think one of the big important things that came out of it was just, if you pull

3:12 up the data and you look at number of hurricanes and intensity of hurricanes over the last hundred years, there's just no correlation to CO2, ie. climate change is not causing this, despite the

3:25 rhetoric. As evidenced by the simplest, most directly correlative metric and that is central pressure of those storms at landfall. I mean,

3:40 since 1851.

3:42 And so taking that as fact, in other words, lower the pressure, the stronger the storm, you've got like a. 009 r-square of that data over 170 year period. I thought

3:59 the interesting thing with this next one, Milton. doesn't just sound like a very fierce storm, but it just spun up to a category four just within the last couple of hours, at least that's the

4:13 headline that popped across. And I've got family in the Orlando area and it's going to current track is

4:23 just south of there I think what it shows is that the biggest landfall impact will be around Sarasota, large surge threat in Tampa again, 10 to 12 feet. I've got a good friend that was in Tampa, a

4:40 high school friend. And so it's not as common as a development in the North Atlantic in that this appears to have spun up in essentially Hurricane Alley,

4:56 right around the Eugetan. Actually, I saw something, Joe Bastardi, I believe talked about it. Sometimes his stuff is kind of hard to decipher on Twitter. But I think the origin of the storm is

5:09 actually in the Pacific and it crossed over the Mexican mainland and popped back up in Hurricane Ali. So looking at about a

5:21 Wednesday evening, Wednesday, midday, landfall. So once it turned to

5:27 the east, northeast, it starts to move very quickly So Chris Martz pointed out, 'cause there's been a lot of talk about controlling the, controlling the weather, if you will, but Chris pointed

5:43 out that 12 hurricanes in our history have moved in effect west to east like this. So this is rarer,

5:53 but not unprecedented to have a hurricane move that direction I saw something in response to. the rarity point of this happening by Janice Dean, who is Fox News's chief meteorologist, she's become

6:14 a lot more high-profile because of the fact that both of her in-laws were died in nursing homes and she's under the quamo. She has been in

6:30 fierce pursuit of justice with respect to that whole era, but she tweeted a map somewhat sarcastically but humorously that, yeah, it's exceedingly rare and there's just the spaghetti plot of all

6:46 the historical hurricanes dating back to the 1800s that have originated into that area, a sum number of those have moved west to east.

6:58 I thought Chris did a good job over the week in explaining the dynamics. in terms of this more rare type of pattern and movement from west to east. But I think a couple of main points from my

7:16 watch of that emergency or special podcast. One, he's absolutely right about the data. It's there. It is largely government or government related data that is readily available.

7:35 And the other point is both sides are making -

7:40 Are probably. If not significantly ridiculous pronouncements. I thought it was interesting. And I actually agree with him that the Republican side could do a much better job of not deflecting and

7:51 then going off on an energy policy tangent and actually using very simple to understand multi-year data, multi-decade data to

8:03 to reinforce a point which then invites theoretically

8:09 the opposing side to bring its data to support its point which never happens. Yeah, the big picture point from, and again, thanks Chris for coming on the podcast and explaining all things

8:25 hurricane. The big point for me is I got into an argument on LinkedIn with a high school buddy of mine who's like, You know, you're being a climate denier.

8:39 And, you know, it's so important and, you know, you're denying it and exon new and lied and people are gonna die. And my counter to Doug back, and Doug, and I've been friends forever, my

8:51 counter to Doug back is, no, when it's equally as bad to make false claims, hurricanes are getting worse because of climate change. when the data doesn't support that, because we will get

9:05 policies that make energy less available, more expensive, and people die when energy prices are high or energy is not available. And I go, you can talk all you want to as an American who lives in

9:22 energy abundance, but you're gonna go tell the next billion people in Africa and Southeast Asia that are coming on the planet. No, you guys don't get energy because we're making up false claims

9:34 that climate change is causing hurricanes. I go,

9:38 that's equally as bad. And I even think that's worse than supposedly what you say Exxon did. So, and I think it's important to do those special edition podcasts like you did with Chris because he

9:57 himself is an admitted friend

10:01 He underwent a transformation and got immersed in the data out of curiosity. He was a believer in all the kind of hyperbolic things that Al Gore, et cetera have been

10:17 promoting for the last 30 or 40 years. And so he's always looking to

10:26 guide people into

10:30 accessing the data. Yeah, he'll give links all the time. Thinking about it and then forming your own opinion. Yeah. Which is, I think, but the other point on the political debate is,

10:44 maybe he didn't give kudos, but credit to the Democrats for staying on topic when that topic is raised. They say it with a lot of passion and conviction. Nevermind the fact that there's not a lot

10:56 of verifiable data to support that In fact, there's refuting data that - He routinely cites, but they stay on message and continue to kind of drive home the emotion of the point, which I

11:10 think is politically astute.

11:15 Yeah, no, it's - But the data's there, use it. Yeah, no, exactly. So anyway, thoughts and prayers with

11:23 our friends in Florida 'cause this is not gonna be a good week. Oh, by the way, I made my daughter who lives in Orlando aware that there was another storm coming on Saturday morning. Oh, okay,

11:35 well, good, anyway.

11:40 Okay, so we said we weren't gonna talk about oil, but we'll go to Iranian oil exports 'cause I thought you sent around Josh Young's tweet this weekend and I thought it was a really good one. So

11:55 let's take it up to a higher level first And there's been whispers and conjecture. as what is Netanyahu going to do next? And there's two dimensions to, I guess, infrastructure and energy. One is,

12:16 is there a threat to Iranians' nuclear power infrastructure? And then two,

12:24 the threat that Yahoo decides to do something disruptive with respect to Iran's ability to either produce or export And so looking at that, and quite frankly, I was a little surprised to wake up

12:37 this morning and not have some massive headline just given the fact that this is the first anniversary of

12:46 the October 7th terrorist attack.

12:50 And

12:52 just given the rhetoric and the consistency with which Netanyahu has backed up that rhetoric,

12:59 aggressive rhetoric. He's followed through. And so on Friday, in fact, I just shared it with you, Netanyahu made a statement really strongly condemning what French President Macron had said,

13:13 forget what form it was, but basically suggesting that the West ought to impose an arms embargo on Israel. And so it's a very impassioned and very

13:25 sobering two minutes of Netanyahu really reiterating the conviction that we're gonna, we'll do this with you or without you. And so

13:37 kind of behind the scenes in terms of what armed twisting or negotiating is going on, the target of the response or whether there'll be a response. I said, I think you said that there's potentially

13:50 something on the table. Yeah, there have been reports of kind of rumors of a deal from the United States for. know or a limited response. You know, you never know if these things are true or if

14:07 they're rumors, but I saw that. You know, I think the interesting things are Buddy Mark Rosano, who was on last week, tweeted out this morning, a really good point. You know, you can go after

14:22 the nuclear facilities, you can go after the oil infrastructure of Iran, if you're Israel But if the regime gets toppled, the new regime, which would be very pro-West by all accounts, you know,

14:37 the Iranian people are generally thought to be very, very pro-American. There's more plastic surgery done in Iran than anywhere else on the planet, etc. How would they be able to, you know, have

14:51 a modern economy if you've gotten rid of their revenue so.

14:58 It's almost the quandary of how do we starve them in the short term to get rid of the regime, but then at the same time, make sure they have a base to be a successful people. It would have to be

15:12 fairly surgical and there are a number of risks that then

15:21 create problems from an international perspective, one of which is you goin' to do a bunch of damage to say, Carg Island and storage terminals or Iranian tankers or producing infrastructure that may

15:37 result in really catastrophic well spill events. That's gonna be, I think, a big negative on the world stage in terms of all the environmental damage. It's something that, like that could cause,

15:50 recall the first invasion of Kuwait how many oh well fires and all the. of vast, very visible and very impactful at least to see it firsthand, you know, just oil flowing everywhere all over the

16:08 ground.

16:11 And the water is even worse. So I think that aspect is one thing, you know, if you can do things that impair, and we'll talk about this as the next part of the topic, you can do things to impair

16:26 their ability to export without

16:31 exposing the infrastructure to something that's going to take multiple years to rehab and get operational again. I don't know what that is. I'm not suggesting they do that. I don't know what the

16:47 right answer is. I know the path that they've been on has been very surgical and very precision and very intelligence driven so if you look

16:58 the Hezbollah leadership structure, the Pedro attacks, et cetera. I think it's more about if there's a regime toppling that is the solution to, or what wins the battle for Israel, it is more

17:13 about taking out the leadership as opposed to exposing

17:20 the Iranian population to widespread kind of economic hardship You know, the crazy reporting from last week was that they embedded the stuff in the beepers nine years ago, and they ran the beeper

17:37 company profitably while they were using it to spy on Hezbollah before they turned it into

17:46 the bombs that they used it for. I don't know if you saw any of that, but that's, I think you gave me those up on that. Yeah, that's unbelievable, if true Ah, that's. So, the

18:02 Iranian export,

18:05 as it relates to pre - and post-sanctions, for example. Josh Young tweeted this morning, or replied, or reposted, and you have a comparison of the destination of Iran's monthly oil exports in

18:21 2017,

18:24 and then now So,

18:29 in the focus here is China. In

18:34 2017, China accounted for 26 share of Iranian oil exports. Today they're 91.

18:42 Syria and Venezuela rounding out

18:46 the majority of the remainder of that And there was another comment by a government official in China saying we're not essentially we're not. I can find that tweet. We'll post that as well.

19:03 Basically saying we're not beholden to any other country. We don't recognize the

19:11 political objectives. We're trying to do what's best with China. So we'll take Iranian oil is basically what he was saying and kind of middle fingering the rest of the

19:25 coalition of countries that are ostensibly of countries that are ostensibly anti-Iranian and behind the sanctions. The barrels will flow, it just points out another kind of feeble actual outcome of

19:41 sanctions, particularly in things as global and as no pun liquid as oil markets. Those barrels will find a market and we'll find a home. Yeah, I mean, you could go back and look under various.

19:56 of Iranian sanctions and notice a corresponding increase in Iraqi production, you know, as they smuggled stuff across the border or at least, you know, reported things through the border. That

20:09 being said, though, and I was called a simpleton this weekend for making this statement, but I truly believe it, the Iranian regime having money is just bad. That leads to this nefarious stuff.

20:23 And the more we can do to squeeze the Iranian regime so that it does not have money to cause all this, I think we've got to be focused on because that really is the difference looking back over the

20:41 last 10 years. I mean, you have all these gray and black market activities going on in terms of ships being translated en route. There's allegedly quite a bit of that going on offshore

20:57 And ultimately the destination, those that are doing the surveillance of those kind of shadowy market operations, the ultimate destination is almost 100 China. Yeah. So this

21:12 take from China, or take from Iran by China makes perfect sense. And that you've got, I don't know if I would characterize Chinese as agnostic, China is doing what's best for China, like we've

21:31 seen from several other countries, like the Indians are - Fine, Russ and Will. Well, they're ramping up coal production and coal-fired generation

21:43 and playing that, playing that International Political Balancing Act. So

21:51 we'll see what happens, But he has said that we are going to respond in what manner. shape or form that takes a time in place of art choosing, I think is the - Been pretty effective so far. Yeah.

22:05 All righty. I was going to say that right before we came in here, I looked at crude and it was fairly muted, although up a little bit.

22:17 It's now up a couple of bucks, it's gotten close to 77 bucks for TI, so So it's what, I call it 15 since I made my pronouncement that oil is fairly valued and it's going down. There we go.

22:32 Fundamentals don't matter. Fundamentals don't matter. So the speaking of oil, BP, are they back pedaling? Is

22:42 this an official me at Culpa or is this - I somewhat cynically, maybe not de-resively, although I've got Exxon DNA.

22:54 BP has long been suffering from - of an identity crisis as it relates to sustainability and it dates all the way back to almost 25 years ago. If you remember things like advertising campaign, it's a

23:09 start almost apologetically, yeah, we're an oil and gas company, but we're doing things in the alternative space and then kind of the relabeling and renaming beyond petroleum. They've got a very,

23:26 I think environmentally friendly and attractive logo as silly as that seems. But more recently, and we've talked about it a lot,

23:37 among the US and European majors peer group,

23:43 in the last five years, they've had varying degrees of response to stakeholder demands for a pivot to alternatives or renewables, for example. Net zero, scope three, net zero, BP. was I think

23:57 the most aggressive and progressive and pivoting hard and moving quickly. They also spent many more billions than any one of their peers committing to things like offshore wind leases in the North

24:12 Sea, which they've since impaired and exit of their US wind business. They also explicitly stated very aggressively, we're going to, and that's really the focus of this particular article that

24:23 came out this morning Started with, by 2030, we're going to contract our oil production by 40. Well, that was revised when the new CEO took over after Lenny was, Auschwitz lost, after Lenny was

24:37 somewhat unceremoniously exited.

24:41 That's basically

24:45 a tacit acknowledgement that we have got to play catch up here on

24:53 kind of investor priorities, which is returns ultimately. And for all the reasons we've talked about in renewable space, supply chain issues, inflation, et cetera,

25:05 we're going back to the foreseeable future to refocus on our core business, which we've been about for 150 plus years. And so

25:19 I guess it's better late than never. But if you look at relative performance of BP and Exxon over the last five years, which was about the start 2019, 2020, maybe 2018, but the last five years of

25:34 relative performance of BP versus Exxon, BP's cumulative returns is minus 12 over five years. Exxon's return 85.

25:49 So that is a bit, and you can look at any time slice over the last three, five, 10, 25 years. that has been the case. So there's a retired BP engineer that I have coffee with. It feels like

26:04 almost every morning down in Richmond, they're a group of folks. Not Vlad. Not Vlad, although Vlad knows Terry really well. Terry's actually a chaplain with the constables now, but anyway, he

26:19 was an engineer stationed to various places with BP I need to get him on the podcast to come tell the story 'cause he talks about basically, you know, when BP bought Arco, that that was the

26:34 downfall. 'Cause you had, you had in effect BP making this bet on cheap natural gas at the time, but all the Arco infrastructure had been way underfunded in terms of maintenance. And he was

26:51 actually part of a group that was examining the accident. position, and they came back and said, just buy the oil and gas assets, not the infrastructure. And of course, you can't do that, you

27:02 can't just pick and choose what you want to buy. So they overrode that group, but their thing was there's so much maintenance needs to be here. This is a walking disaster. And

27:13 of course, that's what we've seen out of BP, all the plants that have blown up and the environmental issues and the like And then the second point I want to make about BP is,

27:27 I mean, just a company that's kind of been a train wreck and all that being said, I've never met an ex BP employee that I'm not just thoroughly impressed with. You know, we've got Jane Stricker,

27:39 who's a long time BP employee who's who we've worked with since she's been over at the Greater Houston Area Partnership, who's great.

27:52 the Treadstone management team that I backed at Caine a couple of times and arguably one of the best deals I've ever done, XBP folks, this impressive, this guy Terry who I have coffee with

28:04 everywhere, just very impressive people for being such a brain dead company. Well, similarly, I think all the majors, particularly the super majors, have incredibly talented people This is, you

28:20 know, this is testament to, or a function of just how

28:28 terrifically complex and challenging the business is. And so, you know, how's the industry figuring it out with declining rig count and crack activity and yet US production is

28:44 fairly resilient? Yeah, it's because of all the stuff below the water line, whether it's better technical understanding or description of the reservoir. These are incredibly skilled and

29:00 intelligent people across the board in terms of, so you've got a lot of BP friends and shell friends and Chevron friends.

29:12 It's just a function of really the strategic direction and portfolio management of the company, which I think has a lot more to do with in BP's case, maybe in Shell's case, Totals case, the

29:26 balancing act that European domicile majors have to do in terms of social issues and stakeholder interest balancing, whereas in the US, we've got a pretty clear mandate in terms of our rags with

29:45 respect to the primacy of the shareholder the stakeholder group. Right.

29:51 five to 10 years has been really murky and foggy and chaotic. But I just think that you're seeing

29:59 just the forces of nature in the oil and gas business and among their investors reaching a point where it ultimately is about returns as a publicly traded major oil company. It just seems that BP

30:16 took a really painful, certainly not as well advised almost an emotional path in response to the moment, making the pivots that it did and committing the billions that it did.

30:31 It didn't seem all that well considered to say, we can be a competitive player in the wind business, for example. Well, how's that when you've got Chinese manufacturers that are hugely advantaged

30:45 and permanently advantaged in terms of things like

30:51 dominance, supply chain, et cetera. So one other side part of this issue that - As I like to say though, if you wanna put oil and gas companies out of business, it's pretty easy. Just don't buy

31:02 the product, but don't still present the fact that the oil and gas companies are always the target as opposed to the consumer. And BP's had a bit more of a

31:16 kind of high wire to traverse here in the US, Post-McKondo. Yeah. And I was reminded of a great piece by Javier Bloss and Bloomberg, which will attach on really the Renaissance and Deepwater. And

31:33 most of it is centered on high pressure, high temperature. So this is 400 degrees Fahrenheit. This is

31:43 20, 000 PSI stacks and equipment This is, Kaskita was discovered.

31:51 2006, and it was also drilled by the Deepwater Horizon, which was the rig that was destroyed in the Mcondo disaster.

32:04 A year after, two years after

32:07 Mcondo, BP quietly bought up to 100 of it, bought out its working interest partners in the Kaskita Discovery. There's 800 feet of pay It's been sitting there waiting to be developed. You've got

32:21 anchor with Chevron that's coming online. So, you know, BP having to come from, you know, a

32:29 slight change in direction, if not an outright pivot to renewables in this moment of the last five to 10 years, to going after a place that, you know, is, wasn't their best moment defined as,

32:45 what happened with Deepwater Horizon and Macondo. It's just a real. unique conundrum for BP

32:56 in terms of how it's repositioning or pivoting back to, we're going to be more about oil and gas, we're going to tell you what oil production targets are going to be sometime in February, we're

33:07 just taking contraction 25 off the table. And so, you know, can they close the performance gap? You know, we'll see talking about the relative stock performance, but it's been a structural

33:20 perpetual thing for any useful period of time from an investment standpoint. Totally.

33:28 So the next story you sent around, I've read the news report on it. I haven't read the actual

33:40 whole study, but basically

33:44 the EIA did a report on ERCOT and power demand because of all the data centers and Bitcoin mining coming, and it's pretty staggering. I mean, I think the punchline is a lot of demand coming. How

34:04 are we going to hook all this sort of stuff up? Maybe crazy. Yeah, it was a feature in their regular short-term energy outlook that was out on Thursday, and it caught my eye because it was focused

34:19 on ERCOT in large, flexible load, which is

34:25 a general description of high-performance computing AI in Bitcoin. And just the sheer numbers in ERCOT, which is

34:39 ERCOT

34:41 territory accounts for 90 of all electrical load in Texas, some other. I'm on a different reliability council, as I often said.

34:50 But if you look at their base case, and there's three, there's a low-side case, mid-case, and then high-side case, which in this particular kind of demand driver and what's going on in the HPC

35:05 and AI space, I know by the way, BlackRock and Microsoft announced100 billion effort for power and

35:14 high performance computing in AI, just I believe last Friday, 100 billion. So Texas, back to ERCOT and Texas,

35:24 we're at almost six and a half gigawatts of large flexible load demand, LFL,

35:32 that'll be 2024. So looking at 2025, the base case is nine and a half, which is up 60. That's a stunning rate of growth. For a grid that has seen, I think, episodic and more frequent.

35:50 intermittency problems, and we are,

35:54 use this word a lot today, pivoting back to trying to build more gas-fired generation in this cycle than we have in a number of years. And I think part of that is in recognition of what's coming and

36:06 what the character of the demand that's coming to find is large flexible load. So six and a half gigs this year of large flexible load demand going to nine and a half in the base case, the high

36:18 growth case takes that up at 142 gigs. I mean, they're building a lot of stuff outside of Dallas. Yeah, the question is, can you deliver on grid utility solutions and looking at another story, I

36:37 think Jeffress projected that delivered power to

36:43 an HPC or a data center associated with one of these nuclear facilities,

36:49 cost will be like, or the price will be like112 a megawatt hour, or

36:53 yeah, which is indicative of a fairly price insensitive customer, which

37:04 reliability, consistency,

37:08 and uptime are all absolute critical drivers of HPC business.

37:17 And so how does this play out for ERCOT

37:21 when there's this, I think,

37:27 standoff between, okay, we've got momentum going on the nuclear side, but look at the timelines, even in the best case, let's say we get the NRC overhaul, let's say we get the energy permitting

37:42 or reporting act implemented. What are we actually talking about in major grid additions in the form of base load nuclear power. We're talking about a utility conventional scale design. Do SMRs

37:59 kind of sneak in? Natural gases is still quite debated,

38:10 but faster is better. Faster and reliable is better. And I'm not saying we totally don't care what it costs, but there's, I think there's a lot of kind of rent extraction and margin opportunity

38:25 for the generators who can deliver. And if you've got to be on grid, you're in ERCOT, you're fighting a lot

38:34 of priorities, particularly when you get into peak demand or a crisis situation. So this Wednesday's Chuck Keitz needs a job is Neil Dykeman, the VC.

38:48 He wasn't predicting that this is going to happen, but he walked me through that there is enough solar manufacturing capacity that literally in two years we could replace all the generating capacity

39:03 in America with solar stuff. And, you know, at the end of the day,

39:10 I don't know the tax incentives well enough to argue with him. He claims there aren't that many tax incentives I know I get pitch deals all the time that say, Hey, we in effect get our money back

39:21 on the tax incentives, and therefore any power we sell is free, you know, we make money off of. But at the end of the day, solar everywhere, I mean, it literally is cost a good zero, you know?

39:34 The sun shines and boom, you get it. So that all you were talking about, the reliability, price and sensitivity, etc, though, is going to be competing in that world where - you have negative

39:48 power prices of various times on here. And so seeing how this, I still think the way this shapes out as data centers will wind up building off-grid dedicated power centers for themselves. And I

40:05 still think they're choosing nukes at this point unless we as the natty guys make a great case for guys we can build turbines right here and deliver you power all the time. I'll skip what's going on

40:20 with kind of a microcosm of some of the difficulties with the San Antonio and Bear County utility and how ERCOT is fighting back against what the pollution regulations mean in terms of having to

40:37 curtail the uptime of some of the natural gas fire plants on that system

40:46 But to the point of generating their own, essentially an off-grid solution,

40:55 I just saw that XAI opened a facility in Memphis in an old Electrolux facility, I don't know, maybe hundreds of thousands of square feet, it may be close to a million where,

41:06 they're housing and operating 100, 000 NVIDIA

41:11 GPUs Yeah, that facility needs 150, 000, 000 or 150 megawatts.

41:20 The utility can only deliver now 50 megawatts. And they've committed to more circuit breakers and everything else you need in terms of the wiring to be able to support that, but I need the power now.

41:38 And so the controversy is around the fact that XAI has cited, I think it's eight.

41:46 gas-fired turbines at that facility, so those are off-grid solutions. And so I'm not sure how the state and local missions and pollutions

41:59 regulations were worked around, but there is kind of a controversy building that they're in violation, they expire in violation of those rags because of the off-grid generations, again, gas-fired

42:16 I believe I read that the exception was related to the fact that these mobile generators and key on mobile there are exempt from those regulations and I think that's interpreted, at least in the

42:33 letter of the regulation was meant to be interpreted as temporary. But I can tell you, the grid or excuse me, the utility and Memphis getting its act together

42:47 that 100 megawatt gap that is being filled by those dates, the right number, it sounds right.

42:56 Gas turbines is, you know, that's a lot of time to get all that done. And in a city whose budget deficit is currently approaching900 million, which has a lot of other infrastructure needs. But

43:13 yeah, I've just had the fortunate coincidence that economic decline, you know, one of the the traditional. Everything's understaffed. The roads are in pretty poor shape. Just general public

43:26 infrastructure and the capacity to do that. And of course, the tried and true or the tired old political resolution is we're going to cut budgets and race taxes. Yeah, I think I think the way this

43:43 plays out and I think, you know, we'll see that. Elon scenario, because

43:51 you can guess for a turbans in some of these big ones in within a matter of weeks to get on. I think the weasily, I don't want to say weasily, that's the wrong word, but that's the connotation.

44:03 The way you do it is, as long as they're mounted to be moved, they're considered mobile. I mean, I think that's the, you know, I think that's the game you play so that you qualify per the letter

44:16 of the law on this for the exceptions. Yeah. So it's going to be interesting watching that. And as with nuclear, we're going to see political opposition and activist opposition slowly, maybe in

44:32 this case, quickly,

44:35 worn down and thinking that, look,

44:42 this facility was a former Electrolux appliance manufacturing or assembly facility right there on the Mississippi River.

44:52 We all know, I wish Colin was here, that the difference between, you know, this power load coming on the grid, particularly in a metropolitan or municipal area,

45:04 you have a former operation at that Electrolux site that had much higher employment We just don't have that aspect of something to offer to the community. For the political calculus. Yeah, for the

45:20 political calculus. But there has to be something that is added to that to make up for the fact that you're not bringing hundreds or thousands of jobs because these are just inherently not labor

45:36 intensive operations. You're making a billionaire. But there's a lot, and I think about it in the case Memphis, there's a lot that can be done through private sector partnership. on things like

45:46 infrastructure in schools and just the general well-being, particularly for a city that's facing, you know, an almost billion dollar budget deficit. Two other big things, dynamics, to just put

45:60 on the table while we're talking about this, 'cause they're gonna come into play, is number one, when I had Zane Ball on Chuck Job, and he's had AI for Intel, he said it's not lost

46:20 on them, that they can bifurcate jobs between interruptable and non-interruptable power. So meaning the AI embedded in an emergency room, monitoring stuff is gonna need reliable power, training a

46:28 language model, you can kind of cycle out and cycle back in on that. So we're gonna see that bifurcation as people go in and start choosing sites.

46:42 The other thing to be thinking about

46:45 in terms of kind of in addition to the bifurcation of this is our own Jake Corley or former own Jake Corley actually tweeted out and I think it's the right thing. There used to be a huge demand for

47:03 kind of this clean power. It's going to be interesting to see if that dissipates going forward and he said it's going to dissipate going forward and then the third thing I said to but I meant three.

47:18 You know right now data centers and AI stuff have to be near fiber just because of the speed and Starlink is getting fast. I don't know it's not fiber fast. It's not fiber fast but it's getting fast

47:34 enough to fit into that whole thing of you know do we really need when we're training when we're training the language model do we really have to have it that. fast. Yes. In the emergency room, we

47:48 have to have it that fast. And so there's going to be other things that come to come to play in this. Yeah, it's because you can, you know, I mean, a line just put a Starlink into all the United

48:04 flights and Jake was on a JSX flight and actually did a FaceTime call. So, I mean, that's how fast

48:15 Starlink is today. We're, the United States is going to overcomplicate this, particularly as it relates to the

48:24 potential of natural gas. We've already seen it in the form of the LNG pause, whereas others, other countries have raced to embrace the whole data center

48:41 citing where there's a ton of gas. Carter Saudis are leaning that way. I think Malaysia's got - They were talking about this amount of momentum on that front as well. Darwin in the Northern

48:56 Territory in Australia was talking about it. If the beat-a-loop basin plays out like Brian Sheffield thinks it is, they were very cognizant of, we're gonna have data centers everywhere. Well, for

49:09 us in the US, it's these looming

49:14 hurdles that thermal generation facilities may have to overcome in the form of kind of net zero. So sequestration, I don't know what other scrubbing that is going to be required for knocks and socks

49:29 and things like that. But that type of capital retrofit or upgrade for very old coal facilities in Texas, basically takes 12 gigawatts out of the base load. equation immediately because it, under

49:47 no circumstances, it makes sense. So that's the, you know, that's kind of the ominous cloud that's building here in terms of our ability to fill the gap between

50:02 the solution that ultimately has the largest scale, cleanest and best solution that's nuclear, but you tell me, when's Three Mile Island going to be operational after all the, the demothballing

50:18 and the upgrading and the retrofitting work that needs to be done, is that, you know, is that five years? I thought that's one 2028. Yeah, that's one. Yeah, that's, that's how many should be

50:32 sold there. I don't know if you saw the Dave Chappelle meme with, you know, he's got the powder. You got any more of those, got any more of those mothball nuclear facilities. Yeah, so I think

50:45 we are disadvantaging

50:48 natural gas at a critical time and we're seeing the response by the rest of the world that isn't encumbered by this because the market's going to be there. It's just a question of whether those

51:01 things get located in the US where there's

51:07 gigantic natural gas potential I mean, just think of the national security ramifications of not having all those assets in the United States. Right. I mean, yeah, it just, it boggles the mind

51:22 why we would want to lag on this. I said, I think around the time of the energy draft that the

51:30 leverage of natural gas is obvious. It could be both a strategic offensive or defensive weapon. Just given the abundance in the endowment that we have and the know-how and the responsibility with

51:43 which we produce.

51:45 and use natural gas. But

51:49 there's the minutiae of the politics related to

51:55 primarily emissions. Well, and the coolest thing is this could be a Texas, this could be a Texas led endeavor because we have our caught, you know, that's not regulated by the feds because we can

52:12 operate in and around there with less interference from the feds and other places. But we'll see. Yeah, last thing. Yep. We do have

52:26 an on scene report from our intrepid co-host, Mr. Coburn. Yeah. Yeah, and Tuckett. This is awesome. I'm digging the hat too. The ongoing broken wind turbine blade saga that Nantucketers are,

52:43 is it Nantucketers?

52:46 and tuck it or it's got, there's so many jokes going around in my head right now, but I won't say any of it. I'll be on my best behavior. Thank you.

52:56 So he's reporting from a recreational site, I believe, but you can see the aesthetics in that tuck it, but there's still stuff going on

53:10 with respect to that turban blade failure from a few months ago, which really severely restricted his surfing season. Well, you know what, I think this actually qualifies as a finger of the

53:33 Hey guys, this is Kirk reporting on the Nantucket wind farm. Recently debris from wind turbines specifically broken blades has been washing up on the shores of Nantucket still creating a serious

53:44 concern for residents and environmentalists alike. The visual impact of the wind turbines is already causing decline in property values as the once pristine views of the ocean are now dominated by

53:54 industrial structures. Hopefully you can see behind me I've spoken with numerous locals and there's a growing sense of frustration. Many feel that concerns have been ignored and the anger is only

54:05 building. Even more windmills are scheduled to go up in the near future. So stay tuned and report another one later. Cheers