Big Digital Energy

0:00 Had a long week of Thanksgiving week, so I hope you guys had a good Thanksgiving. Everyone listening had a good Thanksgiving, and seems like there's lots of energy news over the last few days

0:14 Actually speaking Genre, John John Arnold Arnold,. He He dropped dropped this this pretty pretty bad bad ass ass list list of of just just current current energy energy trends trends over over the

0:23 the last last star several several years years.. As As anyone anyone have have that that pulled pulled up up.. I I like like to to do do dive dive into into that that.. Yeah Yeah,, are are we

0:29 we have haven't? How actually shall we? Uh a,? How How shall shall we we go go about about this this?? She She would would just just a a read read on on or or choose choose one one or or two two

0:34 'em 'em to to read read.. Yeah Yeah,, and and I I think think that that the the first first one one you you know know Clarkson Kirks gonna have have some some input input on on., Ah says, says,

0:41 first First off off,, he he says says these these are are twenty twenty two two random random musings musings over over of of the the massive massive changes changes in in the the energy energy and

0:47 and climate climate in in the the U U.. S S.. Over Over the the past past five five years years.. The The first first one one is is cleantech cleantech.. Vc Vc went went from from disfavor

0:51 disfavor to to overprice overprice to to something something in in the the middle middle, and and. this is This is the the one that one that I I liked liked no no more more grass for grass the with

0:58 price the of price of renewables renewables going to going to zero zero, and and headed headed off ethanol and on split on her her, I. I might might you know you know what mine what was mine was

1:07 that I that I like N like the N girlfriend the girlfriend and and I were I were talking talking about about this this and he and talked he about talked about interstate pipeline interstate pipeline

1:12 projects of projects any of any kind kind. became uninvested became uninvestable. Also, so oil oil, gas gas, carbon carbon., And and I I really really think think we're where that that goes

1:20 goes back back to to. is Is the the Ferc FERC changing changing their their approval approval process process.. Yes Yeah,. And and Jeff Geoff Davies Davies co co-hosted BDE -host Bt with with me

1:28 me, maybe maybe two two years years ago ago when when this this happened happened and and we we talked talked about about it it,, but but, and and I'll I'll I'll get get this this wrong wrong,,

1:35 But but basically basically what what happened happened is is Biden Biden was was allowed allowed to to appoint appoint a a Democrat democrat which, which gave gave him him three three to to two two..

1:44 Joe Joe Manchin Manchin had had always always been been the the block block on on that that 'cause cause he's He's from from an an energy energy state state. He he gave gave, gave gave up up his his

1:51 block for something a pipeline block for or something something, a pipeline or something whatever, whatever it it was was., part of of a a bigger bigger deal deal.. So So the the three three to

1:60 to two two immediately immediately changed changed and and now now the the FERC FERC has has to to consider consider climate climate change change goals goals when when approving approving a a project

2:10 project. And And it it seems seems like like that's that's just just ground ground everything everything to to a a halt halt because because even even if if you you We had had a a pipeline pipeline

2:16 that that was was leaking leaking 10 ten million million a a day day of of methane methane into into the the atmosphere atmosphere and and you you could can put put a a new new pipe pipe in in that's

2:23 that point, O O 0001 one unit unit of of methane methane being being leaked leaked.. The The Ferc FERC. Still us still has to say, say, no Nope that, that one one that that point 001 unit o one

2:32 unit of of methane methane being being leaked leaked that that leads leads to to climate climate change change., So so they they don't don't look look at at it it in and a contextual basis. They

2:38 don't look look at at it it in in a a vacuum vacuum. They. They don't don't have have to to I. I guess. mean It's, at some a point point. It's it's almost almost first first world world problems

2:42 problems. I. I mean mean we we have have so so much much energy energy security security in in this this country country.. Yeah Yeah,. That that these these debates debates are are almost almost

2:49 I. mean I mean the the rest rest of the of world the world world. you He got got, you near know, Japan Japan. that's That's, you you know, trying Trying to to do do these these long long -term

2:55 -term lng lng contracts contracts like like a a lie like, other other European European countries countries, Because Because they're they're worried worried about about energy energy security

3:01 security.. We We have have energy energy security security.. Yeah Yeah,, and and so so were were the the the pipeline pipeline issues issues really Really interesting interesting,. Because

3:07 Because it it through through the the contents contents of of the the lens lens that that a a we we have have so so much much were were so so abundant abundant in and energy energy. is Is now now..

3:13 Our Our prices prices are are increasing increasing because because we we can't can't get get more more. oil Oil and and gas gas exported exported, and and we we can can, Yeah yeah,, probably

3:17 probably be be even even more more secure secure financially financially.. Yeah Yeah,, and but but let's let's keep keep going going.. Yeah Yeah., What What kind kind of of nit nitpicking

3:24 picking on on. If You you don't don't have have that that like like casio casio less lesson India India announced announced recently recently, then, then they they planted planted double double

3:31 underground underground coal coal production production.. That's That's the the response response.. They're They're either either priced priced out out of of it it or or don't don't have have the

3:36 the natural natural gas gas infrastructure infrastructure.. Right Right.. That's That's where where this this is is going going in in very very significant significant parts parts of of the the

3:43 world world. I. I mean mean I've I've been been to to India India quite quite a a few few times times there there.. I I know know there's there's some some oil oil off off the the coast coast,

3:47 but, but they they don't don't have have anything anything in in the the country country,, so so right right there there they're they're screwed screwed.. They They have have a a lot lot of of

3:52 trash trash which which I I know know. one One of of the the facilities facilities that are are used used to to work work at at.. We We had had a at A a a a new new technology technology to to take

3:60 take trash trash and and create create fuel fuel out out of of it it,, but but they they have have coal call a minutes minutes.. It It makes makes sense sense for for them them to to do do it it,,

4:05 especially especially with with a a country country that's that's trying trying to to grow grow as as fast fast as as China China.. Yeah Yeah, the, the acid acid.. The The point point is is you

4:10 you know know one one of of the the other other had had have have a a thought thought..

4:15 One One of of the the most most stunning stunning fundamentals fundamentals is is that that electricity electricity demand demand is is growing growing for for the the first first time time in in

4:20 fifteen fifteen years years, that that that that sounds sounds like like

4:24 stating stating the the obvious obvious, But, But as as we we been been talking talking about about the the pressure pressure that's that's being being put put on on the the grid grid,, that's

4:30 that's a a pretty pretty important important portant port in, one one, Yeah, yeah,, and and that that rate rate of of growth growth just just given given the the profile profile of of demand

4:37 demand changing changing and and tipping tipping toward toward more more to to do do with with data data centers centers, Etc, Etc is is a a pretty pretty interesting interesting con cause. We're

4:45 we're not not gonna gonna to.. I I mean mean we'll we'll post post this this generals generals tweet tweet on on her her on on the the show show.. Yeah Yeah, we we will will,, Because Because

4:50 the the propaganda propaganda right write a a cause kiss of of articles articles, twenty. Twenty three three of of these these.. I I., I'm I'm I I keep keep. Everytime everytime I I do did it.

4:55 I'm. I'm like like. Oh. Oh, yeah, yeah, we, we talked talked about about that that we've we've talked talked above about. Are all all these these.. We've We've talked talked about about all

4:58 all these these things needs will. Will you not know I as was lookin like. He he talks talks about about the the creation creation of of two two in industries chaise. He, He said said electricity

5:03 electricity storage storage became became in in, is, as she she carbon carbon capture capture became became an an industry industry, but, but point points seventeen seventeen rebirth rebirth of of

5:09 domestic domestic manufacturing manufacturing related related to to energy energy transition transition. I. I mean mean. How how many many times times have will we we talked talked about about that

5:13 that on on Amish show show, of have co co -location. -location A We weird we're way way ahead ahead of of that that.. Yeah Yeah, I, that think that's that's what what we're the venom gonna head

5:18 head of of a a lot lot of of that that stuff stuff, and, and so so I'm I'm probably probably going gonna to write write a b B.. I I was was just just thinking thinking about about this this as as

5:22 I I was was looked looking at at as as like like I'm I'm going gonna to write write a a blog blog posts posts and and go go through through. Each each one one of of these these points points,. get

5:26 Get some some commentary commentary and and then then go go back back and and look look at at where where we we talked talked about about it it,, and and but but you you know know Johns Johns.. I

5:33 I love love the the way way that that John John Arnold Arnold. Thanks. Thanks, Because, Because I I love love how how he he just just sits sits down down and and thinks thinks about about a a..

5:38 Over Over the the last last five five ten ten years years.. What What are are the the things things that that we've we've seen seen and and just just go go.. I'm I'm sure sure that that we we

5:42 could could add add even even more more to to that that if if we we sat sat down down and and thought thought about about it it sounds sounds like like a a couple couple may may be be good good for

5:47 for a a frock frock slept slept,, and and so so that's that's what what I'm I'm saying saying then Then is is time time to to a a public public service service announcement announcement., and

5:54 Because because fans fans have have written written and and and and they're they're confused confused,, Because Because Colin Colin, you, you don't don't speak speak with with enough enough gas

6:02 gas gusto gusto gusto gusto and and said said I I was was told told on on Linkedin Linkedin that that I either either need need to to sit sit closer closer to to the the Mike Mike Curb Curb man man up

6:09 up,? Do Do you you see see the the cauliflower cauliflower ears ears To to the that? Apparently? Apparently they're they're telling telling me me to to say save it with my my chest chest, and and

6:15 so? So I'm I'm trying trying to to sit sit really really close close to to the the microphone microphone right right now now,, cause Cause I I don't don't want want to to get get called called out

6:19 out on on Linkedin Linkedin. Yeah. Yeah,, but but anyways anyways, so, so what what else else is is interesting interesting If If you you just just to to kind kind of of like like blows blows

6:27 out out John John Arnold's Arnold's tweet tweet and and everybody everybody should should read read. It. It is is It It feels feels like like the the absolute absolute absence absence of of science

6:35 science was was used used on on a a lot lot of of these these,, but but the the other other half half of of that that of of his his twenty twenty three three are are.. We're We're now now

6:44 realizing realizing that that science science matters matters.. Yeah Yeah,, Yeah Yeah,, that that that's that's what what I I was was struck struck with with when when A I. when When I I was

6:51 was sitting sitting there there., Yeah, I I liked liked his his ones ones and, and, you you know know, one one point point was was about about higher higher interest interest rates rates,

6:58 dismantling dismantling big big renewable renewable projects projects.. Um, it's It's actually actually, you know, kind kind of of helping helping Shell shell, Shell shell realizes realizes that

7:05 that it it has has a a methane methane problem problem.. You You know know this, this is is something something that that we we talk talk about about on on oil oil and and gas gas starts struts

7:09 podcast podcast all all the the time time, new new technologies technologies that that are are being being deployed deployed for for methane methane mitigation mitigation. And and then then I I

7:15 thought thought. One one interesting interesting point point on on there there was was he he talked talked about about oil oil and and gas gas companies companies realizing realizing that that we'd

7:20 we've hit hit Pete peak shell Shale and and acting acting like like it it., I I don't dunno know if. If I I necessarily necessarily agree agree with without that one one,. Um I, no know. I, I

7:29 mean mean, John's John's a a traitor trader. by By nature nature. He's. He's taking taking bats baths.. Uh, I I think think we we should should use use this this list list almost almost

7:36 annually annually. and Just just go go back back to to it and be be like like, I mean a measly, he's a five five to to five five year year view view, but, but I I think think one one of of the

7:41 things the things we've we, we we always always make make predictions predictions,, but but this this would will be be a a, actually actually a a pretty pretty good good list list to to come come

7:45 back back and and revisit revisit. Yeah. Yeah., See See how how it it, see do you ever how we're gone gone to to Raymond Raymond James's as annual annual dinner dinner they they do do around

7:51 around Navy Nape., Marshall Marshall Atkins Atkins,, I I think think I'm I'm going into to Raymond's Raymond's house house and and James James house House, but, but not not Raymond Raymond.

7:58 James. James.. Yeah Yeah,, though though a a Marshall Marshall always always does does, is, is he he a a, He, He does does his his Macro Macro presentation presentation,, and and and and

8:07 it's it's always always he he starts starts with with Here's Here's last last year's year's presentation presentation. Here's. Here's in in red red. What. What I I got got right right and and what

8:14 what I I got got wrong wrong,. and When he he goes goes through through each each one one of of it and you you could could see see that that Okay, Okay here here,, The The twenty twenty three

8:19 three, Thanks things,, Okay Okay, that that changed changed this this year year,, X X Y Y and and Z Z. Yeah. Yeah,, up up this this one one check check still still the the same same., Yeah

8:25 Yeah, I, I dunno dunno, I I dunno dunno be of purpose purposeful fallen in doing doing this this, but, but I I love love just just the the list list., but But as as I I sort sorta of looked

8:30 looked at at this this list list, cause cause we're we're going going to to talk talk about about it it.. He He definitely definitely hits hits on on the the financial financial and and investment

8:34 investment trends trends.. He He hits hits on on energy energy policy policy and and market market dynamics dynamics,. He He hits hits on on technological technological and and industrial

8:42 industrial developments developments and and he he hits hits on on energy energy infrastructure infrastructure and and reliability reliability, and. Then then he he hits hits environmental

8:47 environmental and and strategic strategic considerations considerations with with Spr Spr.. It's It's interesting interesting how how he he categorizes categorizes.. I I mean mean,, I I dunno

8:52 dunno,, If If that's that's how how he he categorized categorized in in his his mind mine,, Yeah Yeah,, but but he he kind kind of of looked looked at at the the holistic holistic Yeah Yeah view

8:57 view of of the the energy energy landscape landscape and and he he did did a a pretty pretty damn damn good good job job of of encapsulating encapsulating all all this this sort sort of of major major

9:03 thesis thesis point point.. Yeah Yeah,, you you know know there's there's a a couple couple of of things things that that I I would would have have added added.. I I would would have have

9:07 definitely definitely said said something something about about electricity electricity demand demand from from data data centers centers,. whether Whether it's it's bitcoin bitcoin mining mining

9:14 cpu cpu clusters clusters. I at think. that that that that's is one one of of those those things things that that you you look look on on that that list list five five years years from from now now,

9:19 and and you're you're like like, man Man., we We probably probably still still underestimated underestimated the the impact impact that of that that has has. that That's lets the the sub subtopic

9:25 topic under under 13 thirteen., which Which is is we've we've had had this this resurgent resurgent growth growth in in electricity electricity demand, man. Oh, right. Yeah, it's to a sub

9:33 sub-bullet bullet point point. out But, but I I think think it it stands stands on on its its own own, too, too,, Yeah, as as we've we've talked talked about about over over the the last last

9:38 Yeah, several several weeks weeks and and months months. Well., he's He's not not going going there there. He's. He's not not going going to to go go there there, but, but we've we've gone

9:42 gone there. There is is sort sort of of this this who's who's driving driving. Who's driving? energy Energy usage usage. It's. It's is to a big Big tack Tak. I mean mean, that's that's not not

9:49 something something John John Arnold's Arnold's going going to to go go.. He's He's not not going going to to go go against against his his friends friends at at the the breakthrough breakthrough

9:55 energy energy, or or whatever whatever you know. Whatever the the funds funds call called,. Yeah Yeah,. Well Mommy, I mean. I, I don't don't think think it's it's going gone.. I I mean mean,

9:59 actually Ash, I'm and pretty pressure sure he's. He's an an Lpn LP in that that,, but but yes, he he said said it it. Yeah yet,, but but also also, I don't don't think think it's it's going

10:05 going again again.. I I mean mean, that's that's just just a statement statement of of fact fact,, right right? I I know know, but, But you it's can't always always, you you know know., I I

10:11 don't think think that that's is going going against them I don't. I don't think think it's it's a a bad bad thing thing either either to to use use energy energy like like we we should should

10:15 embrace Embrace using using energy energy. and And so so I I,, yeah yeah,, you you know know was it was was a a bench bunch of of brutalist rule is has. Don't Don't let let. Don't don't let let

10:22 my my facts facts get get in in the the way way of of your your feelings feelings. Are or that? While quell the. The you you know know the the peak peak shale shale comment comment, I, I think

10:30 think provides provides a a lot lot of of of of material material for for both both short short and and long long term term because because we've we've seen seen a a watershed watershed deal deal in

10:40 in the the form form of of Exxon Exxon Pioneer Pioneer betting betting on on Unix Unix,, an an extension extension of of. productivity Productivity,, productivity productivity improvement

10:48 improvement, continuing continuing far far out out into into the the future future, and and that's that's a a unique unique set set of of assets assets, but, but it's it's also also of of scale

10:58 scale enough enough to to be be representative representative for for at at least least one one of of the the sub sub -basin So -basin So Yeah Yeah, it, it can can be be interesting interesting to

11:02 to watch watch Because because Exxon Exxon you did did imply imply that that big big part part of of their their synergies synergies that that they're they're looking looking to to capture capture

11:08 from from the the dealer dealer are are in in the the form form of of improved improved recoveries recoveries.. Yeah Yeah,, and and there there was was some some common common around around the

11:15 the. notion notion of of actually actually doubling doubling those those.. I I mean mean it,. it's It's fascinating fascinating to to me me when when you you hear hear, Mark Mikey, you may.

11:22 May you may know know these these numbers numbers off off the the top top of of your your head head, I, I don't don't,, but but when when you you hear hear how how much much oil oil we we leave

11:27 lay leave in in the the ground ground from from these these horizontal horizontal wells wells, I. I mean mean, it's it's just just kind of staggering staggering.. We We be capture capture or or

11:34 recover recover your very very little little of of it it.. You're You're in in high high single single-digit digit recovery recovery factors factors, and and you know getting getting to two to 2X x.

11:40 That that it's is just just the the nature nature of of the the rock rock, but, but in in a a more more stimulated stimulated rock rock volume volume, more more immobilized immobilized.. Yeah,

11:46 Can can you you can you get get a a doubling doubling of of that that? And and and to to be be fair fair to to Axon Exxon?, Not not to to kind kind of of go go back back too to far foreign and and

11:55 beat beat that that topic topic into into the the ground ground, they. They didn't didn't really really qualify qualify as as to to that that doubling doubling of of recovery recovery, being being

12:00 a a function function largely largely of of going going from from two two to to four four mile mile laterals admirals,, or or actually actually doing doing a better better, a better job job of of

12:09 more more precision precision in in terms terms of of geo-staring Gia cert and, Joe, stirring, and stimulation stimulation design design and all All that that. So, So yeah Yeah,, it's it's just

12:14 just going going to be to be really really interesting interesting. Watch to watch, because because as as you you all all know know, the, the industry industry copies copies and and learns learns

12:19 and and applies applies pretty pretty well well to to to to get get out out and and to to get get out out on on this this a a topic topic.. A A let's let's all all name name one one thing thing five

12:28 five years years ago ago.. Five Five years years from from now now that's. That's going going to to be be on on the the list list.. Kirk Kirk you're Europe up.. Oh Oh great great,, Throw

12:34 though me me first first. Tell tell ya ya need need time time to to think think.. I I.. I I mean mean I'm I'm going going to to take take the the number number one one says says we we didn't

12:39 didn't really really talk talk about about the the cleantech cleantech Vc Vc went went from from disfavor disfavor to to overprice overprice. Is or something something the the metal metal. and

12:45 energy Energy technology technology is is energy energy technologies technology is. energy Energy technology technology. Yeah. Yeah., and In in five five years years from from now now,, I I

12:51 think think it's it's going gonna to,. you're You're gonna going to see see this this ebb ebb and and flow flow of of people people from from sort sort of of the the West West Coast Coast that,

12:56 that one wanna a play planet in, and the the environment environment and and energy energy., but But ultimately ultimately, it's it's it's for for the the adults adults in in the the room room.

13:02 And, and I I think think you're you're gonna going to see see a flight a flight to to quality quality,. And and you're you're gonna going to see see sort sort of of investments investments moving

13:09 moving towards towards projects projects that that really really make make sense sense You you know know like, like carbon carbon. capture Capture, technologies technologies that that actually

13:17 actually produce produce cleaner cleaner fuels fuels., Yeah Yeah., and things Things that that actually actually makes make sense sense for for energy energy transition transition versus, Vs.,

13:25 you know, I'm I'm laughing laughing 'cause, because one one of of the the companies companies that that I I argued argued against against not non-investing investing in in is as a a as a hydrogen

13:29 hydrogen electric electric powered powered airplane airplane,. and They they just just raise raise additional additional funding funding and like make, there's there's some some things things that

13:36 that I I think think are are just just so so long long term term out out there there and that, and that that investors are going to start shying away from the next five that years investors are gonna

13:43 start away from the next five years.. The It's quite quality qualities, I love that you distinguish distinguish the the difference difference between between, you you know know, cleantech clean

13:48 tech, climate Climate tech tech, energy, energy tech tech. You know know, our our energy energy tech tech podcast podcast, that's, So why I I was was against against naming naming it it climate

13:53 Climate tech tech podcast podcast 'cause, Cause I'm I'm like like, really really,. It's energy energy tech Tech is is energy energy tech tech., And and that's that's all what we we care care

13:60 about about. And and I think they you. You look look at at,, you you know know, we've we've talked talked about about on on the the show show, some some,, but but, you you know know

14:03 Diamondback, Diamondback Energy Energy made made a a 20 twenty million million dollar dollar placement placement and and bird Verde a clean clean fuels fuels. And, and Verde's varies, got got a a

14:08 technology technology where where, you know, you're you're taking taking methane methane essentially essentially, and, and they're they're using using that as as feedstock feedstock for for.

14:15 available Renewable fuels fuels and and start start seeing seeing like like those those things things, you, your know, Diamondback's diamond backs are not stupid stupid,. And and they they know

14:20 know how how to to also also leverage leverage their their engineering engineering and and assets assets and and infrastructure infrastructure as as well well to to help help them 'em and. And so

14:27 you're so you're gonna going start to start seeing seeing a a lot lot more more those of those projects that projects that makes make senses sense as as you you said, said and. And you, you know

14:32 know Kirks, on Karik's the on the kind of kind of ground ground floor floor of of this this too too right right now now. I. I mean mean raising, raising you, you know know capital, capital and

14:37 and building building startups and startups and just just seeing seeing the the shift shift that that's is happening happening in in the the market market. I I mean mean it's, it's definitely cooled

14:42 definitely cooled off off compared. to compared to where where it it was was two years two years ago ago and. And I, you know, I think think that's evident that's you evident. we We talked talked

14:48 about about last it last week week with with Achille like on, Hilly on just getting just getting you, know you know these, these clean clean text tech Baxi specs, these, bags EV specs just, just

14:53 getting completely getting obliterated completely obliterated and. And so I so,, it definitely it definitely seems seems that that it's cooled it's cooled off off, so. what's So what's your your

15:01 five year five forecast year? forecast Didn't? take Take one one of of the the bullets bullets like. Take one one of those of those. You. Yeah either, that or that something or that's something

15:06 going that's gonna to be a be a bowl bullet. Whatever, I whatever. I mean mean, I'm, I'm talking not talking about about bullet bullet as as Jfk a bullet JFK, or bullet. that Yeah would, we'd

15:12 cover that covered law that last. Sb. How bit Speaking of how watch I watched the the jif JFK? The documentary documentary last last night night. We, we just just had had a a big big discussion

15:17 discussion before before we we get get on on the the podcast podcast about about it it.. He haven't watched it. I I don't don't want wanna to take take a a bullet bullet.. Advances That's all I'm

15:21 saying. have, So so I I think think - or Or two two,, for does that that matter matter?, Yeah Yeah., I'm I

15:28 not am not gonna going to pick pick one one. I'm gonna pick pick a a spectrum spectrum of of them 'em what I'm. What really I'm focused really focused on is on is the the data data center center

15:33 thing thing you. know You know. I've, I've been been fortunate fortunate I. I get get to to talk talk to to a a lot lot of of people people in in machine machine learning learning and and

15:39 artificial artificial intelligence intelligence, and, and I think I that think that it's it's fucking cool fucking that cool. we're seeing this intersection where energy and tech garb kind of

15:46 coming to this point of singularity, and and I just, I think that that's going to be a fascinating space to watch, and one thing I didn't see on there was domestic. I'm gonna cut in real quick.

15:57 He has one of the things I'm gonna. I was gonna say. Is that we were going to see independent power plants powering data center, who literally off the grid or may be connected to the grid, just

16:10 for bad that mine was acceptable. Cause I was a subset of that. I think they're all stole my point, but that'll be. He cannot piggyback on my third, The second one is domestic lithium production,

16:22 and thou something that I don't think I saw on his list, And you know our friend Mike Umbro thing Set you give it five years. Exxon is going to completely pull out of there smack over project. He

16:35 thinks that Lithium prices are going to crash, and that those walls are going to be an economic. That's his hot take. I don't see Lithium prices crashing, and just because of the limited supply of

16:47 it, but I do think that we'll see a lot more movement towards you. Know some of these kind of alternative lithium supply place. The third one is, which is something I talk a lot about kind of

17:02 piggybacking off of Chuck is co -location of manufacturing with energy assets. Hassan. Chuck, Chuckles, We're driving across Texas can remember where it was, but there's a Nat gas peaker plants.

17:12 And next to that paper plant, you have three warehouses, they're probably each 100, 000 plus square feet, maybe 300, 000 square feet each, huge. And that's what the future looks like to me is

17:23 manufacturing plants, data centers, are on shoring and co-locating with energy assets. And so I just don't see any way that all three of those things are all gonna be growing trends over the next

17:37 five years. Mark, what are you adding to the list? Or just building on that, I think, despite what happened in new scale, we're gonna see the building wave again of small modular nuclear

17:50 reactors because of the features they offer, the reliability and load of zero carbon. And I think that it's more than commercial opportunism. I think it has a lot to do with the strategic intent of

18:10 the government in that. Chip manufacturing is going to be and data center

18:17 construction or build out. An operation is going to be a an increasingly important strategic weapon, just as I said several months ago that I believe natural gas and out will be the same thing, but

18:30 I think you know Esa Mars get a bit of a shot in the arm because of our intentions relative to attack data centers and chip manufacturing. We, not that goes hand in glove with the co -location I

18:41 think the thing is you know, lately we've been talking about how tech has the political clout and then easily be leveraged from the data Center conversation, But also if you look at Esa, Mars, and

18:52 nice, a small modular reactors, I mean you have to, Sam Altman backed the company's name O'clock. I think it is Vanessa Marr. Or it's a fusion technology. Sam Altman from Open. I backed that.

19:12 And I'm pretty sure he's very involved with it from an operational perspective too. So now you're starting to see, one of those items on John Arnold's list was a decrease in the resistance against

19:19 nuclear. And so you're starting to see people in tech who have all this political clout start to push nuclear energy. And a lot of them are going down the fusion route. Does fusion play out? In

19:33 the next 10 years, like everyone says it does, I don't speculate I don't know, but just a side note on that deal.

19:42 Sometimes deals, when I was at Shell, sometimes deals get to you through executives or like, Will you look at this deal? So the deal got to my desk. And so I called and got hit me. I'm like,

19:52 What's up, man? He's like, Dude, this is so top secret. I can tell you, but then I'm up to kill you. You're gonna have to sign in to yay. And then another in to yay. I'm like, What are you

20:01 doing? And I was like, It's nuclear, but I can't tell you anything about it. Oh gosh, you must be from Silicon Valley's like. Yeah, Yeah, we got all the big guys. Any Nate drops names. Yeah,

20:11 I'm like. Oh, my gosh like this is so exhausting. Yeah, when you when you when you when you raise money from like engineers from the oil patch, their humble like man. Yeah, and you can almost

20:23 question their scientific chops because they're like. Oh, Yeah, you almost feel like they made it with like you know, yeah, twine and some scissors. Yeah, But there they know their shit. When.

20:35 When you go to like Silicon Valley, these people are like dude. We were the best we've invented nuclear. My, Yeah, it's no, he didn't well. There's it's crazy. There's a big disconnect between

20:45 bits and atoms, right, and for a Silicon valley been really geared towards over the last ten, fifteen, twenty years, as bits and much less Adam sashing, most, he won't even invest in anything

20:57 hardware related, and so you know tons of brilliant people aren't Silicon Valley, but.

21:07 So here's what we're going to be talking about in five years, from now, not on John's list. We have kind of defaulted to this point, power generation to the big utilities in America, the grid

21:24 operators, et cetera. You're going to see a rise of a private equity class

21:32 on par with what we've seen in VC And what we saw with private equity, oil and gas and what they did for the shale revolution, you're going to see that in power because that's going to be the only

21:43 way to see them. Hey, when Texas deregulated the birth of Tanaska and like, that's when private equity went wild with building all these

21:53 private equity backed power plants. So actually, that's a great point, John. We're going to have to see that to fix the problem because it will not be done by the utilities. No, no offense to

22:06 our friends at next error any of the others, but it's not going to happen. I have one more to add that I don't think was on that list, but the rise of bidirectional virtual power plants. You know

22:18 utilizing these distributed energy resources, Whether it's solar at a house feeding that back into the grid, and you know Tesla has a big deal out in California, and and you know you have startups

22:32 like David Energy that are now utilizing it here in Texas, and to me that makes all the sense in the world. I know there's misaligned incentives across the the supply chain, essentially, but man,

22:46 if you think about it, you know being able to have a solar at your house battery wall, potentially even an eevee and utilities paying you for any energy that you're storing and being able to

22:57 distribute that and help with load balancing and peak demand that seems like the future to soar back to start. I, that's ahead on the space, and it's called local. I mean the Re at the at the end

23:11 of the day, energy should be produced and consumed locally, As the most efficient. Yeah, and Europe actually has pretty sophisticated self collect consumption laws. Are actually there some

23:22 already laws in European Union around how to actually settle in And what do you do with power? Locally? It's coming. California has been looking at this. I think there's a lot of work is

23:37 Regulatory Is a big reason why it's not working today, But you're right, Actually think it's really local energy consumption. Why doesn't you know? Let's say Boulder, For example, University of

23:47 Colorado, they have big power plant on their university? Yeah, well, when they have excess power. Why can't they feed the neighborhood? And when the neighborhood generates excess solar? Why

23:56 can't they feed it back into his neighbor like you look at like age eighty, Be built, these little micros. Power plants. You know they had these huge net, gasped. Her derive. Say quite why

24:06 can't H E b b a little peaker plant and put electricity, but the problem hasn't been figured out. That's the biggest issue is still think it's bigger than the existing monopoly that runs the wires.

24:21 Claims. Oh, you're going to blow up my grip. Oh you do the apps right that that's big problem. Number one and engineers need to be brought by the government together to say no, You're not going

24:35 to blow up your grid. Guys. We know what the problem is. Our grid's blowing up. Anyway. Way

24:42 you want to know what the problem is. I was talking to a renewable company. The other day. This is verbatim. I'm not making this up and they said. Yeah, One of the big issues right now is that

24:50 all the top tier engineering talent is still in thermal generation and renewables and utilities get the Beta. Yeah. I haven't posted that on Twitter because I don't want to hurt any feelings, but

25:02 there it is on the on the BD. podcast straight from the horse's mountain Can I ask just one question on this post from Arnold number five GOP. Politicians broadly acknowledge global warming from

25:13 human activities

25:15 Define GOP. Well, I that's where I was like maybe I've been paying attention. Is that true? Yeah, I'm not the guy to ask. Yeah, I guess we're just not in that like I'm not in that flow or what

25:28 I Would actually I would trust John. I mean John is obviously very involved in DC and so I would You know, he probably has Went backlash from when Lee Raymond said what he said. I think you I think

25:45 you've seen Generally speaking right when politicians walk that back the the issue is with the third rail is whether or not you believe I It's.

25:60 a direct and primary cause of of climate catastrophe. Right. Yeah. Yeah. We're talking about that. I think there's general agreement and whether that's that's good for the camera and good for the

26:14 party to say, yes, there is some contributing factor. The question is, degrees of severity and catastrophe. Yeah. So I think there's still what we should do about it. Right. What should we do?

26:24 Did you all see the video I posted talking about the five extinction events? Do y'all see this? No? Yeah, I didn't give very many views. But anyways, it was badass video. So it's this narration

26:34 and like 30 second clip walking through the five extinction events and I posted on Thanksgiving and I was just like, oh, yeah, I just wrote a reminder that someday you're that was a cool video. No,

26:46 yeah, it was awesome. I said just a reminder that someday you're descendants are going to buy a terrible death from Climate change to be thankful that you live in one of the most stable and

26:55 habitable times in the Earth. Like you'd have some perspective of, you know, me and Mark are talking about this before we get on the

27:02 show is that, you know, life for humans isn't guaranteed on, on this planet and, you know, hopefully if we figure out a way to mitigate climate change and, or have it other planets, but we're

27:19 one asteroid away from all being wiped out of here. So also keeps in perspective. Good thing that dinosaurs had a carbon tax. COP? Yeah. So the

27:34 OPEC secretariat issued an open letter this morning ahead of COP in response to the latest in a series of reports issued by the IEA which was preceded by a tweet from the IEA's executive director

27:50 Fatih Baral. all of this timing is certainly coinciding with the kickoff of COP, I believe, in the next couple of days. And basically calling out the oil and gas industry and suggesting that they

28:05 very strongly suggesting that the oil and gas industry faces a moment of truth and a binary choice either to continue contributing to the problem of emissions and emissions related climate change or

28:18 shifting hard and spending more in renewables. And the OPEC secretariat issued a two-page strong rebuttal to that and basically covered all the things that we've talked about in terms of

28:33 affordability, sustainability, accessibility, et cetera, reliability and consigning billions of people to a perpetual life or a perpetual state of energy poverty. And so it's this

28:48 vilifying the oil and gas industry that. Certainly, Opec and others have taken a bit of exception to and I responded to a certain tweet this weekend, and that was base, basically taking the

29:03 executive director to task by saying that I believe it's actually the I A that may be facing the moment of truth here as they head into C O P. Twenty eight, and if you look at results of recent

29:16 elections, like an Argentina, and the Netherlands, those were in part a referendum on top -down net zero policies, and more importantly the cost to consumers in the electorate that these things

29:28 have immediately increase the burden upon the electorate, which for a politician is not yeah, not a great situation to be in, I also think. Even though it was as I read it, it was never on

29:41 President Biden's schedule, he is not appearing at C O P. Twenty eight, which I think given the crescendo of things that we've had around the issue. Of climate change and the Ira, that for him

29:54 not to make an appearance this year, heading into twenty twenty four, while I think is is a pretty important kind of symbolism. Here says completely anecdotal and prove aid. You know a little bit

30:06 bias, small sample size, but to me it seems that C O P is losing a little bit of its influence and gravitas because I seen two or three comments on Twitter for my friends who are in climate or

30:22 climate tack in one of their tweets stands out to me because he's like when I first got into climate. You know my mentality was. Oh, seal peace happening, Gonna cover it. He's right now. He's I

30:34 don't give a shit. It doesn't matter like none of it. None of it matters and so you starting to see these people that are like five years in the climate energy and had his realisations of some of

30:46 these things actually don't don't. Setting it had tracks the trajectory of nape. You know. Think about it. You think about it A Clp supposed to have record turnout this year, seventy seventy,

31:00 some odd thousand people there, and all but the true insiders are gone. Ah shit, then get done there. It's a cocktail party. That's Yeah, Yeah, there there will be a series of the obligatory

31:13 tweets about count the private jets and the carbon footprint etc rare, and so you know it's going to turn into. I think a bit of a melee and and fairly chaotic in terms of the rhetoric. That's yeah.

31:27 That's saw this tweet from the got a A just you see the you see the bias right off the bat with their with their wording that they use. You know this is the moment of truth for oil and gas or have,

31:42 however they framed it and you know I haven't talked about this publicly, but stalled. With gusto as tongue with gusto gusto, as told twice over the last couple months, that representatives of the

31:59 Department of Energy couldn't come speak at fuse, because they've been instructed not to be involved with anything that touches oil and gas that shows you how politicized This is that the Department

32:11 of Energy doesn't want to be associated with oil and gas in. It's kind of infuriating to to be honest, and you know I could see it coming from a A. But when it comes from you know Federal

32:27 institution Government institution, you think that you need to be pragmatic, and I was kind of a leading indicator here because I owe is fundamentally Er was fundamentally designed to provide

32:42 objective policy leadership and B.

32:47 It'll be the best in the world at terms of, in terms of data and energy, data and analysis in shaping policy and policy leadership around that, but they've clearly picked winners and losers here.

32:59 Right, It's it's it's pretty clear why. Yeah, because of the money involved, Yeah, but I do think the moment of truth, and I think that was a very

33:13 high risk thing for Dr. Barreled put out there, just given some of the shifts politically that we seen where we've had these, as I describe him top down. In some cases, forced net zero policies.

33:27 Look at Germany. Look at. We covered some anecdotes from Europe. The summer. Both you and I chuck were over there, and there was a palpable palpable pushback among the rank and file That you know

33:42 these things are becoming real in terms of burdens on me. for my livelihood and my ability to afford my standard of living, right? So I think that's the moment of truth really, as I described it,

33:55 it's probably a little bit more shifting toward the moment of truth for the IEA. They've got to have a better solution than let them eat cake. I mean, they're just, and that, I think it's

34:05 becoming more and more apparent. Mark, my favorite. I got. My favorite COP story though is, Sultan Abjabar, I think I'm pronouncing this guy, who's the president of this whole thing, from the

34:17 UAE. He had memos that got exposed of the 15 oil and gas companies he was gonna meet with while he was there to work on oil and gas deals, so. There's an underground nape going on. There's an COP

34:30 20. Absolutely. That's better than the private jet. But this is not, I mean, let's look at what's happening around the world. We talk Germany, we talk the election in Netherlands, the election

34:41 in Argentina.

34:43 UK Prime Minister has been talking about pushing back electric vehicles, man. If you think about

34:52 energy security versus, you know, net zero, it's bouncing back to energy security because of people just can't afford things. And it

35:01 almost makes you in awe in some ways that the Chinese, how they've been head down. And when they come to the US and meet with our president who's all about net zero, they meet in San Francisco. I

35:12 mean, it is amazing how they're sort of just outmaneuvering everyone on on sort of, you know, the political spectrum as well as the energy security spectrum, because their call is abundant and

35:25 they're building coal and they can need to build coal and they know that. Yeah. And lead the lead to energy transition because all the supply chain is they own it. They own it. Yeah. No, it's

35:37 like unbelievable. It's very worrisome how much we're getting outplayed. I know it's gonna come on all ruins. Yeah, which, which makes what just die trotting on this to read Blackmun's do you

35:53 ever you read his? His his piece on sub stack, but he had a picture of sort of four key politicians that are all against gas stoves. They want to go to electric Co. Yeah, They were all posing

36:06 with guest, posing this holidays with their like what they're making an ass to. I told Chuck Cause, I bashed on Elizabeth Warren's last year, and as of I think as the first one to see it, she

36:17 posts that patient. No one had posted it, but I just saw the. I saw the grading on top of the stove like he couldn't even see like. Are we notes it look. It's gas looked. All I need is a little

36:27 corner.

36:30 You can see the ring of blue flame. Yeah, Yeah, it's cause I told I told Chuck that that's going to become a thing where these politicians like that. it won't take a picture from now on with a gas

36:40 stove and idle actually think they're worried about it because cause it doesn't apply to them well Yeah I mean just that Yeah I mean the cognitive you know ability just not give a shit I don't

36:54 understand how politicians operate that way but Mark is also going to tell you that I got invited and this is probably an open invite if we have all four of US want to go do it but I won't say the

37:02 university's name but the university universities like you know every year we go over to Europe and we challenge the you know A's assumptions and we would love for Y'all to follow us in record content

37:14 and a podcast of OH really

37:19 that's a big resenting we Yeah and way Way Yeah So My My You know like these students a sick mark arnold

37:32 so we'll I'll return I'll I'll make that happen to real Quick Opec what are they going to Do Yeah, I'm Rory Johnson had a good tweet at the end of last week saying you know all the hair pulling and

37:46 hand wringing about the uncertainty in the elevated volatility in crude, because of of the opec, and you know background noise, and then the postponement of the meeting crude finished off last week,

37:60 point zero four percent right, so

38:05 it sounds like heading in to the rescheduled meeting which starts at thirteen hundred Gmt on Thursday that they're getting closer to a compromise with the.

38:19 I don't wanna say renegade, but there is a collection of unnamed African countries. This all has to do with. I guess The The the top of the cartel doing a little bit more arm twisting about

38:32 bringing production and tomorrow. alignment with quotas, but also reducing some quotas. Because it's obviously in Russia and Saudi's best interest to Bowie pricing here, certainly in the Brent 80

38:48 territory, maybe closer to 90. Keep in mind that Brent was at 98 at the end of September, so forwarding with sub 80 is a pretty big degradation or erosion in a very short period of time. And so it

39:03 sounds like they're getting their stuff together. I think crude's trading pretty well today. It was holding in around 80 on the Brent side. So, you know, we'll see. I think what the long history

39:15 of OPEC meetings and observers and watchers and prognosticators have proven is that

39:21 we're all mostly wrong about what's happening in the meeting and what comes out of it. But it seems like they're getting to a more constructive place than they were a few short days ago. And that

39:32 meeting again is on Appreciate the sun that we're all wrong about it. You know always that I like Mel Kiper and his fantasy football. I'm like you imagine having a job like just as a matter, and

39:43 you sit there and you like analyze things and like up stuff. That's how I feel about oil and gas analyst. Steve. Like no one really knows what the fucks going on. Just sitting there, guessing

39:52 going on in Pickering used to say when he ran research in one of the organizations I worked in. I won't mention any names, but our leader was institutions. Leader was prone to making provocative

40:05 statements about global oil and gas markets, and Dan used to say that's great, but we have to be right now, so we always talked about oil forecasts and all that they're either right or the wrong.

40:21 Yeah like you to be married and ever precisely right. Yeah it's it doesn't matter if there's a seventy percent probably be for any model or forecasts these are up or down so Sir Mark just as we head

40:35 into the winter of our discontent if this becomes a cold winter what will happen with OPeC and I was just looking at European gas storage is at ninety nine percent full compared to a five year

40:48 seasonal average of eighty eight percent so Europe seems to be preparing Japan's preparing for long -term LNG imports and what's going to happen if brent goes if it gets super cold a F this this

41:02 winter well keep in mind that you're still missing a good chunk of the European supply picture scrape the storage is full but you still have the winds blow however have a lot of you have a lot of gas

41:15 offline from from Russia that last winter the combination of mild winter and the ability to to shift pretty hard to get spot cargoes that were bit up In German spinning eight hundred million dollars

41:29 on floating lng, an emergency call supplies. Yeah, we'll see. I. I think The the anticipated El Nino winter yup pretend some pretty significant ups, upside price risk, And yeah, we could start

41:49 drawn in the pretty quickly. I haven't I've seen the ninety nine point, Whatever per cent fall, but in terms of where demand could go relative, certainly the last winter, I think we could put

42:01 pressure on supply demand balance pretty quickly When it be great to be a trader trafigura. That's meant that sitting watching and waiting for all this just the shit that it. Now. Because I'd have

42:13 a heart attack

42:15 now had built a casino thing. I don't know if he has sought Permian highway had a force mature, and there was a. forget which compressor station they had a pretty significant leak and I think it

42:32 was about 1220 this morning. They went into force majeure and canceled nominations for tomorrow. And so I had to shut in to, you know, to do root cause and then force to do a

42:47 leak. Yeah. Okay. And I don't know if that had anything to do with kind of breaching the statutory methane emissions limits. But I suspect there's there's some of that in the decisions to declare.

43:00 Yeah, force majeure. I have a topic I want to bring up. Yeah, this is our last topic. I was playing golf this weekend. And I noticed there's all these Canadians down here. We don't talk enough

43:11 about like what's happening in Canada and all the oil and gas there. Oh, yeah, I talk about us all the time, but go on. But these are these are, it was a drilling contractors and some guys that

43:20 suppliers. But one of the guys like six, seven. Yeah, and the guy next to me goes. Hey, he played professional hockey. I'm like. No, No, he didn't am. I. Dude. There's no way he played

43:31 hockey. He's like Yeah, I did. He's like I was like. Defense. Of course. A. Yeah, I was like these small guys have singer. Yukon's like the small fast skaters like. Don't they just get

43:41 around big guys like No dude. My reaches so long as they can't get around. Hey, I gotta see that I just doesn't make sense to me. I just wanted to throw out a little Canada. I mean as I know, I

43:53 broke out on Canadian drilling rigs and so they moved all their eggs on the West Texas, so I learned how to drill from Canadians themselves as weird dynamic cause I mean you want to talk about like

44:05 too prideful high ego types of people. It's Canadians, and in West Texas, oil field hands clashing and so and there's a zone removed. Yeah? So you attempted by the Thirty pack in Canada, or was

44:24 that nozzle sizes as a mid -life self? Our safety cultures come for oil and gas, Yeah, Bud thirty pack, and then smash it on the on the rig again. I've got a video. My second second day on the

44:38 rig. Everyone's out there in shorts, flip flops, No shirts, no hard hats, drinking beers, just drilling holes back in the fifth grade. Its

44:50 Sa ri. An any any thank you for bringing up the Canadians in

44:57 flamed. Oh, Yeah, anything else before we ended our Denver, but anyway, that's a little kid, Not even mad way, Not unless you want to share some some of your weekend adventures know I didn't

45:12 really have a. I added. I mean I had a good weekend, and now you know we, I got a comment on Linkedin that. We've got a lot of new listeners to the show hover the last few weeks, and anyways,

45:27 so I got a Commodore Ron Linkedin that said that they'd been listening to our show the past couple of weeks, and it's a must listen to him now, but I need to either sit closer to the or bring more

45:37 gusto. So hopefully I brought the gusto today are talk louder or maybe it's just a technical issue. Something's wrong with my mic, but we'll figure it out, but excited that we're getting new

45:47 listener, so Um appreciate everyone that sharing the show. I'm sharing it with a friend, and you know if you guys ever have any feedback for us, Let us know Send us message Linkedin Twitter. Find

45:58 us online. We'll catch up next week.