0:21 Hey everybody, welcome to Chuck Yates needs a job, the podcast. I think Zane, the last time you and I hung out, I was drunk as a skunk, I had a chicken bucket on my head and we were hoisting the
0:36 trophy for the 2003 college world series. Feels like another lifetime and yet I think our personalities could probably find ourselves right back there again I'm just happy that there was no more
0:48 chicken in the bucket.
0:52 Alright Alex, do you know this story? The rice baseball story? No, I'd like to hear the intro. I'll give a quick take on it but Zane's going to have a much better take on it. So Rice Owl fan my
1:06 whole life, the Yates family I think has, gosh, 14 Rice degrees and it, mom and dad went there, grandfather went there. two or three brothers, all my sister-in-law's ex-wife, uncle,
1:19 everybody's always gone there. So I've spent my whole life being a martyr for Rice Athletics. And 2003, we're at the College World Series and Vincent Sinisi was arguably our best player that year.
1:34 And, you know, he hit over 400, I think that year, didn't make an error in the field. And in the College World Series, he was one of 21, something like that And he'd made a couple errors in the
1:46 field. And so, we have the final game against Stanford, and we're driving around inebriated, 'cause we'd had too many adult beverages. And my dear sweet mom,
2:00 we somehow talked ourselves into, we need to find a live chicken and sacrifice it so that we can break the hex on Vincent Sinisi. bolder.
2:13 Well, and mom got to the point where, you know, we could just drive through Kentucky fried chicken. So that made a lot of sense to the drunk in the back of the car. So we bought a bunch of
2:25 chicken extra crispy no less because we wanted to make sure that chicken was really dead. And we bought a bunch of that chicken and we took it over to the hotel and I think we found Wade Townsend.
2:42 Maybe it was Jeff Neeman. One of them we said go give Sanisi the chicken and tell him we sacrificed it and the hex is broken. So the next day to the final game I'm wearing a chicken bucket on my
2:53 head. Maybe we can dig up the picture of me and we'll throw it in here. And Sanisi goes three for four. He makes seven put outs. Rice wins the national championship. But the funny anything as a
3:08 reporter came up. to us and was like, All right, why do you idiotshave chicken buckets on your head? And we told them the story. So we got the Omaha World Tribune the next morning, ran an
3:19 article about these idiots in the chicken buckets.
3:24 Yeah, coalition or causation, still, still not sure. Oh, causation, no question. So I'll let Zane tell his side of that story. It's much better than mine Exciting times for sure, and this is
3:38 a long time baseball fan and once upon a time participant in America's past time, I think the story speaks for itself. I mean, you do whatever it takes to get the job done and superstitions are,
3:56 to me, the power of energy defined in here on an energy podcast, you're saying, Hey, we gotta do something Because this is our best guy, and we're gonna need him. We're gonna pull this off.
4:09 Yeah, I mean, you know, I think that story and, you know, just the, as Chuck mentioned, the many longtime martyrs, I knew nothing of rice. There's one rice degree in my family. It was a
4:24 place where I kind of accidentally ended up because Tulane had a catcher whose dad was a big leaguer and I believe maybe a Hall of Famer, Bruce Souter And I looked around and said, Well, shit, who
4:37 else will give me a chance to play? Because I don't think I want to go sit the bench behind that guy. Got to stick around and coach for a little bit. Some of those names that Chuck mentioned, Wade
4:49 Townsend, Jeff Neiman, some first round draft picks. So I had the fine pleasure of being their pitching coach and I think even more valuable was just some of the relationships and while Chuck and I
5:02 never really got to know each other, all that will personally, the Rice family, whether it be through sports martyrdom or just the intimate nature of such a small little Southern Ivy League school.
5:19 The relationships are great. And I guess the history that that school has and it's ties to the world that we now work in is, I don't know, it's a hell of a lot of fun making these connections.
5:31 It's great to be here and get to relive a story from what I thought was going to be my life. Right there behind you, you need a job. I got a job. But man, I did not think it was ever going to be
5:46 this job.
5:48 Well, and here's what we'll do. I'll have you back on and we'll talk the Rice Championship, 'cause I'd love to do a whole thing on that whole year. That was an amazing year at Rice Baseball but
6:05 jump into natural gas cause. First kind of level set, mom's watching the podcast. So tell mom who y'all are, tell mom real quick what Mobius does and then let's jump into level setting what's
6:20 going on with natural gas, AI facilities, power generation, et cetera. All the exciting stuff.
6:30 Yeah, I'll kick it off. So yeah, Alex Melvin, I work with the strategy team at Mobius risk group, manage the kind of research and product development side of what the strategy team is doing,
6:41 trying to bridge some gaps between all the tremendous people that we have internally and all the smart things that they're doing and leverage that with technology at scale. With Zane, we talk every
6:52 Friday on a podcast called The Energy Desk, talking about the most interesting things in the energy market. And really, I think that's an outlet for us to just kind of discuss what we talk about
7:03 internally where we're trying to figure out how to you know, manage risk and create opportunity for our clients. So that's kind of a high level that Zane kind of give deeper introduction for his end.
7:16 I'll introduce Mobius first because I think a lot of Chuck's guests are, you know, work for people either they themselves or household names or at least in the energy world or the companies they
7:28 work for are. And while I believe over the 20 plus years that Mobius has been around, it's made a very respectable name for itself, just the quick on Mobius and not a sales pitch advisory firm in
7:43 the energy space and see ourselves largely as energy market translators is one of the most over acronymed black box industries. There are our role is to help then users and producers of energy manage
8:01 their exposure, negotiate their contracts and then me, myself, Zane Curry. I landed here in at Mobius in 2016 by way of a college coaching background. Again, we'll go back to another podcast on
8:16 that, Chuck. And my role in this entity is to hold the crystal ball, keep it shined up and try to explain what's happened and what we think is gonna happen next. So, levels set me this I'm
8:35 old enough to remember15 gas. I'm old enough to remember where we built
8:42 LNG import terminals, if you can actually believe that. I'm also old enough to remember giving away gas for free in the Permian Basin. And now gas is at four. How did we get to four and maybe use
8:60 a three or a six month snapshot on that?
9:06 Yeah, I'll start and let Alex fill in some holes. You know, the history that you just outlined there, there's one kind of, I think, fun point. You're old enough to remember when we gave Permian
9:17 gas away, and you're young enough to still see Permian gas being given away. Some things may be getting changed.
9:27 All right, so how did we get here? Honestly, there, you know, fall from grace, most recent version of it, you know, 2022, we go up average pretty close to7 for a year, trade near 10, you
9:43 know, the hindsight that I think most in the market, and many are much younger than you and I now, Chuck, is rather narrow, meaning they'll look back at that and just go, well, Ukraine, Europe,
9:58 global BTU crisis, when in reality, we had been under supplied. on a weather adjusted basis since early 21. And I think lost in the short-term memory of the market, is the fact that we were
10:16 trading over six in late 21. And then when you, before we jumped on today, we talked about the Haynesville and how prolific that basin is and you can go on and on. There's plenty of places in
10:30 Appalachia and, you know, some basins that were once thought to be the next Appalachia, the next Haynesville that haven't panned out. So how do we get here? Well, the simplest version of that is
10:43 for the past five winners, our weather adjusted withdrawal, meaning you strip out the effect of HDDs, heating degree days, about all the matters in a winner.
10:56 And you would find that each of those five winners, we would have withdrawn about 24 TCF. a normal winner. Now, they weren't normal. They were very warm. And then you look at this winner and
11:11 what's the withdrawal going to be? Well, just about 24 TCF. And it is slightly milder than normal overall. Now it's been a little bit colder. And then normal and Jan and Feb, that's for sure
11:25 offsetting some of the extreme warmth in November and December. And while I got off the path simple there for a minute. If you're taking out 24 and you look back over the past five summers and you
11:38 can't find really any material injections that are above 2 TCF. If I take out more than I put in, then I don't have enough. And that's the flip. And I think more important than being back over4
11:52 and, you know, these five minutes on Tuesday, March 4th, the front of the curves at450.
12:01 Valve 25s trading over Calendar 26. And thus the inverted shape where we spent more than two years steeply in Contango or the front's cheaper than the back. To some, I won't call it meaningful. I
12:18 mean, in terms of the shift it is, we are back-related. Front's higher than the back. And it's as simple as we're taking out more than we're putting in and it wasn't a warm winter And that's
12:29 really the most important piece to understand is it has not been cold. It just wasn't warm.
12:38 Alex, Mike is all yours. I don't know if you want to expand on that. Maybe shift to the other side of the pond and talk about some read-throughs there. Yeah, I think there's kind of a few
12:50 disparate threads that can be connected. One, I think, was highlighted by - one of our colleagues, Matt Parker, where when we look at the infrastructure for the US, you have production kind of
13:01 going through this shale revolution, then your infrastructure for storage transportation is still kind of living two decades ago. We haven't really adjusted to the new landscape of 100 BCF for the
13:16 US production-wise, but then when we look at Europe, I think that it's kind of an early signal of the policy efforts for the last four or five years, where you have Europe going through their kind
13:30 of issues with Russian pipeline gas. Just most recently, you have the shut off of Russian pipeline gas through Ukraine into Slovakia. Now you have a country that's more reliant on a very short list
13:41 of suppliers, and what happens when, as Zane talked about, Mother Nature comes in, I think that there's kind of some downstream and effects to say
13:51 in certain regions of the US. that are starting to shape up like Europe, where you're just under-investing in the infrastructure, the environment that is suitable for production, bringing those
14:03 molecules online. And then when you suddenly need a lot of these BTUs, how are you gonna get them? And then feeding that also into the expectations of what's gonna happen with new technologies,
14:15 like AI, just general industrial electrification, EVs And then I think people are starting to recognize the reliability attributes of the other sources of generation that we've been bringing online
14:29 for the last four or five years, and kind of abandoning our base thermal generation, our dispatchable, reliable thermal generation that is natural gas and obviously nuclear, something that I think
14:40 we should talk about today. But all of those expectations and then the infrastructure constraints, I think are feeding together quite well. So it's an interesting landscape Yeah, I mean, I'll
14:50 kind of caveman approach it for a second. I'm gonna jump back in. I mean, really simply, the storage capacity has not changed in the lower 48. And for that matter, the world in any significant
15:02 quantity outside of the LNG liquefaction and regas, I mean, that's not insignificant. But when you think of global flow of gas, whether, the inter-country or intra-country be it
15:17 storage capacity is insufficient. So every market in the world, for that matter, but certainly we find it distinctly in the US where there are a lot of liquid trading points. Every market has to
15:30 figure out what the hell it's gonna do with it and where the hell it's gonna get it in any given year. The storage capacity just does not stand up to what's flowing in terms of supply or the call in
15:43 terms of daily demand. So I definitely wanna go to the future here in just a second, but real quick while we're on this point,
15:54 totally missed was the associated gas story. We had the shale revolution was able to transition from natural gas to oil. We saw what we did in America, double oil production. An idiot chuck forgot
16:10 that one third of the volumes coming off the average oil well was natural gas. And that in effect caused our glut, caused lower prices there for a while, is part of4 gas, 450 gas. Is that the
16:26 market telling us that we've kind of maxed out on oil production? Two, is that part of the story or does it matter anymore? You know, on a macro sense, no, we haven't maxed out in a micro sense,
16:41 maybe. You know, you've been doing this a long time. At some price, there's another hydrocarbon to be found long as there's not, you know, regulatory. roadblocks placed. I mean, these, you
16:58 know, five minutes just yesterday, Monday, March 3rd, OPEC surprises, the oil markets saying, yeah, you know what? We're gonna go ahead and start bringing these barrels back online. And so,
17:10 you know, in that kind of in-between, going back to associated gas, but looking forward, at present and certainly part of the latest leg hire for the North American natural gas markets, is the
17:24 fact that it does not seem to be the case that oil is ready for another rally to 90. I'm speaking in Brent terms there, call that mid-80s for TI. And so that will impact associated gas. You know,
17:39 if we're sitting in the, you know, mid to low 60s for any extended period, it will impact associated gas. But I think the thing that, and I'll kind of join your bandwagon there on what was missed.
17:52 You know, in 2013-14, like you mentioned, we came out of this wild drilling for shale gas to a transition that occurred in 2012. And this is making the point on price being the driver. Why did we
18:09 go find all this oil? Go back and try to dig up in the archives and invest your presentation from, call it, late 2011 through late
18:21 2013, and I will bet that 70 of everything that you find is going to have, on almost in quotes, shift to liquids. Why did North America shift to liquids? For a simple reason. Gas went down and
18:35 traded190. And the forward curve was not at a level that would warrant any future drilling for gas. And it said, what else can we do with this technology? That really was not new. It had been
18:47 around for a long time. Just no one had really cracked the code. You've had a lot of guests on your show. I think they were part of cracking that code of how do we make this manufacturing process?
18:59 It had been done by 2012.
19:03 You go back and look at rig activity from say 2010 to 2012 and it was a prolific increase. Anybody that was invested in service equities, service company equities at the time might have actually
19:21 retired if they'd gotten out. No, they've gotten out being the key point but there's a couple of pieces in that associated gas story that are pretty important. Back in 2013, 2014, one of the
19:33 thoughts was there was an ethane blending wall. As an analyst at a hedge fund at the time, it was often stated that somewhere between two and two and a half BCF a day nationally ethane rejection was
19:48 all that pipelines could handle. we're producing about 55 BCF a day of methane at the time or at least so those modeling production and all of the electronic bulletin boards that pipelines are
20:03 required to post information on would come up with. And so that blending wall seems to have been a great myth. Here we are producing twice the amount rejecting and widespread across the lower 48 in
20:19 many basins for many years, and no one talks about it anymore. So how rich can the stream get? How much can you reject? I don't know that it's an answerable question or if there is an answer to it,
20:32 it's gonna change in 10 minutes. So the associated piece I think is twofold. The gas that comes along with the oil, like you mentioned, and it's also the ethane that gets sold as a methane
20:44 molecule. And that's a significant piece of the puzzle and certainly very present. at this current moment where you're back to damn near given Permian gas away for free and your15 in West Texas is
20:59 free, history lesson. And ethane is trading near 30 cents a gallon, which would say, well, I should be taking that ethane out and selling it as ethane. If I'm not getting hardly anything from my
21:13 methane molecule in West Texas or southeastern New Mexico, in which case production, I say production in quotes can suddenly fall for simply a pricing dynamic, the relationship between
21:31 the value of ethane and mambel view and the value of a methane molecule at a trading hub in West Texas.
21:38 Interesting. All right, so Alex, take us to today. I mean, this was great about a year ago I keynoted a speech good. Trinity where they're building a new natural gas storage facility up in East
21:55 Texas and they had their user meeting even though I don't think the facility came online till the end of last year and Anyway, you know being a podcast or a blow heart and not having to live with any
22:09 of my predictions I got up there basically said, you know who here thinks they're in the natural gas business raise your hand Who here has actually gone out and tried to sell natural gas to?
22:22 Microsoft Google Amazon all these guys buying these data centers and all the hands went down I go dude y'all are in the electron business and until y'all figure that out y'all are all hosed Because if
22:34 you don't go sell the big tech they're gonna buy nukes now I was kind of just making that shit up at the time just based on you know an anecdotal story here or there But lo and behold it kind of feels
22:46 like that's turned out true. So what are y'all seeing in that world? Yeah, yeah, it's really a fascinating time. I think the expectations have just gone through the roof over 2024. But I think
22:58 the quote from Sam Altman, the CEO, chairman of OpenAI, I think Compute is really the commodity that those firms are really paying attention to. How do you get Compute to power these systems that
23:10 are basically the supercomputers that were top of the line from a decade ago, or even currently, they're now being run across all of these private institutions to try and develop the next generation
23:23 of AI models? It's extremely energy intensive. So to get the BTUs, the Compute for that training, that pre-training, all of the processes that go into developing a massive model like the ones
23:37 that are being developed, you really only have a few choices because these systems really require a sustained level of reliable, electricity. So what can generate that? When you look at the
23:50 attributes of say wind and solar, solar is generally a little bit more favorable than than wind. But I think the wind generation, especially when you see these data centers and say North Texas
24:02 saying that they're going to power a one gigawatt facility with North Texas wind or Texas wind, I think that really just ignores the seasonality and the day-to-day variability of those systems. And
24:15 I think it's important to recognize we're in favor of abundant energy, but each energy source has its own attributes. And so when you're trying to say, I need steady state reliable electricity that
24:25 I can call anytime 365 days a year, what are you going to choose? You're really left with nuclear or natural gas. When we look at nuclear, the long-term landscape is definitely more favorable.
24:37 But for these big tech firms, they're saying, Hey, we want to go build out some small modular reactors or bring some nuclear capacity online. part of the issue for the US. in particular is that
24:49 we don't have a domestic supply chain. About
24:54 99 of our domestic uranium resources are imported, and we rely on Canada, we rely on Australia, we rely on Russia, and especially rely on Russia for enrichment capacity. And so all of these
25:04 different elements are then systems that we have to develop domestically to have our reliable, secure nuclear supply chain, whereas natural gas, you know, we have, as you guys have talked about
25:16 already, just abundant resources that we can pull from. But it still gets into the issue of how are you going to take that natural gas molecule and convert it into the electron that's going to be
25:26 powering the system. I think that's still an issue that is not really appreciated, especially when you have this rapid shift in policy. So the regulatory environment is going from the Biden
25:38 administration, which has been energy transition, energy transition, energy transition only, to then the Trump administration is saying how we need our own leash. oil and gas and get the energy
25:49 that America has in abundance and stop relying on imported fuels or imported energy systems like batteries and solar panels and wind that are all predominantly coming from China. So I think that kind
25:60 of conversation is still a politically sensitive one for a lot of the big tech firms, because I think it's pretty clear you're seeing, say, meta, I think XAI XAI is a great example of a firm who's
26:15 kind of leading the charge into natural gas. But they're still trying to be a little bit more covert. And so for the energy industry, I think that's the real opportunity to say, hey, how are we
26:23 going to take this molecule of natural gas, convert that to electron and deliver that to the people who need that, which is a data center who has co-located generation, which is really the issue.
26:35 Because you see a lot of people talking about data center buildouts, data center construction pairing that square footage to say, you know, I think the the co-located generation is the part that is
26:47 missing, where the data center square footage is not important. It's about the generation, 'cause that's really what matters to the people who are then taking that generation and turning it into
26:58 the advanced AI models that are converting or that are consuming rather between 10 and 100 X more electricity per interaction than say a Google search. And so that's only getting more and more energy
27:10 intensive because we're going from this kind of GPT-3, GPT-4, kind of quick shot, just one-to-one interaction where I query just like I would a Google search. We're now going to a chain of thought
27:23 where it's pairing essentially a dozen to hundreds of those interactions into a single query. So it's spending more time on the backend, figuring out what it needs to do. And that's all energy
27:37 intensive And so I think it really is an under appreciated aspect How do we going to unlock the molecule and convert that to an electron? I think you're exactly right. It is all about the compute.
27:52 So Zane, throw some color on that, on any of it that you want. And then I'm gonna get up on my soapbox and be Mr. Pessimist and throw a bunch of problems I see and it'll get y'all's take on what
28:08 folks are doing about it. Yeah, you know, just really one comment for me I think Alex's color there is really important. Geopolitical issues, Canada, Russia, very present. The interesting
28:24 thing to me about this whole push for data centers and AI is how fast it's leading us back to exactly the way our electric infrastructure and the United States was built in the first place It was
28:41 built on the backbone of big industry. Once upon a time, 100 years ago, the electric infrastructure in this country was built by steel companies and heavy manufacturing. And ultimately, over time,
28:55 it got transitioned out into the hands of public utilities, merchant generators, pick your decade, half decade over the last 100 years. You saw it given back. And now you've got the, I guess,
29:08 the new heavy industry, if you will, of big data, big tech coming in and saying, well, you guys are too slow moving for us. We're going to have to get this done to the point you made at a
29:22 speaking engagement. You know, you're selling the electrons. You're not selling the natural gas. So they need it and they will do whatever it takes and they've got pockets deep enough to make it
29:32 happen. And so I think that's a good transition to probably where you're going with some of the problems. How in the hell are we going to do this?
29:42 Yeah, so here's kind of the soapbox I'll rant for just a second when y'all get annoyed by it just cut me off. But, you know, I think oil and gas folks are the most entrepreneurial folks on the
29:59 planet, but I think they're missing this. I don't know that they're actually gathering this point of I have to deliver an electron because at the end of the day, tech's not sitting there saying I
30:13 wanna translate into the electrons. And so, I don't know that if you went down the roster of the biggest people in oil and gas, that they've had even the first conversation with Microsoft, Google,
30:28 Amazon, et cetera. And I do think that needs to happen. The second thing that discourages me is, Look, I think Chris Wright gets this better than. anybody on the planet. I think JD Vance gets
30:45 us better than anyone on the planet. I think Trump is okay with just the infrastructure build we're going to need. We're going to need wires everywhere. We're going to need EPA permits, etc. to
30:59 be able to get all this done. The thing that scares me is the judiciary. I mean, just look at what we've done. We've had Trump as president for six weeks, and we've already got 100 lawsuits filed
31:12 over executive orders of naming the Gulf of America. I mean, if we're going to take all of
31:20 that stuff to court, and then kind of the final thing I'll start bitching about is, I don't think the public truly understands this. And I think we've done a better job, but we started off from
31:36 being really, really shitty at making our case. explaining to the world how energy really works. But there are really hard physics behind all of this stuff that needs to happen. So I'm somewhat
31:52 pessimistic about our ability to do this. I do think it's a crisis. I mean, we cannot let AI happen in China. I mean, it needs to happen here. I mean, this, if we really are gonna have the
32:05 Terminator running around, it needs to happen here. And so anyway, I'll shut up, take that anywhere you wanna go. Yeah, I think actually last year, one of the most important things that
32:18 happened last year in the judicial space was the Chevron deference ruling. So Supreme Court ruled against Chevron deference, which basically granted deferential treatment to agency heads in groups
32:32 like the EPA to say, Hey, you are, expert in your field, we're going to grant deference to you on your interpretation of certain legislation. When they ruled against that, that now is going to
32:45 slowly erode the 40 years of executive overreach that is just steadily built up. And with the EPA in particular, that's been a big problem. You have a lot of regulations going against power plants
32:57 recently, so coal and natural gas specifically saying that you're gonna have to put carbon capture and sequestration on any coal and natural gas. You're gonna have to use certain types of fuels,
33:06 you're gonna have to co-burn with hydrogen and all of these different types of mandates that were coming through the EPA without much
33:16 to substantiate that type of interpretation beyond what was granted by Congress. So I think that ruling last year really opens the door for a lot of different policy moves for the new administration
33:29 from 2025 and beyond. I The other side on the regulatory piece is that so much uncertainty is kind of built up that the inelasticity of infrastructure growth is going to be the biggest problem. So
33:45 really having people jump in and say, hey, we're going to solve this problem right now, trusting that the regulatory bottlenecks are going to be resolved. I think that is really the big risk that
33:57 I'm seeing, especially on the gas turbine space, or I think the way that
34:04 various folks across the industry are willing to invest in gas fire generation after going through five plus years of a lot of political recourse. Zane? Yeah, I mean, I don't know. To me, the
34:20 biggest issue is not regulatory is I need a gas turbine who in the world can make a gas turbine and I'll ask can they make them for me? That has nothing to do with politics and it doesn't even have
34:31 anything to do with dollars. I mean, In every market, in every part of the world, at some price, it will get done, but then that becomes a really interesting proposition of what is this actually
34:44 going to cost to make this dream come true. And right now, I don't think, you know, everybody's best guess on that is about like flipping up eight sided coin. I mean, you don't really know where
34:58 exactly that thing's going to land and which way is going to be up You know, the, if you're trying to go straight to the source check you mentioned something pretty interesting are these big data
35:11 companies big tech companies engaging directly with the oil and gas community I think it started. Alex probably he's better with facts and I am Chevron GE Vernova. You know they're so you're getting
35:26 pretty close there right you're getting power generation working with and it's not a you know this is not a novel idea. majors have refining assets. They've got cogent facilities. So this isn't
35:39 this long putt for them to figure out. So I think - Plus every oil well on the planet has electricity run into it, basically, in some way, shape or form. So it's not a foreign concept. Well,
35:52 and I think that that point right there is a really interesting one. The even the idea of putting a cogent facility next to a well is not new People have been trying to figure this out for the last
36:05 eight years. Gas has been cheap. People don't want to give it away. And the mid-streamers have been smart. One of my longstanding quips is look around the country and it's Kelsey Warren and Rich
36:16 Kinder for the win. Those two guys are brilliant. Let's go build a bunch of infrastructure where we don't have to tell anybody what we're doing, what we're charging for it, or what's actually
36:25 flowing on it. And there was a few mistakes along the way. I'm sure Mr. Warren will look at the Rover pipeline and go, damn, why did I do that? That was a real ass-kicking. I mean, I don't
36:36 know him personally at all, but when you think about the other places where that company has built infrastructure, it's the opposite of Ohio. So, you know, I think the
36:48 path is being paved and one of the issues, when you go back to that generation at the well site, one of the problems is the same problem today. It was too expensive and it was gonna take too long
36:59 to get the equipment needed to make the electron. And so, if we're gonna take that up, you know, multiple orders of magnitude in terms of the desire, how is that problem gonna be solved? Same is
37:15 true, you know, time back to what Alex talked about with Nukes. You know, maybe somebody solves the small modular reactor solution and we can serve it that way. One of them by just maybe
37:27 hair-brained ideas, that I've got is like. all of these data centers are trying to find access to gas. They have this belief that gas is free. You know, we get multiple calls a month of, hey,
37:41 where can you find me gas for less than a dollar?
37:46 Really nowhere. There's one place where it happens more often than many oil producers would like, but that doesn't exist. I'm sorry, pipe dream And you've got this desire to have this incredible
38:04 amount of access to electrons. Well, what if we went and built the new generation, start building it now and allow these data centers to sign contracts with nukes that are essentially the most
38:18 reliable source of generation in the world and give them access to that power, which ultimately would be transitioned over to the natural gas-fired power plant once it is actually built. I mean,
38:31 these public utilities, nothing's going to happen faster than three years, you know, maybe three to five. That's about as good as you're going to get. And then the other issue that like is
38:41 sitting there in the background the whole time is it was 24 months ago, we were talking about getting rid of all of it. We were going green and everything was going to be powered on cow farts and
38:51 wind and sunshine. So you know, this is a pretty rapid transition. And then I think that is lurking in the back of people's minds too And maybe to Alex's point, and the one you're bringing up on
39:03 the judiciary and regulation, how quickly does the narrative and the sentiment change on how safe this stuff is? Is this the right way to do it? I think one of the points that Zane mentioned right
39:16 there is important to focus in on the bringing the generation closer to the well head. I think actually will be a pretty big push in the coming years, especially as we're trying kind of filter
39:28 through the latency issues with data. So traditionally data centers have been located closer to population centers because they need to transfer that data as quickly as possible to the population
39:40 center where it's being used. I think that there's now a divergence in the latency requirements for that data. So when you're having, say, a reasoning AI model that can spend as long as 20 minutes
39:53 solving a problem, that doesn't necessarily need the same latency or low latency as, say, somebody who's doing high frequency trading needs less than a millisecond to get their data. The
40:04 requirements are totally different. And so especially as we have this kind of divergence in latency requirements, you also have new technologies like Starlink coming out and you're having up to one
40:15 gigabit per second for data transmission. I think that really opens the door to say, hey, how can we bring our generation some of this large load closer to the wellhead where the molecule is,
40:28 where it's extremely cheap, you don't need to build new infrastructure. And I think that actually you'll probably see XAI do some of that before most of the other industry. I think that they are,
40:37 because I think Musk has kind of thrown out the traditional, you know, what you can do in a certain amount of time frame. I think that you'll probably see them be one of the leaders in buying
40:50 assets that deliver that molecule directly to their generation. And I think that you'll probably see more people follow through that when he said, you know, we're going to build our new data center
41:00 for training our AI models in 19 days that shattered everybody else's kind of protocol by 340 days. So I think the standards are a little bit like the four minute mile where somebody's going to do it
41:14 and then the rest of the industry is going to catch up. And I think that's really where the energy industry I think can get ahead of the ballgame and say, hey, we're going to help you get this
41:23 generation, right? at this wellhead and make sure that you can transmit your data where you need to transmit your data. I've been joking that the Mayor of Monahan's out in West Texas needs to have
41:34 Zuck over to the one of the three remaining Benignans on the planet for dinner and tell them we got all this cheap natural gas out here and if we can make that happen. So now I'm going to kind of
41:48 force you guys, we've kind of laid out all the problems we've griped about it.
41:55 Look into the crystal ball kind of five years from now. What does the world look like? What does that mean? And how are you advising clients in this environment?
42:11 There's many angles to take that. I think one of the big. Open-ended question, the key to podcasting, you know I think
42:18 the biggest overarching themes is just under appreciating the energy needs of both developing countries and emerging technology. I think one of the points that Zane and I talk about quite a bit when
42:31 you have folks like the IEA coming out and say that oil demand is going to peak by 2030, I think that really discounts the connection between energy and socioeconomic outcomes. When you have nearly
42:44 7 billion people in the world who don't have access to even a fifth or 5 rather of the
42:53 energy that the US uses, I think the perfect example is India, where you have basically 14 barrels of oil per capita consumed in India per year. The US consumes 21. When India was starting their
43:07 infrastructure rollout in the late 1980s, they were consuming about 041 barrels per capita per year, and that, as I just said, went up to 141, and that just Pretty modest one barrel change per
43:21 capita. Change India's total nationwide consumption from 900, 000 barrels per day to 54 million barrels per day. It's exactly why you saw China become the major demand driver for crude markets for
43:34 the last several years. I think that India is just a microcosm of what's going on across Southeast Asia. So that's just one example for crude. But you also look at their generation stack in those
43:44 regions, and it's just dominated by coal. They're not going to be willing to give up coal because it's what they have as a regional security measure But when you have maybe some policy initiatives,
43:54 say in the EU or the US, they're trying to target the emissions of the supply chain, there's incentives to adopt natural gas instead of coal. I think there's also the tariff incentives as we're
44:06 seeing now. We can go into that. But when you have this transition from dominant coal stack to, say, gas-fired generation, That's just incremental demand that is not really appreciated, I think,
44:18 on the grand scale of 7 billion people and what it takes to get, say, the countries that have no access to air conditioning but have the highest heating demand in the world, how are you going to
44:29 get them air conditioning and improve socioeconomic outcomes? I think there's a lot of these threads that you can pull together and just pretty assertively say that whatever your energy demand growth
44:41 estimate is, and if you're saying that we're going to peak,
44:45 recalculate. Yeah, I mean, I think how you advise clients may be oversimplifying it, but it is a relatively simple formula that
45:01 you stick with. You buy the right insurance, that's what hedging is, and you choose the right insurance for the right time, and you're willing to change your policy you will. I mean, it is.
45:15 Managing one's commercial exposure, whether it be through contracts, getting your hydrocarbon from A to B, whether it's using forward curves to manage your exposure or working with your capital
45:30 sponsors, whether you're a publicly traded company or your private equity backed. If you wanna control your own destiny, you better be pretty clear on what you need We often ask people, you know,
45:44 what is your floor? And it depends. And I understand that it depends. Well, it depends on service costs. Well, it depends on interest rates. Okay, understood. And how close can we get to what
45:56 you need and what's the right tool for the job? You know, what we've seen over, you know, several decades is we kind of take a sledgehammer when at times you need a tackhammer or a saw or a
46:10 screwdriver I mean, we just take the same, like, you're gonna do it and you're gonna do it all now. And inherently what you see when you look, you know, back in the panels of energy risk
46:22 management is consumers by the top and producers sell the bottom and it settles in between. And so there's just a basic human nature component there. We're driven by fear. And so the way to stay
46:35 out of that, you know, fear or that reaction mode is to as close as one possibly can, know what you need to control your own destiny. And it's, you know, I think the laundry list of ways people
46:51 inappropriately manage exposure, whether it's wrong tenor, wrong derivative, you know, not appreciating the,
47:01 I guess, the ways that you can dynamically manage your exposure is just leaves a lot of either chips on the table or has the keys being taken away and mom and dad. are no longer letting you drive
47:16 the vehicle on your own? Yeah, you know, I spoke at
47:22 NAIP, the, you know, I guess, whenever that was three weeks ago, and we kind of had the crystal ball question, and my crystal ball answer was, say what you want about Trump. I know he runs
47:38 around and says, drill baby drill, all that dude is all about lower gasoline prices. I mean, that has been his mantra the whole time, and he's going to bow, you know, he's going to bow, brow
47:52 beat
47:54 the Saudis to release more oil, and it'll do some sort of deal with them for something else they want. He'll try to incentivize US people to drill more, even though I think that's more capital
48:08 markets driven, But at the end of the day, I think we all have to accept energy prices are gonna be lower, come hell or high water over the next few years. We've really got to trade that for the
48:25 ability to build more infrastructure, favorable permitting, et cetera. So we will have a narrower business, if you will, but a much wider business kind of going forward. And I think that's the
48:42 way you have to look at it and to your point, I think at the end of the day, we're at a cost to capital game. I mean, we're not innovating. We're not hitting things with a big hammer now and
48:54 suddenly putting shales online that historically never produced. There's not this big growth story there. It's a cost to capital game. And so sitting there, what's the way to lower your cost to
49:08 capital, create more certainty. That probably means more hedges certainly more strategic about it. And I think knowing that, I mean, there's another like kind of simple truism, what happens to
49:21 oil markets when things aren't good, OPEC and recession? Like go back over the last 20 years, find a time that wasn't OPEC driven or recession driven and it's pretty sparse.
49:35 When you look at gas, it's mother nature, as a warm as a cold When you look at the transition from the elevated pricing environment of 22 and where we live through in 23 and 24, the producing
49:52 community has never produced as many MMBTUs as mother nature can. And by that, I mean, when mother nature says it's a blowtorch Q1 in
50:02 the northern hemisphere, there are extra MMBTUs everywhere because we don't have anywhere to put it You know, I think more hedging, you're right. seeing that. You know, we went to a, I feel
50:17 like it was a bit of a sledgehammer environment coming out of the dull drums of 2015, you know, on the, I guess the tail end of the OPEC US shale price war that started in late 14. You get a
50:29 really warm Q1 in the northern hemisphere. And for that matter, the full winter and both oil and gas are in the tanks. And a lot of assets get transitioned from smaller nimble growth stories or
50:43 they're sitting on the books of big companies that can't really afford to keep it and buy can't afford to keep it back to your point on cost to capital. I've just got I need the dollars now to do the
50:54 thing that I know works. I'm not sure that this piece over here does work and they gave it up they gave it to somebody else. And we were in a hyper hedging environment for I don't know three four
51:05 years and then you've got these other interesting developments that can feel like a rounding here in the grand scheme, but they do matter.
51:13 I guess we went from a housing banking crisis with the good old asset-backed securities, and now we're doing asset-backed securities and the energy world that come with just what you're talking about,
51:28 incredibly long-tinner hedging. And so when that's happening, understanding if you're not one of the participants in that space, what do I do?
51:41 Is the cost of insurance right now too high because it's being driven up by those that are required to be, we'll call it,
51:52 have full coverage on every possible outcome. You see curves get damaged materially when these ABS deals go down and an entire curve takes five years, 10 years worth of hedges, often not done as
52:09 efficiently as maybe it could be, and that's fine because they don't need it. They need it done today so that they can get the ABS product launched and that's that. And so knowing what's happening
52:22 and why, back to I guess the crystal ball, like, you know, some of it's crystal ball. What do we see going for? But what's happening right now and why, which is kind of where we started today,
52:30 right? The question of, why did we get back to4? If you don't have at your fingertips, either you see yourself as the penultimate expert or you've got the trusted advisors, the resources to help
52:45 you really decipher. And that's where I kind of go back to one of our starting points in describing Mobius translators. What am
52:55 I being told right now? What do I need to understand? And what do I do with it? Can I do nothing? Is it time to act? And how confident are you?
53:06 Hey, Alex, give me this maybe to close this out. You guys have standing in the bike, come on the podcast anytime you want, 'cause I could do this all day long. But if we're doing this podcast in
53:20 five years, tell me something we're talking about that nobody's talking about today.
53:27 Yeah, well, thanks for having us on, by the way. It's been fun to sit and chat, and I think that we could go on for a long time and talk about all the different macro themes. I think in five
53:37 years,
53:39 one of the points that we talked about, I think the more distributed generation is gonna be much more of a
53:48 factor in overall US generation. I think
53:53 one of the points that Zane was talking about there, I think that the risks, the risk landscape is evolving to adapt with also all the other generation fields. So when we look at electricity in
54:06 particular and natural gas within that, You're increasingly having to navigate the impacts of other generation fuels and their specific seasonality and in different regions. So the hedging
54:20 environment for producers in different regions is gonna look a lot different based on their proximity to, say, wind generation or solar generation. When you have wind generation, say, in ERCOT,
54:32 the highest wind output is gonna be in the shoulder seasons when you don't have as much demand So your window for the economics of, say, traditional to special generation, that's evolving. The
54:44 risks are also evolving. In California, you have solar output peaking in the winter or in different seasons where you're gonna have to say, okay, my net load curve is gonna be extremely sharp in
54:54 this period of the year, and I'm gonna have to adapt to that to stay in business if I'm a traditional thermal generator. I think there's a lot of variables as technology evolves and the requirements
55:07 are scaling with that. for reliability and just general capacity and just demand. I think that the
55:17 flexibility of the US. kind of energy market is gonna have to evolve quite a bit. And I think that's probably gonna be translated into how we generate electricity and also how folks in our space are
55:30 managing risk.
55:33 Interesting, yeah, we talk a lot on BDE, the other podcast I do, just about all this stuff is gonna be built behind the meter. It feels like, I mean, trying to pile more stuff on the grid and
55:48 having the regulated monoliths that are the various grids, build it and then the utilities manage it. I just don't see that happening. It's very slow moving, yeah, in a fast moving world, yeah.
56:04 Exactly, so how do folks reach y'all? And how do folks get to see the Friday podcast you guys do? Yeah, so podcast is on Apple podcast and Spotify. It's called The Energy Desk. You'll see a
56:16 Mobius logo on there. I think the best way for people to check out Mobius, we have research archive, researchmobiusriskgroupcom. The Mobius Risk Group website is probably the best place to go and
56:26 find all the different resources. I think folks that are interested in kind of the analytics and the technology landscape to try and manage risk and get a little bit more of an informed opinion and a
56:38 little bit of that strategic advisory edge would be best suited to look at risk net. And then we have a few other products that are coming out that are really about capturing all of these different
56:48 global threads and bringing them back into kind of a distilled form that is quick and easy to understand, but also highly informative. Anything we should have talked about that we didn't.
57:01 I think there's just a lot of different ways We could have done her all day.
57:06 Go ahead, Zane.
57:09 I think to me, the one that I would have gone to if we were gonna continue going is that topic of the, I guess, judicial influence. I think regional and state influence. So we've gone in this
57:22 de-globalization path over the last three years, I'll say, to some extent. And I think that can even happen, certainly in places like the United States, where state influence becomes something
57:36 that rears its ugly head. And that gets really interesting when you're thinking about utilities, which cross state lines often,
57:48 more than the Southeast than any other part of the country. I think state legislators, I think you're gonna, what are we gonna be talking about five years from now? States acting as if they're
58:00 sovereign nations and not liking what Big Brother's telling him to do. Um, I think that's going to be a, yeah, I'm a libertarian. So it's tough for me to, to sit there and navigate. I'm a
58:14 libertarian, but at the same time, fuck New York state for not letting a pipeline be built. Yeah. Kind of just right across there. We're running off heating oil in Massachusetts. Yeah. We
58:26 literally took, I think it was 2018. So it's not like it was recent, but we took a shipment of Russian L and G into that import terminal at Everett. I mean, it just makes no sense. I mean,
58:39 you've got the Appalachian Basin right there. There's so much. This was an interesting one for me that I just learned in the last 18 months. Did you know that the Riviera Maya produces an
58:50 incredible amount of its power by burning propane? What the fuck? Really? Propane. They can't get natural gas there. That is just absurd Yeah. Yeah, I think you see kind of the early signs of
59:11 East and West Coast becoming more like the European Union, where you have maybe the South and Middle States kind of staying, of course, in a way. I think a lot of the regulatory environment in the
59:23 East and West is just anti-industrial activity, anti-business. And then when you're having the hurdles to bring on new generation when you need it, you're just not going to be able to compete
59:38 against the other regions of the US. And I think that just translates into exactly what's going on in the European Union right now.
59:46 Yeah, no, it's ridiculous to me that we're talking about funding Ukraine when it's like, you're buying more Russian natural gas and oil and financing their side of the war. Well, one of my
59:58 favorite ones with Russia the entire time. All right, Venezuela, We like you again. Send us your oil. Venezuelan oil is Russian oil. Russia has dumped more dollars into Venezuela in the last 15
1:00:11 years than anybody. You are buying Russian oil with a Venezuelan sticker on the side of the barrel. That is just, I mean, stop, you know, stop lying to people, but that's not, you know, money
1:00:24 gets made by, you know, weaving a good yarn. So that's not really gonna change. I mean, you know, for efficiency sake, I think another fun one at some point, and I don't think Alex are either
1:00:35 the penultimate experts. Maybe you find somebody that is. We love to talk about it, but I don't know. I'm long Mexico. It's got coastlines that are close to one another. It's a hospitable
1:00:48 climate. Now you got a bunch of drug lords. So Claudia is gonna have to figure out how to deal with that. You got proximity to Texas hydrocarbons. I mean,
1:00:58 I don't know, Mexico is this like, interesting geographic place.
1:01:04 act, you know, delivering to the world. I mean, the Panama Canal was a great idea. And you can see when you want to use it 10 times more than you ever thought you did, it's a little bit of a
1:01:15 problem. So where else do I go that has at least developed enough that I could build out some material port infrastructure that's already got some decent roads, got some decent rail. I mean, not
1:01:28 decent, maybe I'm giving them more credit than they're do Well, I definitely see Mexico built the Essness Railway project, if they actually go through that and developed that further, then they
1:01:40 could offload the capacity of the problem. I don't want to be long Mexico since 2018. How do you get long this little sliver of land that's got access to it all?
1:01:51 And then there's another interesting one with Russia. You could go down a rabbit hole on, you know, the whole uranium thing that Alex brought up You know, we're highly reliant on Russia, Canada,
1:02:02 and Australia. Um, the other one to me is pretty fascinating is fertilizer. I mean, what do we need? You know, Alex and I will debate this and kind of go back and forth on it. What comes first?
1:02:14 You need food and water or you need energy. Well, you can't have, you know, food and water. If you don't have energy, I don't know, chicken in the egg, but the number one, you know, reliance
1:02:26 on a foreign power for urea is Russia. You know, they produce a truckload of it. Yeah, I think that comes back to why you saw Brazil actually join OPEC last year is because they are just totally
1:02:40 reliant on Russian fertilizer. I think 75 of Brazilian fertilizer comes from Russia. And then the food exports from Brazil to Russia. So.
1:02:51 Well, how long were you here who blew up Nord Stream? We didn't they come out without it already. I mean we did it right we blew that shit up. We 100 blew that up I mean that you know and and and
1:03:08 potentially strategically it was the right thing to do and all It's just amazing to me though that we risk World War three over that You know, I mean I don't think the Russians didn't know we were
1:03:23 going to do it though Like that was such bullshit that oh, we're gonna sanction Russia. We're mad at Russia No, they're just gonna sell it to somebody else Like yeah, a couple things were amazing
1:03:36 to me. How instantaneously Russian gas and crude and product Started flowing east instead of west. Yeah, like that's a great topic actually is the how? restructuring the flow of energy and then
1:03:54 But there's that. And then the other one, which was just like a miracle. It was taking us seven years to get a LNG import term will turn into an export terminal. I mean, there's like, yeah, I
1:04:04 can do a whole podcast on the brilliance of Sharif Suki. He convinced people to give him8 billion to build an import terminal and then made nothing and then convinced them to give him10 billion to
1:04:15 build an export terminal. I mean, that's just. So you know what we did there? So we had an office lease where we sublet from those guys back when I was at Caine and you know, they were teetering
1:04:27 on the verge of bankruptcy and bankruptcy wipes out all market below so were We. contracts
1:04:33 on that lease that when Blackstone came in and bailed them out with a billion dollar loan, we sent those guys a case of champagne and said, Thank you 'Cause it kept our below market.
1:04:54 first class set of office space. So the thing I was talking about with, the other thing that was really amazing is all of a sudden there were all of these new regas facilities all over Europe. Like,
1:05:08 I don't know, I can't help but like think, and all of these new boats to deliver it. Yeah. Yeah. Conspiracy theorists, you know, for sure, but it was amazing how fast all of that got solved,
1:05:24 to think that there weren't people that knew that this was coming, I don't know. Yeah, I mean, the Russian pipeline gas was disrupted, but everybody in Europe's still been buying the Russian LNG
1:05:37 as well, so it's like, doesn't really matter. And how were they capable of doing that? They didn't need all of those regas facilities, unless they were going to be an issue with Russian pipeline
1:05:49 gas, I don't know.
1:05:52 Yeah, no, that was pretty fascinating. I remember my initial reaction was the Iranians did it 'cause there was some, you had to kind of daisy-chain the gas to get it all through out Europe, but
1:06:05 there was some pipeline excess capacity from the Iranian gas fields. And I was like, you know, and that's a core competency of the Iranians, right? Blow and shit up. They do that really well for
1:06:18 sure. And so I thought it was the Iranians It was kind of crazy that we actually did it and we didn't start World War III over that, but. Well, that's why I think it's like, you know, it was
1:06:31 kind of a planned event on all sides. We're just gonna. Yeah. We're gonna blow this shit up. It's not gonna go this way. Everybody's kind of got like their game plan set up for how it's gonna go
1:06:43 down. Right. You know, the big losers are gonna be the ones don't have their own, you know. I guess backup plans, you know, this is like a fascinating one to me with Astridome. We keep the
1:06:58 Astridome around and it's been, I don't know, hundreds of millions of dollars at this point on that. Sure. But we won't keep power plants laying around. Like the places in the world that have
1:07:08 kept their call it archaic generation resources for whatever they want to do today. And what does it cost to keep them versus what it costs to retire them? Like it's already paid for. Yeah.
1:07:21 Exactly. It's sunk costs like, you know, I don't know. Keep it around. You might need it one day. Yeah. Interesting. Well,
1:07:34 this was cool guys. I really appreciate you guys coming on. My gut tells me we should just leave all that
1:07:42 in the podcast too. But I'll let you all take a look. And if there's any of that, you want to cut out for whatever reason. We're happy to do that. Yeah, sounds good. Yeah, thanks for having us
1:07:52 on. You got connected with Kyle playing poker, is that right? I think so. I think you busted me out of a
1:08:04 poker tournament at some point. And he was like, yeah, we need to come on the podcast. And I go, well, I've been Badger and Paul to come on for years and God rest his soul. I had saucer on who
1:08:14 I'd still miss to this day. Yeah You know, I had John on, I think two years ago
1:08:23 and stuff, so. I didn't know that. Yeah. I'll go back and give it a listen, I miss my buddy. Oh, yeah. Yeah, no, he was great. I forget what
1:08:35 we talked about. It was right around the time when
1:08:40 we were talking about Bitcoin mining stuff and EP companies were starting to use that for flared gas and so Yeah. It's another interesting one right there. Yeah, that's more Bitcoin probably
1:08:53 converting to the AI capable data centers. Yeah, no, I think that's right. Just watch Caruso and their investor deck, and you know where things are going. We've Bitcoin mine on Flair Gas, now
1:09:10 we do data centers. Yeah, I got an interesting one for you to ponder We
1:09:19 have never, in the shale era, been in a period where gas inventory was low, gas prices were trending higher, and
1:09:34 oil fundamentals didn't look all that promising. What happens next? Every period of the shale era, like you go back to 14, we ran out of gas We had 827 BCF in
1:09:48 the ground, but oil was trading 100.
1:09:51 Oil price is high. Yeah. You go to 18, we have very low gas inventory, lowest in the shale era, 32 TCF to start a winter. Oil's moving higher. Gas went up for like a minute. It went from three
1:10:08 bucks to five bucks in just a couple of months. And then it went right back
1:10:15 to 275 because oil was moving higher And Saudi production was down. So I don't know. This is a really interesting setup. What happens if like to your point on Trump wants gasoline prices low? It's
1:10:31 that thing, you know, like you stand up at a
1:10:35 presentation with a storage. I'm turning to gas storage is who you were speaking to, the people that were. Yeah. Yeah.
1:10:42 You know, it's about the electron. Well, so like, I don't know, to me, It's kind of fascinating is
1:10:50 the narrative. is that there's always too much gas. It will, is there if it's not warm and is there if oil is not, you know, either priced high or moving higher? I don't know.
1:11:06 You know, something that kind of brings up is, I haven't really thought about fuel switching in forever. I mean, there used to talk that all the time, you know 2012, it was the number one story.
1:11:22 Well, so here's the rub. Price elasticity only works on the way down. You go down in price, you always find more to burn. You go up in price, sorry, you retired them all. You killed all your
1:11:37 extra domes. 2022, 2022 was the highest year set the record for most gas burn in the power sector in North America until 2023, until 2024 or I mean, it's You know, it's, why is that, why is the
1:11:53 year that was priced at7? Why did we burn more than any other year in the shale era? Because you have a choice. Yeah. Ain't nothing to go to. Damn. When doesn't blow in July? Yeah. It's sunny,
1:12:06 but not a night. Yeah. I'm only going to get worse too. You got, you know, I don't know. Like 10, 13 gigawatts of coal retirements this year. And then, you know, yeah, like the gasoline.
1:12:21 Stories are really interesting, right? Like that's what India wants, all these people with no air conditioning. They want gasoline and MMBTUs of methane that,
1:12:32 you know, takes a developing country. I'm, I guess that's the nice phrase, not third world
1:12:38 and becomes, you know, maybe the next data center mecca of the world. Um, I mean, the gasoline one, this is like an interesting problem that we don't even talk about refining capacity. Yeah. I
1:12:51 mean, I don't know, if I could wave a magic wand, I think I would want to build a refinery somewhere near Kansas City, maybe in Iowa, I don't know. I want one in the middle of the country. I
1:13:03 don't care where you're like making this stuff. I want to be as proximate to you as I can. And I want to be able to send out my product to people and have the least risk of, I don't know,
1:13:15 hurricanes, wildfires, you know, whatever crazy shit government. Ur-kot. What's that? Ur-kot. Yeah, yeah, exactly. Depends on the Texas grant. I don't know how we're going to make the
1:13:29 refined product. I mean, we don't have, and then, you know, right now, the biggest build out of refining capacity fittingly in the world, you know, at least what's coming five years from now,
1:13:41 Indian refining capacity. I think it's like two and a half million barrels a day. No That's a lot. I mean, they don't need two and a half million barrels a day. They don't have the roads,
1:13:52 honestly, like, you may, you know - It's coming fast. Yeah, I mean, you know, and then I can build the refinery, right? It's just like simple, like, back to like, I don't know, just
1:14:02 common sense. I can, on this plot of land, build this thing, and I know what my problems are. I mean, I start learning them in the beginning. When I'm building a road, I don't know. I start,
1:14:13 I'm gonna go from here to there, and then all of a sudden, my shit, I didn't think about that one. Damn, flooded, damn, local government is, you know, I got a bunch of people in there. A
1:14:22 blonde nose, leopard, a leopard lizard that.
1:14:28 The Indian version of the sage grouse, exactly. Exactly. Who knows?