Big Digital Energy

00;00;00;02 - 00;00;23;10
Unknown
All right, so, Kevin, if I if reincarnation actually exists and I get to come back, I want to come back as one of my children. These three daughters live like the greatest life on the planet, you know? Where are you? Oh, I'm heading to Tokyo. What? Hey, where are you going? I'm going to Paris. You know. Anyway, so my kids have led the greatest life.

00;00;23;10 - 00;00;46;05
Unknown
And of course, it's all been fueled by hard hydrocarbon money, right? I mean, that's how dad made his money. And if you asked any one of those three kids, should we ban hydrocarbons? Oh, yeah. They're destroying the planet. And so, like, I'm traumatized by this, but that's a whole other thing. I was reading your bio. There's hope. There's hope for my kids.

00;00;46;05 - 00;01;13;01
Unknown
Were you really a vegan? I was back, back in the day. Yeah. When I was in, when I was in, elementary and, and junior high and high school, I was, vegetarian and vegan and, but I come from a deep, deep rooted oil family, as well my, grandfather actually started the first Canadian drilling company with his business partner from Odessa, C.C. Triplett.

00;01;13;04 - 00;01;37;23
Unknown
And, went on my own, journey, as, as myself. And, was it rebelling? It was it was rebelling. It was rebelling. Yeah. And, and, Yeah. But I think my kids have just been programed. I mean, I love the Montessori school they went to, but there was a lot of Kumbaya going on, you know, there.

00;01;37;25 - 00;01;54;16
Unknown
Yeah. No. And actually, when I started eating meat again, this is after about it was when I went to go work on, drilling rigs, as a roughneck. And I was like, I need to eat 5000 calories a day to, keep my workload. I realized my my vegan options were, you're not doing that on tofu.

00;01;54;18 - 00;02;20;20
Unknown
No. You know, so, it's interesting. It's interesting where your where your life, takes you, but, always unabashedly pro hydrocarbons was just, Yeah. Was a vegan for a good 15 years of my life. Oh, wow. Yeah. Wow. The, Sarah, my my daughter Sarah went, vegetarian or vegan? One of them. Just out of respect for animals.

00;02;20;26 - 00;02;41;03
Unknown
She didn't want to be mean to animals, but now she'll get a rib eye. You know, she kind of came back. Yeah. It's, It's attractive. There's, Yeah, there's something to be said about driving your parents crazy, but, that was, that was my mechanism of, of doing it, but, yeah, it's, it's interesting, but it's also interesting.

00;02;41;06 - 00;03;16;17
Unknown
Just your point around, like, you know, generate living off of the benefits of the hydrocarbon economy and the benefits of the credit for a civilization, and then. No, no, we should ban hydrocarbons. And, it's the interesting moment, I'd say the world is in right now where it's waking up to the benefits of the hydrocarbon economy and, oh, crap, maybe we should make the development of the development of these resources so we can live as a civilization to the standards where we've come accustomed to, by developing these resources in, in, in a, in a, in a more positive way.

00;03;16;17 - 00;03;39;04
Unknown
And so I get a chance through my work to work with, you know, hundreds of, of young professionals in the energy industry. And, there's a lot of hope, I'd say, for the future. These, these, these professionals are, are are ten times smarter than I was, at their age. And, seeing, the technologies that they can come up with, I think is, is pretty exciting for an energy.

00;03;39;11 - 00;04;02;10
Unknown
Abundant, future. Yeah. No, I think, I think when big tech, the light went off, that's actually a bad pun and not even true. But when when the lights went on for, big tech and them going, oh, my God, we actually need the power to run all the stuff. And they decided we weren't the worst thing on the planet.

00;04;02;10 - 00;04;24;18
Unknown
I think the, the the tide, the tide really shifted there. So yeah, it was funny. I was in, San Jose last week for the Nvidia's GTC conference, and, it was funny. It was at this one executive dinner and with all of these tech people and I got somehow got sat beside the one other, energy person that was in the room.

00;04;24;18 - 00;04;47;03
Unknown
And we were actually joking about that. We're like, how did these companies go from, you know, committing to being net zero by 2030 and by 2050, suck out every molecule of CO2 they've ever put into the, atmosphere, into, you know, the drill, baby drill crowd. And we're both kind of killing ourselves laughing. And all the tech people are like, looking at us, like, what are you guys talking about?

00;04;47;03 - 00;05;18;25
Unknown
We're like, you know how you're powering these data centers, right? Like there was still a bit of this disconnect, right? That they didn't, I think, understood just the absolutely voracious amount of natural gas, these things in coal. Yeah. And coal, I mean, so this is really funny. About 3 or 4 years ago, did you ever see the Chappelle Show when he did the racial draft, where all the different races drafted people like Tiger Woods?

00;05;18;25 - 00;05;45;06
Unknown
You know, they drafted all the mixed race people. And it was really funny, like, I think the Asians drafted Tiger Woods. And, you know, somebody drafted the Wu-Tang clan, and it was really funny bit. So I did a spoof of that on the podcast where we did the Energy policy draft. So I had nine people on and you could choose, you know, some energy policy, and you were kind of energy czar of the world for the day.

00;05;45;06 - 00;06;04;28
Unknown
And we all had to do whatever you said. And, you know, there were equal parts serious, thoughtful stuff. Like Mark Meyer came on and said, I'm choosing natural gas, blah, blah, blah, and laid it out. David Ramzan Wood, who I adore, came on and said, I'm drafted number eight. Even if I was drafted number one, I'd still do this.

00;06;05;01 - 00;06;24;25
Unknown
I'm going to take coal. And the reason I'm going to take coal is because I'm going to have energy. I'm going to be able to live a good life. And I don't really care about global warming, because if we could make the Earth five degrees warmer, Canada might be bearable. I'm sorry. All right. Yeah. Where do you go?

00;06;24;28 - 00;06;47;24
Unknown
Yeah. This, coal looks like a pretty, attractive energy source in, in in a world right now where energy constraints are, are kind of crazy, you know, it's, it's it's, you know, coal has, more, more lives than a cat. It seems like I've never seen, you know, the predictions of the end of coal so many times just for everyone to go turn back on their coal plants.

00;06;47;27 - 00;07;14;06
Unknown
Right? Yeah. No, I think it's definitely the definition of baseload. I mean, if, you know, if you had to draw a picture. So tell me about avatar. Because you and I haven't hung out together, but I was reading about avatar. That sounds freaking cool. What you're doing. Yeah, it's, pretty cool platform. And, that we've created, so we call ourselves an energy, technology venture studio.

00;07;14;13 - 00;07;35;11
Unknown
So a normal, that's so cool. A studio. Yeah. Like that, normal venture studio is, you know, we're a bit of capital. We'll go find some dormant IP and find a unique problem, and then kind of build a team around it. And, what we quickly realized was in the energy industry, you can't disrupt it in the way that Silicon Valley thinks about disruption.

00;07;35;11 - 00;07;59;20
Unknown
And to, in our industry being a multibillion dollar, safety critical, highly regulated industry is the problem owner, and the innovator can sometimes get so far apart from each other that the innovator will go solve something. The problem owner is like, yeah, I've got I've got no interest in solving that. So we flipped them on on its head and said, well, how do we work with people inside the industry who actually know where the pain points are and understand how the industry operates?

00;07;59;20 - 00;08;33;18
Unknown
So we work with the employees of the oil and gas companies who come into avatar and work through sort of three legs of the the stool. The first leg is an energy ideation, program, which where we're at right now, over three months, they get to listen to some super high ranking speakers in the macro threads of the energy industry on everything from technology to economics and finance to, geopolitics, and then get a chance to work as teams so they'll be multi-functional as well as multi company.

00;08;33;21 - 00;08;52;22
Unknown
So one team will have one employee from Exxon, one from shell, one from Cenovus. And then what is that? Is that like one day a week people showing up? Is it three straight weeks and, camping out. So till or what is that in the first phase it's every other Friday for the afternoon for three months.

00;08;52;22 - 00;09;16;13
Unknown
Oh, cool. And, and then they'll have you know, it's sort of in the first phase, it's ideation. We want them to be exploring, you know, a whole bunch of different problem sets. So it's sort of 2 to 4 hours a week for an experience in the first phase. And then once they come up with our idea in the first phase, they get a chance to pitch their ideas back to the executives of these oil and gas companies for implementation.

00;09;16;15 - 00;09;37;14
Unknown
And then the best of those ideas get into our studio phase, where now it sort of goes up to a day, a week for six months, and then they get a bit of budget to go and actually go and build it fast tracked access to prototyping labs, post-secondary lot like Shark Tank on steroids, maybe, right? Yeah. We do called the first phase, Shark Tank, where they get to pitch their ideas to.

00;09;37;14 - 00;09;57;22
Unknown
Exactly. Okay. And, it's actually, pretty impressive what they can come up with in, pretty short order of time. And it's always good fun to watch, you know, emerging leaders in our industry pitch their ideas to, executives for, for capital. And then sort of in the second phase, they get a chance to go and prototype it.

00;09;57;22 - 00;10;24;20
Unknown
And then should the fundamental science work enough of a market pull, we hand over the IP and the develop content into a new NewCo. The corporates get beneficial commercial investment rights to the new co. And then we have a venture capital fund that will see that and sort of bring it to market. And so our philosophy on this is how do you give the large corporates, who are needing new solutions in there to develop new production, the nimbleness of a startup world.

00;10;24;28 - 00;10;48;25
Unknown
But then should the technology work, then the startup gets the horsepower of a large corporate because it's sort of working inside the industry that's kind of ready to to adopt it. Gotcha. Oh, that's very cool. And so ultimately, you guys are making money just as a VC fund in effect. Well, yes, the corporates will pay for participation, in the program.

00;10;49;02 - 00;11;10;28
Unknown
The corporates will also pay for priority development of some of these technologies to get equity rights to it. And then. Yeah, and then we do have a, a management fee on our, on our VC fund. Oh cool. Yeah that's very cool. So give me a big huge win. So that's team you up to brag and crow all you want to.

00;11;11;01 - 00;11;39;01
Unknown
But then I also want to hear after that the greatest idea that failed okay okay. I got a few I've got, I've got a more of those that I do of the I got all morning crow about all your wings. Okay. Now these these are all kind of my my favorite children, so I'm. I'm really gonna have to, be careful, but I guess you know what?

00;11;39;01 - 00;12;01;13
Unknown
I you know what? I do, like, once a week, I send a text to my three kids, and I rank order, and I go. This week, Sarah is my favorite. Charlie, your number 211 week. Sarah was particularly snarky. I said, Kelly's my favorite child this week. Charlie, your number two. Sarah, you're number 17. Just for the record. Yeah.

00;12;01;14 - 00;12;23;01
Unknown
So let me start. Maybe, just, no, in the crowd. Let me start with the production optimization tech. So liquid blow downs, especially in the Monte Basin in Canada. Eventually the well will sort of get to, a point where, you have to basically send a battery operator out to go and vent the well, get rid of the liquids that are kind of plugging it.

00;12;23;03 - 00;13;01;01
Unknown
We're sort of back in operation. So not only do you have a lost production or, opportunity or set, you also have a venting problem set up. So what the team did is actually just figure out how they could put a reciprocating pump on the wellhead and then use it with a bit of AI and go out and sort of venting it, be able to capture the, the, the, the, the, the product, but also put a little bit of, well, optimization and AI on the system to sort of be that step kind of prior to artificial lift that you would need on the, on the well, so clear problem set clear opportunity.

00;13;01;01 - 00;13;28;28
Unknown
So that little bit of technology, a little bit of AI bringing production up in decreasing emissions, it's turned into, a bit of, a bit of a success, that one. So that one's, doing really well. Is that where I, it's up more. Is there some unique hardware there, or is it purely just, a combined solution of off the shelf type stuff, combined solution of off, off the shelf pump that hadn't really been used for blow downs without upper application.

00;13;28;28 - 00;13;51;04
Unknown
Okay. Gotcha. But then, like on the eye of the, well, optimization of like, how do you have, you know, how can you bring the well to, you know, peak production, if you will, prior to a step for artificial lift. So yeah. And that's I think one of the areas that we really play in is a lot of the you either get the, you know, AI masterminds in Silicon Valley have no idea how our industry works.

00;13;51;04 - 00;14;25;08
Unknown
And then they come and they're like, well, just give us your data and we'll solve the problem for you. And it's like, okay, yeah, that's going to work. And then the so I got a little secret for you. Flush recovery has nothing to do with the toilet. And you know, and they're like, what? Yeah. And then, maybe what if there's a bit of a fan favorite is, actually, team, when you make beer, you, take your wheat and your hops and you fermented and you vent the CO2, and then you go buy food grade CO2, and you carbonate the beer.

00;14;25;10 - 00;14;45;26
Unknown
So the team just took essentially a vapor recovery unit from the oil and gas industry, modularized it and, put it on, a brewery in, in Calgary where, now they have and food grade CO2 is actually becoming increasingly expensive. So it's actually, emissions reduction play that works without a carbon tax and actually makes you money while you, while you drink beer.

00;14;45;26 - 00;15;13;13
Unknown
Can you taste the difference? You can't taste the difference. It's food grade. It's actually a higher grade of pure CO2 than actually the the food grade CO2 that they've done testing on. It's like 99. It's like five, nine CO2. No way. Yeah, I like that. So that's another one. Actually the other one that's actually working out really well because in the oil sands, you know, these are massive facilities that are producing, you know, sometimes up to half a million barrels, a day at a one facility.

00;15;13;15 - 00;15;35;20
Unknown
And so they're little cities and, what they realized in this world of absolute, you know, the grid and every jurisdiction kind of being about to fry is they figured out, they, figured out the in, in, in grids, the most likely place for, a power line to actually go down is where they connect with the splices.

00;15;35;20 - 00;15;54;14
Unknown
And so they came up with, smart monitoring technology that they can insert onto these splices that will do predictive maintenance to not only tell you where it's failed, but also when it's going to fail. So they've now now gotten a PID pilot, with a large oil sands company to be deploying this grid and power system on it.

00;15;54;14 - 00;16;12;08
Unknown
And then their next step is going to be with the municipality, in Canada, as we all look at our electricity bills going up and, coming to this city, I think, I think it could be a good candidate for, for a grid and a grid and power reliability, with, you know, poking at Houston here.

00;16;12;11 - 00;16;36;02
Unknown
So have I have I told you my, my grid stability story. So my dad is the guy that when a new technology comes out, he's the first adopter. He buys the first thing, but then he never upgrades. He just, you know, we probably still have the first VCR ever made in America. And he bought it. And all this is this size of a refrigerator.

00;16;36;02 - 00;16;54;08
Unknown
So. So one day he's, you know, I'm talking to him and he's like, hey, I got solar panels for the house. You know, I put them out on the vacant lot. And my dad, how much did that cost you? Because, man, $125,000. But I'll never have to buy electricity again. I go, did you do some math on this?

00;16;54;08 - 00;17;14;08
Unknown
And he goes, yeah, it's a 12.3 year payback. And I go, you're freaking 80. I mean, I want you to be here for bail. But, you know, I mean, it's like, dude, you're 80. And, so anyway, Winter storm Uri hit and my house is in between the police department, the fire department, the hospital. So I'm like, man, I'm never going to go down.

00;17;14;13 - 00;17;31;28
Unknown
Boom, lights out. And it's freezing cold. So I show up over to my parents house. I've got my my cat and my cat in the cat carrier bag in the other arm. I walk into the den, dad's reading the paper. He doesn't even move the paper, but he's like 12.3 year payback. Doesn't sound so bad right about now.

00;17;31;29 - 00;17;57;19
Unknown
Doesn't? All right, dad? Yeah. No. That's good. He. My dad is the opposite on that. It's, if there is a new technology that everyone else has adopted, he thinks it's, you know, just a fad. It's a scam. It's a scam. It's. There's, But, yeah, I think he he does have a smartphone now, but he got he's still on his flip phone up until, a few years ago.

00;17;57;19 - 00;18;26;12
Unknown
Yeah. Nice. Nice. So how do you folks qualify to to get into this program? How do big companies get involved? Give me all the kind of participants. Yeah. So, you know, generally generally speaking, they're sort of emerging professionals that are looking to build their technology skills inside the industry as well as build their network. You know, they get incredible networking opportunities outside of the corporates with senior executives.

00;18;26;14 - 00;18;48;10
Unknown
Generally, you know, the corporates, do this to sort of build their innovation capacity inside their companies, as well as get a front row seat on, you know, where are the emerging technology plays, where's the value going to be created. How is the industry looking at some of these things. So some of the companies will sort of identify their high performers and nominate those individuals for the program.

00;18;48;12 - 00;19;12;19
Unknown
And then some of the companies which I'd say is becoming more of it because some companies will get, you know, hundreds of applications for the five seats or ten seats that, that company will, will purchase. So it'll be a competitive process. They'll do an application, and then we kind of score it and rank it and then have a conversations with the leadership at that company about, you know, who's sort of the, the, the best fit, for the program.

00;19;12;22 - 00;19;41;29
Unknown
We do have scholarships available for post-secondary, graduate students. Those in Texas are made available through, taxi. The Texas Energy exchange, which is a partnership between MIT and all five research universities here in Texas. And then through in Canada, through our sort of post-secondary, as well. Those are sort of the two, two kind of ways that, individuals get into the program.

00;19;42;02 - 00;20;05;10
Unknown
So all of this happens in Calgary, Calgary and Houston. Calgary in Houston. Okay. So in Calgary, we're based out of the Energy Technology Center. And then in Houston, we're just down the street here at the cannon. And so it's door. Yeah. And so, every single event is, also hybrid enabled. So we'll have a speaker in Houston, we'll have a speaker in Calgary.

00;20;05;12 - 00;20;24;24
Unknown
And then just with the nature of our industry is you got to get you get called out to the well site. So everything's kind of hybrid. Hybrid enabled, as well too. And also the integrated nature of the North American energy system will have, Calgarians who are in Houston for the week that stay in, in, in the city for and then join the Houston cohort.

00;20;24;24 - 00;20;44;09
Unknown
And then some of the Houston audience will be up in Calgary for meetings and then go out. So it really builds that kind of the two energy centers, bridge and network as well. And they're translators involved so that the, the Texans can understand the Canadians. And yes, first of all, I'd say the energy crowd is pretty, pretty versatile.

00;20;44;09 - 00;21;12;01
Unknown
So, I know there's not as much of, translators is might be necessarily need, fair fair enough. Yeah. Oil kind of trumps all the you know, the thing I used to do back in the day is anytime I was having to negotiate with somebody, particularly from the East Coast, like New York, I would just, you know, I'd make sure I go to the bathroom before the meeting and I'd just talk real slow and I'd say things like, can you splain that to me again?

00;21;12;01 - 00;21;32;09
Unknown
And it would just, you know, after about an hour of that, some New York lawyer's just frustrated. He gives up on everything. I'd be like, well, after I kind of you appreciate that. All right. Go back to crowing on successes because I cut you off on that. Well, yeah, I was, the as I was mentioning, those are my, my, my my favorite children.

00;21;32;09 - 00;22;00;10
Unknown
There's, ones that range from sort of, you know, grit and power, flexibility, production optimization, some really cool CSS tech that's, post combustion, carbon capture technology that, some of the stuff that, I need to be careful of where I can talk about, I to, but, yeah, there's, it's what it's done as it's emerged, some, really sharp technologies.

00;22;00;10 - 00;22;20;12
Unknown
Maybe this one I'll kind of close on before I know you want to get to the the best ideas that didn't work. Yeah. Is, actually one of the things I think it's a powerful example for how our industry should be thinking about things. But essentially, natural gas processing facilities have got condensate stabilizers, that will measure, you know, how much candy is coming out of out of the.

00;22;20;12 - 00;22;48;24
Unknown
Well, that gets sort of reported down the pike. And those stabilizers are not just changing every minute based upon wellhead, gas composition, temperature, pressure, etc.. They're also running on 1990s skater. So one of the teams actually figured out a way to, optimize the readings as well as the stabilizers themselves through an AI system that could integrate with the skater and increase condensate yields by about 20%.

00;22;48;26 - 00;23;14;20
Unknown
So you can imagine when, you know, gas three weeks ago was was was free. How how excited that would get it. So they actually got, live of live production data set that we used to our partnerships with Databricks. And Hitachi and got live production data set for about half of the Canadian, basin, and was able to now come up with an AI system that can sort of optimize it.

00;23;14;20 - 00;23;43;13
Unknown
And so I think there's an also an evolution of how the industry can think about, is the competitive advantage of a company, their, their data set, or is the competitive advantage of a company, how quickly they can deploy a technology and how efficiently they can employ the technology. And I think there's an evolving stuff around, how can an organization like avatar play in the sort of pre competitive space for these organizations to unearth new technologies?

00;23;43;16 - 00;24;05;00
Unknown
And then at the point they're ready to be deployed? That becomes the sort of competitive space that drives competitive advantage of these, of these companies. So and now they're now they're working on the essence and, and, you know, the other, other or other value added products, the, you know, if you, if you really step back and say, okay, what's the biggest still in the energy business in our lifetimes?

00;24;05;00 - 00;24;26;26
Unknown
It was the shale revolution, right? You know, doubled oil production in the U.S after 40 years of decline, tripled gas production, changed geopolitics, lower costs. So we can have Amazon vans at our house every day. And I mean, literally, if you drill down to the core of what happened, some dude went, man, let's shove some baby powder into a sauce rock.

00;24;26;29 - 00;24;53;05
Unknown
That shit sounds cool with the pressure. Yeah, yeah, let's see what happens, dude. But but I mean, to be serious for just a second, it was literally just suspending convention, you know? I love you, engineers. I love my fan base. But y'all were wrong circa 2000. I mean, you were just wrong about all that stuff, so I periodically look at the camera just for dramatic effect while the engineers did huge.

00;24;53;05 - 00;25;22;24
Unknown
But, Anyway, no, but you suspended convention, and, I mean, we did that. We're still at only 5 to 10% of the oil in place out. I mean, we got 90% left to go. And I think, I think suspending convention and the power of AI on that data, you basically need a CEO that just says, okay, we're going to stop or we're going to stop experimenting fracking rock.

00;25;22;24 - 00;25;36;17
Unknown
We're going to frack our own companies. I mean, I think that's almost how you need to be thinking about it. So I'm I'm in your camp on what you chose. Well. And a lot of and I think a lot of it too is like we you know, that when things go sideways in our industry, they can go really sideways.

00;25;36;17 - 00;25;56;03
Unknown
And so for very good reason, we have very rigorous, safety procedures in place, compliance procedures in place, which are absolutely necessary. You know, I often say come from the drilling world. You know, when you're in the middle of a well control incident, it's the worst possible time to innovate. It's, you know, everybody do their job. And we got 90s to shut this in, right.

00;25;56;05 - 00;26;19;06
Unknown
And the challenge is, is sometimes how do you then maintain that rigorous safety standard that is so necessary for our industry, while also creating spaces where you can try new things, operate with new thinking, look at things from some some of the other perspectives, you know, and that's what we really try to say is we don't want the experts on production optimization working in our production optimization stream.

00;26;19;11 - 00;26;40;10
Unknown
We want them to walk in with almost a childlike curiosity of, why do we do it that way? Have you thought about this? What? About what about this? And by looking at it from a kind of unique perspective, you can sometimes get, some unique ideas and then you empower them with these incredible tools of artificial intelligence, and the industrial bit of our industry.

00;26;40;10 - 00;27;13;18
Unknown
It's pretty remarkable what these, what they, what they can come up with and you're and it and it only is going to get better. I mean, it is the sucky is the technology is going to be right now, you know. So yes. No definitely. And then the big question is, is so, you know, I look at the phases of innovation that we've had in the oil and gas industry and you know, used to be that the oil companies would have these, you know, large R&D functions, you know, the big R&D campuses that are driving around here as we speak.

00;27;13;20 - 00;27;38;21
Unknown
And then in the shale revolution, it really was there was, you know, almost like a collective decision by the industry, the right that the IP of the new technology was going to come from the service side of the business. And what you had was a really almost leaky service out of the business, where you'd have a drill crew and a frack crew that would drill for one operator and then walk across the street and get a little bit better, and then walk across the street and get a little bit better.

00;27;38;23 - 00;28;02;02
Unknown
And then about a decade ago. So we almost made we looked at the returns that the silicon Silicon Valley was making, and we got a little jealous. And we said, well, why don't we outsource this to a startup? And, now, unfortunately, the service side of the business is, is not where it once was from. Cash flow perspective and, and their shareholders are saying, you know, show us, show us the returns.

00;28;02;04 - 00;28;23;08
Unknown
And so and then I think we've realized, you know, that there have been a number of great startup successes. But if you're trying to innovate on a multibillion dollar facility is, you know, three guys in a garage, the right forum. And so where's this next wave of innovation going to come from? If we're reaching the efficiency plateaus and shale?

00;28;23;11 - 00;28;43;24
Unknown
Even inside the oil sands, one might argue, where's this next wave of innovation going to come from? And that, I don't think, has been totally figured out. And I think this moment our industry is in where all of a sudden where the cool kids at the party again, how are we going to deliver that? How are we going to deliver an energy abundant future?

00;28;43;24 - 00;29;08;10
Unknown
How are we going to increase production? It's $5,060 oil. And what we need is new forums as an industry to empower people to think about things in new ways, while maintaining that safety standard that we now desperately need on the on the rig. So I do think all the technology that's going to empower that, and my whole take on that is I don't know if it's going to be big or small.

00;29;08;12 - 00;29;40;01
Unknown
I do know it's going to be early adopters. I mean, right, you know, I mean, that's what happened in the shale revolution. I mean, George Mitchell got freaking rich, right? And, after all, was going bankrupt. No, no, no, no. God bless. God bless him. I actually, I, I, was at a cocktail party and met like, his daughter's granddaughter or something, and I was saying, you know, I really like, you know, all the stuff that happened down in Galveston because he spent a lot of money down cleaning Galveston up making it nice.

00;29;40;03 - 00;30;03;03
Unknown
She goes, I sure hope so, because that's my freaking inheritance. And I was like, fair enough. But I think it's early adopters, particularly on AI, because, you know, at the at the end of the day, if you think about what the software revolution was, it went in and it divided the functionality of an enterprise. All right. You know, in the in the real world, you had CRM, right.

00;30;03;03 - 00;30;22;17
Unknown
And we'll do that in Salesforce and you had accounting. We'll do that an SAP and oil and gas. It was like, okay, well forecast our reserves over here in Aries or FD wind or whatever. We'll keep all of our well files here and well view. We siloed it up. The true promise of AI is to create that one data source.

00;30;22;17 - 00;30;52;16
Unknown
And so the guy who's working on Lyft when the well's eight years old is going to see that when the driller was drilling it, he had to side track twice. And so he's going to go, that's why I'm having problems lifting. So I got the screwed up hole or whatever the case may be. And, and I think having that single source of data and using AI tools, I think within 18 months we're going to be able to tell the haves and the have nots in this industry.

00;30;52;18 - 00;31;17;14
Unknown
You're you're already starting to. So last thing, on this point is so the CEO of ramp, the credit cards that, you know, do this he's actually been tracking I spend by his clients. And the clients with the largest I spend in the top quarter have basically doubled or tripled revenues. Yeah. And the ones in the bottom quarter are flat on revenues.

00;31;17;14 - 00;31;50;11
Unknown
So he's starting to see it. I think we're going to see how much of those would be service companies producers versus kind of other. Well and that that's he's he's across all industries. Right. Because these credit cards for everybody and I my gut is he's probably only got a handful of energy clients. I don't have the analogy to be able to look in energy yet to say, okay, but kind of anecdotally, there are some folks out there that are cutting edge using AI, doing a lot of machine learning stuff, and they are the better performers.

00;31;50;11 - 00;32;18;21
Unknown
Yeah. You know, and so I think it's going to be clear cut in 18 months, because it's interesting to me that I think that especially, you know, the last kind of 12 months where, you know, I call it the sort of the, the myth of an easy energy transition is completely unraveled. And, you know, the companies that were showed, I'd say, you know, the most discipline around their their thinking around, you know, what the public commentary was in 2020 of been have been kind of rewarded.

00;32;18;24 - 00;32;38;05
Unknown
But, you know, you you go back to the previous phase and you actually look at the shale revolution. It was, you know, small juniors essentially that, were able to really, push it forward. And the majors, you know, were slow to the game and ended up having to buy up these companies that at higher multiples, once the tech was a little bit more proven out.

00;32;38;07 - 00;33;04;02
Unknown
But you've seen so much and I'm wondering for your perspective in, in the Permian is you've seen so much consolidation, like how many of these juniors are left to be these early adopters on this stuff, or is it going to be inside companies? Yeah. No, that that is interesting. Because if you if you think about it, there probably is a floor or a minimum in terms of how much you can actually spend on AI and data.

00;33;04;02 - 00;33;25;09
Unknown
You've got. I mean, because at the at the end of the day, you probably need some sort of critical mass on your data to just start running, because the greatest thing about AI is that, you know, now you I'm old enough to remember when we called it statistics, but, you know, the, it finds correlation really well. I mean, you still have to be the subject matter expert.

00;33;25;09 - 00;33;52;29
Unknown
And so whether it's causation, but you do probably have to have a critical mass of, of data to be able to do that. So that's that's an interesting point. Yeah. And that's, you know, getting having that and that to me is going to be the is because there's with the consolidation we've seen, I'd say on both sides of the North American border is, you know, is led to sort of everybody wanting to be second.

00;33;53;02 - 00;34;27;13
Unknown
Let's let somebody else figure it out. And, and it will rapidly, rapidly adopted. And so the, the what I'm trying to figure out is does that next wave of efficiencies, and value creation in our industry where we, we haven't for a decade, we haven't been allowed to really talk about production growth. Right. And so now is the next phase going to come through some AI tech that figures out how to get the next 5%, out of the reservoir that's down there, or is it going to be some hard tech prop end or something along those line that that does it?

00;34;27;16 - 00;34;49;09
Unknown
And is it good? Be the company that can figure out that piece of it, or is it just going to be the company that figures out how to reduce their OP costs even further? And, I don't know. I don't know the answer to that. You know, my dumb example when I'm out. So on AI software, just to make the point, you know, if you always throw out the absurd, it usually highlights.

00;34;49;09 - 00;35;18;11
Unknown
The point is, you may find out by utilizing AI and being able to look at all your correlations, you may find out that you have 25% more, well, failures. When you have a left handed pumper. And it may actually be causation. Maybe the tools are, you know, such that it doesn't work. But I always say something stupid like that because the one thing I will allow you to do is literally run iterations instantaneously.

00;35;18;17 - 00;35;38;02
Unknown
Yeah. And you get to go chase all those rabbit holes. So I think everything you just listed out, like people that early adopt and start messing with that and playing with that and and and removing convention or suspending belief for just a little bit. Yeah. Well and that's one of the, one of the spaces we're really trying to play with.

00;35;38;02 - 00;36;12;29
Unknown
And through who are, AI partnerships and were super excited about, what we're working on with Clyde as well too. But it's again, how do you give them that sandbox so they can run for those iterations and try it without, you know, blowing up the wellhead. Right. And that's that's what we need to be thinking about as an industry is how can we use AI to create, you know, the, the physical AI systems that are going to be able to allow you to, you know, rapidly model and come up with those constraints against when we're still operating in the world where these processing facilities are still running on data.

00;36;12;29 - 00;36;38;24
Unknown
Right. And so, like, it was fascinating to me being in Silicon Valley last week for the GTC conference, and there was one individual that came up and said, open up a speech. And he's standing there and he goes, has anybody heard of NIMBYism? And I'm like, of God. Like, who doesn't know what NIMBYism is? And then I'm looking around this crowd and I'm like, they actually don't know what NIMBYism is.

00;36;38;26 - 00;36;59;03
Unknown
And yeah. And I was like, you guys are gonna you go to community and you double their electricity rates and still take all the water. They're going to show up at your permitting process and make your life difficult. Yeah. And then the other thing that I thought was fascinating was one of the speakers gets up and he says, AI is the first technology in the world that will not have an S-curve.

00;36;59;07 - 00;37;21;18
Unknown
It will just be exponential. Oh, because he's like, he thinks that the thesis that he was pointing out is that, you know, every time you get to where you would think market saturation, the ability for the technology to self learn now will create, you know, more exponential growth. But then I was also like, yeah, but you're going to run out of copper and you're right.

00;37;21;20 - 00;37;44;10
Unknown
And all these other kind of physical constraints. And so and I think that world, the I think that tech world is going to run into, hard. Well that's Peter reality, Chuck. That's Peter Thiel's deal is you have the physical world that limits as well as start layering on top of that, the limitations by like government and regulation and rules and stuff like that.

00;37;44;10 - 00;38;09;08
Unknown
Yeah, yeah. Like have you been following this open claw. So a little bit, a little bit. So that was also fascinating as well too. So if you're so open cause like Jensen Huang thinks it's like the next big, the biggest AI breakthrough that's ever happened in the sense as opposed to like asking the AI like, I want to go on a vacation to Hawaii, give me an itinerary and my flights and where we're going to stay and how I'm going to travel.

00;38;09;11 - 00;38;29;11
Unknown
And I I'll give it back to you in 30s open call will then allow you to pay for it. You give it access to pay for it on your credit card. Book the hotel, put your points on it from your point program, pay for the car, go and actually do that. But you can see the cyber concerns that that has because you have to then give it all the passwords.

00;38;29;13 - 00;38;51;15
Unknown
So the chief compliance cyber people across the world freaked out and they were like, shut this down. Like, get this off. Our servers don't do not go. And so the Friday before GTC conference, he flies in Jensen Wang flies and hit top of his top 50 engineers, open claws, 50 engineers. Gives them the weekend to solve this.

00;38;51;18 - 00;39;27;27
Unknown
And then they come out with, Nemo open call on the Monday. And he's like, look, we're going to put the Nvidia stamp on it. And we're good. All these chief compliance officers are now with gold standard. I was like, once you get blacklisted by the chief compliance officer, you're never getting on that server again. And like it was just to me fascinating to see like a bit of a psychology of just like you guys don't understand how this how you guys understand how the physical world works, like you guys are going to run into some walls here, really quickly.

00;39;27;27 - 00;39;51;26
Unknown
And I was joking with one of the open claw guys. I'm like, that's the worst branding in the world. Like the chief compliance officer, he doesn't want an open claw. He wants a clenched claw. Yeah, that's exactly. And yeah. Yeah. That's, that's that's fascinating to think through. You know, the the so one of the kind of godfathers or creators of venture capital was a guy named Burton McMurtry.

00;39;51;26 - 00;40;14;22
Unknown
And so Burton was he went to rice undergrad in the 50s and then went to work for Sylvania out in Silicon Valley. And Sylvania did this thing where you work for us, but you get a PhD at Stanford in electrical engineering or whatever. And so he wound up recruiting a lot of rice folks out of Sylvania to to do that program.

00;40;14;22 - 00;40;43;15
Unknown
So Rice University is a small little school in Texas, actually had probably, a larger than it should impact in Silicon Valley. So like Bert McMurtry, Ken Osmond, John Doar, who runs Kleiner Perkins is a rice guy, you know, etc. it's all him. But it was fascinating because my dad was heading out to Kenny Osman's sons bar mitzvah or wedding or something like that, and he calls and says, well, we can't go.

00;40;43;15 - 00;41;01;07
Unknown
Your brother Bobby sick. And I was still an undergrad at rice back then. And I said, well, I'll come home and take care of Bobby, but you got to bring me Burton McMurtry's card and dad goes, all right, we'll do that. So dad walks up to Burt McMurtry at this party. You're the only reason I'm here because my son's taking care.

00;41;01;07 - 00;41;21;18
Unknown
My other son is sick and can I get your card? And Burt, to his credit, was like, hey, that's really cool. I'm in town for rice board meetings. Love to meet your son. So we we wound up having breakfast a few times. One of the fascinating things that I learned from him, because we were talking about, you know, what's it like being a venture capitalist and thinking through?

00;41;21;19 - 00;41;42;11
Unknown
He said, you know what, at the end of the day, the engineer can always build what they say they're going to build. It may cost too much. It may take a little longer than it should. But we put a man on the moon. We can literally solve all these engineering problems. Your job is to sit there and guess who really cares?

00;41;42;13 - 00;42;04;19
Unknown
You know, is there an ultimate market for this? And I was kind of struck with that story here. And you tell the the story about avatar in terms of we go create solutions that don't have a market. Circling back to tell me the coolest thing that, tell me the coolest thing that just didn't work. I'll give you a few different examples on this one.

00;42;04;21 - 00;42;31;29
Unknown
I'll give you. But my my favorite, because it was the absolute most ambitious. But, what are the. So essentially carbon fibers of this like, you know, masterful magical solution that, you know, are lighter and make every product of the world more, you know, a better product and these advanced materials, but they're really bloody expensive to make and require a huge amount of heat.

00;42;32;01 - 00;42;55;07
Unknown
And then so one of the teams was like, you know, it creates a lot of heat is, nuclear fusion. And I, we got we got more waste heat than, nuclear fusion than we know to do with what if we could, take the, you know, I think that 4 million degrees C or some insane level of heat, and, channel that to create a new market product for.

00;42;55;08 - 00;43;19;11
Unknown
And I just absolutely loved the enthusiasm, the ambitious vision. And I was just. But then it was just like, guys like, this is 15, 20, 20 years out. Like there's just there's no capital pool we can access in energy that's going to take one on one unproven technology that so they can apply it on a second of some economic, unproven, technology.

00;43;19;11 - 00;43;40;09
Unknown
And boy, did I want that one to, to work. But it didn't go go anywhere. And it made me, I think, because I think that, you know, your your failures are where you've got to learn from. Right. And, what I think did learn allowed me to think about is as much as sometimes I do love the big, bold, ambitious dreams.

00;43;40;09 - 00;44;11;07
Unknown
And we need to be pushing yourself forward is where's the space you can really play in, and, and nuclear fusion was or advanced nuclear combining nuclear fusion and advanced materials is not a space avatar was it was going to be able to to play it. Another one that God did I love is still and I it's still one of the early kind of technologies is we were trying to in especially Canada's energy infrastructure.

00;44;11;07 - 00;44;34;04
Unknown
There's no cell phone towers, right. It's, you know, this vast amount of the Arctic that is, really difficult to get, reliable communications, with. But then we have pipelines running through, these and every, you know, four miles or whatever. You have a cathodic protector, that will determine if it's, corroding or not.

00;44;34;04 - 00;44;59;05
Unknown
And so every year you'll send out, hey, get, yeah, guy to go see if the thought of rusting or not. Yeah. And so the one of the teams was like, well, why don't we just put a low land sensor on these every four miles? Because we can send the LoRaWAN signal, every four miles that we create a communication network essentially across the Canadian CB walkie talkie.

00;44;59;06 - 00;45;22;05
Unknown
So. Yeah. Yeah, essentially. And, and then Starlink came out. Yeah. And it was like, well, now we can have, you know, why are we going to have a slow walkie talkie when we can, where we can have, you know, 100MB a second download. And so, but still cool. I like the thought process behind it.

00;45;22;06 - 00;45;58;15
Unknown
Yeah, yeah. So, yeah, that was, that was another kind of, big, big learning opportunity is, is when you fall in love with the solution instead of being obsessed with the problem. If your problem is, you know, low latency communication and no cell phone reception areas, then you can fall in love with Starlink pretty quick and, and, and get it deployed versus, you know, we're going to have this new new telecom system, this new network system, and then just ram ramming it forward.

00;45;58;15 - 00;46;21;04
Unknown
But that also gets to my one of my foundational principles, I think I've, I've learned in my life in sort of the ventures and that's, you know, company corporates look at things through the lens of opportunity costs. You know, if I put a dollar over here and I make $1.10 and I put a dollar over there and I make $1.20 and my opportunity cost is $0.10.

00;46;21;06 - 00;46;57;26
Unknown
In the world of new technology, it's really hard to figure out what that $0.10 is going to look like in a, in a reasonable measures. And so how if you're super passionate about a new idea, how do you figure out what you're willing to lose as opposed to, how much what the opportunity cost is like? When I started avatar and, and me and my business partner who's running one of Canada's, major banks, investor capital markets investment desks, we're both really passionate about this forum, and we're both in a position where we can go a year without without a salary.

00;46;57;29 - 00;47;26;01
Unknown
And so we said, well, let's give it a that let's prove ourselves. We'll run it for free from the industry for a year to see if the forum for works. And, you know, if we still really wanted to do it and we've been able to turn it into a success. But when you're looking at a new idea and you're not sure if it's going to work, always understand what you're if you still want to do it and you're willing to lose that, then you've got an approach where you're nobody's losing more than they can afford to lose.

00;47;26;03 - 00;47;47;05
Unknown
And you are operating in a cycle where people are contributing resources, contributing ideas into an expanding cycle of of co-created resources. And, that to me is the sort of important part. And that's one of the things that frustrates me about the venture community is they want their founders to be eating Ichiban and Brock for five years or ten years.

00;47;47;05 - 00;48;13;00
Unknown
So they can, you know, have the equity upside in, in a decade. And, I think unfortunately, there's not a lot of people that can. And you're getting, I'm absolutely adamant that the founders of our technologies, are in a position that nobody loses more than they can afford to lose, and nobody's putting a second mortgage on their house.

00;48;13;02 - 00;48;43;26
Unknown
You know, how do you how do you work in a world where you're passionate about the vision, but your understanding what your loss point is that you can tolerate, as opposed to, we're in in ten years, we're gonna have all this equity, and I just you just need to sneak through it. You know? There's needs to be some if you want to play in the space of technology growth and equity growth as opposed to just, you know, investing in safe stocks and having corporate options, you need to have a few different approaches to how you want to look at your upside, I think.

00;48;43;28 - 00;49;05;10
Unknown
Yeah. No, that's a that's a really good point. We used to when I first joined the private equity firm, I was with historically, they'd played around on the middle of the balance sheet, a lot of sub debt with warrants and preferred stock and stuff. So being senior to common equity was like just the big buzzword and and all that.

00;49;05;10 - 00;49;30;13
Unknown
And I go, well, we're putting up 100 million and management put up two we we overspend. One well we've wiped out their equity. I mean so like and you know, a man with a lottery ticket is not necessarily the best CEO or, you know, for me, for me. So Kevin, how do people get in touch with you? LinkedIn is a common way.

00;49;30;16 - 00;49;56;15
Unknown
Shoot me a message. You know, try and, try and reach out. Avatar innovations, dot energy. Our program has just started for the year. But we've got a, we'll be opening up, opportunities to get involved in either our events, or pre-register for our 20 1027 program. Those are probably the two best ways to, to to get in, get in touch with me.

00;49;56;17 - 00;50;21;00
Unknown
Cool. Well, appreciate you coming on. Yeah. No, keep up the good work. I'm, super passionate about, about Texas. And, I think you guys have, incredible opportunity. And, I think if in this time frame where we're looking at, you know, this period of energy dominance, if you actually take Canada's energy into, the American energy dominance, it's North American unstoppable.

00;50;21;03 - 00;50;29;04
Unknown
There you go, I like it. Well, we'll we'll, celebrate over, shiner beer and poutine. Yeah, that sounds good. I'll bring the poutine.