Big Digital Energy

00;00;00;03 - 00;00;36;09
Unknown
So I went to work and, New York right after 911. And Goldman had built what many were somewhat derisively referring to the Nasdaq 5000 building across the water in Jersey city. It was J.R. and and there was a there was a, growing belief that all of lower Manhattan Goldman was going to move across the river, which tacked on another 20 to 30 minutes to commute from Connecticut, which was untenable.

00;00;36;11 - 00;01;07;14
Unknown
Plus, there was Jersey. I mean, no self-respecting banker could say they they office in Jersey. The spin on that was unbelievable. I remember that building. I will tell you guys when when the Connecticut people show up in Nantucket, everything changes because Nantucket moves from being were all just trying to survive and enjoy a life we can't afford to.

00;01;07;16 - 00;01;36;15
Unknown
We're all here to serve the people and from that from Connecticut, because they they'll just ask them. They'll tell you how important they are. Hey, welcome to BD. Yeah I'm Kirk Coburn. I am joined by Marc Meyer and Chuck Yates who is absent his private jet looking to get it back with one more sale of Clyde. I. Welcome, gentlemen.

00;01;36;16 - 00;02;07;24
Unknown
I believe we tripled our IRR at Clyde this week, so knock on wood, we we sold some software. Dude, that is. Congratulations. Well, let's just go there for a second. What was the what was the argument that sold the deal? That's a, a good thing. Kind of the the thing that the market is starting to realize is copilot ChatGPT what I'll call more kind of horizontal infrastructure type.

00;02;07;25 - 00;02;33;00
Unknown
I just can't get the granularity necessary to do the job in a deep, complicated vertical like energy. And you need all the things we do at collide to kind of get that last mile done. And that last mile is really tough. So I think people are starting to realize that that that's retail AI to me. What do you mean by that, Mark?

00;02;33;06 - 00;02;56;20
Unknown
Well, you got professional grade, which is inherently vertical and deep. And then you and then you have something that can literally look at every piece of information that's ever been put on the internet. No, no, no, no doubt. I love the idea of calling it retail AI, but but I built a CRM for fractional executives. That's awesome, by the way.

00;02;56;27 - 00;03;19;03
Unknown
Not because I built it, but it actually works. And I did use AI to help me. But I have a coding background, and one of the things you realize is that AI it it's memory is not great. The storage you need requirements are huge. So it goes off script a lot. So you still need someone one throat to choke.

00;03;19;03 - 00;03;53;17
Unknown
You need experts in the room. I can be very helpful at finding information, but especially in energy. You need something that can go deep, but you still need experts in the room. Now Cletus Todd Bush so I mean. Yeah, exactly. Y'all are good. You go down. Y'all are going to love this. So, I'm actually going to record a podcast this afternoon with Cornelius Rosario, our chief technology officer, and we got him out of Upside Marketing, which is the multi-billion dollar software company out of Austin.

00;03;53;19 - 00;04;35;16
Unknown
You know, when you pull up to the gas station, it goes, hey, Kirk, your favorite coffee's on sale inside. That's that's upside marketing. And, anyway, so he's pure software dude and not an energy guy. The third day he was at, Clyde, we go out and see this big oil and gas company, and we started telling Canisius about how this industry just runs off of maps, and that when he builds, when he builds mapping for Clyde, he's actually going to have to put the maps upside down for the geologists because they always stand at the top of the table and look at an upside down map when they present.

00;04;35;18 - 00;04;49;26
Unknown
And, anyway, Canisius believe in about 48 hours later, I hear Canisius and Collin talking, and Colin's like, Chuck had it out.

00;04;49;28 - 00;05;11;07
Unknown
Fantastic. I've got another private jet story, but we need to get into, like, why people listen. They probably listen more for the private jet stories than they do for the news. And oh, by the way, we do have data that just broke. This is huge. You know, the number one reason why people tune in to our show?

00;05;11;09 - 00;05;50;06
Unknown
No, why? What is the number one reason why people Marc Meyers, IEA report. To shoot me now, this take me now. The show is officially been canceled. You said it, Kirk, I didn't I'm not going to even utter the acronym today. I break out and convulsions. All right, speaking of geologist and a very fine geologist, that that is, Tom Jordan, CEO of Qatar, who I met probably 30 years ago back when he worked for Key Production and Murali.

00;05;50;08 - 00;06;10;25
Unknown
Yeah. And Monty Robertson and, Anyway. And how did you treat him back then, Chuck? Oh, I was a young investment banker, dude. I was vendor's city. I was, oh. Did you have a vest? Yeah. Well, I don't know if vest had hit yet, but I was definitely, probably up, bro. So, Mark, what those guys do.

00;06;10;27 - 00;06;51;18
Unknown
Well, one of the, I don't know, widely anticipated and long anticipated deals got announced. And that was the all stock merger. Devon and Co Terra, $58 billion combined value. Really long on, you know, described in the headline as or at least the the deck in the conference call as a transformative merger. But it seems like the way I look at it, you know, it was mostly universally positive across the, the analyst community, reiteration of buys, etc..

00;06;51;24 - 00;07;20;24
Unknown
But from a strategic asset standpoint, I believe this was really primarily about bulking up, extending, Devon's position in the Delaware. I found it interesting that there wasn't a whole lot of feature of the Marcellus assets that Katara brings, which they, of course, acquired in the, Cabot transaction. That has been, I guess, subject to mixed reviews.

00;07;20;27 - 00;07;54;09
Unknown
Since that time, if you remember, it's been a few weeks ago, but, Kamaraj had announced, a campaign on Katara, not the least of which was getting Scott Sherfield to agree to be on their slate of of nominees for the board. And so you've got $1 billion in projected synergies run rate in 2027, a third of which is going to come out of quote unquote, corporate redundancies.

00;07;54;12 - 00;08;29;08
Unknown
And I think one of the, you know, one of the more impactful messages here is that the company will be headquartered in Houston, and that, I think, implies all kinds of anxiety, etc., for Oklahoma City, although they did say that the company will remain based, retain a strong presence in Oklahoma City. I don't know if it's, I don't know if it's a Devon Tower worth of presence, but that that was that was kind of the chatter around the.

00;08;29;12 - 00;09;08;10
Unknown
You don't think there can be $1 billion of reductions with a full Devon Tower in Oklahoma City, but you know what redundancies mean. Redundancies equals a I, which in other words means we're we're firing a bunch of people. I mean, unfortunately, right. As we know from a lot of our contacts and at least the way I assess it among the employees, I think Devon is pretty, pretty out front on its adoption and development of of digital capability.

00;09;08;12 - 00;09;34;00
Unknown
And so, technology was a big was a big part of this. But you we've attached the an investor deck here, from the transaction conference call. And you just look at the overlap and an alignment map from an asset perspective. And it it makes a lot of sense in the Delaware. We did have the words world class pop up several times.

00;09;34;00 - 00;10;04;19
Unknown
I think one was describing that that moniker to the ego for. But really this is about, you know, bulking up and scaling up in the Delaware in my mind, with, you know, capitalizing on, G&A reductions and capital efficiencies and cost of capital. One thing I'll, point I'll make about the deal is, another kind of kudos to Ben Dell at Cambridge, because I forget how long ago it was.

00;10;04;19 - 00;10;29;22
Unknown
But, you know, post-Covid. But, you know, four years ago, Ben Dell started talking about, hey, you need to merge with no premium, just stock for a stock. Let's do it. Let's get these deals done. Let's not hold up the deals. Looking for a 10 or 15% premium when at the end of the day that gets wiped out when the stocks normalize anyway.

00;10;29;24 - 00;11;03;19
Unknown
And so it looked like they followed that model. Yeah I think Devon trades at like a 4.3 consensus EBITDA multiple. You know the sector has had a strong run here in the last several days, couple of weeks. A lot of that I mean has has the good old days geopolitical premium around Iran returned. But yeah, I, I think, you know, what Cambridge did with inventive, same, same type of catalyst for Qatar.

00;11;03;21 - 00;11;29;28
Unknown
Post-merger, expected to close sometime in the second quarter. Claire Gaspar will be the CEO of the combined company, and Tom will take on the role of non-executive chairman. So I believe he gets it. I believe he gets the change of control out of this. I think everyone wants Tom's job, even though you're not in power because you get paid a fat salary to do nothing.

00;11;30;01 - 00;11;51;23
Unknown
He has no power, but good for him. Well, you know, supposedly deals fell apart over the last five years, particularly in the oil service world, because the CEOs were fighting on who got to leave. It wasn't who was going to be a good drawer. It's like, no, no, no, I get to go. You got to run this. Nah, we're not doing it then.

00;11;51;29 - 00;12;20;11
Unknown
So I mean, this is, Delaware Basin deal with some side dishes, I mean, Marcellus, that's the garnish. Nobody ordered. And capital is going to flow to where returns are fattest, which is Delaware. It'll be interesting to see sort of in a combined entity, which will take a lot of time because that basically grants them a year to make excuses of what they're not going to do, because it's hard.

00;12;20;11 - 00;12;42;02
Unknown
I mean, it's really hard putting two big organizations together, but I would love for them to throw Marcellus to a guy, guys like the three of us. I'd love to take Marcellus off their hands. We would screw that up so quick for sure. God, yeah. Hey, hey, did you send out the royalty checks? Damn it! Who's going to do that?

00;12;42;07 - 00;13;19;27
Unknown
For sure, 100%. We could have dead Toby watching over our shoulder, making sure we don't screw up too badly. No. Even he couldn't bail us out. The incompetence level. I've got a cool little story about this. The Devon entre into the Delaware came via their Wpx acquisition. Wpx got, their Delaware position from Panther, which was a company I backed back in the day, Barry Mullinax and, Roy Grossman, and we sold it to Wpx for just under $1 billion.

00;13;19;29 - 00;13;50;00
Unknown
Great transaction. We did really well on it. And, Rick Moncrief was the CEO of Wpx. And Barry Mullinax is a dear friend, but he's a piece of work. And so we were trying to think of what can we do for a closing gift for Barry. So we actually hired a crop duster and printed up a long banner that said, congratulations, Panther on your sale to Wpx.

00;13;50;03 - 00;14;13;11
Unknown
And we flew it over Tulsa for eight hours. And, I actually had to call Rick Moncrief and apologize. I'm like, hey, Rick, I know this is really obnoxious, but you like Barry as much as I do. And, you know, he's appreciating this. So that plane just flew around for eight hours and it made the Tulsa World Tribune or whatever their their paper is.

00;14;13;11 - 00;14;37;19
Unknown
Big picture of that on the front page. I'm sure Rick took it. Well, yeah, Rick laughed. Now that I live in South Oklahoma, I just wanted to wanted to look at it. And what's interesting is Oklahoma, like the triple A farm team for Houston Energy. Halliburton left Duncan for Dallas in 1961, then Houston in oh three.

00;14;37;19 - 00;15;11;20
Unknown
Conoco left Bartlesville for Houston in oh two, care McGhee in oh six. Chesapeake expand quietly, growing their Houston footprint. So what is it about these Oklahoma oil and gas boys and gals that are really good at building energy companies? I mean, it's perfect for Houston. They just look in Oklahoma. That's that's where you buy. We're just taking back the formerly departed Ocean Energy, Santa Fe, Snyder, Mitchell Energy, all of which were headquartered in Houston.

00;15;11;22 - 00;15;38;14
Unknown
So. Well, and the other thing we always, you know, any time the energy business is in a ditch, people always go, oh, is Houston suffering? And actually what happens in that scenario is you close your New Orleans office, you fire half the people, but you bring half of them over to Houston. You get rid of Shreveport, you get rid of Lafayette, you get rid of Oklahoma City, Tulsa, Denver, Casper, Wyoming.

00;15;38;14 - 00;16;10;27
Unknown
Pick all those cities and you consolidate back into Houston. And I do think there's exponential growth in Houston for corporate headquarters, because you want to be at your kid's baseball game and sit next to the head of land for another company. And that that uniquely happens in Houston, Texas. Yeah, you got more choice of FBS in Houston. Fortunately or unfortunately, we had a daughter that was a cheerleader.

00;16;10;27 - 00;16;42;07
Unknown
So we went to the Friday Night Lights football games at Insert Local in the middle of Houston private school. And the deal attorneys in oil and gas that run that sideline as if they are the head football coach was insane. I it made me sort of like, I don't want to be here because this is ridiculous. But of course, if I was a deal attorney, I'd be doing the same thing.

00;16;42;07 - 00;17;12;14
Unknown
So yeah, it's good. Good for Houston and I agree. Except there's some good golf in Oklahoma, by the way. Tulsa. Amazing. And guys that are good golfers that I talked to. It's like it's like two stoplights to get to the golf course Houston is another another story. All right. I actually hate to do this, because I like both companies and people at both companies, but this is kind of pretty funny.

00;17;12;17 - 00;17;37;29
Unknown
I went on grok and said, give me a hot take, nimble, fatty style on this merger, on this merger. And it says it's the corporate equivalent of two dudes at a bar realizing they're both sexes, both losing their hair at the same rate, but driving 2018 f-150s and going want to just merge households so we can stop paying two streaming subscriptions.

00;17;38;01 - 00;17;57;09
Unknown
Ouch. That far trumps the best one that I picked up yesterday. Well, at least Wall Street yawned at the at the merger, which means they basically gave it a blessing. So yeah. And there's more to come. This isn't going to be the last, the last one of these because, there is a lot to be said for scale.

00;17;57;09 - 00;18;26;25
Unknown
There is a lot to be said for automation and what it's going to do, in the workforce. So it's it's coming. Chuck, is this the does this dislodge any more, private acquisitions by the public strategic? I mean, I think at the I think at the end of the day, you wind up, you know, if you're willing to take stock as the private equity person, every everything's for sale.

00;18;26;25 - 00;18;53;26
Unknown
The question is, do you want 4.3 times EBITDA for it? You know, it's, well, I would say that the news is the message to every mid-cap ENP. CEO is clear. You're either at the table or you're on the menu and no. And but I but here's here's the thing, Chuck, you've been in this business. Oh, Mark, you two for 100 years now.

00;18;53;26 - 00;19;23;17
Unknown
So, I mean, both of you guys were born in 1818. Whatever. One. Wow. That's a long time to be alive, guys. That's that's a hell of a way to talk to your prospective clients. Hey, dude, I'm with you, man. I was born in, and I hate that everything hurts. God, I listen, I grew up and around this business hearing about it.

00;19;23;19 - 00;19;52;04
Unknown
I just said something that now I'm thinking back like, that sounds stupid. Like we're always in the cycle of, we're buying, being bought or no one's buying anything. Why is now the time to buy? Tell us we just just level us. I mean, at the end of the day, you can make a true case here for the the commodity supercycle to hit, and you ought to be accumulating as much in the way of assets as you should.

00;19;52;04 - 00;20;15;10
Unknown
We're bouncing around at $60 oil. Natural gas is had a little bit better, run here recently, but, you know, you can make a case that the under investment that it feels like we talk about weekly on this show in two and three years, the Roosters are going to come home to roost. And and that that would be the the reason to buy.

00;20;15;11 - 00;20;49;23
Unknown
I think the other case you're going to make is bigger, better scale is going to happen. And then when you have bigger, better scale and it doesn't materialize and better returns, that's when you get start ups popping up. So that's kind of the cycle. Yeah. One one interesting graph in the, in the investor deck is showing positioning of the peer group relative to their scale of lower 48 production and post merger Devon moves into second place behind ConocoPhillips, albeit significantly gas here.

00;20;49;26 - 00;20;55;13
Unknown
I like 1.6 million barrels equivalent per day, so.

00;20;55;16 - 00;21;21;22
Unknown
The good point on on the scale up all comes down to cost of capital. I'm convinced of it. It's all about if you're a mid-cap ENP CEO, it's how much is my cost of capital? And what am I telling investors? Because it cost me more money and my returns are going to be less because he's these big gobble up googly doos.

00;21;21;24 - 00;21;49;17
Unknown
Let me set up the next conversation because two summers ago I might have been three. I was on the beach with a executive VP of one of the largest owners and operators of data centers in the world, and he told me he data centers is everything, man. And what I knew from energy is that we don't have enough energy.

00;21;49;20 - 00;22;13;09
Unknown
And it's not just energy. We can produce a lot of energy, but but producing a lot of energy in the right locations, because energy generating electricity is a local thing. We don't have enough electricity in the key areas around the world to generate enough to power these data centers that we're going to need because of AI coming and etc., etc..

00;22;13;12 - 00;22;45;23
Unknown
So Mark set us up. What is happening with data centers? Yeah, I just I came across this last night on LinkedIn, someone who tracks the data center market in the US, and I guess I was a little, but surprised. Totally. Just because the dynamics are moving in this direction. But and we see it in every major wave of infrastructure, a big part of it's Nimby, but we're seeing in it an acceleration of data center cancellations.

00;22;45;26 - 00;23;18;20
Unknown
We had 25 last year. That was up from 6 in 24 and only 2 in 2023. Now there's been a wave of announcements or, you know, interspersed in that time frame. And in 40% of the of the, cancellations, water and related greater public issues related to water, were the were the primary driver of those cancellations at least cited by this, market observer.

00;23;18;20 - 00;23;52;14
Unknown
And we'll attach the full LinkedIn post here. Jacob. And what do you mean by water, Mark. Literally, I don't have enough water to flush the toilet or, well, in, in evaporative cooling, which is in a lot of cases, migrating, probably more in the middle market, the multi hundred megawatt sized, liquid cooled, but you still have a kind of a battleground over water, because if you're doing evaporative cooling, you have to have almost distilled water type of purity.

00;23;52;21 - 00;24;26;22
Unknown
And so you start with fresh water. It's not, you know, treating produced water. And in the Delaware Basin, from a cost and viability standpoint, you're competing at least the perception is you're competing for significant volumes. Water. I think looking at will say, 50MW and strictly about it depends on your heat rates and all all the different calculations.

00;24;26;22 - 00;25;00;23
Unknown
You have to make. You're talking about something on the order of 80,000 barrels a day. Sometimes times a bunch of data centers and whoever know specifically more about that, which I'm not claiming to know, can contract that, not even the back of the envelope arithmetic. That's more anecdotal. And so water water is clearly, certainly not as high profile when we think about all the the more,

00;25;00;26 - 00;25;23;17
Unknown
Less easy to, I guess, see, which is, you know, emissions has been the big driver. You see a lot of these data centers wanting to be net zero, whether that's cost combined with, with the power in the data center construction. But let me ask you a question mark. Who cares? Why should we care about this story? Why is it important to us here?

00;25;23;17 - 00;26;02;24
Unknown
Here's why, here's why. So if we're looking ahead, I totally was knew Chuck was going to jump in. If you if you're looking for the canary in the coal mine data center, reductions you look at Microsoft recently reported earnings and stock fell 1,112% I think down because of the viruses or what do we know? Because, no, it was even it was even more specifically that Azure, their cloud compute revenues, only only grew 39% year to year.

00;26;02;26 - 00;26;29;28
Unknown
And lot of Wall Street expected north of 40% growth on that. Microsoft's take was, hey, we were using a lot of our compute power internally on open AI. Instead of selling to our clients. We could have had more revenue there. And it was sort of a double whammy. Well, you didn't get the more revenue. And oh, by the way, why does open AI take all these resources to marks?

00;26;30;01 - 00;26;55;18
Unknown
Point on CapEx? And so is this the canary in the coal mine that maybe AI's not all it's cracked up to be all its, data center? I, I'm here to tell you this is a blip. I mean, AI is going to be a runaway train. It is going to be the transformational technology, more so than the shale revolution and the internet put together.

00;26;55;18 - 00;27;18;01
Unknown
We're going to throw so much money off this and and the, the yeah, they're going to be blips all along the way and setbacks etc.. But the transformation is going to be huge. So I'm like to your point what? Why is this a story? It's interesting, but we're going to look back and say it's a nothing burger. Well, here's my question.

00;27;18;03 - 00;27;52;00
Unknown
Flybe's going to have to raise some more money at some point. So here's as an investor, here's my question to you, Chuck, as an owner, okay, I want an answer. Where do you where are you getting all your cloud compute for your AI engine? And you better have a better answer than just Amazon, because if you keep saying Amazon, Oracle and, you know, Google, God forbid, that's not an acceptable answer.

00;27;52;00 - 00;28;14;26
Unknown
Now that everyone's looking inside of all of those big providers saying, what are they doing? So what is your answer? When people are like, how are you going to have enough compute power? What is the compute cost? Because your revenue model needs to take into consideration that these costs are most likely going up. Let's say you Chuck. So nobody's talking about it right now.

00;28;14;27 - 00;28;43;14
Unknown
But you know, in a future. Oh no, no, no savvy investor is talking about this. Well general, I'm sorry. I'm savvy. There you go. Savvy? You're also, I believe you rejected the offer to invest in Clyde, but that's another story. The, That was funny. You could laugh. Yeah, I'm laughing about how am I, like, my credit card keeps getting declined because I need to pay my bills like I have other issues to worry about.

00;28;43;17 - 00;29;20;04
Unknown
Fair enough. No, but clients aren't thinking about this right now. But tokens and running these searches. Yeah. Gotta think the price of that is going up in the future. So we're actually spending a lot of R&D dollars earlier in terms of building our software. We actually and Jacob needs to put up a picture. We've got Spindletop. We've got a $25,000, I think we've got four GPUs, in a machine that we're running stuff on today to help minimize that cloud and compute cost.

00;29;20;06 - 00;29;41;07
Unknown
And it is. I don't want to scare people. But I do want people to think we're cool. It wouldn't surprise me if in a year we're walking and giving you a Clyde system saying, by the way, here's your computer. What closet do you want it in? Because at the end of the day, I think, you know, we're talking about that last mile.

00;29;41;09 - 00;30;04;09
Unknown
And to fix that last mile in terms of precision, you got to condition data. You got to chunk embed, slap metadata on it. You got to have Rag software to sit there and retrieve the appropriate stuff. You also, we're fine tuning our own language model that there's a big press release coming in the future that I can't talk about, but it's pretty freaking cool.

00;30;04;12 - 00;30;25;28
Unknown
And then the last thing is, you're actually going to have to fine tune hardware for costs as well as precision. I mean, you run the same query on ChatGPT ten times and you get a different answer once or twice. A lot of the time that's a hardware issue, just given the way they bundle the information and the kernels to process it.

00;30;26;00 - 00;30;59;16
Unknown
It's not a software problem, so we're attacking it on all that fronts. But, you're right. In the future, I mean, compute the I think the cloud has disappointed in terms of being cost effective, because everybody that went from having stuff on prem to cloud is has cringed at the costs they've paid. And those big on prem, cloud centric data centers are inherently, good, connected and close to, industrial and metropolitan centers.

00;30;59;16 - 00;31;40;09
Unknown
I think, to answer your question, Kirk, I think Nimby is, ultimately forcing a pivot here, whether it's water, whether it's emotions, whether it's noise, etc., it is forcing a pivot that we're going to see more of. Particularly on the inference side, we're going to see data centers that are you know, much faster cycle time, and they're going to where the energy, namely natural gas and the power is to less populated areas where you run into these, you know, public interest issues, which water clearly is emissions is particularly for an EPA non attainment zone.

00;31;40;09 - 00;32;08;22
Unknown
We've seen that. And so I do agree that, you know, what Chuck described is really a distributed model of compute on prem. Fed these same conversations. We'll call on talking about Spindletop. And so you know, I think we're going to see a maybe a diffusion, depending on, you know, what the function is. But I had the same conversation with my father, who started coding on mainframes.

00;32;08;22 - 00;32;40;17
Unknown
And so when the cloud was hitting and he's like, we're going back to the way compute used to be done and it's going to keep it. This is this vicious cycle. What's interesting and here's, this is a prophecy, which means this is a this is prophetic, boys. But the heaviest cancellation rates for data centers is in PJM, which is the northern Virginia corridor, which has been really the ground zero for data center development, because that's where AOL came out of.

00;32;40;17 - 00;33;09;25
Unknown
And I don't the US government, all the telecom connected to the government. Yeah. Yeah. I mean it's people just drifting off the the big teat. But PJM keeps failing its reliability target. And so they're canceling a bunch of data center orders because of grid reliability. But here's what's interesting. Is PJM, the poster child for what happens when you try to bolt on.

00;33;09;25 - 00;33;40;21
Unknown
You have 21st century demand with a 20th century grid, with a 19th century permitting process. So that's good. Yeah, write that down. And Ercot said Ercot open for business. No cancellations because they say bring your own power. So that's, you know, Texas we've been beating up on Ercot. But here's the prophecy. If we don't figure the shit out, China will.

00;33;40;24 - 00;34;07;26
Unknown
And at one point and the Saudis, because they have a lot of money, at one point, you're going to start seeing regulations change where data security people are willing to move their data offshore because we just can't get it done. I right now, it's not happening because of all the laws. But let's follow this for the next ten years.

00;34;07;29 - 00;34;31;02
Unknown
I bet there's going to be a lot of push to start moving and securing your data anywhere that has cheap data center capacity. That's that's what. And I know On-Prem is one route, but that's really expensive, I think. But we should do the math. We'll have some finance pros invest. Dallas. Devon. Devon branded hyperscalers in the Marcellus.

00;34;31;05 - 00;34;52;18
Unknown
There we go. Monahan. If I'm the mayor of Monahans, Texas, man, I am I am rolling out the red carpet. We we can put it anywhere you want. The the one funny story about us and Spindletop. Colin ordered all the stuff from Micro Center and when he showed up there, they were like, hell, we didn't even know this was real.

00;34;52;18 - 00;35;11;28
Unknown
We didn't. We were wondering if you were going to show up. So he got all the stuff. It was total geeks ville over here, Clyde, because all the components were out and they were putting it together and late night pizza was ordered and all this, and we're going to plug this bad boy in. And, Jimmy was great.

00;35;11;28 - 00;35;33;16
Unknown
Jimmy was like, hey, shouldn't we get a surge protector before we plug this? Like it? It's like, yes, yes we should. I just want to know what micro Center thought when a thug rolled up in his. Whatever his big ass truck? Or is he driving an electric car? But when he got out and he looked all, you know, UFC.

00;35;33;22 - 00;36;01;23
Unknown
Yeah. Not some big fat guy that eats pizzas all day. Yeah, exactly. Exactly. God does what they thought. But, anyway. Hey, let's do this. Can we do just five minutes on trade policy and, I'll let you fire away at that, because I think more than five minutes would put us all to sleep and lose half our audience.

00;36;01;26 - 00;36;29;07
Unknown
Not as much as the IEA, but just throw out. Yeah, yeah, exactly. Saying in a nutshell, over the past week, listeners tune out for the next five minutes. There's been a flurry of of trade related, I think security moves by the administration, not the least of which was Rubio a couple of days ago hosting a critical minerals summit at, the State Department.

00;36;29;12 - 00;37;05;21
Unknown
And there were dozens of our allies there, both EU, Japan, some of the African countries where minerals are ubiquitous. And so, you know, this is, and in one case, the, you know, the threat of tariffs because some of these countries like Canada and there's a fairly high profile resurgence of of, friction between Carney and, and Trump, you know, we're going to we're going to slap a 50% tariff on, Canada.

00;37;05;28 - 00;37;35;22
Unknown
Canadian plants. If you guys move toward your embrace of China, for different things that are subject to tariff, from the US. So, you know, there's that there was the, there was a higher profile, trade deal announced with India with Prime Minister Modi. The crux of the demands from our side, you know, lowering our reciprocal tariff from 25% to 18%.

00;37;35;24 - 00;38;21;23
Unknown
Of course, we got zero. Looks like a win. But, you know, the overarching thing was allegedly an agreement for India to quit purchasing Russian oil and a $500 billion investment or trade commitment from India involving things like energy, technology and agriculture on all these things. The devil's in the details and we are oh one other. This is not related at the summit, but, Alaska Senator Sullivan is raising alarm about the spike in, Arctic activity, military activity by the, maneuvers by the Chinese and the Russians.

00;38;21;23 - 00;38;42;05
Unknown
And I thought it interesting that, you know, talking about icebreakers as being one of the things that we want to have more capability and capacity. And Russia has 54 nuclear powered icebreakers, or, as he called them, they're nuclear powered and weaponized. You know how many we have?

00;38;42;07 - 00;39;14;16
Unknown
Zero, two, two and one is in drydock. So apparently there was a $25 billion Coast Guard, provision. And the one big beautiful bill there was, I think, a deal struck with a, a shipbuilder in Finland for three. I don't know where that stands in terms of final agreement, but the gap between 2 and 54 doesn't sound like can be closed between now and certainly the end of the president's term.

00;39;14;23 - 00;39;39;02
Unknown
Two quick things on this. I think it's important we had all this trade flurry stuff, and the market is getting to the point. It's just ignoring, you know, they're didn't you know. So if Trump goes on a future rant or something, we won't see the stock market collapse. Conversely good deals. We're not seeing a huge bump that that I think's a good thing just given how Trump operates.

00;39;39;05 - 00;40;06;07
Unknown
The second thing I will say is I am seriously concerned from a strategic point of view, that we just cannot ramp up our shipbuilding strong enough to compete in this world. And so we need to be thinking through things of, can we buy from allies? Can we get rid of the Jones Act and maybe use, allies ships, but tariff or something.

00;40;06;09 - 00;40;40;10
Unknown
Because at the at the end of the day, I mean 2 to 54 sucks. And remember, China's shipbuilding capacity today is 300 x the US. Oh yes. Yes. And they and they build on the on the commercial side, they build those with tight alignment with the Chinese military. So those, those, those ships can be put it into military service quickly.

00;40;40;12 - 00;41;11;19
Unknown
Yeah. So it was just a spike. And, you know, as the Greenland freighters pops up, they've noticed a pretty significant increase in, you know, the this is not Greenpeace out there, you know, doing whale surveys. This is, you know, these are Chinese and Russian assets that have really increased their presence, encroaching on on Alaska, which, you know, as Sarah Palin once said, I can see.

00;41;11;20 - 00;41;37;20
Unknown
I can see Russia from here, man. I mean, there's there's some famous like, politician political quotes. That's one of them I like. I don't know, of course, the news, but the Critical Minerals Summit. Rubio I think this is really interesting. Rubio basically told 55 countries that China has this by the periodic table, and we need to fix that together.

00;41;37;23 - 00;42;14;27
Unknown
So the IEA, by the way, comparison is it's subtle. They're basically trying to build OPEC for minerals, except where the cartel. So I think that's super interesting now whether they'll pull it off or not. But that to me is is the news that I took away as wow, that's pretty interesting I don't know. And one of the things I think Chris Wright said in the midst of this summit was we really got to focus on processing where, you know, China's an 80 to 90% monopolist in terms of of processing critical minerals.

00;42;15;00 - 00;42;40;11
Unknown
No. And, and, I would say to the environmentalist, if you want all your electric cars, etc., we have to do that and we have to do that here. And if we're speaking Russian or Chinese in 30 years, that's on you, not on me. So, boys, this was fun as always. It was very fun. Was that your subtle like, we're done.

00;42;40;14 - 00;43;02;29
Unknown
We have no more things to talk about. No, it was a very overt I must p I've been. That's what I thought. I've been at this for an hour and I drank the whole thing. Well, that's what that top is for, is to fill it up. Last time he ejected because he had to go sell software, which is kind of been the I do have a 1030, 1030, somebody coming in.

00;43;03;02 - 00;43;08;20
Unknown
Awesome. So yes, go sell some more. Yeehaw! Guys, good to see you boys.