Big Digital Energy

00:00:01 [Speaker 1]
Welcome back to another BDE.
00:00:04 [Speaker 1]
I'm Kurt Coburn, and this is my sidekick who happens to be on his sidekick, Mark Meyer.
00:00:14 [Speaker 1]
Welcome back, Mark.

00:00:15 [Speaker 2]
Hey, Kirk.
00:00:16 [Speaker 2]
Another Chuckless edition.
00:00:18 [Speaker 2]
However, before we kick it off, we've got to wish Chuck, although we were on time yesterday, belated happy birthday yesterday.
00:00:27 [Speaker 2]
And in advance, I believe yours is on Thursday.
00:00:31 [Speaker 2]
That's correct.

00:00:33 [Speaker 2]
Early happy birthday.
00:00:35 [Speaker 2]
Which is

00:00:36 [Speaker 1]
two days away.
00:00:38 [Speaker 1]
Thank you.
00:00:39 [Speaker 1]
Thank you very much, Mark.
00:00:42 [Speaker 1]
39.
00:00:42 [Speaker 1]
Feels good to be old.

00:00:43 [Speaker 1]
Right?
00:00:47 [Speaker 1]
I I commented on that.
00:00:50 [Speaker 1]
We've got a few interesting things to talk about before we get to the world of energy.
00:00:57 [Speaker 1]
So roll it, Jake.
00:00:59 [Speaker 1]
Let's show some clips if you can because I need some comments from you, Mark, because this is some wild shit going on.

00:01:10 [Speaker 3]
Seen a few AI edits of stuff, but that's, that's about it.
00:01:13 [Speaker 3]
I saw AI edit of Sartre's interview.
00:01:17 [Speaker 3]
Y'all seeing that one?
00:01:19 [Speaker 3]
How's it going?
00:01:22 [Speaker 3]
Of him slapping how he wrote.

00:01:27 [Speaker 4]
Yeah.

00:01:29 [Speaker 1]
Oh my goodness.
00:01:31 [Speaker 1]
Like, here's I'm have was I a Manning fan?
00:01:35 [Speaker 1]
I'm always skeptical about any Texas quarterback because if you're gonna play Texas football, you've gotta be a great quarterback if you're gonna if you're gonna wear, the Bern Orange jersey.
00:01:50 [Speaker 1]
And so I've been skeptical of Manning, especially because he has Manning name on it, especially because he played small private high school football.
00:01:59 [Speaker 1]
I could go into details, and I know there's a lot of Manning lovers out there.

00:02:03 [Speaker 1]
So let's get after me in the comments.
00:02:06 [Speaker 1]
But, man, can you muzzle like, this is gonna is he gonna get canceled?
00:02:12 [Speaker 1]
Mark, what do you think about this clip?
00:02:14 [Speaker 1]
I'm just so surprised.

00:02:16 [Speaker 2]
What was the context of the clip?

00:02:19 [Speaker 1]
Okay.
00:02:19 [Speaker 1]
I we'll play that clip.
00:02:21 [Speaker 1]
We gotta play that clip.
00:02:22 [Speaker 1]
But is the clip the original clip was okay.
00:02:26 [Speaker 1]
Halftime, not Holly, but the other reporter of regular name, she was there.

00:02:33 [Speaker 1]
Yeah.
00:02:33 [Speaker 1]
That that's that's her.
00:02:35 [Speaker 1]
She was there to interview, SARC at halftime, but they had technical issues.
00:02:40 [Speaker 1]
So SARC left and was never interviewed.
00:02:43 [Speaker 1]
The they came on and said, hey.

00:02:46 [Speaker 1]
We had technical difficulties.
00:02:48 [Speaker 1]
Our fault.
00:02:49 [Speaker 1]
So Sark was already shunned once.
00:02:52 [Speaker 1]
So then after the game, Holly gets Sark to interview, and he walks up to her, turns her, and says, hook him, and and runs off.
00:03:01 [Speaker 1]
Someone made an AI clip, which we're gonna play, or maybe we don't play it out of out of I I think we shouldn't play it because it's it's ridiculous.

00:03:11 [Speaker 1]
But it shows Sark slapping Holly, which I just, like, I don't find funny.
00:03:16 [Speaker 1]
I don't think it's in in good humor.
00:03:19 [Speaker 1]
It's tasteless.
00:03:20 [Speaker 1]
It it's not gentleman.
00:03:22 [Speaker 1]
But that's the clip that Manning thinks is funny, and he says it.

00:03:29 [Speaker 1]
And I think he looked to his side because people are, like, don't say anything, and he just opened his mouth.
00:03:35 [Speaker 1]
So that's the context.
00:03:37 [Speaker 1]
Mark, you're a gentleman, and you're a good Aggie.
00:03:40 [Speaker 1]
What say you?

00:03:42 [Speaker 2]
Yeah.
00:03:42 [Speaker 2]
I don't I don't think it was funny at all.
00:03:45 [Speaker 2]
I will say I'm more than worn out on the whole sideline reporter thing in the middle of, you know, euphoria from a victory or at halftime when you're down by a bunch, you're gonna ask the trite and cliche questions.
00:04:01 [Speaker 2]
And I I feel the same way about and this is really the the the genesis of all this was had to be with ESPN.
00:04:10 [Speaker 2]
I see it on, you know, Fox and baseball with Ken Rosenthal and Tom Verducci in the dugout and mic'ing up players during the game.

00:04:18 [Speaker 2]
It's just it's just gotten absurd.
00:04:22 [Speaker 2]
And from a reporter celebrity standpoint, it's more about them than it is about the game, the coach, the situation, asking any kind of insightful types of questions.
00:04:33 [Speaker 2]
So you're not getting any substance out of it.
00:04:35 [Speaker 2]
So just I I've I've said this often.
00:04:38 [Speaker 2]
There's one MLB announcer who, you know, must get paid by the word count play by play.

00:04:45 [Speaker 2]
You know, just let the game breathe a little bit.
00:04:47 [Speaker 2]
That's that's kind of my comment there.
00:04:49 [Speaker 2]
But I I don't think, you know, I don't think that that that AI kinda meme of of Sark and Holly on the side after the game was funny at all.

00:04:58 [Speaker 1]
Well, I will say this, that there was one postgame interview in the heart of celebration that will we should play this clip.
00:05:11 [Speaker 1]
Rudy Tomjanovich after the Rockets win the whole NBA finals.
00:05:17 [Speaker 1]
What does he say to the reporter?
00:05:19 [Speaker 1]
Do you remember this?

00:05:21 [Speaker 2]
Never underestimate the heart of a champion.

00:05:23 [Speaker 1]
Never underestimate the heart of a champion.
00:05:25 [Speaker 1]
That was the greatest postgame interview line of all time.
00:05:31 [Speaker 1]
Remember?

00:05:33 [Speaker 2]
Rudy is part of another infamous NBA moment.
00:05:37 [Speaker 2]
You remember this?

00:05:38 [Speaker 1]
Did you tell me?

00:05:40 [Speaker 2]
Well, when he was a player, Rudy Washington yeah.
00:05:44 [Speaker 2]
Almost killed him.
00:05:45 [Speaker 2]
I mean, go back and look at that clip.
00:05:48 [Speaker 2]
It's brutal.

00:05:50 [Speaker 1]
We've got a lot of clips to play.
00:05:51 [Speaker 1]
Here's the second thing second comment of the day.
00:05:54 [Speaker 1]
I'm giving, you know, two thumbs down to to Longhorns victory.
00:06:00 [Speaker 1]
You know, I went to UT.
00:06:02 [Speaker 1]
I love Longhorns, but show this other it's not a clip.

00:06:05 [Speaker 1]
It's it's a it's a photo that's gone viral.
00:06:09 [Speaker 1]
This one from actually Beau French who is running for Texas Railroad Commissioner posted it.
00:06:18 [Speaker 1]
I am so frustrated over this because it's gone viral about this whole, like, this has become an immigration issue.
00:06:28 [Speaker 1]
And I went to UT.
00:06:30 [Speaker 1]
Like, I looked at I looked at this photo.

00:06:32 [Speaker 1]
I'm like, hey.
00:06:33 [Speaker 1]
It's there there was quite a few not I mean, there were a lot of there were Indians that went to University of Texas.
00:06:43 [Speaker 1]
There still are.
00:06:44 [Speaker 1]
I mean, it's Texas is a diverse community, but this looks pretty normal to me.
00:06:50 [Speaker 1]
Like, it's probably a group of friends.

00:06:52 [Speaker 1]
Maybe they live in the same dorm, maybe in their same fraternity, but there's nothing to see here.
00:06:58 [Speaker 1]
There's nothing interesting about this photo except a bunch of guys celebrating a victory.
00:07:04 [Speaker 1]
But this has gone viral because people on x and other platforms think it's outrageous.
00:07:10 [Speaker 1]
And I'm like I just throw my hands up.
00:07:13 [Speaker 1]
I'm like, this is ridiculous.

00:07:15 [Speaker 1]
What do you think, Mark?

00:07:16 [Speaker 2]
Well, I you know, I think it's just more political distraction as we approach election day, and it's more about tearing down and gotcha in creating controversy than it is about addressing issues.
00:07:29 [Speaker 2]
Why isn't Beau French talking about what the Railroad Commission is going to do and should have been doing as it relates to produce water disposal?
00:07:40 [Speaker 2]
And some of the problems that, you know, Clyde and and Chuck in particular have been out in front on.
00:07:45 [Speaker 2]
And, you know, I had a conversation back in February right before the primary with Hawk Dunlap.
00:07:50 [Speaker 2]
And, you know, Kent Paxton is out suing a a fiberglass recycler for abusing a facility in Sweetwater.

00:07:59 [Speaker 2]
But the big issue, you know, the big issues for the Railroad Commission, I know Collide's got a a coming feature on, some of the the orphaned wells with the non p and a wells.
00:08:11 [Speaker 2]
I saw one kind of in my home hometown bay, Corpus Christi Bay.
00:08:17 [Speaker 2]
So I I look forward to watching that.
00:08:18 [Speaker 2]
But sitting here in North Carolina, you know, we get interrupted with political ads and with increasing frequency.
00:08:26 [Speaker 2]
And every one of them is a tear down ad or trying to, you know, spark some controversy.

00:08:34 [Speaker 1]
I'm with you.
00:08:35 [Speaker 1]
I'm with you, Mark.
00:08:36 [Speaker 1]
But did you see what I did there?
00:08:39 [Speaker 1]
Did you like that segue from Texas football to energy by by throwing a bow French reference and we moved from Texas football?
00:08:53 [Speaker 1]
Because he put himself into it over to energy.

00:08:56 [Speaker 1]
So what's going on in oil and gas and energy overall, Mark?
00:09:00 [Speaker 1]
Let's jump into the show.

00:09:01 [Speaker 2]
Well, what's kinda led everything for the past several weeks is what's going on in the diesel and distillate complex.
00:09:09 [Speaker 2]
And if you look at, you know, where we are, and we talked about this two or three weeks ago, we're at very low distillate inventories heading into, the winter season.
00:09:23 [Speaker 2]
And so you're already seeing that reflected in heating oil prices in places like Maine, which is the heaviest heating oil user, among, the New England states and in fact, all all 50 states.
00:09:38 [Speaker 2]
And you're seeing prices well north of $5 a gallon already, and we're still in the in the shoulder season.
00:09:47 [Speaker 2]
You've you've got both in the Midwest and then where New England gets the majority of its its, distillate imports, refineries, the Exxon Joliet refinery went down because of some massive power outage, a utility failure.

00:10:05 [Speaker 2]
They've they've had a previous one may get restarted

00:10:08 [Speaker 4]
by Yeah.

00:10:10 [Speaker 2]
May get restarted by this week, but, you know, the the, forget the name of it.
00:10:21 [Speaker 2]
The the saint the Irving's Irving Oil, Saint John's, Canadian refinery, it's a 320,000 barrel a day facility, and it's coming down for fall maintenance that is much longer, seventy five days.
00:10:36 [Speaker 2]
And, you know, we're looking at New England, dependency on those distillate imports at a time when, you know, we're already very low coming into the, into the demand ramp that we're we're going to see that is naturally, concurrent with winter.
00:11:00 [Speaker 2]
There's a lot of hope about El Nino and and certainly much warmer winter weather.
00:11:07 [Speaker 2]
But if they get a fern like episode, you know, we could see $8 heating oil in in New England.

00:11:14 [Speaker 2]
And if you remember, during fern, Dustload accounted for on some days at the coldest, point, accounted for accounted for 40% of power generation.

00:11:28 [Speaker 1]
I mean, Maine is already at $5.30 or higher a gallon for delivered heating oil.
00:11:37 [Speaker 1]
And this is before the season.
00:11:39 [Speaker 1]
So before the first cold night, and I'm already you know, I'm still in Nantucket.
00:11:43 [Speaker 1]
It's cool.
00:11:44 [Speaker 1]
Fall is hitting.

00:11:45 [Speaker 1]
So what is crazy about this is this is before groceries, before electricity, before the mortgage.
00:11:55 [Speaker 1]
You're putting you're you're you're getting heating oil delivered way above normal prices.
00:12:02 [Speaker 1]
This is crazy.
00:12:03 [Speaker 1]
And, I mean, I don't know what to say about Exxon's Joliet plant.
00:12:08 [Speaker 1]
That's the second time they've gone down in a year, especially when inventories are I mean, we're running at, what, 98% capacity, and this is an unplanned downtime.

00:12:22 [Speaker 1]
What is Exxon saying?
00:12:23 [Speaker 1]
Is it have we heard anything?

00:12:26 [Speaker 2]
Nothing precise, but I think there's hope that they will achieve restart by the end of the week.
00:12:33 [Speaker 2]
And, you know, this type of capacity offline for any multi day stretch of time is just more pressure on the system.
00:12:41 [Speaker 2]
But, you know, it also I I hope the, the grid aficionado data center developers are looking at this because the failure was a utility failure.
00:12:55 [Speaker 2]
The power outage was was, related to a a a utility provider failure.
00:13:04 [Speaker 2]
Massive outage.

00:13:05 [Speaker 2]
You saw the, you know, the flares go off, when this was announced.
00:13:10 [Speaker 2]
And so the time it takes to restart safely and comfortably at this point in time is, you know, under a lot of pressure, but, you know, hopefully, they're they're able to safely do so.
00:13:23 [Speaker 2]
But at the same time, you're continuing to draw distillate inventories when you should be in the shoulder season starting to build a little bit head heading into winter, and we're not able to do that because we're taking meaningful North American capacity when you throw in the Canadian extended maintenance time, at a at a very inopportune time.

00:13:45 [Speaker 1]
I mean, the Canadian refinery was planned downtime, and it's longer than it's a traditionally, it's what?
00:13:52 [Speaker 1]
A thirty day or whatever.
00:13:53 [Speaker 1]
It's a seventy five day turnaround.
00:13:56 [Speaker 1]
They're rebuilding a catalytic.
00:14:01 [Speaker 1]
I don't know what they're rebuilding.

00:14:02 [Speaker 1]
I think it's something with with the catalyst, the cracker, the catalytic cracker.
00:14:08 [Speaker 1]
But regardless, they're down for seventy five days.
00:14:13 [Speaker 1]
And what's interesting about this is you couldn't we've been talking about this is gonna be a huge red flag.
00:14:22 [Speaker 1]
Diesel prices going through the roof.
00:14:23 [Speaker 1]
We're at max capacity and refining.

00:14:26 [Speaker 1]
We can't we can't produce anymore.
00:14:29 [Speaker 1]
We've got two major refineries down.
00:14:32 [Speaker 1]
And then, I mean, for those of us that sort of are looking through the through the crystal ball and have been talking about this for a long time, the cheapest natural gas on the planet is sitting next door to the in the Marcellus and the Utica.
00:14:49 [Speaker 1]
There's it's sitting right next to the Northeast, but all these pipelines, the constitution pipeline, the Northeast Energy Direct, both dead.
00:14:58 [Speaker 1]
The Northeast has been getting away with not having pipelines run because they're you know, the environmentalists, the left wingers, the nuts have been they don't care.

00:15:12 [Speaker 1]
They can afford it right now, but this is gonna come home to roost and cause some real issues.
00:15:17 [Speaker 1]
What do you expect is gonna happen after this as we're heading into election also?

00:15:25 [Speaker 2]
Nothing.
00:15:26 [Speaker 2]
I I don't think there's nothing.
00:15:27 [Speaker 2]
Exactly.
00:15:28 [Speaker 2]
I I think we continue down this path of got you every two years or four years and undoing what the previous administrations and congresses have put in place legislatively or, you know, most of the impactful things that have been done since the new administration took effect in early twenty twenty five have been executive orders.
00:15:50 [Speaker 2]
Yeah.

00:15:51 [Speaker 2]
We had the one big beautiful bill, but there's, you know, there's there's nothing on the legislative front that is pushing, certainly at the state level, in in New England that is is going to suggest that there's a massive kinda sea change on how they think about energy policy.
00:16:11 [Speaker 2]
We'll continue to play the weather casino and, you know, the consumers and the rate payers ultimately just get get hit hard and, in some cases, harder, when you have the the double or triple whammy of what diesel's doing throughout the supply chain and what, you know, what everything's costing and and is going to cost, as long as diesel prices stay elevated and and trucking and shipping rates stay high.
00:16:37 [Speaker 2]
So, you know, it's it's, I've I've I've said as far back, you know, twenty five years ago when I started covering oil and gas stocks, we've just never had a coherent energy policy.
00:16:51 [Speaker 2]
It's really been an absence of energy policy and not, you know, with with some layers of bad policy decisions.
00:16:59 [Speaker 2]
And that cuts across the aisle in terms of of how we, how we debate this.

00:17:06 [Speaker 2]
Certainly, hopeful that we've got, you know, some expert and substantive energy leaders in the cabinet like Chris Wright.
00:17:17 [Speaker 2]
But at the same time, you know, that that agenda that this administration is certainly, showing its cards about we want lower prices and getting increasingly shrill about it doesn't you know, just really doesn't comport with kind of the physical market reality right now.
00:17:37 [Speaker 2]
And

00:17:38 [Speaker 1]
So let me tell you what's gonna happen, Mark.
00:17:40 [Speaker 1]
We just said nothing.
00:17:43 [Speaker 1]
But I'll tell you, this is another grift by the government because I'm here on this tiny island of Nantucket, and we've been under a drought, a drought because we're in the same quadrant of Massachusetts that is in the drought zone, and we're surrounded by water.
00:18:05 [Speaker 1]
And the drinking water we have wells here.
00:18:07 [Speaker 1]
There's plenty of water.

00:18:09 [Speaker 1]
And I play golf, and we know how golf courses are water hungry.
00:18:14 [Speaker 1]
Well, my golf course, the we've been on half we the greens and the tee boxes, we we water all the time.
00:18:24 [Speaker 1]
But we've been on ration water for the fairways, and the fairways are amazing.
00:18:29 [Speaker 1]
It looks like Ireland right now.
00:18:32 [Speaker 1]
But this is what's happening.

00:18:33 [Speaker 1]
This is the story that's been out this week in Nantucket.
00:18:37 [Speaker 1]
The long running drought on Nantucket may not feel like a natural disaster to many, but the federal government is now offering disaster relief loans to island businesses and nonprofits that have suffered financially because of it.
00:18:56 [Speaker 1]
And they're offering up to $2,000,000 in economic injury disaster loans.
00:19:02 [Speaker 1]
So how is the Northeast gonna handle not having with super high prices?
00:19:09 [Speaker 1]
The federal government's gonna pay for it.

00:19:11 [Speaker 1]
And guess who pays that bill?
00:19:13 [Speaker 1]
You do, Mark.
00:19:14 [Speaker 1]
So thank you.

00:19:18 [Speaker 2]
So I guess, desal plants on Nantucket have never been a considered option.

00:19:23 [Speaker 1]
I mean, you you know, desal is is super energy intense, number one.
00:19:29 [Speaker 1]
And we get a and we get an energy pipe run under the water off from the mainland 30 miles away.
00:19:37 [Speaker 1]
And and I know Tesla's here with some batteries, but you know how that works.

00:19:42 [Speaker 2]
Yeah.

00:19:42 [Speaker 1]
There's some there's some hey.
00:19:43 [Speaker 1]
There there are some, solar panels around the island.
00:19:47 [Speaker 1]
But

00:19:48 [Speaker 2]
You have plenty of energy.
00:19:50 [Speaker 2]
Just just go look.

00:19:51 [Speaker 1]
It's called the gray lady.
00:19:52 [Speaker 1]
So, you know

00:19:53 [Speaker 2]
Go look off the South Shore.
00:19:54 [Speaker 2]
You got all those spinny things.
00:19:56 [Speaker 2]
They're gonna

00:19:57 [Speaker 1]
They are not spinning, Mark.

00:19:59 [Speaker 2]
They can they can run a desal plant.

00:20:02 [Speaker 1]
We the the smartest idea you've had in five minutes.
00:20:06 [Speaker 1]
What else is happening in the world?

00:20:09 [Speaker 2]
Well, speaking of another world of hurt, we've got European gas storage, which is so if you look at what European gas prices have done literally since the end of August, they've gone from 23 to almost $30 per MMBtu.
00:20:28 [Speaker 2]
And the EU did the the courageous thing and cut its storage requirement from 90% at the end of fill season to 80%.
00:20:41 [Speaker 2]
So they are behind pace on fill.
00:20:45 [Speaker 2]
Obviously, they've been disproportionately impacted by what has happened with a loss of the a fifth of the world's LNG being unable to transit the straight.
00:20:58 [Speaker 2]
But, you know, Europe Europe is going to be competing more aggressively than, perhaps we saw in 2022 for all the, available LNG that's out there on the water, which also has it it has implications for the global South, but it also has implications for New England, which still you know, we're we're still bringing LNG in, you know, because we can't pipe from the Marcellus 300 or so miles away.

00:21:28 [Speaker 2]
And and so you're you're gonna get you're gonna get squeezed on both ends from distillate diesel and from LNG potentially.
00:21:37 [Speaker 2]
You know, again, Europe's playing the same weather casino game and hoping that we get, you know, a bit of a mild winter break.
00:21:45 [Speaker 2]
But late September is kinda when, you know, when demand starts showing up, in The EU and The UK for for heating fuel.

00:21:56 [Speaker 1]
I mean, the people who need the molecules the most are the people that are the furthest away from the wellhead.
00:22:02 [Speaker 1]
And we know The Netherlands have a bunch of wellheads, but they've shut those downs because of tremors and earthquakes.
00:22:12 [Speaker 1]
I think we're calling basically for the end of the world in some ways, aren't we, Mark?
00:22:17 [Speaker 1]
I mean, all the everything's happening at exactly the same time for the worst disruption price disruption of all time.
00:22:27 [Speaker 1]
So I bet we know who's getting rich right now, don't we?

00:22:31 [Speaker 2]
Yeah.
00:22:32 [Speaker 2]
I mean, it's the government.

00:22:35 [Speaker 1]
Well, the government and the guys sitting in Houston that are trading all this.
00:22:39 [Speaker 1]
Oh, and they're in London and other places, but the traders are having a ball.
00:22:43 [Speaker 1]
I'm sure.

00:22:46 [Speaker 2]
Yeah.
00:22:46 [Speaker 2]
And, you know, I I I don't see kinda leads us into our next segment, which is kind of a reprise of I don't I don't know which version of, you know, Iran badly and quickly wants to make a deal we're on, but that you know, that's kind of the kind of the the story du jour on, on Iran this week.
00:23:10 [Speaker 2]
And, you know, meanwhile and it's not clear as to whether this tanker strike was an old one and the the damaged tanker was actually being towed through the straight, but there was a mine hit by a tanker, of in or, undetermined kinda timeline here.
00:23:33 [Speaker 2]
And so where are we, Kirk, as we, you know

00:23:44 [Speaker 1]
as he get where where am I?
00:23:46 [Speaker 1]
A rescue cat that wants in when I'm anytime I'm on the phone, this rescue cat doesn't even like me.
00:23:54 [Speaker 1]
But when I'm doing something else, she's like, I have to see what's going on.
00:23:59 [Speaker 1]
Well, this is what's going on.
00:24:02 [Speaker 1]
Here's the problem.

00:24:03 [Speaker 1]
I I think we that you know, Trump I don't wanna, like, I don't want MAGA to come after me because I've never been a huge Trump fan in general.
00:24:15 [Speaker 1]
He's a he just wants to do deals.
00:24:18 [Speaker 1]
And I think he's confusing because he wants a deal for what the long term impact's gonna gonna be.
00:24:29 [Speaker 1]
I mean, the straight's still mined, and Trump wants a deal.
00:24:34 [Speaker 1]
There's it's incongruent.

00:24:36 [Speaker 1]
So I think what we're gonna see is much of the same.
00:24:39 [Speaker 1]
And that's why we're we're hearing that all of us are gonna get $5,000 from the government.
00:24:47 [Speaker 1]
Is because he knows heading into this election cycle that he's screwed.
00:24:52 [Speaker 1]
Gap prices are way up.
00:24:54 [Speaker 1]
And wait till, like, October hits, and you see that that, you know, cheap sirloin that used to be $7 is now 25.

00:25:06 [Speaker 1]
And people are gonna start, like, you know, voting with their paychecks, which is what most of us do anyway.
00:25:13 [Speaker 1]
I see a disaster coming, and I think Trump is just trying to get deals done.
00:25:18 [Speaker 1]
But but the reality is he he basically made his bed months ago on this.
00:25:26 [Speaker 1]
So

00:25:26 [Speaker 2]
Yeah.
00:25:27 [Speaker 2]
And and the, you know, the the notion that we need to stimulate here, you look at the ten year breaching five yield on the ten year breaching 5% earlier, this week or last.
00:25:40 [Speaker 2]
I can't remember exactly.
00:25:41 [Speaker 2]
But, there there's all kinds of pundits out there with hopeful commentary, Kramer among them.
00:25:46 [Speaker 2]
You know, when oil prices have a big correction, we're gonna see big big rally in the bond market.

00:25:53 [Speaker 2]
The, you know, the reality is is that the the systemic threat here is what's going on in the physical product side, namely in diesel.
00:26:03 [Speaker 2]
And we keep beating this horse, but it's it's not dead yet.
00:26:07 [Speaker 2]
And, you know, with with all the kind of intractable things going on, the refining complex, in particular, turnarounds and deferred maintenance and running hot and heavy for, you know, months on end, what's what's the workout, to to reverse the draw in, really, the workhorse of the global economy, which is diesel.
00:26:34 [Speaker 2]
And and so that's certainly not going to happen between now and November 5 or whatever the date is for the, for the midterm elections.

00:26:45 [Speaker 1]
Yeah.
00:26:45 [Speaker 1]
So, I mean, what's gonna happen is, I don't know.
00:26:53 [Speaker 1]
I mean, we what we know is prices are gonna continue to go up.
00:26:59 [Speaker 1]
I think I mean, forget the elect election cycle.
00:27:02 [Speaker 1]
I mean, that's wiped out.

00:27:03 [Speaker 1]
I mean, I think Republicans are gonna take a beating because of prices.
00:27:09 [Speaker 1]
I I you know, it's more of the same.
00:27:11 [Speaker 1]
We keep calling it.
00:27:12 [Speaker 1]
Like, there is no diesel.
00:27:14 [Speaker 1]
There is no diesel.

00:27:15 [Speaker 1]
There's no diesel.
00:27:16 [Speaker 1]
We've got, like, oh, we got a deal in Venezuela.
00:27:19 [Speaker 1]
Okay.
00:27:19 [Speaker 1]
Great.
00:27:19 [Speaker 1]
That's 2028.

00:27:22 [Speaker 1]
If any, that's gonna take years.
00:27:25 [Speaker 1]
We've got refineries down.
00:27:27 [Speaker 1]
No plan downtime.
00:27:30 [Speaker 1]
There you've got the the Iran war, which is in Ukraine as well because that's disrupting what what Russia can produce.
00:27:40 [Speaker 1]
I don't I don't know.

00:27:42 [Speaker 1]
I mean, it's kinda like, well, we we all know what's happening.
00:27:45 [Speaker 1]
Prices are gonna go way up.
00:27:47 [Speaker 1]
It's gonna probably cause a massive recession when it flows through.
00:27:51 [Speaker 1]
Traders are getting rich.
00:27:52 [Speaker 1]
Good for them.

00:27:53 [Speaker 1]
Hopefully, they'll invite us to their Christmas parties.
00:27:57 [Speaker 1]
Other than that, I think it's we're screwed.
00:28:00 [Speaker 1]
I mean, those of us that are the working man, you and I still, we're screwed, and there's nothing we can do about it.

00:28:07 [Speaker 2]
Glad you brought up Ukraine.
00:28:08 [Speaker 2]
You know, I think Witkoff and Kushner were there, and there was some belief that the Russians and Ukrainians agreed that we're gonna quit striking energy infrastructure, namely refineries.
00:28:20 [Speaker 2]
And that's mostly Ukraine taking Russian refining capacity offline.
00:28:27 [Speaker 2]
We do have the gasoline and diesel export bans out of Russia that are still in place.
00:28:32 [Speaker 2]
And maybe victory lapping this a little bit, and then right away, Ukraine strikes another refinery and and announced it.

00:28:39 [Speaker 2]
You know?
00:28:40 [Speaker 2]
I I think I've come down on Josh Young's post last night.
00:28:46 [Speaker 2]
Zelensky called and really, you know, badly didn't wanna strike any more refineries.
00:28:50 [Speaker 2]
And an hour later, he they turned around and announced that they've struck another one.
00:28:54 [Speaker 2]
Here's what I think is going on, on the on the Ukrainian side.

00:28:59 [Speaker 2]
And I commented in that same reply last night is Zelensky knows that diesel prices for the West, particularly The US and Europe, are are an Achilles' heel on a weak spot politically.
00:29:14 [Speaker 2]
His his leverage is only going up.
00:29:16 [Speaker 2]
Diesel prices are a real trump card for him.

00:29:19 [Speaker 1]
That's brilliant, Mark.
00:29:21 [Speaker 1]
You're saying, like, he wants the Democrats who have been supporting the grift back in office.
00:29:28 [Speaker 1]
So the only way to do that is to make prices go even higher.
00:29:31 [Speaker 1]
Brilliant.
00:29:32 [Speaker 1]
You're right.

00:29:33 [Speaker 1]
Man, you probably play Go on the weekends too.
00:29:36 [Speaker 1]
Don't you, Mark?

00:29:37 [Speaker 2]
I I think, you know, where it really hurts in the EU and the NATO countries and The US, you know, he's got a lot more he's got a lot more control and leverage because he's flying these, you know, $55,000 lawnmower engine drones and wreaking some real havoc deep inside of Russia.

00:29:57 [Speaker 1]
Yeah.
00:29:58 [Speaker 1]
So Who's supplying the drones, Mark?

00:30:02 [Speaker 2]
I forget the name of the company.

00:30:06 [Speaker 1]
Who who which country is supporting the drones exactly?
00:30:11 [Speaker 1]
I mean, come on, dude.
00:30:13 [Speaker 1]
It's the we've got great griffs going on.
00:30:16 [Speaker 1]
So we've got Ukraine grift, amazing, because if you're part of the industrial military complex and you're a politician, you've already gotten way rich.
00:30:26 [Speaker 1]
The other grift is this whole diesel oil and gas price is going way up.

00:30:33 [Speaker 1]
How do you get on that grift?
00:30:35 [Speaker 1]
I mean, you you there's other ways, but those guys are making money off the grift.
00:30:41 [Speaker 1]
And then the the only grid that you and I as common man can take advantage of is let's just trade behind Nancy Pelosi.
00:30:53 [Speaker 1]
That's our strategy To to stay whole, whatever Nancy buys and sells, that's what we do.
00:31:02 [Speaker 1]
That's our plan.

00:31:04 [Speaker 1]
But we've got another grift about we're about to talk about because the last topic of the day is what and I I've been seeing it all over the news, and I took some photos.
00:31:14 [Speaker 1]
I'm gonna share them with Jake.
00:31:17 [Speaker 1]
AI leaders asking for the leash.
00:31:21 [Speaker 1]
So I've been watching because I watch on my YouTube TV.
00:31:26 [Speaker 1]
I've got four different channels I can watch on my iPad next to me, and I've got BBC News just to give me what's happening in the world.

00:31:37 [Speaker 1]
I've got Fox News.
00:31:39 [Speaker 1]
I've got Squawk Box, and then I've got the golf channel.
00:31:42 [Speaker 1]
So those are my four screens.
00:31:45 [Speaker 1]
And I see a headline that says, guess guess which news outlet said this, Could AI wipe out humanity?
00:31:56 [Speaker 1]
Who is that, Mark?

00:31:59 [Speaker 1]
Which news outlet?
00:32:02 [Speaker 1]
BBC.
00:32:03 [Speaker 1]
I mean, the the Brits are such in Maslow's hierarchy of needs.
00:32:08 [Speaker 1]
They're so deep in their self actualization.
00:32:12 [Speaker 1]
Could AI wipe out humanity?

00:32:14 [Speaker 1]
I love it.
00:32:16 [Speaker 1]
Fox News.
00:32:18 [Speaker 1]
Speaker Mike Johnson warns AI slowdown could benefit China.
00:32:25 [Speaker 1]
So two totally separate.
00:32:27 [Speaker 1]
And then we have Omega takes.

00:32:31 [Speaker 1]
We have the foremost powerful AI CEOs on Earth who simultaneously ask the government to slow them down.
00:32:41 [Speaker 1]
So I'm sure our friendly CEO of Collide has a take on this, but the four largest AI companies asking the government to basically don't let our competitors catch up.
00:32:58 [Speaker 1]
Of course.
00:32:59 [Speaker 1]
Brilliant.

00:33:01 [Speaker 2]
I already

00:33:01 [Speaker 1]
That's another grift.

00:33:03 [Speaker 2]
I I won't

00:33:03 [Speaker 1]
And I'm just paying into it.

00:33:05 [Speaker 2]
I I won't claim this as an original take, but I can't recall the attribution.
00:33:10 [Speaker 2]
But, you know, this this feels a lot like we want to get out in front of any future litigation liability by, you know, being backstopped and regulated by by the government.
00:33:28 [Speaker 2]
I I also think maybe there's a little bit of a, one on one game being played here between Sam Altman and and the anthropic guys in that I think you saw that they pushed OpenAI has pushed its IPO out until sometime in 2027, whereas Anthropic is kinda raring to go at 2,000,000,000,000 plus.
00:33:50 [Speaker 2]
And, you know, is there are there competitive reasons?
00:33:55 [Speaker 2]
Are there kinda liability and indemnification reasons that are driving this?

00:34:01 [Speaker 2]
Probably.
00:34:02 [Speaker 2]
You know, is does it feel like what pharma got in the middle of COVID for the emergency use authorization and the fast track of the vaccines.
00:34:12 [Speaker 2]
I don't know.
00:34:13 [Speaker 2]
But, you know, there there's a there's a whole division of plaintiff's attorneys out in the future that are going to be making a lot of cases, about personal injury from AI, I gotta believe.
00:34:30 [Speaker 2]
And so they're looking at this I think they're looking at this from a a bit of an indemnification liability protection standpoint.

00:34:38 [Speaker 1]
But as humans, what do we do, Mark?

00:34:41 [Speaker 2]
We sue each other.

00:34:43 [Speaker 1]
Well, that but what do you think there's no reason for any of these companies to IPO.
00:34:49 [Speaker 1]
There is a reason.
00:34:50 [Speaker 1]
I'll tell you what it is.
00:34:51 [Speaker 1]
But but they can they have enough access to private capital to in perpetuity because they are making a killing on these tokens.
00:35:03 [Speaker 1]
So why are they IPO?

00:35:05 [Speaker 1]
Because the individual owners want a mega yacht.
00:35:10 [Speaker 1]
And if if if their mega yacht, once they get cashed out, that $6 diesel, and it takes thousands of gallons, so one fill up will cost a million dollars or actually 3,000,000, means nothing to them.
00:35:26 [Speaker 1]
They're just looking for they're just looking to return they just want the capital I gotta in their pockets.
00:35:33 [Speaker 1]
I gotta give Yeah.
00:35:33 [Speaker 1]
Let them sue let them sue each other.

00:35:35 [Speaker 1]
Who cares?

00:35:36 [Speaker 2]
I gotta give Elon credit here.
00:35:38 [Speaker 2]
He's not looking for a yacht.
00:35:40 [Speaker 2]
He's not looking for a mega mansion.
00:35:43 [Speaker 2]
Saw he was on a podcast yesterday or an interview literally from his Airstream trailer on-site at Colossus 2 in Memphis.

00:35:52 [Speaker 1]
That's what he does.
00:35:53 [Speaker 1]
No.
00:35:53 [Speaker 1]
But I will I'm gonna give some heat.
00:35:55 [Speaker 1]
He's brilliant in many ways, but this damn Grok bot that he's added into cursor, it, like, it is a token horror, and I'm tired of it.
00:36:07 [Speaker 1]
So, like, I'll tell you, you know what's speaking of, and I'm gonna probably get a lot of shade for this.

00:36:13 [Speaker 1]
You know which AI engine is actually the most friendly price wise?
00:36:20 [Speaker 1]
They're one tenth or less the price of every other platform.

00:36:25 [Speaker 2]
No idea.
00:36:27 [Speaker 2]
DeepSeek.
00:36:28 [Speaker 2]
China's

00:36:28 [Speaker 1]
DeepSeek.
00:36:29 [Speaker 1]
And they're actually doing a great job of, like, attracting the common, AI user is because, like, all the quad, Chad g p two I've been on the phone with Google last couple days because they're trying to get me to move over, and I'm asking some for a lot of free tokens.
00:36:50 [Speaker 1]
But Gemini and all their like, Gemini is a really good AI engine for for code, but all of them are token whores.
00:36:59 [Speaker 1]
Grokbot is the worst.
00:37:01 [Speaker 1]
Like, it is by far the worst.

00:37:03 [Speaker 1]
But DeepSeek's way under here saying, hey.
00:37:06 [Speaker 1]
Y'all keep fighting each other.
00:37:07 [Speaker 1]
We're just gonna, you know

00:37:10 [Speaker 2]
Well, is it

00:37:10 [Speaker 1]
take all the AI users and just copy everything they do anyway.
00:37:13 [Speaker 1]
So is that related is

00:37:16 [Speaker 2]
that related to what we talked about a couple of weeks ago?
00:37:21 [Speaker 2]
Your Yeah.
00:37:22 [Speaker 2]
What what are we calling?

00:37:23 [Speaker 1]
Maximization, like, where they're where they're just Token flare

00:37:26 [Speaker 2]
or, AI flaring.

00:37:28 [Speaker 1]
There's the AI flaring is what your term, which I love.
00:37:32 [Speaker 1]
Like, they're just running, and they run.
00:37:34 [Speaker 1]
And you have to be very, very on on on the ball so that they don't just run-in perpetuity.
00:37:41 [Speaker 1]
I've got all these limits and budgets set up.
00:37:44 [Speaker 1]
So because they keep running they just keep like, I I burned a 100,000 tokens on Grokbot by and I shouldn't have done it.

00:37:53 [Speaker 1]
I should have just turned it off.
00:37:54 [Speaker 1]
I said stop.
00:37:55 [Speaker 1]
And it's one word, 100,000 tokens.
00:37:59 [Speaker 1]
I'm like, okay.
00:38:00 [Speaker 1]
I'm out.

00:38:02 [Speaker 1]
That cost me a couple bucks.

00:38:03 [Speaker 2]
And and and that's why the, you know, the hyperscalers and the, NeoClouds are so you know, I happen to think they're coming at it from an unrealistic perspective.
00:38:13 [Speaker 2]
But, you know, they think they can get 6¢ a kilowatt hour, power prices all day long.

00:38:21 [Speaker 1]
Not with And we're come yeah.
00:38:22 [Speaker 1]
We're coming to a head.
00:38:23 [Speaker 1]
I mean, maybe this whole maybe this whole, wind farm idea is a good one when you think about oil and gas prices.
00:38:34 [Speaker 1]
Those wind farms off of South Of Nantucket are actually gonna start coming into the money and being profitable.

00:38:43 [Speaker 2]
We've got some, yeah, it's gonna be interesting to watch and see where this goes, but it's it's all going to be show me the money at the end of the day.

00:38:55 [Speaker 1]
I mean, what a so what a week.
00:38:57 [Speaker 1]
We got another big week in September.
00:39:00 [Speaker 1]
Birthday week, Chuck's in Vegas.
00:39:04 [Speaker 1]
I know we flew out on somebody famous as private jet to get there.
00:39:08 [Speaker 1]
He hasn't called in.

00:39:09 [Speaker 1]
He hasn't even gone to bed in two days.
00:39:12 [Speaker 1]
Maybe we'll get an update next week from from how he's doing.

00:39:16 [Speaker 2]
Let let's hit some lightning round items before we go.

00:39:19 [Speaker 1]
Yeah.
00:39:19 [Speaker 1]
There's some good stuff.
00:39:21 [Speaker 1]
Jump in.

00:39:22 [Speaker 2]
So at the g twenty, there was an announcement by Lee Lee Zeldin that and who was flanked by Chris Wright and Doug Burgum, the Biden era regulations that are were coming and pertain mainly to natural gas and coal fired power generation facilities are being rescinded, which basically has a lot to do with big capital needed to fund things like sequestration and storage.
00:39:56 [Speaker 2]
Mhmm.
00:39:57 [Speaker 2]
No greenhouse gases.
00:39:58 [Speaker 2]
So that goes out the window.
00:40:00 [Speaker 2]
And, of course, the hue and cry from the opposition.

00:40:05 [Speaker 2]
And I'll remind people again that because of natural gas substitution in the power generation sector over the last twenty, twenty five years, we've actually had a pretty significant, and I would say, leader on in in the clubhouse globally about taking down absolute emissions.

00:40:23 [Speaker 1]
Here's my, you know, conspiracy theory thought process, but we have AI leaders asking for guardrails the same week the EPA strips them from power generation.
00:40:38 [Speaker 1]
I mean, that is is that not the American policy process in one sense?
00:40:43 [Speaker 1]
The people building those powerful technology in history want regulation.
00:40:47 [Speaker 1]
The people regulating the oldest technology in history want deregulation.
00:40:52 [Speaker 1]
Somewhere between those two instincts is a coherent energy policy, and we just haven't found it yet.

00:41:05 [Speaker 2]
Next item.
00:41:07 [Speaker 2]
Our friend Chris Martz was all over this.
00:41:10 [Speaker 2]
He's been talking as the days go by that we're, you know, approaching or setting records year to date or season to date for hurricane season.
00:41:19 [Speaker 2]
The ACE metric, which is accumulated cyclone energy, it's a it's a as the name implies, accumulative measure up to this point.
00:41:29 [Speaker 2]
And we haven't seen ACE numbers this low, certainly since, satellite imagery came into the toolkit, which was 1966, but we've not seen an ACE this low in modern history since 1950.

00:41:47 [Speaker 2]
Now we still have some time to go in hurricane season, but we've not had named hurricanes make landfall.
00:41:55 [Speaker 2]
And I I think I've got this right.
00:41:58 [Speaker 2]
Looking at the phenomena that are at play, you've got big Saharan dust, and you also have El Nino related elevated levels of wind shear, that are, you know, potentially explanatory as as to why we've not seen development so far, that turns into a, you know, major landfalling hurricane.

00:42:23 [Speaker 1]
And and I don't know if you realize this, but the White House took credit for no hurricanes.
00:42:29 [Speaker 1]
And and I'm not not making that up.
00:42:33 [Speaker 1]
So, I mean, this is the same administration that didn't understand why oil prices go up.
00:42:40 [Speaker 1]
Now we're talking about Scott and his comments, but but overall, the administration and and now I'm thinking maybe the government does control the weather, which would say you because if if we had a hurricane parked off Louisiana, gas prices are gonna be $25 a gallon.

00:43:05 [Speaker 2]
Yep.
00:43:07 [Speaker 2]
And that has more to do with refining than production shut in.

00:43:12 [Speaker 1]
Correct.
00:43:12 [Speaker 1]
I mean, we're we're we're lucky.
00:43:15 [Speaker 1]
We're lucky.
00:43:17 [Speaker 1]
Thank you, Jacob, for that, that graphic up there.

00:43:24 [Speaker 2]
So Mike Worth, our last item in the lightning round, Mike Worth was on the, what is the KBH Center annual energy conference called?
00:43:36 [Speaker 2]
I forget.
00:43:37 [Speaker 2]
Know.
00:43:39 [Speaker 2]
Anyway Energy week.

00:43:40 [Speaker 1]
Just call it energy week.

00:43:42 [Speaker 2]
Yeah.
00:43:43 [Speaker 2]
It's burn orange syrup week.
00:43:47 [Speaker 2]
That's right.
00:43:51 [Speaker 2]
Basically saying, look, the buffers are are gone.
00:43:55 [Speaker 2]
And I I found it interesting that Worth has not spoken with president Trump for, I believe, almost a month after the haranguing to, you know, get retail prices down and and run harder.

00:44:08 [Speaker 2]
But, you know, they warned us three months ago that this is kind of the physical reality we're headed to if if we don't get this resolved and get flows reestablished.
00:44:19 [Speaker 2]
Inventories are one thing.
00:44:22 [Speaker 2]
You know, so here's someone on the front lines of both the upstream and the downstream.
00:44:29 [Speaker 2]
Maybe not victory lapping, but also pointing out, based on just the volumes of inventory draw downs and, strategic reserve releases.
00:44:40 [Speaker 2]
Those, you know, those shock absorbers are pretty much gone as we head into a critical period like we talked about in the first segment heading into winter with, distillate heating oil.

00:44:51 [Speaker 2]
So I think I think the next several weeks between now and the election is is going to be interesting and see if congress gets on board and starts calling these guys in.
00:45:07 [Speaker 2]
We predicted that would happen over the summer.
00:45:09 [Speaker 2]
It really didn't happen to to the degree.
00:45:11 [Speaker 2]
It was mostly through social post and, you know, a a few video conferences with industry leaders, but there's there's really no ignoring or pretending that the, kind of physical product side of what's going on here.
00:45:27 [Speaker 2]
And I think Mike Worth and Darren Darren Woods and the rest are very well positioned to call it like they see it.

00:45:36 [Speaker 1]
Well, I mean, when when the second largest oil and gas company says in in in North America says buffers are gone.
00:45:47 [Speaker 1]
He's he's possibly talking about his own supply chain and seeing, like, there really is no buffer, which means prices are only headed in one direction.
00:45:57 [Speaker 1]
So let's just summarize what we've talked about.
00:46:01 [Speaker 1]
One of the biggest refineries, Joliet, is down again, unplanned.
00:46:06 [Speaker 1]
Irving in in Canada, a giant refinery in Canada, is down planned, but down for a long time.

00:46:15 [Speaker 1]
Distillate inventories are record low.
00:46:18 [Speaker 1]
Maine is at almost $5.50 for heating oil.

00:46:24 [Speaker 2]
And it's September.

00:46:26 [Speaker 1]
And it's September.
00:46:29 [Speaker 1]
The TTF just spiked 27% in three weeks.
00:46:34 [Speaker 1]
A tanker hit a Mayan, Hormuz, and the CEO of the second largest oil company says the buffers are gone.
00:46:42 [Speaker 1]
I mean, if I'm not a betting man, I'd say prices are going up.

00:46:51 [Speaker 2]
And Ukraine can keep sending plywood drones into deep into Russia to wreak havoc.

00:46:56 [Speaker 1]
Excuse me.
00:46:59 [Speaker 1]
Hey.
00:46:59 [Speaker 1]
At least news is not boring.
00:47:01 [Speaker 1]
Right?
00:47:03 [Speaker 1]
I've gotten bashed lately on some, like, LinkedIn stuff.

00:47:07 [Speaker 1]
Might as well add this stuff to it.
00:47:08 [Speaker 1]
So let's go.

00:47:12 [Speaker 2]
And if the CFP route next week?
00:47:18 [Speaker 2]
The CFP.
00:47:20 [Speaker 2]
College football playoff.
00:47:22 [Speaker 2]
That What about doesn't start until November.
00:47:25 [Speaker 2]
It just seems that you're sitting you're sitting on top of

00:47:27 [Speaker 1]
the world.
00:47:29 [Speaker 1]
Sark Sark made an argument, which I I mean, maybe that's like, he basically told that Ohio State shouldn't be penalized too much for their loss because Texas got unfairly, he says, penalized last year for the CFP.
00:47:46 [Speaker 1]
So I don't know what that means, but that's kinda a little hilarious hilariousness.
00:47:54 [Speaker 1]
I'm sure Ryan Day was like, dang, Sark.
00:47:57 [Speaker 1]
I appreciate that.

00:47:59 [Speaker 2]
I'll admit I, fell asleep in the third quarter and didn't didn't feel like I was gonna miss anything.
00:48:05 [Speaker 2]
Woke up in the wee hours and got the got the score update.

00:48:10 [Speaker 1]
You mean from the Horns game when we won?
00:48:12 [Speaker 1]
Yeah.
00:48:14 [Speaker 1]
I

00:48:16 [Speaker 2]
Look.
00:48:16 [Speaker 2]
We've got so we have Kentucky.
00:48:20 [Speaker 2]
I'm talking about A and M.
00:48:21 [Speaker 2]
We got Kentucky at home this week, and then we go to Baton Rouge.

00:48:27 [Speaker 1]
Yeah.
00:48:28 [Speaker 1]
But what what's going on with with, LSU?
00:48:30 [Speaker 1]
Are they distracted about getting kicked out of the SEC or removing themselves because of professional athletes?
00:48:37 [Speaker 1]
What's the what's the issue here?

00:48:39 [Speaker 2]
I haven't been following it that closely, but college football and college sports in general have just gotten to such a ridiculous place.
00:48:47 [Speaker 2]
You know, Ted Cruz shows up on college game day, and, you know, they're they're talking

00:48:53 [Speaker 1]
about See see tell me the Russian intervention.
00:48:55 [Speaker 1]
That he lifted the Cruz curse.
00:48:58 [Speaker 1]
Yeah.
00:48:59 [Speaker 1]
That's funny.

00:49:00 [Speaker 2]
That is funny.

00:49:01 [Speaker 1]
But but, you know, those of us in golf that are amateurs, you know, they they created I mean, one of the most prestigious events of all time is the US amateur.

00:49:12 [Speaker 2]
Yeah.

00:49:12 [Speaker 1]
And the winner gets you into the masters.
00:49:15 [Speaker 1]
The it Bobby Jones won the US amateur.
00:49:18 [Speaker 1]
It is one of the most prestigious events, but they the United States Golf Association made a mid amateur because those of us that have jobs and are older can't compete against the college kids because they play every single day, and they're so good.
00:49:34 [Speaker 1]
So they created a mid amateur keeping anybody under 25 years old out of it.
00:49:39 [Speaker 1]
Well, now the USGA has walked it back, and they allow former professionals to play in amateur events.

00:49:46 [Speaker 1]
In fact, The United States senior amateur, where you have to be 55 and older to play in, was won by a guy that played over a decade on core and won a few million dollars, but he got his amateur status back and easily like, this he got an ambiter status back a little bit over a year ago, almost won it last year and won it this year.
00:50:09 [Speaker 1]
And so there's just been this huge debate going on about the pros are supporting him saying, hey.
00:50:15 [Speaker 1]
He deserves it, and I'm claiming, look, guys.
00:50:19 [Speaker 1]
Once you're a pro, you're better than everybody else.
00:50:24 [Speaker 1]
And no one has really been able to challenge I'm like, I'm not saying whether they should or should not.

00:50:29 [Speaker 1]
They shouldn't.
00:50:30 [Speaker 1]
But I'm like, they're just better.
00:50:31 [Speaker 1]
Anybody that's had to make a putt for money, and and and that putt means I'm gonna eat dinner tonight or I'm changing jobs for the rest of my life, is a lot better than a guy like me that if I miss the putt, I go back to my day job.
00:50:47 [Speaker 1]
For some reason, football is moving that direction where the the lines are blurred.
00:50:54 [Speaker 1]
Now, I mean, of course, like, Manning, speaking of, is making a few million dollars a year already.

00:51:00 [Speaker 1]
So are there any lines left, Mark?
00:51:04 [Speaker 1]
Maybe we should allow former pros to come back.

00:51:07 [Speaker 2]
I started to get a little bit cynical about this all the way back in the early nineties when we started bringing, you know, professional athletes into Olympic competition.
00:51:15 [Speaker 2]
You remember how great 1980 was.
00:51:18 [Speaker 2]
Right?
00:51:19 [Speaker 2]
The miracle on ice.
00:51:21 [Speaker 2]
And if you go all the way back in in history, you know, our competitive teams and gold medal winning teams were all amateurs.

00:51:29 [Speaker 2]
And Yeah.
00:51:29 [Speaker 2]
There is no there is no amateurism anymore, certainly not in NCAA athletics and sports because you've got so much money.
00:51:39 [Speaker 2]
It is I get it.
00:51:40 [Speaker 2]
It's it's a trend that is not going to reverse.
00:51:43 [Speaker 2]
And the puritanical notion that we've got amateurs who are scraping and clawing to get by so they can train at an elite level for, you know, the amount of time that they need to to compete with other countries professionals.

00:52:00 [Speaker 2]
You know, that that's been the focus forever for, you know, countries like China and you think about how how well the Cubans have done in in, international competition and things like boxing.
00:52:14 [Speaker 2]
They they are heavily subsidized and supported by their governments.
00:52:17 [Speaker 2]
So we've we basically said we're gonna play that game too, and we'll just allow the, you know, the professional athletes an opportunity to to play in international competitions against quote, unquote amateurs.
00:52:29 [Speaker 2]
And I I just, you know, I I think with you look at rosters across college football, they're they're varying degrees of it, but you you get pretty significant roster turnover and, particularly the first string frontline players that, you know, were somewhere else the year before.
00:52:49 [Speaker 2]
Yeah.

00:52:49 [Speaker 2]
So the institutional kind of, I don't know, legacy or identification or loyalty and all that, I get it.
00:52:57 [Speaker 2]
I mean, I was a d one college athlete and somebody was throwing seven figure NILs.
00:53:05 [Speaker 2]
The likelihood that you're going to make it to the highest level of professional sports is just inherently very small.
00:53:13 [Speaker 2]
So why not get it while you can?
00:53:19 [Speaker 2]
I I just Hey.

00:53:20 [Speaker 2]
We have a couple questions.
00:53:21 [Speaker 2]
I'm an old head nostalgic, but,

00:53:24 [Speaker 1]
I I just We're just getting this late last minute, but we have a couple questions I wanna throw to you, Mark.
00:53:29 [Speaker 1]
One is from Bailey Midkiff.
00:53:31 [Speaker 1]
Aren't quite a few refineries needing put off maintenance making me wonder overuse of them causing more unexpected down plants?
00:53:42 [Speaker 1]
Yeah.
00:53:42 [Speaker 1]
We talked about saying is refiners are running hot.

00:53:45 [Speaker 1]
And even though they probably had planned maintenance, they're continuing to operate because they can't afford to go down.
00:53:54 [Speaker 1]
Absolutely.

00:53:56 [Speaker 2]
Yeah.
00:53:57 [Speaker 2]
And then we talked about this before, you know, and I talked about it with Arjun, several weeks ago, when we focused on refining.
00:54:05 [Speaker 2]
And, you know, it's the people inside of the fence that are are really exposed here.
00:54:12 [Speaker 2]
And the refining industry has gotten a lot better since the mid late nineties optimized.
00:54:19 [Speaker 2]
You know, they don't they don't cowboy things like the old EMP sector used to do and hoping and and praying for high prices.

00:54:28 [Speaker 2]
They run, you know, they run the business with very, very tight margins historically.
00:54:33 [Speaker 2]
And, you know, the the sophistication of of plant systems and monitoring and measurement and predictive maintenance have all hugely benefited by what's happened with technology and things like an AI assist and and and keeping plant operations safer.
00:54:51 [Speaker 2]
But you run some of these very old units past their regular maintenance cycle because of political pressure, to keep running and and keep prices lower than they otherwise would be.
00:55:06 [Speaker 2]
Yeah.
00:55:07 [Speaker 2]
That that's what you really worry about.

00:55:09 [Speaker 2]
I mean, what's what's the newest refinery in The US, at least from a greenfield perspective?
00:55:15 [Speaker 2]
50 plus years old.

00:55:18 [Speaker 1]
Alright.
00:55:20 [Speaker 1]
Next question.
00:55:21 [Speaker 1]
But before BBC news has breaking news, Harry and Meghan's children changed school.
00:55:28 [Speaker 1]
They're back in The UK.
00:55:29 [Speaker 1]
I know you you've been following this closely.

00:55:32 [Speaker 1]
We'll get the opinion.
00:55:33 [Speaker 1]
But first, here's from Jay May thirty two.
00:55:37 [Speaker 1]
I'm in construction aggregate.
00:55:39 [Speaker 1]
Do you think we're going to see the funding of the new LNG plants slow down in place of more refinery work for capacity gain or construction of new fuel refineries?
00:55:51 [Speaker 1]
And then left the best underscore coast added factor in the Farmers' Almanac calling for an El Nino cold winter.

00:56:03 [Speaker 1]
What say you, Mark?

00:56:05 [Speaker 2]
I I don't think the pace of LNG construction is is going to abate.
00:56:10 [Speaker 2]
You know, I think secretary Wright was out talking just the other day that he expects The US to be 30% or more of global LNG trade and exports by 2030, which isn't that far away.
00:56:29 [Speaker 2]
So if we go back to, you know, where where kind of the political and regulatory focus is, I think it's going to be I think it's going to continue to have a tailwind, for LNG.
00:56:45 [Speaker 2]
But but maybe something happens, as we traverse the winter that pushes the political winds back in favor of doing things that are helpful, to the refinery investment decision.
00:57:02 [Speaker 2]
But I think those things are gonna be on the margin.

00:57:04 [Speaker 1]
Well, here's my question.
00:57:05 [Speaker 1]
I mean, I like, entrepreneurs are gonna, like, fight for themselves, and they don't care.
00:57:12 [Speaker 1]
But if you you think about an integrated like, when I was at Shell, we had to fight for our own capital.
00:57:18 [Speaker 1]
And allocation of capital was up to the executive team.
00:57:22 [Speaker 1]
So if you've got sort of the head of downstream saying, hey.

00:57:25 [Speaker 1]
I want new refinery capacity, fund this project, and you've got the LNG team, which is in a different team saying, hey.
00:57:34 [Speaker 1]
Let's green light this next project.
00:57:37 [Speaker 1]
Where are you allocating capital, Mark, and why?

00:57:41 [Speaker 2]
Well, I'm gonna allocate it to LNG because I I think we'll increasingly see demand shift or consumption shift away from liquid hydrocarbons to natural gas.
00:57:52 [Speaker 2]
That's why few years ago, I picked natural gas as number one in the energies are for a day draft.
00:57:59 [Speaker 2]
I I think it's a major strategic, offensive and defensive weapon, you know.
00:58:05 [Speaker 2]
And I I think I think because of of the power generation and emissions, reduction via substitution aspect, I I think, you know, I I think it continues to win, against other hydrocarbons.
00:58:23 [Speaker 2]
And I think, you know, those that are making the decisions on allocating capital today at majors in particular between LNG and refining have a long history and perspective on how viciously cyclical the refining cycles can be.

00:58:40 [Speaker 1]
Yeah.
00:58:40 [Speaker 1]
So you're just playing into the the same old, which makes sense to me, which is refining is the hedge.
00:58:49 [Speaker 1]
Like, you don't you make money in refining rarely.
00:58:54 [Speaker 1]
It's the hedge.
00:58:55 [Speaker 1]
It's it's low margin, and that's why you're not going down right now because prices are high.

00:59:02 [Speaker 1]
So refiners are actually making money for the first time.
00:59:05 [Speaker 1]
But you're not betting long term on that strategy.
00:59:08 [Speaker 1]
And you know you make a lot more margins in LNG, especially long term when you think United States has a ton of gas.
00:59:16 [Speaker 1]
The rest of the world needs cheap fuel, we're gonna sell it and make a lot of money.
00:59:21 [Speaker 1]
I like that strategy.

00:59:23 [Speaker 2]
Yeah.
00:59:25 [Speaker 2]
I think that's right.
00:59:26 [Speaker 2]
I've been wrong before, but I like the molecule.

00:59:30 [Speaker 1]
That's why we're that's why we're podcasters, Mark.

00:59:36 [Speaker 2]
Well, I think the demand the demand profile that

00:59:40 [Speaker 1]
I mean, inner Jacob is saying we're cut off.
00:59:44 [Speaker 1]
So, gosh.

00:59:44 [Speaker 4]
No.
00:59:45 [Speaker 4]
I actually have I have I have something to say.

00:59:47 [Speaker 1]
I can't hear a thing.
00:59:49 [Speaker 1]
You can't hear me?
00:59:50 [Speaker 1]
My audio went out.

00:59:51 [Speaker 4]
Hello?
00:59:52 [Speaker 4]
No.
00:59:53 [Speaker 4]
Do you hear me, Mark?

00:59:54 [Speaker 2]
Go ahead.
00:59:55 [Speaker 2]
Yeah.
00:59:55 [Speaker 2]
I can hear him just fine.
00:59:57 [Speaker 2]
Go ahead, Jacob.

00:59:58 [Speaker 4]
Okay.
00:59:59 [Speaker 4]
Well, first off, I have two things to say.
01:00:00 [Speaker 4]
First off, I got your Rudy t clip, if you'd like to watch that.
01:00:07 [Speaker 4]
There it is.
01:00:08 [Speaker 4]
Alright.

01:00:08 [Speaker 4]
Here we go.

01:00:10 [Speaker 3]
Let's turn to Rudy t.
01:00:13 [Speaker 3]
Obviously, each is special.
01:00:15 [Speaker 3]
But I also think let's let him have his moment.
01:00:18 [Speaker 3]
Let the crowd express their appreciation for him.
01:00:21 [Speaker 3]
I think it's fair to say that this year's team is a better basketball team than last year's.

01:00:27 [Speaker 3]
Why?

01:00:28 [Speaker 5]
Well, I can't take anything away from last year.
01:00:31 [Speaker 5]
That was special.
01:00:32 [Speaker 5]
This is a new team and no one has ever done what this team's done.
01:00:37 [Speaker 5]
Come from the sixth seed, down in series, one we won nine road games and we had non believers all along the way.
01:00:51 [Speaker 5]
I have one thing to say those non believers.

01:00:53 [Speaker 5]
Don't ever underestimate the heart of a champion.

01:01:03 [Speaker 4]
There you go.
01:01:06 [Speaker 4]
Any comments?

01:01:09 [Speaker 2]
No.
01:01:09 [Speaker 2]
I remember it well, man.

01:01:12 [Speaker 4]
Well, I just wanna, say y'all are my favorite sports show.
01:01:18 [Speaker 4]
Lots of great coverage today, boys.
01:01:21 [Speaker 4]
To to hearken back to that, I wanted to shout out Yoshi.
01:01:25 [Speaker 4]
When this whole UT debacle came out this weekend, I think she was the first person a lot of us thought about.
01:01:33 [Speaker 4]
You have a person of color who went to UT, praises Midland, works in the industry, a woman in the industry, and got married at a goddamn pump jack.

01:01:45 [Speaker 4]
So I would just, I mean, this is someone who it's just it just doesn't make any sense, and, it makes me,

01:01:56 [Speaker 1]
pissed.

01:01:58 [Speaker 4]
I don't know I don't know if y'all also thought about her, but, this is a great post by her on Collide.
01:02:04 [Speaker 4]
You're muted, Mark, actually.
01:02:05 [Speaker 4]
Sorry.
01:02:06 [Speaker 4]
Or, Kirk.
01:02:10 [Speaker 4]
Kirk, you're muted.

01:02:12 [Speaker 4]
You did that too.
01:02:13 [Speaker 4]
Man.
01:02:14 [Speaker 4]
Alright.
01:02:14 [Speaker 4]
Anyway, yeah.
01:02:15 [Speaker 4]
So

01:02:16 [Speaker 1]
Look, Jacob, I mean, I looked at it, and I was like, I wish I was in the middle of, I don't like, I didn't see any what is this?
01:02:24 [Speaker 1]
It's very small town thinking.
01:02:28 [Speaker 1]
It doesn't make any sense.
01:02:29 [Speaker 1]
If you went to UT, you know it's like I mean, I could be in the middle of, like, sorority row and see a bunch of girls.
01:02:37 [Speaker 1]
I could see a different fraternity.

01:02:41 [Speaker 1]
I mean, there's it's just like, what are we what are we doing?
01:02:44 [Speaker 1]
But people will do that, and this is election cycle.
01:02:48 [Speaker 1]
People

01:02:49 [Speaker 2]
will

01:02:49 [Speaker 1]
I mean, there's always gonna be haters.
01:02:52 [Speaker 1]
And right now, that's what's happening.
01:02:54 [Speaker 1]
But we'll see that in almost every corner of life, and you just have to be bigger than that.

01:03:01 [Speaker 2]
Yeah.
01:03:01 [Speaker 2]
Especially for public high schools, you know, Texas has UT and A and M have rules, and and they're there for everybody to see.
01:03:09 [Speaker 2]
Everything's on the table.
01:03:10 [Speaker 2]
You know what you gotta do to compete.

01:03:13 [Speaker 1]
I mean, it's a meritocracy.
01:03:14 [Speaker 1]
And if you're upset because your kid didn't get in, then maybe it's on you.

01:03:21 [Speaker 4]
I think it's, these people are reposting don't live in Texas.
01:03:25 [Speaker 4]
They don't understand the diversity and the demographic of the state and our universities at all.
01:03:33 [Speaker 4]
So it's just a little bit of those that outsider just saying whatever the hell they want on the Internet like always.
01:03:40 [Speaker 4]
So

01:03:42 [Speaker 1]
That's what the Internet's known for.

01:03:46 [Speaker 4]
Well, we're still live, by the way.
01:03:47 [Speaker 4]
So go ahead and sign us off, Mark.
01:03:49 [Speaker 4]
Got anything else to say?

01:03:51 [Speaker 2]
No, man.
01:03:52 [Speaker 2]
I I I think that's a good last word.
01:03:55 [Speaker 2]
Jacob, thanks for popping in, and, we'll see everybody next week.
01:04:00 [Speaker 2]
I'm I'm sure we'll we'll have more to talk about.
01:04:03 [Speaker 2]
I don't know that I can predict that diesel will be part of the agenda, but I'm guessing that it probably will be.

01:04:11 [Speaker 1]
So Yeah.
01:04:11 [Speaker 1]
One more thing.
01:04:13 [Speaker 1]
For all those haters of our show, never underestimate the heart of the champion.

01:04:21 [Speaker 4]
Never.