Big Digital Energy

00;00;00;00 - 00;00;30;13
Unknown
Welcome back to B.T., guys. I'm your co-host, Kirk Coburn, with Mark Meyer and our fearless Chucky. What's up boys? Hey man, how are you? Well, I got to tell you, we got into the comments this week with a listener who goes by gopher, 27. I mean, there's 26 other previous gophers. I assume, and I want to bring it to the show because it produced one of the best exchanges we've had in over two years on this podcast.

00;00;30;16 - 00;01;06;00
Unknown
And I want to do something unusual. I want to give my opponent credit before I take him apart. So gopher, 27, came back with a real argument because I talked about Walmart and how corrupt Graham is on the show last week, and he cited Bastiat, Bergman's new trade theory, the variety benefit of 100,000 SKUs versus the Soviet commissioner commissary, the fact that General Mills was never local, so that most of the dollar always left as wholesale costs.

00;01;06;00 - 00;01;32;07
Unknown
All legitimate he knows is Duval, Duval County. He knows his Frank Hague machine. He knows his alma patent and delivery of envelopes of cash. The man actually has a genuine education and political corruption and economic history. And I respect that. So I conceded four things. And you can go to YouTube and see all this. And my reply I and I'll concede them again here.

00;01;32;09 - 00;02;03;01
Unknown
Walmart prices are lower. Unambiguously that's proven. Variety is real. And Krugman won the Nobel for explaining why it matters. Now, most of the input cost was never local because I brushed over this last week and you go back to the show to hear it. It was always General Mills and Mondelez, so the entire dollar was never circulating in town because every town imports those foreign goods anyway.

00;02;03;03 - 00;02;27;00
Unknown
And grams net worth was exactly what my co-host said it was. You guys said Graham's net worth and were accurate. So here is what is left after the concessions pull out the wholesale cost, which is always left. What sits on top is the margin. Because I said last week that Walmart destroyed this small town, and he debated me really well.

00;02;27;00 - 00;02;53;25
Unknown
He actually called me on the carpet on this. But what I am referring to and speaking this week is the owner's profit his day. So the owner of the small store that got killed by Walmart, his deposit, the local bank, the loan he underwrites for the kid starting a business down the block. That's the whole game because it's the only part that was ever local.

00;02;53;27 - 00;03;18;24
Unknown
And it's the exact part that now banks in Arkansas. So that is not the price of seasoning. That is who owns the shelf and where the profits sleeps. So when Walmart comes into small towns, it does destroy this town in many ways because all the profits sucked out of the small town and goes to Arkansas. So I'm talking money.

00;03;18;25 - 00;03;42;00
Unknown
The money multiply affect, not lower prices. So you can have both. And so we were both right in different ways. And go over 27 did a great job of calling me out on that and making me be specific. And then he made my argument for me. And one example he made. You can go look at it. He compared Exxon moving to The Woodlands.

00;03;42;02 - 00;04;14;27
Unknown
And he said no loss to Houston because the jobs and tax base stay in the metro. And he's correct. But that was my exact point. Exxon keeps every dollar in Houston. Walmart mails it to Bentonville. So that was my point last week. Now my other point of calling Graham Robert. This is where it got real interesting. He upgraded my, my speech on air as not only negligence, but malice.

00;04;15;00 - 00;04;43;18
Unknown
He got legal on me. So which at least shows he went back and read the case law. Give him credit for that. But he still has not answered the question I posed. If the corruption is structural, if the man traded well for power and spent 31 years pointing trillions at other people's wars while declaring the consequences, quote, not my job, which he said, then what is the correct word?

00;04;43;20 - 00;05;12;02
Unknown
He said, audio log and zealot. That's fine. But Jefferson, Thomas Jefferson, my God. TJ wrote in 1799 that quote, when once a man has cast a longing eye on offices, a rottenness begins at his conduct, not bribery, not an envelope of cash, a longing eye. The corruption begins at the moment you start wanting the office more than the outcome.

00;05;12;05 - 00;05;45;00
Unknown
And Graham longed for that gavel for 31 years. But Jefferson word, Jefferson's word word was corrupt. The anti federalist word was corrupt. And I'll keep using it because the Founders Dictionary is older than go for 27 statute book. So I'm going to call Graham corrupt. I meant it. And the actual definition of the founding fathers, which anyone that wants to be a politician for this long, they are corrupt.

00;05;45;04 - 00;06;06;02
Unknown
And that is exactly what I meant. That's what I said. Now, two things I want to say about this exchange with is that we love these debates, and we want you guys and listeners to bring them. So bring that bring up. And by the way, governor 27 that he's heard nothing I said of value on the show, but he keeps turning it.

00;06;06;03 - 00;06;36;03
Unknown
So bring it, boys. What do we got today? So, so just just so you know what I was doing? I was sitting at the Peaks Resort in Mountain Village, Colorado, staring at, Wilson Peak, which is famous for being on the Coors Light bottle, watching our BTC text thread go back and forth with all of your retorts. And I think my line to you was, Kirk, what brand of coffee do you drink?

00;06;36;03 - 00;07;00;11
Unknown
And have you tried fiber? I'm sure the altitude made it even more interesting. Chuck, thank you for bringing this down to reality. You and I have coined I have coined a new term this morning called banter. It's a combination of banter and rant. There you go. But I'll give credit. We have some smart listeners, by the way. Keep them come and go for keep them come and go for it.

00;07;00;11 - 00;07;28;11
Unknown
And would love to meet the family of go for 26, 25, 24, 22. Now I have to be like, go for 20s listening. So he's going to tear it apart. I hope he does. He or she, I don't know or she. You're right. Yeah, exactly. Exactly. All right. Like like I, I guess this is, you know, we've gone from weekly EIA stuff to weekly war stuff.

00;07;28;11 - 00;07;56;26
Unknown
Where are we in the war, Marc? Well, we are in escalation part infinity, as I put it, in the run a show and trumping all that is kind of below the the header. There, there was an announcement by the Houthis this morning that they're going to impose a naval blockade on Saudi Arabia, which directly means the Mandeb straight.

00;07;56;28 - 00;08;29;22
Unknown
And, you know, we had we had some higher profile. Things happen over the weekend, not the least of which was Iranian strikes in Jordan that ended up killing confirmed to US military service members and one Mia, Kuwait's diesel and utilities power power generation also took a hit. I think there were 2 or 3 sites that were hit.

00;08;29;25 - 00;09;01;07
Unknown
And then now, you know, we're we're into our ninth consecutive night, the US doing targeted strikes. IRGC responds to those not only with these types of more outbound retaliatory strikes, but also with increasing rhetoric. I picked up something over the weekend on a. On a rumor thread that, you know, Kuwait was now on the table for Iran to launch its first offensive ground campaign.

00;09;01;07 - 00;09;28;25
Unknown
I don't know if that's been confirmed anywhere else. It was a bit of a a thread that was running around over the weekend. So in the meantime, you know, crude bounced a little bit last night on the open. We've got, you know, pretty well behaved crude this morning. And so this week I think is going to be another round of in the background.

00;09;28;25 - 00;09;56;06
Unknown
We'll start soon to hear some things other players may be getting involved trying to to resurrect the the interim MoU type of ceasefire and peace peace negotiations. The markets certainly kind of shrugged it off relative to what I think the, kind of the kinetic impact of all this and what it what it potentially implies. So, Kirk, I got a question for you.

00;09;56;08 - 00;10;21;06
Unknown
Give me the over under on timing. So how long will this take? And then give me the number of times we will hear it. This week from saying Iran called. They want to do a deal. I mean, 27, as it go for 27 is that is the number, the over over under on the go for over and under on the go for that's a new term.

00;10;21;09 - 00;10;50;23
Unknown
Only seven is a great number for us Houstonians. Right. Who's who's number 27. The all time legend Jose Altuve. Hey come on. There you go. Dude. That's amazing. Get your head back on the field and out of the pitch. I'm. The Hutus are quoting Hammurabi and the Old Testament to justify the naval blockade. So an eye for an eye and as a Calvinist, by the way, note that this is mis misreading of the text.

00;10;50;23 - 00;11;23;04
Unknown
So the original context was about limiting retribution, not authorizing it, but whatever their strong suit is, anti-ship missiles. And what's interesting is crude barely moved on. This headline, which tells you the market has either prices in or it hasn't absorbed it yet, but I my votes on that is potentially on the latter. Well, it's the further disconnect between fruit and products globally as well, which we saw this week.

00;11;23;07 - 00;11;54;09
Unknown
Gasoline nationally recaptured four bucks and diesel is back over five per gallon and to your to your kind of Walmart reference perk. I did a little road trip this week and I did opt at an interstate. Collection of all the different travel stops I did, conveniently for Murphy USA, and they were $0.10 a gallon below everyone else in that exact area.

00;11;54;12 - 00;12;18;02
Unknown
Now, this is only a well done mark in Nantucket. We ban chains. We don't allow chains on the island. You can't do it now. People can, like, chains can come and do, like pop ups. But we don't have any change on the island. And the only reason we have a Ralph Lauren store is because Ralph Lauren is a polo store.

00;12;18;02 - 00;12;45;20
Unknown
Ralph Lauren himself is an island resident or what? So, that's my little Walmart rant with no data except a data point of one. Anyway. Well done. There's not even a Starbucks on the island. No, no, I love it. But again, I'm also a capitalist. So I think basically we talk about the war every week and who knows where it's going.

00;12;45;23 - 00;13;10;28
Unknown
I'll go back to, my original point is, I do think we had to take out the conventional forces. That Iran had just because they could build a nuclear bomb behind it. The rest of the stuff's going to be messy. I don't know what the exact answer is, but we probably had to do this. This is unfortunately, just one of those things that got to happen.

00;13;10;28 - 00;13;38;24
Unknown
It's going to be messy and all. But to like, summarize this kind of all up and what Trump was doing, I've written some new lyrics to the song yesterday. Yesterday all my troubles seem so far away. Now it looks as though they're here to stay. Oh, I believe in yesterday. Suddenly Iran's hitting Kuwait and the Gulf's a mess.

00;13;38;26 - 00;14;06;12
Unknown
Trump's tweeting about Paul while the markets stress. Why have they have to go and make it yesterday. Yesterday. And then I did the whole run of show data centers needed power. Yesterday was Texas ugly. But we'll build anyway. Anyway, we'll get to that. But yeah. What the hell are you doing tweeting about Paul McCartney when it was a hoax.

00;14;06;15 - 00;14;35;29
Unknown
So you go look at community notes. That whole all caps rant about the Beatles being no talent, at least the community notes to several different threads that I saw on on X suggested that it was a hoax. So I'm going to throw a gopher 27 project. And if he's listening, I think this is a theory, but maybe we're into hits with the Saudis.

00;14;36;01 - 00;14;57;27
Unknown
Let's keep Iran bomb on, you know, keep it confusing, but make the Persian Gulf keep the conflict so that we can justify a pipeline to the Mediterranean. You know, we talked about this. Was it two weeks ago that the Saudis could just they said it's going to be $1 trillion, but why not just build a pipeline through Israel?

00;14;57;28 - 00;15;27;26
Unknown
By the way, from the Saudis to the Mediterranean? Just say a new meaning from here to the sea. Wow. That's right. Wow. Just saying, I don't know that we'd be that 4D, a chest to do and all that really does is just change the pressure point in the future, you know? I mean, a bomb can take out a pipeline, but I don't know.

00;15;27;26 - 00;16;01;24
Unknown
I like the conspiracy. All right. Should we go on to, hurricanes or do we want to go to data centers? Mark, let's go to hurricanes first, because it's, you know, an important. Follow on to all the other things that are roiling the markets and energy right now. And I think this one is a bit more topical and interesting because, you know, our discussions of Iran have gotten necessarily incremental, just just the, slow crawl way this thing's playing out.

00;16;01;24 - 00;16;44;10
Unknown
But T two, which is expected to escalate into Tropical Storm Bertha, I forget which, when and, when and which a name preceded it, but the current track has the cone of uncertainty and the, I guess, the bisecting line taking it ultimately down the almost the entire coast of Louisiana, keeping itself and then heading on shore somewhere south southwest of Houston, like around Bay city, while Gulf of Gulf of Mexico production shut ins are no longer the,

00;16;44;12 - 00;17;20;28
Unknown
The supply threat that they once were, at least in terms of price action, got to remember that that Louisiana and Upper Texas Gulf Coast is just densely populated with a big chunk of the country's refining and petrochemical assets. And so, Big Joe Bastani, who is, pretty prominent figure, Penn State meteorologist who's who describes himself as a historical analog meteorologist.

00;17;21;00 - 00;17;44;11
Unknown
Great guy. If you've ever paid any attention to Joe, he's been around for a long time, but he's he's currently forecasting or suggesting that this thing is going to be in, position to intensify and, and could make, you know, landfall in Texas as a, as a major hurricane, which.

00;17;44;13 - 00;18;11;15
Unknown
High winds and and flooding is probably the biggest threat to a refining complex that has been running at 95% utilization for at least the last two months. And so we'll we'll go into, kind of emergency cutback and shutdown mode if this forecast materializes. I mean, of course, there's a tropical storm in the Gulf, you know, I mean, if Hormuz is blocked, the Hootie is just declared a blockade on the Red sea.

00;18;11;17 - 00;18;45;19
Unknown
Russia banned diesel exports. Frac spreads are around $80. Fishing's at tank bottoms. Desolate inventories are 11% below the five year average. Refineries are running at 95%. And now there's a tropical depression in the refining and petrochemical corridor between Port Arthur and New Orleans. I mean, that's a screenplay, boys and I it makes me think are the traders? Do the traders have the ability to create weather anomalies?

00;18;45;20 - 00;19;09;15
Unknown
It's to be, like, someone's behind this. This is vital. It's this Darth Sunlight's who's the cabinet secretary responsible for that. I'm. I look forward to the president waving at them or cruising at them like he did Chris. Right back in not so long ago. Is it C baby seed C is. That's right. Because you could do that.

00;19;09;17 - 00;19;33;20
Unknown
The the one offs. We have to all of the, all of the bad news though is because we have suspended the Jones act as soon as we get the refinery, capacity back online, we will be able to supply Puerto Rico with, propane. So there is hope. Well, you've seen the export. The export numbers, right?

00;19;33;26 - 00;20;00;27
Unknown
Oh, it's through the roof. Yes, through the roof. It's it's it's like more than the last, what, ten years combined? Yeah, the last 20 years. It's the same is true for getting product California from the Gulf Coast. If you needed any evidence of just the the bad effects of the Jones Act, there you go right there. And to have the and the defenders of the Jones Act say, well, we need a U.S. shipping, building industry.

00;20;00;29 - 00;20;32;15
Unknown
We're 19th in the world right now. That's what the Jones Act has given us. So, yeah, whatever. 1/300 of China. Exactly, exactly. So the, but there is a booming, like, drone boat industry happening in the US check out and rules, released this morning about its new high payload, autonomous fixed wing, rotary wing piece of equipment that it it's called thunder.

00;20;32;18 - 00;21;03;11
Unknown
But every hurricane season, boys, I make the same point and most of us forget it. By September. The Gulf of Mexico is not just an oil province. It is the insurance policy for the entire North American energy system. I mean, we have offshore production, onshore refining, LNG export terminals, petrochemical plants, pipeline interconnects. It's all there in a 500 mile corridor, crude product and LPG exports.

00;21;03;13 - 00;21;27;06
Unknown
There you go. I mean, we built the most critical energy infrastructure in the most weather, exposed location on the continent. Now it makes sense why we did it, but it is a systemic threat. We always talk about it. I don't know what you do about it. Maybe you create California, but I'll just move everything into California. Wouldn't they love that?

00;21;27;09 - 00;21;51;25
Unknown
There was an interesting tweet this weekend that somebody suggested we basically just go take the Baja Peninsula from Mexico. And that's that's where we build all this stuff. And my response to that was, God, just don't let the state of California administer that. You know, maybe, maybe as Texans will do that for, for the world. But we could go move a lot of the infrastructure there.

00;21;51;25 - 00;22;15;10
Unknown
But then again, you'd have the same thing. I think you get, what do they call them, typhoons over on that side of on the. So fairly rarely it's more, earthquakes. Right. Probably. Yeah, probably. And then you've got the cartel. I mean, the cartels are the big issue, but if you allow them to police it, you know, they run things better than governments, that's for sure.

00;22;15;12 - 00;22;42;26
Unknown
The only other thing I kind of have to say on all of this and, I'm. I hate to correct you, Kirk, and I'm. I'm going to, to go for 27 land. It's the Gulf of America, not the Gulf of Mexico. We changed the maps. The seventh generation Texan land grants from Mexico. We had a better deal under General Santa Ana on the Mexicans than we did under America.

00;22;42;26 - 00;23;05;16
Unknown
Just saying so I'm a loyalist to. I'm too old as a career oil and gas guy to not call it the GOM. I mean, it's the Cowboys, but yeah, so in our little in our little, ecosystem here, that's what we're going to use. My former interchangeably in the Netherlands, when it was announced the Gulf of America, they threw the biggest fit of anyone.

00;23;05;19 - 00;23;34;27
Unknown
It was crazy. I should have filmed it the day after Trump, tweeted that out, I actually bumped into somebody from BP. They had already printed cards that said Gulf of America. So at least the British were on board. All right. Sophie Cunningham, quite a bit of the, I guess the data center populism that we have commented on fairly frequently.

00;23;34;29 - 00;24;05;26
Unknown
A new round was ignited by an expos that had Sophie Cunningham, who was one of the stars of the Indiana Fever, as if she didn't have enough to post about with what's going on with the league and Caitlin and the the absolute shit show that that whole drama is, she basically tweeted out, how do we save our farmland and stop all these dumb data centers?

00;24;05;28 - 00;24;54;05
Unknown
As always, the rebuttal is in the numbers. So, Wall Street journals talking about, US data center footprint, that 1400 square miles by 2028. Contrast that with or compare that to what total farmland in the US is 876 million acres, which is a smooth one point 4,000,000mi². So however many orders of magnitude more farmland is. And if you look at, what has happened to farmland that has actually shrunk over the last several years, from 2000 when it was 945 million acres, why?

00;24;54;08 - 00;25;18;24
Unknown
Because yields have improved. And I think the same thing can be argued with where the tech is, is rapidly innovating and evolving. We're likely to see the same thing, but it is a, it is a an almost indiscernible pen on the map. There was an interesting kind of grid breakout of the different types of uses across the continental US.

00;25;18;26 - 00;25;47;14
Unknown
There was actually 2018 data. Golf courses were a tiny square down and positioned in North Carolina, almost indiscernible on the map. And so data centers being, a sub square of even that wouldn't even fill up a whole square on the grid. Wait a minute. Don't I mean, yes, golf courses used a lot more, what, 2.6 times more prime farmland than solar installations, according to the data.

00;25;47;14 - 00;26;40;19
Unknown
I guess. And they consume 1.63 million acres acre feet of water per year. So that's that's a lot. But it's still grass like what's not versus concrete. And once you pour a concrete, you lose. You lose the topsoil basically forever. Not I mean, you can you can pile drive the concrete, but still, as a sidebar to that, Ellen Gilmore had an interesting observation over the weekend, and it was on the order of of or on the subject of, of the the concrete that's poured for a typical wind turbine and that, you know, it's it's deep enough and expansive enough that, you know, he posited that there's some restriction on groundwater recharge just by

00;26;40;19 - 00;27;17;14
Unknown
all the surface area that is consumed by something that's from a, you know, a recharge standpoint and certainly impermeable, or virtually impermeable. So, but the main point here is don't use social media, don't use Amazon, don't watch anything on Netflix, HBO Max or anything else. And certainly don't use GPT. If you want to completely free yourself of data center dependency, because that's what that's what runs everything in our day to day lives now.

00;27;17;16 - 00;27;50;11
Unknown
In fact, don't use your cell phone well, and I'm going to be the the gracious Texan here to to maybe solve a problem for, Sophie. And I will say this with the disclaimer of somebody that's driven around Indiana and kind of seen the cornfields and stuff, didn't think it was all that awe inspiring. But given that West Texas looks like God just ran out of ideas, got drunk and puked rocks everywhere, and just left the mess there.

00;27;50;18 - 00;28;18;19
Unknown
We'll take all the data centers in West Texas. Don't worry about it guys. We've got a lot of ugly land out there that we'll just cover up with concrete. We got tons of natural gas to power the whole thing and maybe we'll get the Chili's and Monahans or the, not the Chili's. The Bennigan's and Monahan upgraded, to a VIP section, and we'll just handle this for all the rest of the United States.

00;28;18;27 - 00;28;58;19
Unknown
And you guys can Facebook, Twitter, social media chat GPT to your heart's consent. We've got it. Well, so, I'm not sure, I, I'm not sure I would've used your, divine characterization, but I'm torn on this one, because on an aggregate, the data center footprint is less than 1.3% of the farmland. We've already lost. And part of it disappeared because the corn yields went from 24 bushels per acre in the 30 1930s to 180 today.

00;28;58;22 - 00;29;27;12
Unknown
That's a seven and a half times productivity gain. I love that on some ways. But then I think about how we're sort of raping our ground about these productivity gains in farming is actually reduced. Our the minerals. And I've. You ever seen a really ripe tomato. We haven't in 20 years. So there's some real systemic issues that really bother me and I haven't figured out.

00;29;27;14 - 00;29;50;02
Unknown
And maybe go for 27 could help us here because I'm actually at a loss. But the so so I'm not necessarily worried at an aggregate level like 1.3% sounds pretty small for data centers, but I think the the real issue is more of a local one besides the farmland. And it's a national security risk. We need to grow food.

00;29;50;02 - 00;30;16;00
Unknown
All that stuff we should probably unpack. But the real issue is when you pour concrete and someone sells their 100 acres to a data center, is that data centers still need water, and the local numbers say someone's wells going to run dry. So the real issue is a local issue. It's where these things are being built. How much water are they going to suck up?

00;30;16;02 - 00;30;41;03
Unknown
Someone's wells going to run dry. That's the real it. It's a local issue. It's not really on an aggregate level, especially most of our listeners. And I'm not I don't know. We're go for 27 is. But if you're a big city person you don't care. All you care about is going into your local Walmart and buying the corn or the beef, and you don't really think about where it comes from.

00;30;41;03 - 00;31;12;08
Unknown
Go over 27, come back to us on that one, because I think that's the issue. Duly noted. But it's a federal issue too. And let's not get away from the fact that farm subsidies have totally distorted any notion of a free market approach, to farming in America. We pay farmers not to grow crops on certain lands. It is one of the biggest cluster fucks out there.

00;31;12;08 - 00;31;40;03
Unknown
When you look at federal programs and what the distortion has done, I believe the largest, recipient of farm subsidies is Archer Daniels Midland and, supermarket to the world. If we were talking about the family farmer and ruining their land, that goes back to Walmart versus the local person that you talked so eloquently about in the opening, Kirk.

00;31;40;05 - 00;32;07;04
Unknown
And those are good discussions to have. But it's really not that it is big commercialized farming, federal government subsidies, regulation. That's a mess. No, I think the the the death of the local farmers, this, that's a separate issue we need to discuss at some point. But. That's a great point, John. Yeah. So go for 27. I'd say we would probably not on that one.

00;32;07;04 - 00;32;29;14
Unknown
But that's you. That's why I tunes into the show. Is because of your brilliant insights and Mark's I bring nothing of value. But I'm only here for the comedy. Okay. I'm going to just flat out and say it, you know, I've always kind of had a man crush on you, Kirk. And now that gopher, 27, is employing so much of your head space, I'm a little jealous.

00;32;29;14 - 00;32;54;15
Unknown
I will just pass up. I will say this. I'm going to have to go and send you flowers and chocolates next week because, this is a little tough. Just send me some savage tweet that I suck, and then that's. That's the answer. Who knows that I'm not go for 27. But anyway. Wait, are you go for 27 I am not I wish I was given the reaction I've seen here.

00;32;54;17 - 00;33;23;25
Unknown
Have we fully debunked that is also not Mr. Skilling. I am not Mr. Skilling. Mr. skilling has a, a level of genius that I cannot. I only aspire to. Oh, can I tell you I have a crush on like a man to man crush? Do you know, bore on the shale floor? Oh, yeah. Dude, that dude I have no idea who he is, but that fucker post the mark that his martini pictures are just world renowned.

00;33;23;25 - 00;33;49;27
Unknown
I mean, he he must be a stud. He was on the Land Man series. Yeah, he was one of the land men that I was doing the, thing with. And he's actually a dear friend and a really good dude. The, next time for his tweets, by the way. So I don't want to reveal, his identity, but, you two, we all ought to go to YouTube one night, and I think we could make that happen.

00;33;50;00 - 00;34;18;19
Unknown
Is that when we do the live show from your, from from your your the Van Halen. Well, yeah, the Van Halen, all Viper Room, the Richmond House grand reopening, grand reopening. So let's close out the data center side of it with, you know, there was a big announcement. There's moratorium on data centers in New York. Now, I guess they're following the template of of not allowing horizontal drilling and fracture stimulation.

00;34;18;21 - 00;34;54;15
Unknown
There's some you know, there's some recent data points on you. You have the choice not to do it. In some of these jurisdictions, there was a Kentucky farm, that farmer that turned down 26 million for 1200 acres, and one in Pennsylvania that turned down 15.7 million. It which was, $60,000 an acre number. So you do have that choice, and we're going to continue to see, as should be the case, if there is local opposition, those people have to live there.

00;34;54;18 - 00;35;29;07
Unknown
They can make the choice as to whether the, you know, the, the related economic benefits. One of the problems, and we've discussed this before, too, is that. County governments have been, I think, pretty malleable in wanting to just give these massive tax incentives to some of these, developers in the question to that, that should be posed as why and please explain that and why certain other businesses don't receive the same type of incentives.

00;35;29;10 - 00;36;06;23
Unknown
And so why are those necessary? Is it ultimately the, you know, the kind of the litmus test from an economic standpoint? But the Nimby is truly local and people given a choice not to not to have data centers around where they live, that's always going to be the last line of defense. No, it's I mean, it's the the genius of the Founding Fathers and setting up the federal system so that entities can compete within this, this laboratory to see what works best.

00;36;06;23 - 00;36;39;28
Unknown
I mean, I do think some locales are going to be burned by paying up for a data center because it's it's not as many upper middle class high income type tech jobs as you would think. But we'll see. So. All right. Do we want to roll into, our, brackish water topic now, this is a follow on to Project Kilby, which is the Chevron Microsoft 2.7GW data center announced.

00;36;39;28 - 00;37;05;12
Unknown
Not if I did yet if it is expected by, the end of this year. Dug a little bit more into, you know, the whole land and water situation. Texas Pacific is going to provide both the land and the water. And where it gets interesting is that it raises the issue not only of water in West Texas, but also produced water.

00;37;05;15 - 00;37;57;23
Unknown
So the things that they're going to look at are one, using brackish water, which is not competitive with with potable or groundwater, but also there's some, some notion that there's going to be at least a scale attempt to actually make produced water what we're putting in the ground to the tune of more than 20 million barrels a day, in the summer days, which is, you know, we've talked about that ad hoc on, prior to the primary and, of course, the antenna ranch, you know, if if there is a novel solution that is workable at scale in the form of Project Kilby, I think it opens up a tremendous opportunity for all the other

00;37;57;23 - 00;38;31;19
Unknown
producers out in the Permian to then contemplate taking pressure off, no pun intended. There is WD Pro and that that's the thing that was that was really interesting to me. You know, brackish is is easy. So you can go to a deeper aquifer, cut the cut the TDs with some basic processing. But even a brackish solution cuts your freshwater use anywhere from 94 to 100%, depending on what your cooling solution is.

00;38;31;22 - 00;39;02;13
Unknown
And oh, by the way, other things are going on at the downstream end where, Nvidia has talked about this a little bit, you've got at least purported latest generation chips that can now run at something north of 110°F ambient, which takes a tremendous amount of cooling load, both off of your your electrical system, but also from a pure water requirement.

00;39;02;15 - 00;39;31;00
Unknown
So it would be curious to see one whether Chevron, Microsoft fit this thing. And two, as they announced more details. Well, we looked at this deal. We invested a deal back in the shell days that I thought was ridiculous. Investment, but we made it because it was a, another Amsterdam based company. But they their solution was using a product of oil and gas as you put the chips inside it instead of.

00;39;31;02 - 00;39;41;19
Unknown
And so sort of like you've seen all these like liquid cooling, but it's actually better to use a oil and gas byproduct to do it than, than water.

00;39;41;21 - 00;40;09;05
Unknown
Maybe that idea is going to come full circle, but none of the chip manufacturers, no one was actually invested in the deal. So I don't know why we we did it because we were like, oh, we can sell the actual, you know, product to the company. But I think there's probably some more research that needs to go in and more development on how to cool data centers, because water is is might not be the best solution.

00;40;09;07 - 00;40;30;13
Unknown
And there needs to be a lot of it. And that's the big challenge. So I think there are solutions out there. I think there is some innovation, but no one's adopting that that strategy at this point. I had the former head of AI and former head of, data centers for Intel on the podcast about little over two years ago, I believe.

00;40;30;13 - 00;40;56;16
Unknown
And one of the things when we were talking about data centers is he kept saying, tell me the cost of things, and I'll go innovate. He goes, we're, we're we're in the first and second innings of data centers and really optimizing designs for the inputs on, on cost. And so if we say, hey, fresh water is going to be really expensive, for that they'll go innovate around it.

00;40;56;18 - 00;41;32;14
Unknown
There's already innovative cooling solutions that are grounded in tried and true industrial mechanical refrigeration type, peak shaving, meaning you don't you know, you've got parasitic power issues depending on what you're you know, you're what you're trying to cool to in terms of, you know, kind of a safe operating environment for the, for the GPU itself. But, there's a lot of creativity already coming to bear.

00;41;32;16 - 00;42;00;22
Unknown
And I don't I don't care if you're in areas that have, fundamentally abundant water resources. I think the, the industry is moving rapidly to adopt some of these, both old and new combination of solutions, plus the fact that the chips are going to get more resilient to operating temperatures over time, as has already been proven. I think.

00;42;00;26 - 00;42;23;23
Unknown
I think part of the problem with, you know, committing tens of billions of dollars to a bit of a novel or frontier solution as regards cooling and minimal water use, is that nobody wants to be first. You know, Chuck, you need to have someone from Texas specific land who they supply both surface acreage and exclusive brackish water rights.

00;42;23;23 - 00;42;57;29
Unknown
Or Kilby on your chuck needs a job. So that's the curious one to watch. So if anybody out there is listening from Texas Pacific Land, please reach out. We'd love to, do that. Maybe we'll, close this segment with one of the best tweets I saw about this whole situation. Data centers, brackish water and all this. Hey, the almond milk latte that you're buying at Starbucks when you're tweeting about the anti data center stuff.

00;42;58;02 - 00;43;24;17
Unknown
The almond farm requires way more water than a data center does, so be careful on that. What was it like ten gallons per almond. Yeah, something or nut per nut. You're talking about California though. So beware. Let's put this on the bingo card. Never thought I would hear Mark Meyers say, per nut on, bd no no no no, we've done it.

00;43;24;19 - 00;43;49;00
Unknown
All right, boys, a new high bar for the awkward thrush. Yeah, exactly. I, I talked about God puking. Mark said per nut. And, Kirk went on a rant fest with somebody named Kofod, 27. Either a new high or a new low in, BD. All right. We'll, we'll jump to PJM next week because, I think we've run out of time.

00;43;49;00 - 00;44;16;03
Unknown
But, anyway, boys, always a pleasure seeing you guys. Yeah. Likewise. Likewise, man. Mark. Coop and go for 27. Keep on coming. Yeah. And, go for 27 if you reach out. I'll also put you on the thread to watch Kirk's reactions to your comments. It's good stuff. Let's do it a man. See your boys face, your boys.