Big Digital Energy

00;00;00;03 - 00;00;33;28
Unknown
You would kick us off mark with an exciting what's up everybody? Welcome to another episode of BD. I'm Kurt Coburn and this is my better half with Meyer on the show. Better half. I thought we were thirds. Well, Chuck's not here, so we didn't know better. He's an Asian little Mexico. Is he really? I was told, by an immigrant who doesn't have her papers in Nantucket.

00;00;34;00 - 00;01;02;12
Unknown
I mean, this is a crazy story. Who's from who? Who lived and has a house in Rosenberg. So I'm not sure how all this works, but I said, my boy is Mr. Richmond, and she said, Little Mexico. That's why she goes, we call that Little Mexico. So the El Salvadorian throwing shade from Rosenberg over to man from Nantucket, from there to talk to him.

00;01;02;18 - 00;01;38;29
Unknown
And I'm like, well, I'm Mexican. And she's like, what? You don't look Mexican. She's pointing at my skin. And I was like, well, my family were the original settlers. We we were we were given land grants by General Santa Ana himself. So we're as Mexican as anybody. Now the wattles and the other natives could claim otherwise. But from all the Spaniards that in dot, which I'm half dozen, half Scottish, I'm claiming it to.

00;01;39;01 - 00;02;09;00
Unknown
So. Yeah. So she's throwing shade at me too. But I'm just in shock now. Lives in Little Mexico. I love all the gathering of the wisdom of Little Mexico. Place takes place daily or semi daily at where? Where it's at where Larry's and Larry's the Larry's Tex-Mex. We need someone to call in. Mark the live update of what is happening.

00;02;09;02 - 00;02;35;02
Unknown
You know, at the diner. At the diner. Jack, you know, we need to do a bit from there. Yeah, man, I'm on to live. I live unfiltered commentary from the Council of Elders. Well, Mark, how was your weekend? It was good. Probably not as busy as yours, but, hell of a weekend on so many fronts. So many fronts.

00;02;35;05 - 00;02;59;07
Unknown
I mean, it's like Father's Day. Belated, of course. Happy belated Father's Day. I, unlike many others, was fixated on the College World Series, which actually featured a couple of really good games. We got another one, too, for all the marbles tonight, but I know that most of the, media and social media traffic is dominated by two things.

00;02;59;07 - 00;03;27;08
Unknown
One is the World Cup and the other is something that concluded yesterday in Southampton, the U.S. open. So, we I know we're supposed to talk the world of energy, and we are because this all relates because how do we power these sporting events? Energy. But in my household, I heard this statement, no, no, I'm not going to name who it was.

00;03;27;10 - 00;03;57;06
Unknown
And it might not even have been a family member, but America should just get rid of baseball, was the comment. And and it was predicated by my statement, which is is soccer, which I mean, we've bastardized everything about soccer. We don't we call it a field versus a pitch. We call it soccer versus football. We call them soccer fields versus boots.

00;03;57;06 - 00;04;15;12
Unknown
I mean, we just just to games versus matches. Exactly. There you go. So my comment was ties versus draws. This is the world sport Mark. And and the US just has not embraced it.

00;04;15;14 - 00;04;39;01
Unknown
I mean we're embracing it now because it's a cool event. But it is so interesting that we are like the MLS has no respect in the world. I mean we've got messy. You know Ibrahimovic came over to play for New York. We've got people coming over because we pay them well. But Americans are just not embracing it like the rest of the world.

00;04;39;04 - 00;05;11;22
Unknown
And is it because of baseball is my question. No, I don't think so. You know what's still dominant for us is the other flavor of football, which dominates the professional sports landscape in the US and and globally. I mean, yeah, you might you might get your prediction, as the collective bargaining agreement expires on December 1st in Major League Baseball, and it looks like we could lose a big chunk if not all of the 2027 season.

00;05;11;22 - 00;05;38;13
Unknown
So voila. There you go. Okay, maybe it's happening. Maybe. Maybe the the footballers, the soccer, the soccer exacts behind MLS are pushing for it. And the commissioner of Major League Baseball has taken it upon himself to say, you mentioned the bastardization of soccer. Don't don't think that we're not doing the same thing to baseball. And I won't get into the reasons why.

00;05;38;13 - 00;06;04;20
Unknown
Let's get on to the other sporting dynamic. That was it at play over in Switzerland over the weekend. And I don't even know if we were supposed to record on Friday. On the heels of President Trump signing the 14 point MOU in Paris, by the way, which is I don't think, great symbolism and of course, the immediate, you know, reaction commentary.

00;06;04;20 - 00;06;36;15
Unknown
It's a hot take instant reaction commentary is that, you know, we've given everything away because we're being pressured as every day that passes gets closer to the midterms. We need gasoline prices to come down. And really, what, you know, what it's showing is I think what Bob McNally was alluding to literally a couple of days after we invaded or attacked back in, you know, late February, was they're going to play.

00;06;36;16 - 00;07;05;22
Unknown
It's likely they're going to play the economic, leverage game against the West. And that's what we've seen. And so we don't know what the Iranians tolerance for inconvenience and pain is, but we kind of know what it is in this country. And that's $4 plus gasoline. It's not being able to get my, G.I. Joe with the kung fu grip, all of those things.

00;07;05;22 - 00;07;36;24
Unknown
And so that's the way I've been thinking about it. I mean, who knows what this MOU, I call it the Memorandum of uncertainty. What this MoU really means in effectively getting things agreed to and done. I just know over 47 years we haven't been able to cross the Iranians in any agreement. And one of the things that I just sent earlier this morning was an analysis by, he's an academic.

00;07;36;24 - 00;08;03;11
Unknown
I forget the name, but head of the extreme extremism department at George Washington, and he he made some pretty good observations in that the Iranian contingent that is in Geneva right now or somewhere outside of Geneva, is not just a, a team of diplomats. They've got everyone who is a decision maker in the area of oil and energy, which includes the strait.

00;08;03;14 - 00;08;31;20
Unknown
They've got the head of their central bank, they've got the security apparatus represented, which, you know, is is completely controlled by the IRGC and the regime. And so they're looking at this pause, at least according to this analysis, as let's get everything we can get in. The chief thing among them is not to cede control of the strait, but more importantly, to get the cash coming in.

00;08;31;22 - 00;09;05;17
Unknown
I mean, Mark, that's a mouthful, but but what's interesting is I don't understand why we would sign something like this. Because if you walked into a car dealership and the salesman said, full disclosure, I'm going to lie to you about the mileage in sheet. You on the warranty? Would you still sign it? But apparently United States is okay with signing agreements like this when the person on the other side, like they're bartering, it's a barter society.

00;09;05;19 - 00;09;34;02
Unknown
They lie. We know that. I don't understand, you know, the latest thing that came across that I kind of rolled my eyes at as well, we've made very, very good progress after, you know, the delegation, the Iranian delegation apparently walked out without shaking hands and posing for photo ops after, predictably, President Trump issued some fairly bombastic threats on social media that they wouldn't have a country to go back to.

00;09;34;04 - 00;10;04;12
Unknown
If they didn't. You know, if they didn't get off the the high fence. And so this morning, and I think a bit of damage control, they've agreed to having the IAEA inspectors come in. Well, that's somewhere out in the future. What does that look like? We've seen this before and that's the main one. We have these red lines, no nukes and free and open traffic.

00;10;04;14 - 00;10;33;26
Unknown
Through the through the straight on un, Being able flow without harassment. Violence. So. Where are we? I, I really don't know. I know, I know what Cruz is telling you. I mean, it's down over 8% over the past week since all this started building momentum. But. Are we going to end up in the same place where we were before?

00;10;33;26 - 00;11;00;25
Unknown
I mean, I think you just said it. We said it best in my mind it is. The administration looked at $4 plus gasoline, $100. Brant looking at tank bottoms and midterms and 17 months and Boeing. We blink. And that's part of the challenges. We're looking short term because of our electoral cycle. They're looking long term so they can wait.

00;11;00;25 - 00;11;36;12
Unknown
They know we have to. They know Trump is in a weak position. So that's that's my take. They're the 300 billion I don't know if you I mean the $300 billion reconstruction I mean that's ridiculous. I mean of a country of a country bond. They, you know, they they attack their bases. There's just so much there that I think most Americans don't care because it's summer and they're cooking hot dogs, but this is a idea.

00;11;36;14 - 00;12;14;03
Unknown
Who's this coalition of private and and state, funders of this 300 billion, you know, do we end up being the sole provider of those reconstruction funds? And I'm sure we can trust them to do good civil works with with every bit of, every last dollar of that 300 billion, it's going straight to the nuclear, nuclear weapon facility and what private capital players are going to expose a dollar to the risk in country.

00;12;14;05 - 00;12;43;12
Unknown
Yeah. What kind of contract you sign in there I mean good question. Good question Mark. Yeah. The best take that I that you've talked about I mean, it bears repeating about the 47 years of bad acting. What can you tell us more about where it all started with the revolution back in 79 and the hostage taking you? We all remember that, release on or the day after, I don't recall precisely, President Reagan's inauguration.

00;12;43;15 - 00;13;18;19
Unknown
And the Ayatollah, who was in exile in France up until that point, building to this inevitability or eventuality. And as we've seen, the only consistent thing is that the regime has stuck to its hard line and has continued to use violence and torture and murder to squelch any dissent and protests. And here's one thing I was thinking about this morning.

00;13;18;21 - 00;13;51;06
Unknown
And it harkens back to something that, Constantine Kasem was talking about when comparing contrasting what we did in Venezuela with Iran. We got, a regime adjustment as a result of removing, removing Maduro. We've taken out layers of senior Iranian in IRGC. We've got no apparent regime adjustment. And I don't think in its in its current kind of let's talk about it stage that that's going to happen.

00;13;51;06 - 00;14;23;00
Unknown
So this is a much more complex and much more ideologically driven situation. And we've seen evidence of that over the last 47 years. That's been the only consistent thing. Yeah. And I mean, unfortunately I, I'm not a big fan. I think Trump is not an ideologue. I think he's more just of transactional. He likes doing deals. So I don't think he really thinks through the long term or care, nor cares about the long term implications.

00;14;23;00 - 00;14;48;17
Unknown
This is let's get a deal done. I look, it's good for the yes country. Sign it on my birthday. Yeah, I think this is just a much, much ado about nothing. Let's kick the can down the road. Yeah. We have a very malleable remnants of the legacy regime in Venezuela. We don't have that at this point in Iran.

00;14;48;17 - 00;15;23;01
Unknown
And I don't know what gets us there. Well, let's move on to your favorite topic, Mark. The EIA weekly oil stocks. Been on I was hoping for sometimes your, your malapropism for the EIA, which is the IEA, but we won't go down that road. Hey, Chuck. Big draw last week. You know, we've got, Cushing, which is technically at tank bottoms, and, you know, there are those out there.

00;15;23;01 - 00;15;45;29
Unknown
Cushing doesn't matter. It's the most important. You got a big tank farm, 90 million barrels of shell capacity. You know, operationally, what happens when you get down to 20, it's starts to get more problematic in terms of water and sediment and other things that you don't want in your crude coming out of Cushing. And so I think we all understand that.

00;15;46;02 - 00;16;21;19
Unknown
And if you look at the the, the updated charts that we show on the weekly petroleum status report, the, the interesting one, there is what we've been in terms of US production, which is what I call a bit of a lull period. We haven't continued to be up into the right. So when you when you put all these things together, where does you know, where does the ability to continue to export the volumes we've been exporting?

00;16;21;22 - 00;16;48;23
Unknown
We're getting I forget what percentage we are, but it's a big number relative to what our contribution to the IEA is a SPR authorization or request. But, you know, we're at we're at levels in the SPR that's below basically when it started or all the way back to the early 80s, I mean, we're, we're draining our our strategic insurance policy to manage political operative for a war.

00;16;48;23 - 00;17;21;15
Unknown
We started well, this is a little different than than the last drawdown. This is, you know, anticipating at a minimum, the real physical disruption that's taking place. But the point is also that, you know, we're sending out a lot to make up for lost export volumes from elsewhere, with our own, with our our own supplies, which, you know, speaks speaks of the dominance we've created over the last 15, 20 years because of shale.

00;17;21;22 - 00;17;45;27
Unknown
I mean, let's talk about Cushing for a second. I mean, the delivery point for every West Texas Intermediate futures contract graded on my map is that 20 million barrel that's at the bottom and there's no slack left near. And so I'm just thinking like, I think, of course there's so many traders out there that listen to our show.

00;17;45;29 - 00;18;18;25
Unknown
Most of them are are our trading are not trading the physical. And so let's put this in perspective. The just operational if I mean if we just wanted to move oil like the system, the pipelines, Cushing is worth the bottom. Cushing means enough barrels in the system to actually make the system operational. You can't move barrels if there's no if there's no oil in it, there's no pressure, there's crude.

00;18;18;28 - 00;18;36;26
Unknown
So where are we really what what do I mean? What can we do if we want to move more? I'm kind of sitting here looking at the ground like we just drained it. We're at the bottom now. What happens? Well, you continue to pull on commercial stocks. You continue to pull on the SPR. You know it's the physical versus the financial.

00;18;36;26 - 00;19;00;27
Unknown
Yes. Those are that delivery point for WTI is in Cushing. And we're not we're not at absolute bottom in terms of cannot Canada operator. Can it not. It just becomes more problematic as you dig deeper into the tank bottoms. You know, ask me 5 million barrels from now what it looks like. I don't know, because I don't recall having seen that.

00;19;00;27 - 00;19;22;03
Unknown
At least over the course of my career, where we're kind of at a minimum level that we've seen in the past ten, 12 years. I think 2014 was the last time that we were down this low, or at least that's a contemporary comparative. I mean, my read is the contango, the backwardation split that happen in the futures curve.

00;19;22;03 - 00;19;53;09
Unknown
Is it a trade signal? It's more of a stream from the old storage. I mean, to me, yeah, that's what I'm saying. And that's that, that that's what a contango signal tells you. Past, past the, the point of indifference. It's it's rational to store as opposed to concern or draw. So what does that mean? What do we do?

00;19;53;12 - 00;20;21;16
Unknown
Well, we're being so. So what's the difference? Or the, you know, if we start to see, physical pinch points, you know, there there's the financial versus the physical argument or debate going on in places like Twitter where you still have oil companies, CEOs, you have some analysts, you know, like Jeff Currie talking about, you know, we're we're going to hit a physical wall in certain products in crude, certain regions of the world.

00;20;21;18 - 00;20;53;13
Unknown
The other aspect to remember is it's going to take some time. Let's say Hormuz was free and clear and ships were moving. You've got loaded tankers sitting there. They've got to get out and then you've got to bring empty tankers in to take off, bringing onshore storage on both sides of the strait. All the countries whose production and and inventories are dependent upon traffic through the strait.

00;20;53;14 - 00;21;23;05
Unknown
Now you have workarounds like the East-West pipeline, etc., etc., but there is a logistical period that getting the the kinks out of the system is not going to be tomorrow, a week or two after. The question is where does the you know, where's demand at that point? And you know, that's been the lever, China really ratcheting back on its imports pretty heavily.

00;21;23;07 - 00;21;46;11
Unknown
And that's been a not in I think it's been the primary factor in keeping a lid on, you know, what what the physical, pinch point signals have been so, you know, they did a really good job. China did a really good job of building a lot of domestic inventory via strong imports. Prior to this, did they know what was coming?

00;21;46;13 - 00;22;15;09
Unknown
I don't know, is this part of their their longer game? Probably. And you know, we don't we don't know what, you know, places like Kuwait and UAE, Kuwait in particular can do in terms of returning shut in production and how quickly so, you know, I just think there's a very ambiguous period once the all clear is given.

00;22;15;09 - 00;22;41;15
Unknown
And in my mind, we're not there yet because we're we're doing this now. It's open, not shut. No, it's open, not shut. I mean, you can use production to actually decline. And so we're down to 120,000 barrels a day year to date, while refineries are running at almost 95% utilization and exports have surged to 6 million barrels a day.

00;22;41;18 - 00;23;17;22
Unknown
So those three numbers production down, refinery running, it backs export records. That's a physical market being drained from both that. Where's the swing production? It doesn't exist. So this is interesting. I went back the rig count never responded. And we talked about this three months ago. Mark. Three rigs in two weeks. So the industry doesn't trust the price signal because the price signal has basically been wrong, manipulated or reversed by government act for three decades.

00;23;17;22 - 00;23;46;02
Unknown
So what do we do now, Mark? The outlier here has been Diamondback and nobody else really of significance. And so here we are. But if you're a CEO are you deploying incremental capital. Yes. Or no? I mean, you've had a pretty you've had a pretty rapid reversal under 80. We're sitting here with seven handle. I don't know what it is at this very instant, but we talked about it for a long time.

00;23;46;09 - 00;24;12;05
Unknown
And, you know, the the cajoling summit were, you know, the administration was had a big, conference call with over 100 participants. And there was a very tepid response. What they're telling you is, and what we've been talking about is, you know, give me an eight handle out 2 to 3 years that I can trust. Nobody actually knows.

00;24;12;07 - 00;24;51;15
Unknown
But structurally, if that's where we're going to be, that's that's the way boards and CEOs thinking or think about capital budgeting going into 27, 28, 29, I mean, 27 hasn't even been sorted because we don't have the clarity yet. And what's been working for the past 5 to 10 years is what the market flight from the sector has been telling all company management teams and boards, look, we need better returns and cash returns, performance before we're going to reweight back into or rotate into the sector.

00;24;51;20 - 00;25;23;20
Unknown
It's been an inconsequential for a generalist PM. At a at a big mutual fund to want to take a dive into energy because of, you know, getting burned by head fakes before. But the industry has done a really good job of following a, a bona fide, definitive capital discipline model. You know, we're most covered. I would say we're five, six, five, six years into proof, you know, much stronger balance sheets.

00;25;23;23 - 00;25;54;29
Unknown
But the the reading between the lines is we've got to have more than front months. You know, 80, 90, $100. We got to look out into the future and see that, you know, supply demand balance inventory situation. Structurally we're going to we're going to be able to invest on a deck that generates, you know, attractive returns. Otherwise, you know, we're not going to set in motion something that is really hard to then pivot and shut down.

00;25;55;01 - 00;26;20;14
Unknown
Well said. Mark. You know, it's funny when I'm not you know, a lot of the people I played golf with up here in Maine tuck it are pretty conservative, some of them. But there's a lot of like, you know, northeasterners, so I was playing golf this week in a sky definitely progressive. It's like, hey, what's up with all this?

00;26;20;14 - 00;26;47;01
Unknown
Like, us getting all this Venezuelan oil? Why are we taking that? Like, it was kind of like he wants to know. Like, why do we do that? I was like, well, I was like, the refineries on the Gulf Coast. You can't just show up with a truckload of oil pulled out of the ground and that refinery can process it.

00;26;47;03 - 00;27;20;03
Unknown
So our most of our big refineries have been geared towards this heavy oil. So anyway, I just love the fact that people read headlines and they don't. And that's what we're talking about. I mean, we're talking about our physical inventories. And Cushing are at the bottom, and they physically just can't work. If you pour more oil at them, they just break up and it's just another reminder about the fact that there's headlines, there's financials and there's physical health.

00;27;20;03 - 00;27;44;04
Unknown
And we have to talk about you mean and I pull up to one of 120 pumps at Bucky's. There's not an individual line connected all the way from West Texas to that pump. No. But I like I'm glad you mentioned that. So this is a great point, Mark. Two things Bucky has gotten the best global PR because of the World Cup.

00;27;44;06 - 00;28;05;16
Unknown
I mean, Friday, I mean, you just the Scots and I have some great pictures of Scott actually in the Dallas this morning because I flew home for the week last night. I was in the Boston airport and I saw literally 50 kills, and a lot of them were headed to Miami. I guess maybe I don't know what's in Miami, but there must be a game.

00;28;05;16 - 00;28;33;10
Unknown
Maybe, Scott replied there, but Bucky's might be the number one destination for foreign tourists in the World Cup. But secondly, here's the buttons problem I have an issue with Bucky's, and I want our listeners to call on that. This isn't bullshit, people park their cars at the gas pump and then go inside. I think that is the weirdest thing I've ever like.

00;28;33;10 - 00;28;54;27
Unknown
That is rude. I don't like Bucky's, like they actually encourage that behavior because there's a guy that walks around and I once a year ago, I was like, hey, why don't you ask these guys to move? He's like, no, we're not going to do that, Mike. Well, that's what Bucky Bucky's that's the one is that's about one complaint about Bucky.

00;28;54;29 - 00;29;21;19
Unknown
And you're right, Bucky isn't connected to West Texas. But I wonder if I mean, think about negotiating for gas. Does Bucky's have any preferential I mean, of course it's all about price. You pay more, you're going to get more gas. But it means, you know, sort of where Bucky's lands in deliveries and in preference to, I mean, it's pretty high.

00;29;21;21 - 00;29;57;07
Unknown
I bet it's pretty high. What are they at 56 or something stores now and their expanded footprint. Yeah. But of mine, one of the companies that's that is, that manufactures, you know, like renewable gas was telling me that the Bucky's buying power is pretty damn that it's like. It's like I told somebody the other day, I said, you know, they were complaining about the quality of beef that they got, when there's, you know, a Publix or, Harris Teeter or something around where I am currently.

00;29;57;07 - 00;30;32;20
Unknown
And I said, well, you ought to go to Costco or Walmart or Sam's Club because they are the they're the 800 pound gorilla in terms of, of the quality of the beef that they get. If you're buying from not a specialty kind of operator. Right. So I think the same is true always. So so you you really brought up my last residual road rage, which is pulling in to a Bucky's and seeing and man, if I'm on an interstate, I'm trying to get in and out.

00;30;32;20 - 00;30;59;13
Unknown
I've got, I've got my whole sequence lined out and that is fine. An open pump. Get out of there, find something in a about 80 or 90% of the time just because of the the volume of traffic, I'll see somebody vacating a parking spot right up front. I'll go swoop into that one, make a beeline for the restroom, and then I've got 2 or 3 things I'm getting.

00;30;59;15 - 00;31;32;06
Unknown
I will say that they have made it much harder to find Coca-Cola products on the fountain bike. There's like one Diet Coke, nozzle, and that's it. They know the real estate is valuable, so they're starting to really maximize their extremely hard on their suppliers. You've seen things disappear, like when Bucky's Superstore first, you know, when the when the Yeti type super cooler, came up, came into being.

00;31;32;08 - 00;31;53;09
Unknown
You know, Bucky's you can find Yeti. Then I went to Arctic and now it's something else. So. Yeah. Yeah. It's really hard to find. I don't even know if they have it. Then it's really hard to find a Topo Chico in the refrigerated section. That that may have changed. Damn right they should know that, sir.

00;31;53;09 - 00;32;19;03
Unknown
That's their business. They have. They own the customer. If you own the customer. Yeah. You know, I don't care what John Mackey's, when he was still running real things about. And then you get attached to certain things, and then they just disappear, like white cheddar or jalapeno popcorn while you're beaver nuts aren't going away anytime soon. Mark, you should, we have, dark chocolate covered almonds is another one.

00;32;19;04 - 00;32;45;26
Unknown
Anyway, enough about boxes. But at the through the, something we were going to talk about had we recorded on Friday, I think it's still relevant, although it's probably faded a little bit with the way that, prices have come in over the last week is our friends Sheldon Whitehouse and Elizabeth Warren took it upon themselves to write a letter to Big Oil.

00;32;45;28 - 00;33;22;08
Unknown
All the majors Conoco, BP, shell, Exxon, Phillips, Conoco Phillips about. Explain yourselves. Because of clearly the profits that they're going to be reporting are helped by the fact that you guys helped. Essentially, the insinuation is in a 20.4 hour Mar-A-Lago meeting that they exchanged $1 billion for help on things like regulation rollback. But there's, you know, there's some insinuation that this is all a concerted effort to help the oil industry.

00;33;22;11 - 00;33;53;29
Unknown
I think it's a for sure. So it's a strongly worded letter. And look, it's not 100%. It's pretty tilted across to the Democrat side of the aisle. And these two senators that wrote this letter are Democrats. And on the more progressive in our northeast Democrats. But you got guys like Tim Burchett out of here, the from Tennessee who's been ridiculously ignorant in talking about this stuff.

00;33;54;02 - 00;34;33;15
Unknown
And I'll, I'll use this opportunity to remind people, most people what they see is the price on the sign and immediately connect what's it exon and what's going on there? Oh, I see an X sign. Gas is 459 150,000 plus or minus retail fuel outlets in this country. Over 60% of them are controlled by single or a handful of store operators and retail margins over a long period of time, average, what, 1 to $0.03 a gallon or excuse me, 3 to $0.07 a gallon.

00;34;33;17 - 00;34;59;21
Unknown
Razor thin, thinner than a razor, which translates into a whopping 1 to 2% net income margin for that fuel retailer. Well, I mean, listen, with Warren and Sheldon Whitehouse probably never took economics 101, but oil companies don't set the price of oil. We've talked about this on the show, but I went back and did some research on this.

00;34;59;23 - 00;35;06;20
Unknown
The crude oil windfall profits tax of 1980.

00;35;06;22 - 00;35;35;24
Unknown
Congress has they this is not the this is the same playbook over and over again. But Congress passed a crude oil windfall profits tax in 1980. And what happened? It reduced domestic production by 3 to 6%, increased imports by 8 to 16%, raised much revenue than projected, and was repealed in 1988 as a failure by nearly unanimous consent.

00;35;35;24 - 00;36;02;20
Unknown
It so, unfortunately, this is for their audience. It's only it doesn't help. It doesn't help the citizens of the United States. For them to do this, it helps their constituents because their constituents are stupid. I mean, we have a WPT playbook because what you're setting a precedent and it doesn't work kind of like tell like socialism is never actually work.

00;36;02;23 - 00;36;57;11
Unknown
Socialism is never work. But it's growing. I mean, Seattle, Maine, I mean, Maine is about to let go. Not we've come so far from at least having some substance, thoughtfulness and selflessness. And our federal elected officials to it's all this kind of theater and reality TV type of look at me. And the symbolism trumps everything else. And they do that by no one challenging, just the absolute ignorance and in some cases stupidity of what they're saying, because it doesn't take a lot of research to go back and look just like you alluded to what happened between 1980 and 88 to the industry made us more dependent on things we didn't want to be more dependent

00;36;57;11 - 00;37;24;22
Unknown
on, which was like imported oil. It just doesn't sell, you know, it doesn't get votes. Unfortunately, I think being the only ones that I mean, I remember watching the CEO there was Terry London of Gaylord Entertainment when I was there, a company that primarily owned most of it was a public company, primarily owned by the Gaylord family of Oklahoma, big media and media and other big assets.

00;37;24;22 - 00;37;56;13
Unknown
But he was telling me and complaining about how difficult it was to be a CEO in today's world become just Wall Street's managing you by quarter, and sometimes the best interest of the company long term is to maximize profits. By the way, Milton Friedman would say. But the point is that you can't always maximize profits by being short term focused.

00;37;56;16 - 00;38;23;14
Unknown
That's what this is. And unfortunately, you would think Mark, that people are getting smarter because we have the internet and AI and all this. But what I've realized is people are getting dumber. We have almost made it a cultural norm. Good. Not politics around the dinner table.

00;38;23;16 - 00;38;50;05
Unknown
That's not I mean, growing up, that's what was argued around my household and family. And so something that was pretty normal. But people are getting dumber because they read headlines on, on. And now with social media, their headlines are are literally four words versus the newspaper. We we read the newspapers even as kid, we read an article. People don't read them anymore.

00;38;50;05 - 00;39;24;24
Unknown
So they're dumber. They believe what people tell them. And they their influencers are people like Elizabeth Warren. So I mean, I guess that who we're electing is more socialist now than ever. And so that's unfortunate. So we're here to talk things to people. We need to get our our message out to more. Hopefully the Vlad Vlad is is is listening and he's defending the Little Mexico and Rich Richmond.

00;39;24;27 - 00;39;54;23
Unknown
But that's the problem Mark. Well I, I think as we've seen the pendulum tends to swing too far in to violently that it really makes it hard, at least from a policymaking and a government standpoint, to take a longer view beyond your own kind of election, vulnerability, which for Congress is every two years for everybody in Congress.

00;39;54;25 - 00;40;24;24
Unknown
Right. And, you know, for this administration at the executive level, at least for the president, it's, you know, it's one the end of this term. And, you know, what happens in 28. And so that we, as we talked about in the first segment, it's pretty obvious that the pressure to do a quick deal is very heavily related to the fact that that the midterms are what now, four and a half months away.

00;40;24;27 - 00;41;00;24
Unknown
I don't know that, that changes. But, you know, some of the things we're doing on the margin where you've seen what's what's going to protect, young, impressionable minds by limiting or prohibiting certain social media access. All those things. I think that genie's way far out of the bottle and is never coming back. And to the extent that people aren't curious about things, then they're not going to they have the intellectual capacity to to learn.

00;41;00;24 - 00;41;31;07
Unknown
Really. What's up? But we we've created, a convenience aspect that is only exacerbating and feeding the distraction tendency and the shortening of attention spans and really wanting to become deeper, an expert in things that are pretty important. You know, the stuff we talk about related to energy is pretty important stuff, because if it went away or got prohibitively expensive, your life would change pretty dramatically.

00;41;31;09 - 00;41;54;18
Unknown
Yeah, but no. And I mean, unfortunately, our minds, most of our minds are too small to think in big picture terms like that. Let's wrap up. I've been wanting to get your take on it. We now have a week plus of trading post the Space-X IPO. I mean, if Elon Musk isn't playing the long game, I don't know who wins.

00;41;54;21 - 00;42;20;02
Unknown
I think it's amazing. I mean, that that's that's why capitalism work. That's why we need incentives now. I mean, let's not go through the subsidies of space. Waiting on the government. There's a lot of stuff we can argue in the weeds. Maybe they're not doing it, but overall, this country.

00;42;20;04 - 00;42;53;08
Unknown
Allows people to be whoever they want to be. And. And SpaceX is just another reminder of how great this country is, is. That's the big takeaway in my opinion. The fact he's a billionaire. People are jealous. I don't understand that. I mean, you have the same opportunity. I have the same opportunity. So go make the opportunity. And that's what you created 400 or 40, 400 millionaires on paper instantly.

00;42;53;10 - 00;43;28;16
Unknown
And many of those had been putting in years, if not decades of work for hundreds sent to millionaires and, you know, there are a handful of billionaires that came out of that IPO as well. The combined employment and across the board, pretty high paying jobs, 160,000 people. But people look at wealth first trillionaire. We've got to find a way to grab a piece of that.

00;43;28;22 - 00;43;54;25
Unknown
And so the the politics of envy were on full display as, sure as the sun rises every morning and the, you know, the the acceptance of that by the, a large swath of the population is. Yeah, we ought to do that. We ought to be doing things like taxing paper gains, capital gains on paper. So I saw he exercised.

00;43;54;26 - 00;44;03;23
Unknown
I think it was. I don't know, 135 or 180 billion in options.

00;44;03;25 - 00;44;26;03
Unknown
He didn't sell a share upon exercise. And if you look through the history for all the way back to, well, I forget what it was before PayPal, but PayPal and you know, the liquidity outcomes, he put all of what he gained into building the next thing. And so what's on what's on display here is, you know, it's probably an oversimplification.

00;44;26;03 - 00;45;01;29
Unknown
And people toggle toggle back and forth across both classes. But there it really in my mind comes down fundamentally to mindset. And there are really two distinct mindsets on display here. There's the builder mindset and then there's the blame mindset. Yeah I 100% Mark. These are people that don't want to take any risks for themselves. They want to have a backstop by the government, and they want to take from those that take risks in redistributing.

00;45;02;00 - 00;45;27;09
Unknown
I mean, let's just that's what it is, that they're thieves. People vote for people that promise them that they're going to give them something. That's what it is. So we need to do everything and fight everything to protect what Elon Musk has made and encourage others to do the same. I was doing some, there was some interesting back and forth over the weekend.

00;45;27;09 - 00;45;44;01
Unknown
I think MSCI, awarded their lowest ESG rating to SpaceX, obviously, because rockets require a lot of, liquid methane to get it.

00;45;44;03 - 00;46;19;27
Unknown
Beyond the Earth's gravitational pull. So I asked grok what? You know what what does a starship combo consume on a per launch and retrieval basis? And it's about 60,000,000 cubic feet of methane. So if we get to if we get to Elon's 10,000 a year launches, and just using Starship as a model and saying there's no real improvements on methane usage, you're at about 600 BCF a year for those ten 10,000 launches.

00;46;20;00 - 00;46;50;01
Unknown
Which is that moves the need a whole lot of methane, right? That's about I think that's about 1.5 and a half to 1.6 BCF a day. That's a big chunk of a long haul pipe from West Texas. They're down in Texas. So that's probably somebody post that need you on. Elon responding he said, yeah. Basically saying that's that's the physical and physics reality.

00;46;50;03 - 00;47;16;27
Unknown
And unfortunately like, electric rockets don't work. They don't unfortunately. Sorry. And then the last thing I'll say on this is that, you know, back to the politics of envy. No, none other than the San Antonio mayor jumped on the bandwagon here. I didn't know this, but apparently Michael Dell had purchased a 10% minority stake in the San Antonio Spurs.

00;47;17;00 - 00;47;43;26
Unknown
And the Spurs are trying to get a $1.2 billion arena built. And it's always the the battle between public funding versus private funding, and her seeming request or suggestion were sounds more like a populist demand. Is that, well, why shouldn't he just pay for the whole thing? He's worth $245 billion or whatever the number is today on the Bloomberg index.

00;47;43;28 - 00;48;18;12
Unknown
He doesn't even live in San Antonio. I've been around a few billionaires and and and they there's a reason they're billionaires. They're smart with their money and and most of the time, they never want to spend their own money for anything. That's. Well, it's amazing. We can learn a lot from that though. Mark. Great seeing you. I assume you didn't catch the ending of the US open, but it was quite an interesting US open this year.

00;48;18;14 - 00;49;01;26
Unknown
Played in probably the greatest venue in the Shinnecock in the Southampton. It's just unbelievable golf course. Incredible. I played a similar golf course in Nantucket. Same grass, same sort of features. It's a fun, really fun golf. But what was displayed yesterday was quite extraordinary in multiple ways. You had one in the Clark, you know, one line. He's an American no one likes and not the fact that he destroyed the lockers last year in Oakmont and had and was basically bullied into paying for it and apologizing.

00;49;01;26 - 00;49;26;02
Unknown
But he says he's done everything he had to do. He took anger management classes, but people haven't liked when in Clark at all. And he was being heckled by the New Yorkers. Like almost every shot, which was which is funny. Scotty made a funny point about the fact that, hey, being in the arena is not for everybody, which was a funny way to communicate that.

00;49;26;05 - 00;49;50;08
Unknown
But Scotty himself were disappointed and disappointed. I wanted to Scotty when I was kind of depressed by the fact he didn't make a run, but the fact that he finished fourth when he doesn't have is even be. Game is and he is the best player in the world by how you just plug in there. Absolutely no. You got to look at all those factors.

00;49;50;10 - 00;50;26;00
Unknown
I read all your stuff that you posted over the weekend and I would say that, all of the, you know, the, the things that were just bombarding Clark on really the toughest task, which is the US open. Right? That's why that's why the scores were so high every year just because of the course set up. You know, for him to keep it together is that that's mental toughness on display.

00;50;26;00 - 00;50;46;28
Unknown
Like we see very rarely. I really snap like a flag at some point. I mean, I, I don't mind playing with some angst. Some people wanted me to lose, but. And I can play in pressure. But I think, man, that would break just about anybody. And the fact he hung in there is impressive. He had some great golf shot.

00;50;47;00 - 00;51;21;17
Unknown
That's the point. Impressive. Good seeing you have a good week in Dallas or wherever you are in Texas. And this in Dallas for the week. Got some golf? I have a golf match to play for my my my my clubs annual member member match playing. I'm playing in an 18 handicap. I have to give him 25 strokes. So in my mind, I have yet Strickler who's the greatest handicap buster of all time, alerted.

00;51;21;19 - 00;51;46;07
Unknown
But I ran the math, did a tornado analysis, and I have a 93% chance of winning. But I'm looking at the at the at the number six in men. Only five stroke. But I have to shoot par which I can, but it's not easy. So I'm going to have to go to to win. We'll say that that's not big.

00;51;46;09 - 00;51;59;05
Unknown
Why I'm in Dallas. Well, at least they didn't schedule it in July or August. Yeah, we we closed, till after July 4th for a month, so. All right, we'll, watch that baseball online. We're still out, and I'll find a way.