Big Digital Energy

00;00;00;00 - 00;00;08;25
Unknown
Hey, everybody. Welcome to be a election edition.

00;00;08;27 - 00;00;12;18
Unknown
Wow. Good to see you guys.

00;00;12;20 - 00;00;36;15
Unknown
All right. Mark. Mark. Mark had a take he wanted to start with. So. All right. So, you know, before we get into the stuff of lesser importance, I mean, duck, what's going on? You know, we've been picking on not picking on, but we've been doing a lot of in-depth analysis and critique of UT and Arch Manning these last few weeks to open the show.

00;00;36;15 - 00;01;11;08
Unknown
But let's let's shift to the other utilized story with the Dallas Cowboys. Chuck. What's going on? I have absolutely no idea. I mean, I don't think you could be on this bad run of luck if you tried. I mean, you know, I want to throw throw shade at Schottenheimer is just not a good coach, you know? But even that just doesn't feel like it describes the totality of the shit show that's been happening in Dallas the last 30 years.

00;01;11;08 - 00;01;37;00
Unknown
So I don't know. I spent, you know, I was running around on Sunday. And now that baseball seasons over with, I don't watch complete NFL games, but I got I got kind of locked in to the Dallas Cardinals broadcast. And then I stepped away for a minute. Had to run an errand. I come back, they were up ten points and then they lost the game.

00;01;37;03 - 00;02;03;19
Unknown
Yeah. And and and tried and like the Cardinals tried not to lose it to a missing an extra point for the win. The Cowboys defense somehow held the Cardinals. And the offense couldn't put a field goal up on the wall. What did, what did Jerry Jones say in frustration? This is this is an indictment of the whole system.

00;02;03;21 - 00;02;18;22
Unknown
So, Mark, you did tell me you were going to bring this up. So I wrote one joke for you. Dallas calls itself America's Team. The way the IAEA calls itself a data shop.

00;02;18;24 - 00;02;45;18
Unknown
Rating records every week rings zero this century. Well, yeah, I mean, here's here's my long running take on or my philosophy or view of teams like the Dallas Cowboys, the New York Yankees, Notre Dame's in this category. We at Texas A&M tend to act like we're in this category. But it's you know, it's a multi-decade dry spell in terms of championship.

00;02;45;21 - 00;03;09;26
Unknown
You guys are awful, by the way. And we are so awful. We're terrible embarrassing. I call it a leap by entitlement. You know the Yankees have got it. Notre Dame's got it. The Dallas Cowboys have got it. You know, if you're on a 30 plus year run of a dry spell for championship, then, you know, I think you squarely fit in that category.

00;03;09;28 - 00;03;40;16
Unknown
And the sportswriters and talking heads always seem compelled to put, you know, championship expectations and probabilities that are out there that just don't, you know, that kind of skip over the last 25 or 30 years of, of underperformance. So porch light, Pete, porch light. Pete says Jerry runs Comstock in the Haynesville just fine. So why can't he run the Cowboys like an EMP?

00;03;40;19 - 00;04;01;12
Unknown
Good point. Good point. Porch light. The fact when I moved to Dallas and people come up to me on the driving range like, can you believe the Cowboys? I'm like, I don't care. I'm an oiler. I'm a Houston Oiler. And he's like, oh, so you love the Tennessee Titans. No I don't. I'm a Houston Oilers, which means we have no team.

00;04;01;14 - 00;04;30;14
Unknown
That's that's how bad it is. Texas football is just embarrassing. Yeah. The you know, the whole notion that Jerry owns the asset, he runs the asset, yet he blames the asset, puts him on par with every MPCO on the planet. Right? I mean, for sure. So this is election day. We are an oil and gas and energy podcast.

00;04;30;17 - 00;05;04;07
Unknown
And I just want to say G.K. Chesterton who amazing. He wrote an orthodoxy in 1908, quote, perdition means giving votes to the most obscure of all classes, our ancestors. It is the democracy of the dead. Whoever wins tonight inherits a constitution, property rights, and a price system that they cannot rewrite by themselves. And as a libertarian, I sleep a little better knowing that the dead still hold a vote.

00;05;04;07 - 00;05;27;28
Unknown
So. And I'm not talking about all the dead in Chicago and probably a lot of dead people in this election today in Texas that are going to vote for Senator. The good news is we do have a system. People are trying to destroy it left and right. But that is what we're going to kick off with, boys. What is happening with the price of oil?

00;05;28;00 - 00;06;18;19
Unknown
Go ahead Mark. Well, it's another I. I've lost count of the US approved going to the Iranians. The IRGC is adopted a conciliatory tone which is probably too strong of a word. And then the back and forth about kind of rejection of what the US has approved, unless, as they've stated repeatedly, all seven of their demands are satisfied, which includes things like releasing funds, stopping the blockade, removal of troops from the region, and importantly, delaying or having the nuclear conversation take place after this agreement is signed.

00;06;18;21 - 00;06;56;07
Unknown
And so as a result, you know, I don't know how many times we've been fooled over the weekend. You had a ramp up in that type of of hopeful rhetoric and the sensible movements of paper back and forth, shuttling by the Omanis and maybe the Pakistanis in the Qatar to Tehran. And then the last thing I saw which could already be dated is the IRGC or the Iranians have said, nope, we're still we're still sticking with the demand that all seven of our conditions are agreed to before we sign anything.

00;06;56;09 - 00;07;23;21
Unknown
Yet crude was off roughly 7% yesterday. The all equity indexes across the energy complex got smacked. And so, you know, I think we're in this tedious limbo until at least we know which direction the key races are headed or when they're decided. In some places that might not be for several days or weeks or hopefully in Texas, we know.

00;07;23;24 - 00;07;50;00
Unknown
All right, Mark, to bring this all together. Has Iran been quote unquote, weeks away from a deal longer than the Cowboys have been a year away from the Super Bowl, almost. Wow. There we go. Tying it all together. That's what it feels like. It kind of feels like the Iranians are those guys that try to sell you a car insurance plan for your repairs.

00;07;50;02 - 00;08;15;13
Unknown
I mean, you know, it just it's like, really, guys, I'm not going to buy that. And, I, I guess they're just gonna bait around. But, you know, the the day the midterms over. Sorry I ran. You're in trouble. I mean, it's really interesting. I've seen a few takes on this, but JP Morgan says every geopolitical dip since March got bought Monday.

00;08;15;16 - 00;08;47;28
Unknown
Says every piece rally gets sold the next Friday. If both are true, is the risk premium insurance or is it a habit? And I saw Jamie Dimon. Did you see that that that video that you probably don't want to I know, Chuck, I don't want to throw shade at shade at you. Who's who might who might get offended by it, but I, I think it's interesting that, you know, we see you know Goldman raised its December Brant called 105 on Friday.

00;08;47;28 - 00;09;22;28
Unknown
It looked bearish. It was 7% below the January screen. On Monday, Brant settled at what a little bit under 105. The forecast didn't move. The market moved to the forecast. So that's $0.23 of daylight. And so what's interesting is we have you know, the price system seems to process information faster than any planner. Monday proved it. I mean, diplomats leaked, ministers postured, you know, the barrel repriced almost $9 in one session.

00;09;22;28 - 00;09;49;24
Unknown
So what's happening here? I mean, it's just we have a we have a man on the ground who I tried to bait into joining us. But haven't heard anything from Breck slap. He. Are we talking about frack slaps in the Middle East? Is he is he the the intrepid frack slap and showed up on our thread? Celebrating the fact that he ran into somebody in Abu Dhabi.

00;09;49;26 - 00;10;19;07
Unknown
Who who let frack slept. No, he loves listening to BD. Dude there right now at the hookah bar with BD on. It's interesting. They actually watch us on YouTube because they want to see what we're wearing, what we're talking about. It's amazing. And they're on the phone with their New York brokers. Exactly. I don't know, man. Goldman Sachs raising the price target to 105.

00;10;19;09 - 00;10;41;14
Unknown
Kind of right under where, the futures was trading. Kind of feels like me saying I'm on a diet going to Whataburger. You know, it's just like, come on, come on, guys. I mean, this is just. I don't even know how you make make sense of all this. I mean, literally, you're probably trading not based on fundamentals, not based on what's happening in the war.

00;10;41;16 - 00;11;05;28
Unknown
You're you're you're basically trading on true social. So I don't know what you do about this. I do know that you can feel pretty good that you're above 85. So, man, if I had a company, I don't know that I wouldn't throw a couple of rigs after this. Right now, I know five years from now we're staring at 70, but still, we've got some good quotes coming in.

00;11;05;28 - 00;11;21;13
Unknown
Rusty Bucket and Texas says, what? Actually, this is for you, Mark. What actually has to happen in the Gulf for Goldman's $140 upside case to stop being a tail?

00;11;21;15 - 00;11;58;06
Unknown
Well, I think it has to, see an election night. And thinking about what Trump has been saying for the last few days and weeks leading up to the election, nothing is going to happen before the midterms. And if Iran digs its heels in and we start a risk of military activity, you know, I, I think all bets are off in terms of how much long term physical infrastructure damage can be done and whether or not we continue to sneak barrels out of the straight.

00;11;58;08 - 00;12;31;01
Unknown
You know, where this goes is as unpredictable as trying to figure out what his next true social post is. No doubt. You know, we have 10% of global refining capacity offline. A big chunk of that has been hit by lawnmower engine drones, launched by Ukraine and Russia. You know, Valero is showing you something by, you know, taking the bargain basement price of buying and restarting the Lindell facility that's been shuttered for a few years now.

00;12;31;03 - 00;13;20;16
Unknown
Lindell had very doggedly tried to sell that asset. And you know what? They're what they're saying is they're hopeful they can get roughly about half the capacity of the refinery back online and producing by sometime in 2027. So it's tight. And, you know, the just the downstream performance of the majors that you saw last week, one of the few quarters in which you see refining up actually outperform the upstream, and the major CEOs continuing to stick with this is, you know, this is going to take some time for us to, to physically work out of, but, well, green Bee Gina says Goldman, Morgan Stanley and ANZ all parked at 105.

00;13;20;18 - 00;13;52;14
Unknown
Is that a forecast or just the whole street hedging together? I think the latter, no. No doubt, no doubt. They don't know what's going I mean, this is this is classic, you know, like sheep following each other because it's just started. We started a, a, practice of differentiating whether it was, you know, brilliance or just luck, but differentiating our price tax and covering the in peace.

00;13;52;21 - 00;14;15;16
Unknown
This is some years ago in the midst of super spike. We're just we're just going to forecast based on whatever the strip is at that point in time, you know, leading into the quarter and our maintenance updates throughout the quarter. And I had a fairly colorful hedge fund client call me and say, well, that's great, but it's useless to me.

00;14;15;17 - 00;14;37;07
Unknown
How do I compare you to consensus? Yeah. Well, you know, it was interesting when I had Bill Perkins on the podcast. Gosh, probably 3 or 4 years ago, we were talking about natural gas pricing, but the same holds true with oil. One of the things I said to Bill is, you know, because he was like, man, I make 30, 40% rates of return every year.

00;14;37;09 - 00;15;03;14
Unknown
And I go, yeah, but you're getting lucky, Bill. I mean, if you fill the state Rice Stadium and everybody flipped a coin, somebody would flip heads 20 times in a row and he goes, all right, fair criticism, Chuck. And my point was basically there's billions traded. How can you have an edge? And he said, if you truly think about it, how many of those billions are based on having to get the price right?

00;15;03;17 - 00;15;27;22
Unknown
Everyone's a taker. And same is true with all of you. You know, the refiners are sitting there looking, do I want to buy four years out at 72? You know, the airlines are sitting there going, do I want to lock in at 72? Everybody's just price taking and in effect buying insurance. The producer is not saying. Am I right about my forecast do I.

00;15;27;24 - 00;15;53;18
Unknown
They're just saying do I want this price? And Bill said I provide additional liquidity, which is like insurance. And when people provide insurance, they write big fat premiums and they make money. So, you know, a lot of this is, holy cow, who actually is sitting there trying to forecast this and get it right, versus who's just a price taker.

00;15;53;18 - 00;16;19;03
Unknown
And I bet the world of people trying to guess all prices and having their livelihoods dependent on it's probably relatively small versus the producers, the refiners, the consumers, etcetera, who just want to take insurance. Well, of course we know. I mean, the traders that are taking physical delivery, those those guys are are making the real decisions. But all the financial traders are clouding the market.

00;16;19;06 - 00;16;41;08
Unknown
We need to move over to the midterms because this is a big election cycle. Today is voting day and I'm going to lead off with this, this text I got from my buddy in Washington, DC. Right now, I think both parties are taking early vote results around the country and saying they're good for them. So I would make it more simple than that.

00;16;41;08 - 00;17;04;24
Unknown
Kobane. He calls me Kobane. I'm sure many on on this, he says. I think I call him chainsaw, but I think it's simply if the polls are mostly accurate, it's going to be a medium or a large blue wave for Democrats. If the polls are wrong, like Republicans say, it will probably be a small blue wave. All right, Mark, kick us off.

00;17;04;27 - 00;17;15;12
Unknown
Small blue wave. Does that mean that the entirety of Congress tips to.

00;17;15;14 - 00;17;42;22
Unknown
Democrat control in the House and the Senate? I mean, I'm seeing polls, but polls matter not at the end of the day because they've got this wrong. But but Kyle, she Aldi even the betting apps are showing a majority goes to the Democrats. But what news do we want to talk about Mark. Well I'll throw one. I'll throw one more piece of data in here that,

00;17;42;24 - 00;18;10;19
Unknown
So Congressman, a Troy Nelles who comes and drinks coffee with the old guys was very, very depressed and pessimistic last week. So, he's always been really good spot on it. Kind of reading the tea leaves on this stuff. He was, you know, in 2016 saying Trump's going to win. ET cetera. But, yeah, he was very pessimistic.

00;18;10;19 - 00;18;38;02
Unknown
So. Well, we talked about we talked about it. Oh. My hair's little nudge. You look great. Other than that. That's one of the comments from from someone important to me. So my hair is a little nuts. Makeup and wardrobe. Jacob, you fail again today, but let's go to the Texas Senate. Towel. Rico versus Paxton. Guys, what say you?

00;18;38;04 - 00;19;04;05
Unknown
I mean, I still can't believe the fact that we're going to elect Tall Rico. I get that Paxton's not the best dude on the planet and has a lot of baggage, but, I'm. I'm shocked. We've really gotten to that point in Texas sneaking suspicion that Paxton holds on to this seat. You know, he's never actually lost an election in his career.

00;19;04;08 - 00;19;24;26
Unknown
But, yeah, I can't believe Texas has gotten to this point. I will tell you this. And if he doesn't win, it's because of the Cornyn folks sat down and would not vote for him. And anyone that says, well, you should have just nominated Cornyn to hold that seat. I'm not sure the Paxon people would have voted for Cornyn.

00;19;24;28 - 00;19;56;05
Unknown
I mean, this was a true civil war in the Texas Republican Party. You know, I've seen I mean, they actually I've seen multiple reports of actually investigative journalists coming down here and saying there is this whole wave of corn and iets that are trying to send a message to the Republican Party by voting for Talarico. However, the Democrats and this is pretty general, but progressives by nature will take you give them an inch, they take a yard.

00;19;56;05 - 00;20;29;27
Unknown
So once you start playing that game, it's over. But here's what's interesting. Republicans have outspent the Democrats 386 million to 158 million. Basically, it's almost two and a half to one if Toriko wins. Anyway, this might be the worst ad by in history. Now, three polls say tell Rico by 6 or 7, Khanna says Paxton by one. The average says, for when the polls disagree by eight points, the only numbers that matter gets counted tonight.

00;20;29;28 - 00;20;52;29
Unknown
Now, I say that with a grain of salt because, as we know, and we're already seeing this, that nothing gets counted today anymore. That is a great democratic strategy. I think it should be illegal. I think it is completely wrong. How have we progressed? We're it's harder to count when we're not counting by hand like we used to.

00;20;53;01 - 00;21;19;25
Unknown
I, I, I say time and time again, DeSantis won by basically his first term by like one point they went in, they put election reform and procedures and policies in place. And then he wins by 20%. It's a little suspicious. I'm just so total number, total number of votes went up. So it's not like it was suppressing the vote.

00;21;20;00 - 00;21;37;08
Unknown
This is fantastic because our our our listeners are actually helping us stay on track. This is for Mark. If Cornyn voters sit this out, does the patch lose more in DC than it would with Talarico?

00;21;37;11 - 00;21;59;29
Unknown
If Cornyn voters sit this out? Does the oral patch lose more in DC than it would with Talarico? I, I think what they're saying is I don't know what they're saying. Gina, you need to tell us more. Well, well, Tariq has claim has been you know, I'm pro Island Gas. I'm going to go fight up there, blah, blah, blah.

00;22;00;04 - 00;22;32;06
Unknown
If you vote for Chuck Schumer as Senate majority leader, you've killed and gas. I mean, let's let's be 100%. Yeah. So I mean this that's you know. Ironically, because of what we've been talking about for more than two years now, we've got a, I think, an educated audience that now everyone appreciates, both inside of the industry, especially and outside, is that Trump hasn't been an industry allies or all price guy.

00;22;32;09 - 00;22;57;04
Unknown
He's just yeah. Is is is is Democrat is kind of the Democrats vengeance campaign which we're going to see a lot of that is that is that ultimately bullish. You know I was listening to Bill Ackman on CNBC this morning being interviewed. And he's and he was like you know Trump knew that this was going to hammer the Republicans in the midterms by waging this war and in Iran.

00;22;57;04 - 00;23;30;18
Unknown
But the reason he did it is Iran just can't have nuclear. I don't know if I buy that or not, but here's what's interesting. And I love this because Sunday Gravy, 22, just said polls split by eight points. So who's pricing this race? Better pollsters or the betting apps? You know what's so interesting? This is going to be one of the first elections where if betting apps actually get more accurate than the pollsters to the pollsters have to go look for work.

00;23;30;23 - 00;24;06;10
Unknown
What's going to happen? Well, you know, the interesting thing on the betting apps, and I don't know this to be true, I just read this, but supposedly the number of people betting on PACs and is larger than those betting on Toriko. Toriko has had a handful of very significant bets made in his favor that are skewing his kind of 70% odds of of winning, and I've heard that can be traced to literally advertising dollars.

00;24;06;10 - 00;24;30;10
Unknown
Man, if we have the betting apps out there saying Toriko is going to win, that's good for us. And so it's just part of the ad by and I don't know if there's any truth to that, but that's. Yeah. Ultimately, dollar spent is what leads to the odds. Let's go back. Back to the how long it's going to take to count, which seems to get more opaque every election cycle.

00;24;30;13 - 00;24;59;19
Unknown
One of our brilliant insiders posted this morning at 808 central tech technology has accelerated immeasurably in the past two decades, yet the mainstream media is preparing everyone to not know results tonight. And the mic drop was we truly can't hate them enough. Sound familiar? Kirk? I mean, this is this is it's not even I mean, they're saying the mainstream media, but that all of this is Democrat strategy.

00;24;59;19 - 00;25;28;06
Unknown
This is not a conservative strategy. Conservatives don't want. Like we're basically saying our republic, which is a democratic republic, we're not a democracy. So please, everybody that's listening, don't call this a democracy. We're a democratic republic. If we can't have honest elections, and if we can't count the same night, then we are not a society anymore. We've lost any there's any rule of law.

00;25;28;08 - 00;25;55;11
Unknown
So that's the problem. That is the problem. That is the problem. We're already seeing polls lose power where, you know, we've seen this before, where ballots have run out. Oh, in conservative territories, I mean, it's just a sham. So that's my take and I'm sticking to it. Yeah. No it it it you know, it's interesting I mean Florida shows the way right.

00;25;55;16 - 00;26;16;13
Unknown
You can have voter ID, you can have integrity. You can have paper ballots, you can get them counted the night of. And a lot of people have confidence. And at this, I mean, the debacle we saw in the Los Angeles mayor's race, I mean, give me a break. You know, as of election night, Spencer Pratt's in the runoff.

00;26;16;13 - 00;26;49;12
Unknown
And lo and behold, all of a sudden, 62% of the remaining mail in ballots are for the other candidate. Give me a break. I mean, even if you're liberal, how can you sleep at night knowing that's the fact pattern? We need to get to the railroad commission, because I wanted to get your take on this. But this reminds me of, like, every in our in my member guest at my golf club, we have caddies and the caddies keep score on and that so we real time.

00;26;49;15 - 00;27;14;01
Unknown
But there's one team and somehow they came in first that the caddy didn't put the scores in. Because that's exactly the strategy. What do I need to beat? Give me the number and then I'll come produce the votes. That's exactly what happened. But let's move to the railroad commission for a second. Rosenthal has outraised French exactly once. French outraised them in the last stretch.

00;27;14;03 - 00;27;43;20
Unknown
748,000 to 524,000. Polls are tied. What is happening in the Railroad Commission range? Well, so, Karl, Karl Rove has come out in support of Rosenthal. And so I'm not saying that hell's freezing over, but it does sound like it's applied for a flaring permit. But probably well deserved. I mean, French has come out with just it's hard to say anything but just flat out racist tweets.

00;27;43;20 - 00;28;08;05
Unknown
And I don't understand why he did that. Maybe that's just who he is. I've never met him, but it's like, come on. Because the problem is, you know, I actually think a railroad commission that's 2 to 1 Republican versus Democrats probably not a bad thing, in terms of having having some balance. But at the end of the day, man, you let you let that go to one.

00;28;08;05 - 00;28;30;05
Unknown
We can all kiss our jobs goodbye. Well, porch light Karl Rove backing a Democrat for railroad commissioner. What does he know about this race that we don't. It's the right. It's the racist tweets. By by it's the first. Yeah. It's. Yeah. I mean, it's just it's it's kind of the,

00;28;30;07 - 00;29;03;01
Unknown
The things the defeated rhinos are aligning on just to, you know, we're going to take our ball and go home. Right. That's the new beauty. Tweets. And this is what will determine the race is will there be glitches? Which makes counting the votes not happen tonight. That's what we have to see. And we're already seeing in some territories where there are glitches, which, you know, many people have said, why don't we go back to just hand counting?

00;29;03;04 - 00;29;30;16
Unknown
Why don't we just go back to Election Day? Well, I'm all fan. Okay. Questions for you guys to Chuck. First Texas Democrat in the Senate since 1988. Does the oil patch lobby differently when the swing vote on permitting reform on November 9th might be a Democrat from Texas? Oh, I mean, I think the the actually the first test isn't going to be that that permitting thing.

00;29;30;16 - 00;29;54;13
Unknown
It's actually going to be the windfall profits tax when a when Toriko votes for that, then we will know no to note it. That's actually great and collide. I can help us. So he won't. He wouldn't be voting on on November 9th anyway. It's a lame duck Congress that will pick up that make up that legislation. And that's a good point.

00;29;54;18 - 00;30;18;16
Unknown
Now it's like it's likely to I think just given the climate in the, you know, lack of unification and bipartisanship, despite it being characterized as a bipartisan piece of legislation. I don't expect Congress to get anything done in kind of the industry's favor between now and the time you swear in a new Congress in January, although they should.

00;30;18;23 - 00;30;44;03
Unknown
I mean, at the end of the day, that that's your last window because, if you lose, if you lose the House and the Senate, we're going to spend two years being impeached for everything, impeached because McDonald's didn't give you enough French fries. And Donald Trump worked at McDonald's that one day. So, I mean, we're going to we're going to spend two years doing that.

00;30;44;03 - 00;31;12;09
Unknown
And if they wind up with the presidency, we will see D.C. and Puerto Rico as states. We will pack the court. There will be none of this respecting of the filibuster. It will go to 50%. And then then you start talking about having a lost generation. And I mean it. History repeats itself the second more people are on the dole versus producing, society declines.

00;31;12;11 - 00;31;40;27
Unknown
Now, Mark and Chuck, question if tower wins, does a Democrat this is for the independents out there because I think the windfall tax impacts everybody. But it does a Democrat crack a three zero commission, or is one vote out there out of three just allowed her to set? Do operators feel it on permits flaring or plugging?

00;31;40;29 - 00;32;08;07
Unknown
I you know, I go ahead Mark I feel like flaring as well in the hand. I think the as Ross Perot once said famously, the issue that's like the crazy aunt in the basement, everybody knows she's there and nobody wants to talk about her is produced water disposal. That's going to be the most interesting issue that the railroad commission, I think, takes up.

00;32;08;13 - 00;32;41;05
Unknown
And how much more explicit and aggressive do they get if there is kind of a 2 to 1 structure on the commission? Hey guys, real quick, if you're watching or listening and you haven't joined collide yet, it's a free online community for all. And gas professionals go to collide. I slash community forward slash community. Let's say that again collide dot I Ford slash community and mention this show.

00;32;41;10 - 00;32;47;14
Unknown
When applying. We'll send you enough. What's for a free t shirt?

00;32;47;17 - 00;32;50;26
Unknown
Sign up now.

00;32;50;28 - 00;33;24;16
Unknown
Done. And if you want to have a conversation about software structure, man, there you go. Oh, there's another one hot off the press. Betting apps. Betting apps are incorrect because the bets are huge. While the Paxton bets are many, it skews horribly. There's zero chance of betting apps being more correct than pollsters, and pollsters are rarely correct. Oh, this is going to be a night for us to watch, for us to talk a lot about next Tuesday.

00;33;24;17 - 00;34;13;20
Unknown
They've they've suffered some losses or being incorrect pretty consistently over the last ten years. I mean, our first big awareness and surprise, wasn't it 2016. Let's talk before we leave politics in Texas. Let's talk about the gubernatorial race and what it means. You know, I think, again, a little bit surprising to find ourselves here, that we may be in a toss up for, for governor, but one of the, you know, one of the loudest issues that has generated a response from from both candidates and Abbott has been what's going on with data centers, moratorium moratoria.

00;34;13;23 - 00;34;46;11
Unknown
ET cetera. And I think the, you know, the the central piece of that for Hosa, which should give everyone pause, is a moratorium that then waits on the Texas Legislature to codify the rules and regulations and the laws related to data center developed development, which sounds like, kind of real pause. What do you guys think about that?

00;34;46;13 - 00;35;13;23
Unknown
You know, we've we've talked about this on previous BDS. There are some real property rights type issues. I mean, if you have cattle, you do not want a data center next door. Supposedly the noise, the vibration upsets the cattle. They don't eat. They don't make the same. It truly changes the economics of your business. We need to think through the power where it comes from.

00;35;13;24 - 00;35;43;29
Unknown
Should they have to be behind the meter? I think the water issues overblown, but there there's a little bit of an issue there. And so I actually think being, you know, I'm the libertarian here, but being thoughtful about this and maybe putting some rules in place wouldn't be a bad thing. And I hope that's truly what this delay was, to be thoughtful about it, as opposed to just kind of like a a political type hack job, you know?

00;35;44;02 - 00;36;09;22
Unknown
I mean, so go ahead, Mark. Speaking of political, I do think the pause in the audit, the stop audit were kind of hurry up politics, you know, two minute girl, whatever you want to call it. I spoke with someone who's in batch zero, can't name them, but the RFI is that they were responding to as part of the audit.

00;36;09;29 - 00;36;43;17
Unknown
Seemed to leave very little room for, you know, contextual explanations of things and across different areas. And it was it was really just yes or no. And so I think what the Q, Ercot, PSC, etc. involved in all of this and the fact that I think it's a December 10th, which is rapidly approaching barely a month away when this is all supposed to be complete, that they have it on record, that they've checked all these boxes is the way I, I took that that conversation.

00;36;43;20 - 00;37;11;26
Unknown
And then they'll run it through AI. And if there are gaps and red flags as a result of of whether they hit the wrong toggle on a certain answer, then they can zero in on on specific projects and specific locations. I mean that in go. Sorry, Mark. No. Go ahead. No, I was in one of the studies. I 71% of Americans.

00;37;11;26 - 00;37;38;18
Unknown
That's one of the studies. I'm sure there's there's multiple do not want a data center nearby. That is more than a pose a nuclear plant. That's a pretty big number. Everyone wants the chat bot. Nobody wants the building and make them pay for the grid. Is the one democratic idea that Milton Friedman would actually agree with. By the way, the cost, cause, or pays the problem is never the price signal.

00;37;38;21 - 00;38;05;26
Unknown
The problem is when a politician replaces the price with the moratorium. That's what I think is what's interesting, because Abbott paused data center permits. Hinojosa says that's a false flag because his own his his own agency, kept issuing permits. I mean, they finally paused it, but so I think, you know, in many ways, Abbott's vulnerable because of his own decisions.

00;38;05;29 - 00;38;26;18
Unknown
And I agree with you, Chuck. I don't think, you know, the jury's still out about anyone can do what they want on their own land. But if it causes issues on someone else's on your neighbor's land, that's the problem. I don't think we've figured it out yet. I think we could. I actually don't think this is really that hard to do.

00;38;26;18 - 00;38;50;18
Unknown
If you got everybody in the room and you were serious about it and thoughtful about it, and, nobody would be 100% happy, but we could generally get some rules in place and get get going on this because I, I know this is hyperbole, but I truly think the AI race is like mortal type issue versus China stuff.

00;38;50;18 - 00;39;13;20
Unknown
And we need to take this really seriously and we need to be the leaders in it. And I hate to say this for all my brethren in Midland in the desert, but it's pretty ugly out there. I just put concrete all over it and put data centers everywhere out there. And let's go ahead and just go from Port Aransas all the way to Beaumont and just make that nothing but petrochemical plants and refining.

00;39;13;20 - 00;39;35;18
Unknown
And let's just provide the world with all the power and all the AI it needs. Hey, I know that Talarico, he's not for a 90% tax, but he wants to go back to the 1950s because he thinks Elon Musk's wealth is is morally wrong and bankrupt. But I think what you just said, Chuck, is you're for building data centers in space.

00;39;35;21 - 00;39;59;04
Unknown
And that's that's that's the future. I know we laughed at it, but maybe it's coming around just getting behind it. And and must say what you want. He's usually been right about his science. You know, he's always made incredible products. So that's a good point. Sarah Okafor if produced I'm just going back to make sure we get some of the comments.

00;39;59;09 - 00;40;09;03
Unknown
If produced water is the railroad Commission's crazy. Aren't the basement what forces them to finally deal with that?

00;40;09;05 - 00;40;46;03
Unknown
Well I you know, I think it comes down to priority and money and starting with the establishment of a much more aggressive, campaign to actually do something about the orphan wells and taking care of remediating those, plugging them, whatever. But that that takes a lot of money. And then I think really understanding on a kind of regional, holistic level from real good simulation and modeling as to what's actually going on.

00;40;46;04 - 00;41;15;17
Unknown
Look, no one is going to kind of throttle back the industry for a lot of reasons politically. But, you know, it's it is one of the issues that has been bubbling, if you will, below the surface. And you you've seen industry leaders allude to it in terms of, you know, we've got a, a fairly, fairly short runway before a lot more problems start to manifest.

00;41;15;20 - 00;41;43;12
Unknown
And so we're putting, you know, we're putting tens of millions of barrels of water back in the ground every day. And it's absolutely critical to being, to producing the oil. I kind of laughed at a similar experience Colin was had posted earlier this week about his career in stripper Wells, where he had, I think, a well that he talked about that produced 200 barrels of water a day on two barrels of oil.

00;41;43;14 - 00;42;10;15
Unknown
That's that's really what we're talking about. And, and so, you know, how how fast can the, the industry and its emerging partners in tech who increasingly need water, how fast can we get the technology and the cost there to do something with produced water to keep it from going straight back into the ground? So, I mean, we've been talking about this.

00;42;10;18 - 00;42;37;20
Unknown
I think interesting thing is there's been a thread maybe even over the last year when we talk about Texas, there seems to be the TCU. It's almost like the TCU is becoming our is a water has always said it I did. Water's always been our biggest issue here in Texas because of of of who has the original water rights and downstream.

00;42;37;23 - 00;42;58;29
Unknown
Andrew Paulson asked where does a landowners right to build a data center end and his neighbors right to quiet begin? But it's not just quiet. It is power, water. There's a lot of, I think, issues that have not been addressed by the one that wants to build the data center, which I'm all I'm I'm all in favor of it.

00;42;59;02 - 00;43;28;04
Unknown
But I'm also opposed to if you inflict on your neighbor in some way, you have to address that. You know, the Dust Bowl limits talking about noise, the Dust Bowl limits and, and unincorporated, you know, unsold areas that are not under some type of municipal rules and rags or are pretty high, something on the order of 80dB.

00;43;28;07 - 00;43;56;02
Unknown
So we're going to see a lot of battles crop up in another area where I think a lot of this is is headed, and you've seen it explicitly or expressly in the audit. The the pukes and the grids are, are demanding that data center developers take on a significant portion in some cases, if not all, of the of the transmission capital.

00;43;56;02 - 00;44;33;11
Unknown
That's not going to be trivial in this build out and on. On a related issue, I saw that Texas Monthly did a recent investigative report where, you know, we've got all these super high voltage, like the seventh was 760 kV lines coming west to east. And so they they put forth all kinds of rights of way. And apparently one of the first iterations have five rights of way that were originally supposed to cross Kelsey Warren's Hill Country Ranch.

00;44;33;14 - 00;45;05;06
Unknown
Yeah, 20,000 acre ranch. And all of a sudden now there's none in the latest plant. And so it was it was kind of an accusatory thing at Abbott and and citing how much in the six figures that, Kelsey is has contributed to Abbott's campaign. So. Well, it's not only the data centers, but we have a real kind of grid resilience and capability problem that's going to involve a lot of these these conversations.

00;45;05;09 - 00;45;40;03
Unknown
Well, and I do think it's important that we as Texans tackle these head on and solve them and not get punted to DC because that would be bad. You know, if we start, having air quality issues as the EPA comes step in, take over, you know, we start having transmission type issues. I know we're not, you know, or Cots outside of Ferc, but, you know, who knows what happens if you left our own devices of screwing things up, and we ought to be able to run a grid.

00;45;40;03 - 00;46;04;27
Unknown
We ought to be able to do energy infrastructure. We're Texans, for crying out loud. Hey, Chuck, this is a mental note. Let's have Clyde go down and look at everyone that has been in charge of policy. What school are they? If they went to Texas A&M or rice? Who makes better policy decisions long term for the state? That's a we'll come back to that.

00;46;04;27 - 00;46;24;19
Unknown
Chris Martinez does says on LinkedIn does 80dB and UN's own counties meat ranchers basically have no legal defense against a data center next door. Good question. Don't know the answer. We should watch that. We'll monitor that and come back to it.

00;46;24;22 - 00;46;38;24
Unknown
I remember remember when Pearl jam was trying to get around Ticketmaster and they played in that field and knackered dojos. I guess that was the last time we had that 80dB thing pop up.

00;46;38;26 - 00;47;07;16
Unknown
That's classic Chuck. Hey, by the way, Mr. Down Rising on YouTube says, can you all talk about LyondellBasell reposition with Valero? That's a mark question. I haven't heard it. It's a 90s random because that used to be his. That used to be his, refinery. He texted me the other day, said, glad it's back rocking. Yeah, I, I think they bought it for the low, low price of maybe two quarters of their EBITDA.

00;47;07;19 - 00;47;35;14
Unknown
I mean, this this was a this was an asset that clearly nobody wanted. And as I stated earlier, I think the the notion of getting something on the order of half of the throughput back online sometime in 27 tells you what the, you know, was expecting in terms of product margins. And they're buying assets on the cheap.

00;47;35;14 - 00;48;05;12
Unknown
Somebody I think it was random, not as random yesterday said, what's next? The I forget who was the last operator is a refinery in Bellechasse, Louisiana. You know, are we going to see mothballed refineries come back online. And, you know, we make enough diesel as it is for the US? And boleros clearly not banking on kind of current refining margins to justify its case for the price that they paid for LyondellBasell.

00;48;05;13 - 00;48;38;16
Unknown
But, yeah, I think I think this whole exercise in this series of events has given us renewed confidence that maybe we don't have to go into chucks, pave the Texas Gulf Coast plan and build new refineries. We can we can find a bunch of old retired assets out there, at least make some headway into, to getting the the kind of the safer capacity cushion that we need, not only for the US, but for the globe in particular.

00;48;38;18 - 00;48;59;09
Unknown
I think we'll come back. Go ahead. Well, just just just just one last take on this. I don't know this for sure, but to me, what this points to is it's easier to get a legacy facility with the legacy permitting and figuring out how to navigate it. Then just, hey guys, go buy a piece of land and build us a new refinery.

00;48;59;13 - 00;49;23;22
Unknown
I mean, right, you know, we haven't we haven't had a new refinery since, whatever, 78. And so the one snarky joke I wrote ran for 57 years. It survived Humble Oil, exon two crashes, and Valero. It did not survive a city council ordinance.

00;49;23;25 - 00;49;52;02
Unknown
Well tells you a lot right there. That's scary to think about. Hey, we need to move on because, Mark, because we sort of banned him. We put a mask or muzzle over him on EIA. He's our next segment is talking about turbines on trailers and our favorite story here. Go ahead Mark set it up. Yeah. So part of the.

00;49;52;05 - 00;50;26;28
Unknown
Build up and build out in of Colossus in the Memphis area has been a relocation of the bridge behind the meter source. All the trailer amount of gas fired turbines that are providing most of the power to Colossus one and two, while they get the the permanent combined cycle facility built over across the border in Southaven is they moved a bunch of of those temporary turbines down to Mississippi.

00;50;27;00 - 00;51;02;23
Unknown
And right after that or during that process, the EPA closed the loophole that said, you've got 360 or 364 days to be exempt from Clean Air Act. Well, the NAACP has been leading a lot of pushback and protests in Memphis and Shelby County and in the nearby areas. And they filed suit against XII will x I, I just yesterday I believe had its it's motion to dismiss denied by federal judge.

00;51;02;23 - 00;51;30;25
Unknown
So the lawsuit under the Clean Air Act as filed by the the NAACP will go forward. And I think it's, you know, tell me what happens tonight. Maybe you can't. Maybe it takes three weeks. Maybe it takes three months. But I think we're going to see more of this type of renewed activism through litigation that, you know, is another risk of having a, you know, even a small blue wave.

00;51;30;28 - 00;52;04;17
Unknown
Because we're we're going to get, I think, more favorable, public sentiment. We're going to get more favorable judicial sentiment as it relates to, you know, letting letting this forever litigation continue to obstruct progress. I mean, the Peabody's already lost to the community in Memphis, so this doesn't bother me as much, but I'm curious. It's roughly 495MW across 27 turbines, which is roughly 18MW each.

00;52;04;19 - 00;52;30;06
Unknown
Those are all on a power plant with tires. So these are on wheels. And I mean, I'm a free market guy. The the exemption for the Clean Air Act, a mobile source exemption was written for construction equipment. Now that we're stretching it, and I mean good for X, I to find this loophole. I mean, it's an arbitrage on the regulators patience.

00;52;30;06 - 00;52;56;14
Unknown
But what is your what is your take guys on on on sort of the issue is they needed power to power all this all the data centers. They figured out a loophole just to put turbines on a truck. Where do you guys fall on this? This is actually an interesting story. Well, the EPA loophole was in place until January of this year.

00;52;56;16 - 00;53;24;11
Unknown
And so when classes one started in August or September of 2024, they were taking full advantage of that federal loophole. And I think similarly in Tennessee and Mississippi. The state level gives you similar 360, 364 day exemptions, and Mississippi signed off on it when they moved those turbines down there to Southaven and said, yeah, that that exemption is still in place.

00;53;24;14 - 00;53;52;17
Unknown
But we talked about it some months ago on on another show and another time when this issue was relevant, the federal loophole was completely closed. And, you know, anticipating some, some litigation around that because they are in violation of the Clean Air Act, because those trailer mounted turbines do not qualify for the exemption. Does x I just eat this is from Mike Delgado.

00;53;52;18 - 00;54;22;09
Unknown
Just x I just eat the lawsuit and keep running until the permanent South Haven plan is done. And then Olivia Grant jumps. On top of that is in daily CP style Clean Air Act litigation, about to become the biggest risk to every data center build out. Well, I think you have to look at proportionality of, you know, if we're talking about, you know, jury type outcomes and punitive damages, that's one thing.

00;54;22;12 - 00;54;34;13
Unknown
But in administrative fines and other things for violation of, of permitting, you know, those are disproportionately small.

00;54;34;15 - 00;55;12;07
Unknown
Compared to foregone opportunity in terms of being energized faster. I shared something yesterday. I forget who posted about the whole kind of Louisiana build out. And, you know, everybody around $3 natural gas ultimately turning into an equivalent of $300 of compute revenue. That's the arbitrage that everybody is chasing. So until you get some proportionality into the distance or the fines and damages, then I think you're going to see the posture continue to be, you know, ask for forgiveness instead of permission.

00;55;12;10 - 00;55;39;07
Unknown
I did I do respect the fact that he's claiming their mobile units while he's pouring concrete to place them on at the at the same time. So I mean, we this is a day. So we are talking about some of these like you know these sort of foundation level issues. But the root cause is grid lag. I mean, nobody parks a power plant on trailers.

00;55;39;07 - 00;56;04;23
Unknown
If the interconnection queue works. I mean, the trailer turbines really are a symptom. The disease is that the grid can't keep up. But here's my question. Do we have a right to power? I mean that do we as a society, do we have a right that, that that the that the grid should just have the power available because we want extra power?

00;56;04;26 - 00;56;09;27
Unknown
That's the question. What do you guys think?

00;56;09;29 - 00;56;44;14
Unknown
I mean, if you if you have the ability to pay for it, you ought to be able to buy it. I mean, that's that's the American way. And and that's what we're seeing in Texas is is there building behind the meter? We're just going to build our own data center, and we're not going to worry about the Q yeah, I think that's that's what's being increasingly taken as the bring your own power type of demand from politicians and decision makers in the government.

00;56;44;16 - 00;56;52;28
Unknown
Okay, not only will we bring our own, I don't know, call it bridge power. We'll bring our own power forever.

00;56;53;00 - 00;57;17;06
Unknown
Yeah. No, I mean, we definitely you don't I mean, we we can go back to this and we've talked about it for years. You don't have a society with a high standard of living that's energy deficient. You just don't. And so all these people that want to put roadblocks in the way for energy, at the end of the day, they hate poor people, period.

00;57;17;12 - 00;57;22;14
Unknown
And it's just it's not right.

00;57;22;16 - 00;57;41;00
Unknown
Actually. I'll I'm going to argue with you, Chuck. There are people that that love poor people as long as they get rich off the poor people. So that's for those. There are politicians out there, but they're getting rich off the poor people. So let's, let's make that clear. I will, I will say, I will say this.

00;57;41;00 - 00;57;51;26
Unknown
I wonder if, if Elon Musk is using grok and he's running prompts like, find me the next county that hasn't read the Clean Air Act.

00;57;51;28 - 00;58;12;18
Unknown
Hey, Cassie, underscore, I says, would anyone in the oil field get away with putting a turbine on a trailer and calling it temporary? Good point. Cassie. Good point. We're not even going to get to our segment for today, which I say we just bypass over it. What do you think, Mark? We're all the time. I think a good closer would be.

00;58;12;18 - 00;58;44;05
Unknown
And I was just glancing at, the revenue numbers. It was Apple's fourth quarter and it was the rest of the normal reporting sectors third quarter. But Chevron made 68 billion in revenue in total in third quarter of 2026. Apple's iPhone segment revenue alone was 58 billion.

00;58;44;07 - 00;59;13;29
Unknown
And Exxon's total revenue rivaled Apple's total revenue in one of the best quarters ever. So back to our long running, you know, what about ism? Well, on gas versus tech, big, loyal. You see, you see terms like big oil rakes it in. That's let's let's just kind of take a deep breath and see who has the bigger rake.

00;59;14;02 - 00;59;26;26
Unknown
I mark. We're not allowed to talk tech good and gas bad. You can't challenge that man. Come on.

00;59;26;29 - 00;59;52;11
Unknown
Okay everybody go vote if you haven't big election guys. And if you have this industry it is pretty wild. We it is pretty wild. We've finally gotten to the point in the industry where literally upstream as a hobby to Chevron and Exxon and all those guys who have ever thought that. All right, everybody, thank you so much for joining us every Tuesday.

00;59;52;11 - 00;59;56;02
Unknown
Good to see you boys go. See you next week.