Open Book with Anthony Scaramucci - America's Energy Future with Jay R. Young

Episode Date: May 21, 2025

This week, Anthony talks with Jay R. Young, an entrepreneur and author of 'The Upside of Oil and Gas Investing.' They discuss Jay's background in the oil and gas industry, the importance of fossil fuels in today's economy, and the strategies for investing in oil and gas. Jay shares insights on the tax benefits of such investments, the pitfalls to avoid, and the challenges and opportunities in the renewable energy sector. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Conditions apply. Hello, I'm Anthony Scaramucci, and this is Open Book, where I talk to some of the... the brightest minds about everything surrounding the written word. That's everything. That's from authors and historians to figures in entertainment, political activists, and, of course, Wall Street. Before we dive in, make sure to follow or subscribe wherever you get your podcast. And don't forget to leave a review.

Good or bad. I want to hear from you. I want to hear whether you're enjoying it or where we can improve. And I can take the hits. So let me know. If you don't like something, say it straight. Now let's get into it. Hi, and welcome to Open Book.

I am your host, Anthony Scaramucci. And joining us today is J.R. Young. J.R. is an entrepreneur podcast host. I've done his show. Thank you for having me on. He's a philanthropist. He's an author. And the title of the book is the upside of oil and gas investing,

which I think is a very topical book for where we are right now. And where we're going to be for the next 50 years, Jay. So we'll talk about that as well. It's great to have you on. we get into the book regal us a little bit with your background your upbringing how you got into this space and how you started your show yeah great thanks thanks and thanks for having me on i appreciate that um well i love reciprocating people on each show i think that's that's that's what we're doing a home and away you put me on your show i want to bring you on i want people to learn about what you do

and your book i appreciate that yeah i appreciate it yeah because i'm a i'm fourth generation oligal and gas guy so my great-grandfather you know my great-grandfather and Great grandmother, A.K. Turner and Grandma Bertie, they had 12 kids. You know, back then there's no TV, I guess. So they had 12 kids. If you're a man, you're in the old business. And if you're a woman, you're married to somebody in the old business. So, man, I mean, it was just all in our family, all our reunions, everything. All we talked about was the old business. He grew up and he landed. His last 30 years of the business was in West Texas, Permian Basin, you know, back in the day when there wasn't all the big fracking going on or just there were shallow oil and gas wells but he grew up there

i spent a lot of time with uh my grandfather my grandfather growing up was also in the business and and i spent a lot of weekends with him out of the oil field you know as soon as he let me drive his pickup which is the old three speed on the column uh pickup uh as soon as he let me drive his pickup you know i was i was with him and i would go and he would every time we would go buy one of those oil Wells, he would, he would tell me to slow down and he'd roll his window down the old fashioned way with the, with the crank. And he would listen to that oil well to see if there's anything going on with it or any noises that would, you know, weren't, weren't normal. So I spent a lot of time there. And then after school, I got, I, I went to the stock business at first

because when I was going through school in the early 80s and the mid 80s, man, oil and gas was not very favorable and prices had gone from $10 a barrel, man. Oh, yeah, absolutely. and we could not make money. And my dad, my dad, who'd spent some time in the business got out and told me to stay out. You know, so I did for the first five years. And then in 1990, I decided to get into it. I'd been in the stock business. I thought real estate or oil and gas, I decided at that point, oh, let's go into oil and gas.

And I did. And it's been incredible. I don't know where I'd be if I'd been in the real estate business. But, hey, I'm in the oil business and I love it. And we raise money for funds and we drill, we're drilling, we're drilling, we're drill baby drill right now. So, well, well, listen, I, I think it's important for people, even environmentalists, not environmentalists, whatever you want to, whatever stripe you are, we use energy. And our industrial society has been set up to be reliant on fossil fuels. and it's going to be a part of our lives, whether we like them or not.

And by the way, I want to get your reaction to this because I have a lot of friends that own Teslos. Again, I am a fan of Elon Musk's. I'm also a proud owner, a private owner of SpaceX. But an electric vehicle is generating energy, and the energy is being produced by an electrical generation plant. most of those plants are either coal-fired, you know, natural gas-fired entities. Am I right or wrong? So the energy is coming from oil and gas, whether you're using it at an electric outlet or not. And so tell us a little bit about that situation.

You're from Texas. So, you know, make the case for oil and gas. Yeah. Well, true. I appreciate that, Anthony. I'll tell you, you know, the big thing is what I look at and what I think a lot of other economists look at. is your demand for oil and when's the demand for oil going to start going down and you know people say five years 10 years Goldman Sachs whatever they your old your old company you worked with they say

yeah I eight 10 years from now 15 years from now the demand for oil is going to go down but not until then because teslas do use a lot of natural gas they use a lot of oil there's there's there's there's there's tires on those you know we don't want those tires to be 50,000 dollars a tire if if we don't have oil and gas so we definitely do and I know that that that uh George W. Bush in his 2006 State Union address. He said, we have an addiction to oil. And I don't, I want to, hey, I'm, I'm sober, 30 years.

So I don't like the word addiction, but it's a necessary evil. There is, there is a word called addiction. We have an addiction to oil. Matter of fact, we produce only about 13 million barrels of oil a day in the United States. And we need over 20. You know, so we do need a lot of oil. And our refineries in the United States can't even handle all the oil that we produce here. So we've got a big need.

I don't really feel like that with population, I do know there's, there's, you know, we talk about the four, the four Ts, you know, with Trump tariffs, taxes, Tesla's, what's going to happen on demand and what's going to happen with all the other great four teas that's going on? I know that's a, that's probably a 12 episode podcast by itself, talk about that. When we just talk about the need for oil, we're going to need it for a long time, especially for my lifetime. Put your investor hat on for us for a moment. Yeah.

And let's talk about our dollars and cents. The book is called The Upside of Oil and Gas Investing. Why should we have a piece of our portfolio in oil and gas investments? Yeah, that's a great question. And then again, and then how do you do it? Is it through syndication? Is it buying the majors? Is it buying stock?

or bonds, how best to do it. Yeah. And the reason why I wrote the book is because I had a lot of my friends that wanted to invest in oil and gas. And they, they've come to me and I go, I got a hundred grand, 200, whatever. And I'd say, oh, hey, yeah, great. Let's do it. And I really do feel good about this project.

And if we do this and this, we're going to make money, you know. And I didn't know this. You know, I did. And then I kept trying to do better, better, better. And I'm like, you know what? This doesn't work. This philosophy of just really a couple of. of wells and letting it go, is it really going to work? And they may or may not get their money

back, but it may take three to five years. So, you know, a lot of investors are, or they like the tax benefits. You know, we have 100% tax write off with our funds and our projects. So they like the write off. But then they also like to make money. So what I did is I thought through this after decades of being in the business and I'm like, okay, this, I'll kind of walk you through our $35 million project that we have. It's a five well project. We're going to bring in $35 million, and we're going to go drill five wells.

And then after we do that, we'll send out monthly revenue checks. Clients get 100% right off, probably 80% right off the first year. They get monthly income off that investment. And then after that, we'll take that asset after we've drilled those five wells, and we'll take that to a bank and we'll say, hey, we've got PDP,

which is a producing property of X, and they'll say, okay, here's some money to go drill some more wells. So my goal is to turn $35 million into $100 million. How do you do that? Well, you do it by using leverage in a way that you're not hurting the investor. You're sending out monthly revenue checks to them. So they'll get their money back in a few years just by the monthly income. But you also want to create value and explode. that value, maybe not explodes the right word, but just to increase the value of that asset

so you can sell it. So you have to have leverage. You need income, monthly income, but you also have to divest it. We talk about at King operating, we talk about ADD, which is not necessarily the Adderall, you know, attention deficit disorder, which a lot of us entrepreneurs definitely have. Anthony, we can talk about that. I confess to that. That's what I. But it's called ADD because we acquired developing divest, right? We acquire the asset, but it's got to be a great asset in a great area. And you have to develop it.

How do you do that? Well, you do it with first equity, 100% equity. We go in and drill five good wells and a good and like right now we're drilling in the middle of two billion barrels of oil that's already been produced. It's not like we're going out and you're looking off the shore of, you know, wherever and trying to make a huge discovery. You can't make money there. I mean, you can, but it's like a one out of ten shot. I mean, the, you know, the batters that in the major league baseball, you know, they bat better than a hundred.

So, and that's not what oil and gas is. Oil and gas is going into a area that's developed and by drilling wells and using that as leverage. You don't use it for leverage first. They won't let you. But clients like, clients like 100% income. They like, they like tax write off. So you take the money in first, you drill the wells, use that as collateral.

Do that two, three, four times. And your money turns into, your dollars can turn into from 35 million to 100 million. What are the tax benefits going on? You write a lot about that in your book. Tell us. Yeah. Take us through. You've made the case for the investment.

You made the case for the cash flow thesis. But tell us a little bit about the tax benefits. Yeah. Well, like last year, I was talking to my, my CPA. And he says, you need to make sure you invest in only gas. And I said, well, or invest in something because you got a tax problem. I said, okay, hey, what if I lowered my tax? My taxes by three or four hundred thousand.

He said, oh, that'd be great. You know, how do you do that? And I said, well, obviously he knows because he's been around me a while. But what I did is I invested $500,000 in our fund at the end of last year. Okay. So I'll get a write off of $400,000 because it's about 80% of a $500,000. thousand dollar investment and i'll i'll take 400 000 right off so if i made a million dollars last year let's say i don't pay taxes on the million dollars i'll pay taxes on 600 000 last year so

that'll save me considerably in my tax in my tax bill you know come on april 15th well we don't pay tax labor 15th but you get what i'm saying so i'm trying to i'm trying to decrease my adjusted gross income down to a good dollar amount and so that's kind of kind of a round about way on on how we look at it because we do know we're going to we're going to pay taxes and we just want to lower that that tax bill yeah no this one but it's also there is an incentive as it relates to the way the tax system is set up to get into the industry what what would you avoid what are some of the things you would avoid in this industry and who's the ideal investor yeah good question very good question matter of fact that's that's the

The reason why I wrote the book. I wanted to get our name out there and just tell people, hey, man, those guys that call you on the phone, all they're looking for is one thing and they're looking for your money and they're not going to, they don't care if you make money or not. Maybe I shouldn't say it like that because I come from that industry. I learned that. I know it. I've been on that side of the phone where I'm calling people up and I want them to make money. I do. I really want them to come back over and over and over again.

but the chances are really good on any retail oil and gas deal, they're not going to make money. They're just not going to make money. That's why we restructured a retail project that you could get in and increase the value over a short amount of time by using leverage, going into a fund and doing that. That's the reason why I wrote the book

because I wanted people to know, hey, Forbes, you know, I got a Forbes book, and I wanted people to know, hey, you know what, I've got people that, you know, want to increase their tax dollars, but don't do it just for the taxes. I know I write about that, but people, that's the catch because people in New York or California, we don't have a state income tax here in Texas, but still a lot of people in Texas, they make money, they want to decrease their adjusted gross income. So we have, we have fund of funds that are participating in the projects now.

we have we have high net worth individuals anybody with a tax a tax situation that you know like I said don't do it for the taxes but hey if you're going to do oil and gas and if you want to diversify find somebody like us and I don't know anybody else like us but if there is you know God bless them I'm glad I'm just glad that they are because I stood up in front of you know a few hundred people the other day in a conference and there was some oil and gas promoters out there and I said hey don't invest with all these only gas promoters. out there unless they know what the hell they're doing because you can. You can just, you do it and you hope you make money and you see your check because the wells that you produce or participate in, they decline. Those wells decline. You may be producing 20% of a barrel of oil of what you did the first day in one year. It may decline 80% the first year. Well, good luck on getting your money back.

You know, and it's not, I'm not saying it's a bad deal, but just you have to use leverage in that and you also have to develop. Visit BetMGM casino and check out the newest exclusive. The Price is Right Fortune Pick. BetMGM and GameSense remind you to play responsibly, 19 plus to wager. Ontario only. Please play responsibly. If you have questions or concerns about your gambling or someone close to you,

please contact connects Ontario at 1-866-531-2,600 to speak to an advisor, free of charge. BetMGM operates pursuant to an operating agreement with Eye Gaming Ontario. I think it makes great sense. I want to go to renewables for a second because there's an angle to renewables, coincident to oil and gas. You write about that as well. And so tell us a little bit about that. What are some of your expectations there?

Yeah. And a lot of companies just came out and said, hey, okay, we're not going to really spend a lot of money on that because it's hard to make money on that. So even though it makes sense for the economy. And Biden was really 100%. I mean, he was like, yes, let's do this and let's do this. And let's cut off oil and gas, oil and gas production and all. It's tough to make money on renewables.

It's tough to have alternative types of energy other than what we already know. We already have the infrastructure set up. We already have a lot of, you know, it's a $4 trillion industry. It is right on, you know, like number seventh industry in oil and gas. we're not going to go away anytime soon, but also renewables. It's hard to catch up and it's hard to become profitable. But I was on routers or something the other day or somebody asked me questions about this. And I said, well, hey, two reasons.

Number one, politics. You know, people, people love to hear about the politics of renewables and not using as much oil and gas. But number one, then number two is, you know, does it make sense financially or can you make money? You know? Yeah, it makes sense. You have a great show, Jay. You know, I've been plugged into it now. One of my friends introduced me to you virtually.

Actually, before I met you, I met you because I was tuned into your show. Tell us about your show, the Jay Young show, which, of course, I was a recent guest on. How did you get it started? How do you think about curating your guests? What are the topics that you like discussing? Yeah. As, you know, wealthy, healthy, wealthy and wise, I guess. you know, hey, we talk about the Bible.

We may talk about your success. We may talk about what's going on with you. We do have a Wednesday or Monday, 3 o'clock, Central. We may talk about only oil and gas and what's going on. I may have my landman on, which isn't Billy Bob Thornton. Billy Bob, if you're out there, you're welcome to come on the show anytime. We'd love to have you. Do you watch that show?

Is that show accurate depiction of the industry? Yeah, that's good. You can also watch me on TikTok. I'm doing the true false landman questions on it, you know, like Jerry Jones. I mean, you mentioned on my show, you mentioned, you know, that the New York Mets, you know, they need, Cohen needs to let some of the decision making go. Well, I'm a Dallas Cowboy fan, unfortunately, and Jerry Jones doesn't do that. But he was on the show.

And he mentioned, like, I drilled four wells in northern California near outside Palo Alto, and I made enough money to buy. the Dallas Cowboys. That was false. There's a, there's, there's, there's a, uh, boobes and babes coffee shop that, uh, outside that you drive through that,

that, that field workers starting at five, five 30 in the morning they stop. And that's true. There are places like that in Odessa, uh, with women and bikinis hanging out coffee first thing in the morning. That, that'd have been a great entrepreneurial, uh, deal. And there's just, I think it's a lot of Hollywood, but it's like 30, 40% of it's true.

everything else is kind of compounded, you know, like, like wells blowing up. Wells don't blow up like that, you know, there's a lot of good stuff on it, but it was really good in the industry to see the oil and gas industry. And we're using a lot of that material. And, you know, to help, help, you know, tell more people about what's going on in the industry. And how can you invest in oil and gas? Hey, I'm not telling you you should, I'm not, I think you should invest in on gas. But I'm not telling you to invest in only gas. But if you do, you know, I think you should really look at our product very, very hard. But yes, I mean, I think it's really a great, great show. So, so let's go to let let let let let's go to

Jerry for a second. If you don't mind me asking is I, I love him. He's been at my conference. You and I talked about the salt conference. Yeah. And I thought his depiction on the show and the story that he told, which he told at our conference by the way. So I know what Jerry said to John Ham and Landman is true. And it wasn't acting because that was Jerry telling the story. I'm sure he's told it many, many times. And so the question I have, though, is controversial. I got to ask it, though, okay?

Because I love the Cowboys from a distance. I'm a Roger Staubeck fan. I remember Drew Pearson. I grew up with all these people watching them in the games, Tom Landry, et cetera. And Jerry won twice without being involved. in the football operations. He won twice. He's been involved with the football operations for 31 or two years

since he won the Super Bowl twice. What is the stubbornness there? What is the definition of insanity is you repeat the same thing over and over again without, you're expecting a different result, but you're not going to get one. Okay, so what, what, go ahead, give me the brain chemistry there.

You're a student of people. Yeah. You know, I think it's more about family. And he says in the show, and he is tear in his eye. And he is very emotional. And it is true. If you go up to the star here in Frisco, up north of where we are today, but if you go up north, you'll see, you'll see Jerry Jr. there.

You'll see Stephen. You'll see Charlotte. You'll see them. They're at the, they, he does talk about family and he is 100% engrossed in family. And every time you see him out, he's, he, and every time you see him out, he, he, he's, he, he does. He's with his family. I mean, it's like there's, there's no question about that.

But it's like, it's like, Magic Johnson, you know, after the, after the Redskins, or I'm sorry, not the Redskins, the commanders. Yeah, commanders, when they won one of those playoff games, he says, you know what? We gave, we gave ownership. We got new ownership, which gave the coach,

which gave the GM. But Jerry just loves getting his hands right in the middle of everything. And he won't, he won't let go. And it's like, he'd much, rather he'd much rather deal with his family and and he's done extremely well financially you know 10, 15 billion, whatever he's worth. But he, he just won't let it go family wise. He wants his family to be there. And, and it's all about, you know, is this for business or pleasure or family or whatever? And he just won't let go. All right. I get it. I just say I have to ask. Okay. So,

so, Jay, how do people find you? What's your Instagram? What's your, your, your, uh, your, you know, social media. Yeah. If you Google Anthony Scaramucci's best friend, new best friend, that's Jay Young. No, but. So on Twitter, you're at Jay Young? J.R. Young, text. Yeah.

J.R. Young, T.X. On Twitter. All right. We're on, we're on LinkedIn. We're on Instagram, Facebook, all the other, all the other. If you look under king operating.com, that's where we are as well. I did have J.R. Young.com, but you can find us, find me there. And write in, I'd love to reply back to readers to find out what they, what they think,

what can we be doing better? You know, how can we help you? All right, good stuff. I end my podcast every week with five words. We go through your book. We went through a little bit of your show. I'm going to list the five words. You're going to give me a reaction to the word.

It's almost like a raw shot test. You give me a statins. You give me a word, whatever it comes from mine. I say the word risk. You say what? Oil and gas. Mitigating risk. A mitigating risk.

Okay. So when you hear the word risk, you think risk mitigation and you think oil and gas. Yeah. What about reward? Yeah. Oil and gas. The new way, the new model. Okay.

And that's really the essential tenets of your book. Okay. So let's go over these. Then you're going to be able to predict the last three. I say oil. you say what? I just say it's definitely a needed product controversial, you know, but but also a very needed demand.

I think about the peak demand, what's going on and how long are we're going to need, we're going to need oil, we're going to need oil for a long period of time. And I just think it's, it's not going away anytime soon. So it's funny because when you, when you say the word oil, I think the most important commodity in the world. that's what it is to me. I mean, everybody needs it. You and I couldn't be talking to each other right now.

We didn't have it. We didn't have the electricity on. Yeah. I say the word gas, a little different from oil. So what do you say when I say the word gas? Yeah, I think about natural gas instead of a tank of or a gallon of gas for your car. But I think about natural gas. And I think that it's a great product.

And we're starting to LNG export a lot of natural gas here. So it's a clean burning fuel. It's something that definitely needed. and there's going to be a lot more demand for it because of the, you know, us liquefying it. And there's a lot of, you know, Trump's opening up some of the, some of the ports in the down so we can't export it. So I think there's a good, good need for it. And I love drilling for natural gas because there's so much easier than oil because there's not as many moving parts. But that's just on my side of, of would you ever drill an oil well or a gas well?

I grew up with oil wells and pumping units. but gas wells are very, very easy to drill. And there is also a big need, need for that as well in the United States. Okay. And more energy efficient than oil or no? You mean cost-wise? Yeah, yeah, yeah. Yeah, because there's not, like I said, there's many moving parts and there's not, you know, pumping units and downhold motors.

There's rods. There's tubing. There's all these different products. and you have to, you know, and gas, as you can imagine, gas coming out of the ground and how fast it comes out of the ground is a lot better and more efficient to come out and just go right down the pipeline into, you know, and it goes right straight down the pipeline instead of oil, which comes out into, you know, liquid and it has to go up and has to go into a barrel and then you have to transport it out of a barrel and your pumper has to, you have to have a pumper that goes by there. every day and measures how much oil is in the tanks. Well, not today as much. Most of our wells are by Skylink. But a lot of them are, but, but natural gas is just so much easier.

It's so much easier to, to drill and operate than, than oil. All right. Investing. I say the word investing. You say what? I say, I want to put together the best investing investment, oil and gas investment product available for investors to come in. I mean, for people that want to put in, you know, less than $100 million,

we have a $100 million fund right now. We have a $35 million fund, but I want to put together the best oil and gas investment vehicle that I can for investors. That's my legacy. All right. And what's next for you, Jay? You know, I think after this, after being on your show, man, Who knows, right? I mean, sky's the limit. No. My kids to grow up. I need to read the Bible every day, which I do. And I want to be a better person. I want people, I don't, it's not about respecting me. I want people just to listen to me because I want to give plenty of knowledge out for not only, the Jay Young show was originally for the 16 to 22 year old. So I could tell them stories of,

about people like you. How did you get to where you are? I mean, man, you've been extremely successful. There's a lot of, yeah, a lot of things there. Yeah. How can we, how can we fall on our face and get back up, which we talked about on, on the show, which I really love. How can we do that?

That's what I want to do is I want more people. My wife says, you know, what, what, what, what do you, what do you, what, what, what. And I said, you know, what, what. I want people to have learning experiences. You know, I want to know that, hey, you know what? If somebody ever said, hey, I wanted to go into real estate or if I wanted to go into whatever the case may be, you know, they could listen. They could listen on the Jay Young show and be resourceful, be thoughtful, be, you know,

something that they would appreciate it. Well, I really appreciate you have being on with me today. The title of your book is the upside of oil and gas investing. It's by J.R. Young, who's all. also the founder and anchor of the Jay Young Show. And I really appreciate you being on. Thanks, Jay. Absolutely, man.

Thank you very much. Hey, great. I look forward to saying it's all right. I am Anthony Scaramucci, and that was Open Book. Thank you so much for listening. If you like what you hear, tell your friends and make sure you hit follow or subscribe wherever you listen to your podcast. While you're there, please leave us at Radiohead. or review. If you want to connect with me or chat more about the discussions, it's at

Scaramucci on X or Instagram. I'd love to hear from you. I'll see you back here next week.