TFTC: A Bitcoin Podcast - #317: Exposing environmental LARPs with Mike Umbro

Episode Date: March 22, 2022

Join Marty as he sits down with Mike Umbro. Follow Mike on Twitter Read more about Mike at FieldView Capital Shoutout to our sponsors: Unchained Capital Braiins HodlHodl Bitcoin 2022 - use the code TFTC for 10% off Download Fountain Podcasts

You don't need to. Oh, are we on? What is up, Freaks? Is your boy Marty Ben here? Still got the guest sitting next to me, Mike Umbro. That was a good rip. That was fun. I enjoyed it.

I did as well. It was... I think these are important conversations to get out there. We don't have to rehash the conversation. We just had it. Right. I got to go home. My wife's on her way.

Actually, Cara, I'm not going to be... We're just going to rip the ads from last episode. My wife's about to pick me up. And then she's going to get her nails did because she was such a saint last week during South by Southwest. I was gone every night. She goes to the party.

She goes to people. So she's getting a little pamper. She earned it. She did. She earned it. I like that. She earned it way, in way more ways

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If you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Kind of the rhetoric out of D.C. and the rhetoric out of Sacramento and how that really impacts an operator because a lot of it is just misdirection. Yeah, it's pretty insane what's going on right now.

Yeah. Are you a greedy oil company operator? I don't think I can be. I mean, it's been five years and we've shipped like eight loads of oil. so about 120 barrels a load so uh i want to be i want to be and then i want to give give that money back to the community well you're not going to be able to give it back because elizabeth warren's going to take it from from your hands first right in in 10 more years when i do generate a profit it'll be too much it's only been five yes it's uh freaks i ninja launched on you we're live

I'm sitting down with Mike Umbro hello everybody you've probably heard clips from him on the show we've showed many clips of yours on the show I've seen a couple I was like wow that's cool I think you're cool dude and I'm very happy that you're here because I think

like I was saying you're one of the few voices in the oil and gas space that isn't I said something that was probably brash before we hit record but you're not timid to call out the nonsense in the space which is desperately needed right now. We live in a clown world.

And as it pertains to oil and gas, particularly in the United States, the energy policy that has been thrust on your industry is nonsensical. And then on top of that, you have a bunch of unproductive hysterics who keep beating you down. That's a good, you said it.

I like that. Yeah, I think we have to have a voice. And if we don't have a voice, those hysterical voices will get all the airwaves. And it's either them or the politicians, which kind of just go with the hysteria because they want to be elected. So it's just kind of their echo chamber. And I think for too long, the industry relies on this, oh, well, the big players, Exxon, Chevron, whoever, back 40 years ago when they tie all this nonsense to climate change, that they're hiding this from people. And we as independents can't expect those majors to correct this. And I don't think they ever can because their environmental impact is whatever infinite times mine will ever be as a local operator. So it's totally different.

So I guess maybe we'll start there. Let's define for anybody out there who's listening. It's like, what the hell goes on in the oil and gas world? How would you define independent operator versus like a super major? What is the dynamics across the industry in different players? I think the majors just generally, they have national oil agreements with Saudi or whoever. They're operating in national oil fields that are unfriendly to us. they might have uh typically upstream midstream downstream operations so they're the full spectrum

of operating and they're massive corporations um for me when i'm saying independence locally i'd say an operator producing under 20 000 barrels a day of oil in california and there's there's some in in california but there aren't many like there are in the midwest and throughout the country i mean there's thousands and thousands of independents in that range that collectively don't have a voice what like so why i wanted to bring you on particularly is because like you are a voice for and again trying to like get a perspective on the whole landscape like you're a voice for producers in california particularly right and this is different than then like voices in North Dakota or Texas. What, what is it like being an oil producer

in the state of California? Um, I think the best way to describe it is when I went to NAEP in Houston, the North American petroleum expo, um, I've been plenty of times, but it was back on this year and everybody was calling me the last of the Mohicans because I've been posting things on LinkedIn. I'm like, well, I guess that we're a dying breed in California. I mean, that's the best way to put it um sacramento is vocal about wanting to stop in-state production by 2040 or 2035 i mean it's hard to keep track of all these like 15 and 20 and 30 year timelines and and like your mandates well that's been one of my things when the one 2030 actually might be like 2028 or 2029 is the year i have in my head when i'm gonna go to greta and greta you said in 12 years the

world is going to be underwater and everybody's going to be dead this hasn't happened like do you have any introspection on on that 12 year right the 12 year call that yeah did not come to fruition gretel be like oh maybe then she'll start to understand business side of things i mean that's kind of what it is right all these really whatever the generation is now that's that young these babies they don't have any notion of how money flows how energy flows how any of it works they're just on this little drum beat that the planet's going to end yeah sad you're you're bad humans you're bad you shouldn't be doing things stop driving well they're going to make sure they're going to try to make sure that happens but in california specifically what

has the development of the demonization of the local oil industry been like over the last decade, last two decades? I think, you know, dating back to before I was in the industry, we passed the California Environmental Quality Act, CEQA, under then Governor Reagan. So that kind of sets the framework for California's environmental movement, which really started back in 69 when there was a spill, a blowout in Santa Barbara, and that spawned the first Earth Day. So it's all this kind of dates back, yeah, in California history. So California as an oil state is traditionally a powerhouse before all these regulations. In World War II, they ramped up production 42% from 1941 to 1945 and powered the United States to victory. And you have fields like the Strategic

Naval Petroleum Reserve, which is now Elk Hills. So you have this rich history. And at that time, California was producing 12% of the world's oil. So you've got a ton of resource. But over time, we've had sequin. That's not necessarily a bad thing. But then Governor Schwarzenegger signed in ab32 the global warming solutions act of 2006 and really since that like late 90s early 2000s time frame california production has just been on like a terminal decline um just kind of just chipped away at chipped away at chipped away at global global warming solutions they're going to solve global warming and solve global warming and if these regulations weren't put put into place how big do you think the the oil industry in california could be i i think we could

be producing a million barrels a day and right now we produce somewhere between 330,000 and 400,000 barrels a day so about 30 30 to 40 percent yeah of what the potential is easy yeah easy and this and so like i mean what you're what do you explain when we first met at a digital wildcatters event I don't know how much we're about to say about that, allowed to say about that particular event, but we met there. I haven't said anything about it. This is mind-blowing, just like the hypocrisy involved with the policy in California,

specifically where everybody wants to scream hysterically about the environment, we're going to fix it. And the way we're going to fix it is by constricting and restricting the oil and gas industry within our state, Yet, demand for oil has only been on the rise from Californians over the years. It's been pretty steady, but that has been at 600 million barrels a year. So 1.8 million barrels a day is California's consumption. So you're talking 2% of global consumption is California every day.

And that has been steady. The only year it was below 600 million barrels for the year was COVID lockdowns of 20, which California had harsh lockdowns, but we still consume 485 million barrels. So still well over a million barrels a day. And you could provide over half of that in-state if you had the political will to actually produce. Yeah. And you could do all of it if you included Alaska and Canada.

Easy. It was that way. So in the early 80s, mid 80s, it was 90% California and Alaska supplied and like 5% to 10% foreign crude. So we had that and we just gave it all away. Who do we give it away to? I think this is very important. For us right now, we're giving it away to, and traditionally, the Middle East, Saudi Arabia, Iraq. Ecuador is California's largest source of crude oil for the last available year and been well

over 50 million barrels a year for some time. So you're looking at OPEC nations. Last year, we were all like, whoa, this Russia stuff came out and it was 15 million barrels of Russian crude hidden in the other category on the pie chart. It's like other is 9% and like 8% was those 15 million Russian barrels. Oh, we can't use those anymore. No, not anymore. So now they'll go, you know, wherever. They'll sell them to China

who will put them in an Ecuadorian tanker and sell them to us anyway. Let's get into like the intricacies of that, right? Like, so again, going back to like hystericals, virtue signaling and LARPing, like the oil demand has remained constant to somewhat elevated over the years. there's a political inability

or unwillingness is probably the better word to produce that domestically, whether it be sourced via California, most of it in-state, plus other North American producers who are also constrained by idiotic policies. But that gets, again, the virtue signalers feel good

because the oil industry is getting hindered in California. They think they're reducing oil production, but they're really just allocating it somewhere else where they don't have CEQA regulations, which means that the oil is produced in a much dirtier way, would you say? Oh, yeah, the worst way imaginable. And it's kind of ironic.

I don't mean to be laughing about it because I do care a lot about the environment, but it's groups like the Center for Biological Diversity that's constantly launching lawsuits in California. It's like, well, how do you feel about the lizards in the Amazon of Ecuador? I mean, we're literally on our lease. We count the freaking lizards, common lizards and endangered lizards.

And it's important to note where- Why are we counting? What do you mean by counting lizards? You send a biologist out before you move an inch of dirt. So if you're making a drilling pad, if you're doing anything, making a road through your lease, you're having a biologist out there to make sure you're not potentially running over a lizard.

Now it's important for the endangered species, but they'll count the common lizards. They're counting everything on your lease. And to think that that is happening in the Amazon rainforest where China's operating their oil fields. I mean, really? What does a Chinese rainforest oil site look like? Oh, I mean, I look at it and I post about all this stuff. I guess that's the only reason people know who I am because I'm just researching what happens in the Amazon because I'm unable to get my own permits. But anyway, so the long story short is the last administration in Ecuador sold them out to China for green projects. Yes. And so he took out like 15 billion in Chinese debt, all pegged to oil production. So the only way for him to pay this back is to produce the oil. And they built a green dam and dammed up their number one tourist attraction, the San Rafael Waterfall, to make this hydroelectric facility that now is causing constant landslides in that area.

And so their oil production can't even stay on pipeline because the pipelines are constantly eroding and spilling oil into these sensitive ecosystems that all these indigenous communities, you know, thrive on. They fish from, they drink from. So the Chinese operation comes in and ruins the Amazon for every indigenous Ecuadorian tribe. And California buys that barrel. And they feel better about themselves. Yeah. And we feel good about ourselves. And we're buying something like 60% or 70% of everything produced out of Ecuador.

So we are the main driver of that production. Which is, again, we live in a clown world. We do. And so I think this is indicative of the fact that society at large, particularly here in America, does not understand the concept of opportunity costs. The opportunity cost of not producing a barrel in California while keeping your demand at the level that it is, is you produce in Ecuador. You don't see it, but it still gets produced and there are consequences. There are costs for the production of that barrel. Exactly.

That's why I love what you're doing because you're bringing these opportunity costs to the surface, which is people just want to LARP and think, oh, I'm doing good. but it's like no you're destroying the amazon rainforest in ecuador you're handing this over to china you're i mean so esg it just destroys every esg score you can think of you like esg destroys the environment you're supporting a autocratic regime uh they don't really care about governance i don't know where the g always trips me up right right and and this is this is how it plays to texas and everybody else because it's i'm finding i need to start relating this outside of just California. But Ecuador had the top quantity of immigrants fleeing Ecuador coming through our southern border the last couple of years. They're one of the top destinations.

So these people are being driven from their communities and they're coming in with nothing. And it's very sad, but that impacts everybody at the border and wherever they go and then are on our social dime and our tax dime just because it's exacerbating and they don't want to leave. These are indigenous people that have avoided

contact with civilization for millennia. We're literally driving them to our country needlessly. They're supporting the Belt and Road Initiative unintentionally. And I'm sure Kamala's

been down there to check that out she's probably like she's probably at her cackle down there yeah yeah she's like oh there's oh there's oil in the river yeah well let's talk more about that supply chain so what happens so you they extract the oil from the ground in the rainforest they dam up a dam cut down trees get the oil out try to pipe it if they can pipe it what happens there they get it to the coast and then how does it get to the pacific coast of california and it's and then it's tankers. And that's a whole other can of nasty worms that Gavin Newsom does not want to talk about. They won't even mention tankers in Sacramento because it runs counter to everything

they talk about supporting disadvantaged communities. Everything they talk about environmental justice, everything they rally on for those communities and for those votes, It, it just, they can't, they cannot talk about it because it blows. If, if the people of those communities understood the air they were breathing and why the air is so bad, they wouldn't be voting for, for Gavin Newsom. How do tankers play into this? Well, so, so the port of, the port of LA and Long Beach, you've got the number one single source of pollution in Southern California is that port.

And so these tankers that are coming in, as well as the cargo ships, they, it's always engines on. I mean, these ships don't just kind of like come in, turn off, offload and turn on and leave. I mean, these things are, these things are using big, massive boiler systems, diesel engines. These things are running auxiliary systems 24 seven. So not to mention in the warm months when these tankers are sitting on our coast because it's basically floating tanker storage because you're bringing all this product in. When they're floating there, the atmosphere, the heat rises, the gases build up in the tanker. They got to open hatches. They just release whatever's, you know, expanding in that tanker. I mean, it's really sad. I mean, it's in their health consequences in the LA area. there are exactly i mean it's it's one of those things where the the if we want to look at true

esg in the environment upstream oil and gas production folks like me trying to operate in a field in kern county and put our product on a pipe the whole upstream industry accounts for 3.6 percent of california's emissions as a whole and so the port now that's carbon okay that's not poisonous to your lungs the port these ships produce uh sulfur oxide nitrogen oxide and particulate matter from all these engines sulfur oxide like if you get enough of it oh yeah small proximity will kill you yeah yeah it's it's nasty i mean they it's sad but the 710 freeway there by the port is called asthma alley i mean you've got kids adults everybody asthma cancer all these nasty things because all whether it's shipping

containers or these tankers it's all pumping out right on their homes and so as we are saying hey we need to regulate oil production out of the state or manufacturing out of the state or anything It's all coming back to us on the dirtiest form of transportation that exists. Well, let's lean into that because the demand is still there. Right. What is it about, it's not only California, it's happening all throughout the United States and the Western world in general. Right. What is it about like exporting or relocating all of these manufacturing and extraction activities to another country that makes us think like it just never happens?

It's just magic. That's their plan. That's their plan. They point to urban oil fields as these oil fields are poisoning your community. And then the urban oil field will put these crazy air sensors on the fence line and pick up. I had one buddy say, yeah, we're picking up a lot of acetone. I'm like, why acetone? He's like, yeah, there's a bunch of auto body shops down the road. So they're picking up all the crap in the air in the LA basin, but it's not from the oil field. It's from everything around us or whoever lives in the LA basin and other cities that are heavy industry cities. It's pretty wild. So compared to the operations in Ecuador, Saudi Arabia, Iraq, Iran, how strict are the regulations in California for extracting oil and putting it through a pipeline? What are the differences?

Well, like I said, maybe an operator's experience is the best way to put it. We started in 2017. My partners and I bootstrapped everything. We took over a lease and just started cleaning it up. it had some violations from the past operator so you start fixing up the lease and we have a green field so there there's only six wells on it it's basically going to be a brand new development we're the only ones in california doing it right now um but you start you know kind of addressing your day-to-day operations um then you're going to have your biologists come out if you want to

drill a well you're going to have your biologists come out in the spring in the late summer depending on what species they're trying to monitor. So they're going to look for anything endangered. So for us, it's a kit fox, a burrowing owl, and a blunt-nosed leopard lizard. Those are the three animals. So we're making sure we're not disrupting that habitat. Then for us, as you're looking at the ability to get permits to inject produced water or to inject water for steam, for thermal EOR, which is popular in California because it's a heavy crude. So you have steam injection for thermal enhanced oil recovery. But anyway, you're looking at all that. You're doing water studies. You're sending that to the water board. You're making sure that you're not fouling any of the

water table. We've been permitting these things for three years and still haven't gotten approvals. We have a pond, a percolation pond for our produced water that's already built, that we've done all the studies on. It's already there and they won't give us the discharge order. So to do it in California, you have to be willing to spend at least five years of your startup phase, not making any money and just surveying everything and making sure you have all your T's crossed, everything ready to go to meet CEQA and meet that standard. So it's everything, air, water, animals, everything. Why would you do this? well because because like for california for our lease in particular we have 560 acres and we've

got 60 million barrels in place so you have very concentrated reserves and a nice prize to go after so once you're once you are permitted um you know our plan is to develop and have 6 000 barrels a day of production in this one asset well price is getting close to above 100 people calling for 200 250 that's nice little yeah it's huge nice little rip there it's huge yeah and so so back to like what does a million barrels a day in california look like to the community kern county we receive 200 million dollars a year in property taxes to kern county at this level so if you're producing three times four time and you're talking 600 million 800 million a year to a community that needs it and how big is kern county gosh kern county's

the bakersfield is now like 300 000 people kern county is probably 500 000 people but kern county is i think the biggest county in the state kern county's huge portion of the central valley so you go all the way you know west from the hills kind of bordering san luis obispo and paso robles all the way kind of to the sierra nevada so you got it the whole valley that's what i said when When you said biggest county, I thought you meant population-wise. Yeah. It's huge. Yeah.

And it's the, so Kern County produces 70% of the oil in the state and like 70% of the renewables too. So it's both. And it's still in the crosshairs for oil and gas. Are you making any headway in state, do you think? Because like California is like somewhat of a laughingstock for anybody who understands like energy policy it's like new york and california are hilariously enough like the coastal elite yeah states are getting shit on because like california you guys have all this

energy uh you're not only making it hard for people to drill and deliver oil decommissioning nuclear power plants that are perfectly fine right and still importing oil and yet still having brownouts blackouts new york similarly banned fracking seven dollar gasoline now seven dollar gas eight dollar gas in san francisco it's like how like what like part of me me looking in i'm like i just want to shake people like how do you not realize like this is there's a pretty straightforward order of operations that has led to your to your trials and tribulations here and And yet you have, again, a political unwillingness to reverse course. Yeah.

And I'm really optimistic as an operator. So it's got all whacked out, right? Are we making progress? Yes. Only because we've been at it for four years. Only because we've been doing it. And it kind of feels that way. That we hear Jen Psaki come up and say, oh, it's not our fault.

Well, yeah, it is. We're working with the water board and the water board ultimately passes one of our permits to the EPA, which is a federal agency. So yeah, it's not this cookie cutter solution. And that's why I'm optimistic because I think this whole mindset is going to get voted out. I think they're clinging to this green movement as you see how much money has been pumped into the sector over the past few years. So they have to prop it up while maybe they unwind their positions. I don't know. They're to cling on to it and it's not going to work and that's why i'm optimistic well how bad how bad is the idea the green new deal in this transition i think it's i think it's a joke where does it fail

like for california this is and and i hate i don't hate to bring it up but i i want i'm not coming at it like california is this you know terrible place but it's it's when when these programs aren't managed by a good fiduciary they just go to shit and so for us we've had cap and trade and low carbon fuel standard which account for 45 cents a gallon at the pump so consumers are paying half a dollar just for our green new deal right now and where those monies are supposed to go to projects that address global warming or whatever they want to talk about and so So they have these scoping plans that come out every four or five years and talk about, okay, where do we want to go next?

And then you can look back at the budget and see where they spent the money. And they've spent $8 billion of our cap and trade on a high-speed rail that they sold to the public as going from San Diego to the Bay at like $20 billion. And that's how it got passed. And has ground even been broken? Ground has been broken, but now they're connecting Bakersfield, California to Merced, which nobody does that, for $20 or $30 billion. That's how much that little piece of crap segment is going to cost. And the whole thing is now going to be $100 billion.

And so the reason I tell my Texas buddies, you got to pay attention to this, is because that project is the largest infrastructure project in the country right now. So federal dollars go to that, your money goes to that, and D.C.'s modeling all these policies off of California cap and trade. $100 billion on a rail to nowhere? On a rail to nowhere. Who doesn't fly southwest from San Diego to San Francisco? It's like a 55-minute flight. There's no rail fast enough to get me there, even with the TSA pre-check. It would probably take you all day to get there because they're going to stop all day.

it's just asinine it's just the projects are terrible clown world it is clown world well i learned that from you you were the first person i heard say clown when we met in november it's true i like it i've been using it i put the little clown emoji yeah it's effective it's effective well that's what like talking about like taking back the narrative i think we need to make fun of just how idiotic these people are right again yeah i truly do believe like it's unproductive hysterics the most important hysterics gets uh gets gets the most attention but unproductive these people are not producing anything no except for like regulations and laws and rules that you have to follow like you're out right in the field doing the hard work to make sure that right the

land is set up properly and then you're actually doing the drilling you're doing the extraction you're doing the delivery like this is hard work that i don't think people realize is necessary to make this modern economy this modern lifestyle that we have today like functional and yet you have people like elizabeth warren who's done nothing but pretend to be a native american and and like kinder got her into harvard right and uh and then like people who want to like protest and do this stuff to feel good but then they don't do anything on the back end they're still filling up their tanks they're still yeah reaping the benefits of oil and gas that's extracted in a much dirtier way right right and and and their their spouses are making money

selling you know bidding out the work to construction companies or whoever you know nancy pelosi's husband and you know uh diane feinstein and all these all these people dinosaur politicians that have been in office forever are just bidding out the work to their buddies and that's how it works I mean we're seeing it with the Biden the Hunter Biden deal I mean he's out

he's out there working for a gas company hey that's Russian disinformation we're gonna get taken off the air if we talk about it do we have free

airwaves here are we in free airspace not on YouTube YouTube hey we're not talking about we're being good here

I could not post an episode on YouTube yesterday because I definitely would have got kicked off we talked about injections oh I don't want to

I don't want to get kicked off YouTube hey it's gonna go viral you don't know it's going viral right there's people right yeah there's people tweeting at president biden right now like you gotta watch this my gumbo's got the energy policy for you the framework i'm working on that i'm working on that what's what's it looking like buy local that's it that's one of your hashtags i do it all the time yeah and and and i think that's the message for the uh do you want okay let me get I think that's the message for anybody starting up is building that local feel into your project.

And for us, what does that look like? If Gavin Newsom blesses our project and allows us to proceed, just in our little oil field, that's $200 million spent investing in drilling companies in Taft, California and service companies in Bakers. field and biologists throughout the Central Valley, just all these different vendors that come into play. And then you're talking about over $100 million in property taxes from our project to the state and $10 million locally and the jobs, the community. It's just everything woven together that they want to just say, oh, we'll just transition you. You'll just learn another trade or whatever. You're going to learn to code. it's yeah it's like dude i just went to school for for something and now you're telling me i

can't do that it's just it's it's crazy well that's that's the one thing alex epstein has really driven home to me is like this whole you know what we're going to do with the the fossil fuel industry is transitioning the green energy jobs and there's not as many they don't pay as much no no the average the average worker in california oil fields makes 125 000 a year And they can be a felon, and they can have no diploma, no high school degree. They can just come off the street or out of prison and make $125,000 a year. And over 50% of the workforce is black and brown. So tell me how that doesn't align with environmental justice.

That's probably the social part of it. Yeah, they're not socially friendly with the left elites, so they don't count. Do white people fart more and put more methane in it? It's ridiculous. It's ridiculous. The numbers show that the industry lifts up everybody involved in it. Well, this just begins to make me, like, you always get to the conversation. Is it incompetence or is it malice?

Like, are they literally trying to make us energy starved because they want to control us more? Because it doesn't make sense when you look at it. You logically, like, all right, we're still using the same amount of oil. We're sending it over there. Right. We're impoverishing our local community. People are buying internationally and not local. I'm not going to force you to go down that rabbit hole.

But for me, it's... No, I think it's a valid question. But then my question back is, why don't they just do both? Why don't they just... Why doesn't someone that believes so strongly about the environment say, look, as part of the solution, we need to make our own stuff, whether it's oil or whether it's a car or whatever. We need to make it.

Computer chips. yeah computer chips that we're not going to be able to get soon or whatever how are we going to build all these cars without any of these semiconductors i mean how are we gonna is there enough lithium that's the other thing hey pete bodichich yeah you don't need to pay for gas just go buy a tesla it was poetic you said that and then a week later tesla's prices went up like just like 10 grand no big deal yeah just go buy a 70 000 car yeah poor yeah most most people are probably buying 10 000 used vehicles and they just bump their price up 10 grand and we're gonna tell everybody to go do that well i retweeted something from you today that you have ev bros coming at you

oh yeah what what is there no i don't i don't really i i like to tease about that i kind of i I think I make a fictional fight about the EV stuff in my... No, but I love to drive by the charging stations and like they're empty. And it just goes to show the people buying Teslas are... I hate to break it to the politicians, are not the disadvantaged communities. I don't even think there's one.

I mean, it's not happening. No, I mean, you should see the houses that have Teslas in the driveway here in Austin, Texas. they're nice houses they're very nice houses and then they got they got like the Ford Bronco

in the garage and they got you know the Yukon in the other garage and the Tesla something that you drive locally

you know to your office for your other buddies that bought Teslas and they're like oh man I bought a Tesla okay

cool it's a cool car it's a cool car it's not it's not solving any climate crisis it's cheap though it's cheap material

I don't like driving yeah it's very cheap material yeah yeah I told this story actually a couple of weeks ago. I was in Whole Foods parking lot with my wife and my child. Luckily, I had my child tight in my arms.

But I witnessed a Toyota Prius and a Tesla opposite sides of the lane, not seeing each other back up, ran into each other. Toyota Prius looked fine. Tesla crumbled. Not high quality materials to make them there. No, no. I have a buddy that he's, he's a car guy and he's had all the high end stuff. And that's the first thing he said when he got one, cause he got one to try it out, which is what a lot of wealthy people do. That's what's driving a lot of the sales. And he's like, it's cheap material.

It's not, it's not that nice. And you know, I draw, I just didn't like that. You can't just cruise. Like when you take your foot off the gas, it just stops. Oh really? There's no, it's like a golf cart. There's no cruising. It's a golf cart. There's no cruise. I could never drive one i drove it i'm like i can never do this the second i like try to coast into a red light it just dies and now you gotta like push on the gas to get up i've never driven one i would never it's not a fun drive for me i like the feel of the engine under there yeah under the metal there yeah but and then are they environmentally friendly if that is even like that's the other thing like the language around this what is renewable what is green what is sustainable

And from what I'm told, I want to start researching this, but they're one of the larger producers of hazardous waste in California because manufacturing uses a lot of water and you're using metals and that gets in the water and you're producing a ton of hazardous waste. And from what I'm told, they take it down east to Tijuana for recycling. Ah, they just dump it in Mexico. That's where they recycle, they just dump it in Mexico. Oh my gosh. And then it probably got, you know, that's probably what's happening in the Tijuana, you know, sewage line that spits out south of Coronado and all our Navy SEALs get to swim in poo. And we can't fix the poo that our Navy SEALs swim in, but we can, you know, mandate oil out of the state or whatever, fill in the blank. And electric vehicle fleet by 2026.

Like how, again, going back to like dates and stuff like this. oh we're going to be net zero by 2040 so what the what isn't again words are important definitions are important right what is renewable what is green what is sustainable net zero means there's no humans all right right we produce carbon yeah that's right and and the vehicle thing if you if you look at the numbers can you transition no you can't you look at the sales data from the california auto dealers 64 of the vehicles sold last year were suvs trucks and vans so there's still a majority of huge vehicles being bought and i think 10 were were fully electric which was the the highest so it's growing but still if you're only selling 10 evs every year how does

that ever transition well then you think like is there enough lithium to meet the demand yeah and how much not only the u.s need to get it yeah so let's talk about that like what so that's the thing that irks me about the the green movement evs whether it be electric vehicles solar panels wind turbines hydroelectric electric dams people look at the end product the tesla in the charging station the solar panel in the middle of the desert the wind turbine in the field and they say oh look that's clean it's not producing anything but everything that came before that and on the back end of its life is not talked about right at all and it's pretty important it's totally important and nobody talks about that and and it's needed it whether you're

mining in africa or whether you're i did a video the other week just down on a trail below my house they're doing some lagoon restoration and it's like big ass equipment i mean you got you got excavators you got reach lifts you got dozers you got dump trucks you got all this stuff just to you know, even prepare for a climate catastrophe, you need a lot of diesel. So if you're going to prepare our coastal communities, how are you going to do it without yellow iron that's building seawalls or whatever it is? And that's the thing that's just so silly. It's like, well, we need both. Like there's no getting around that. And so you want to buy it from, you know, whoever in china or you want to buy it from me like buy local buy local buy local but they want to end you they

want to end me they really do they want to end me yeah i think they want to end all of us they do i think they're malthusians they do they know that there's some young blood coming up ready to get ours and they're not going to live forever so no they're not that's the other thing because you're so old just go die peacefully peacefully in your sleep of your own accord sleep yeah but it's like honestly like we have this golden opportunity here to we have so much like look we're streaming on the internet we got lights here we got mics we've come so far and i feel like we're just being held back by a bunch of people again we're unproductive never really done anything right in the real world their whole lives yeah and don't need to be doing this they can get what

they want and we can get what we want that's i think that's the most frustrating part is we can all get ours if you just let us they want the adrenochrome dude what that's a whole nother deal that's a whole nother thing it's children's blood car i'm sorry i see you shaking your head over there that's gnarly stuff on the radio i'm sorry dude I like that you're saying maybe we'll be on Sirius one day car yeah no but it's yeah what is the solution you're thinking of a new energy policy what what do we need to do buy locals one part I think we I think we need I think we need the politicians to level with the public I think that has to be a part of it and I don't know that they're going to do that

So I think it falls apart first. I think it's like we get to some crazy number, $10 gasoline, 12, maybe 15. I don't know. But I think the policy has to say, hey, this zero stuff is not achievable. I mean, we can't even get a guy to... No, it's not achievable. It doesn't even make sense. It doesn't make sense either.

I guess I'm playing the game too much then. I'm playing along with it too much. This is where Bitcoiners come in, we just say. End it. yeah we've i mean we've been playing this game for like over a decade now where people like you're dumb you're stupid it's like you know what no what you're doing makes no fucking sense right and that's the beauty of bitcoin it's giving people fuck you money not in the sense that like they're exceedingly rich obviously it's made a lot of people exceedingly rich but

they literally can't stop our bitcoin accounts they can't stop our private keys right and so we can still move money and allocate money they can't like freeze our bank accounts like justin Trudeau or the U.S. government freezing Vladimir Putin. It's like, hey, we're going to invest our capital in what we think. And there's nothing you can do to stop me. And maybe I've even mentioned that I'm like, maybe operators just say, we're going to drill our wells without a permit and there's nothing you can do to stop me. And I'm going to, if oil's expensive enough, I'll find somewhere to sell it. Yeah. I'll set up, someone will set up a teapot refinery somewhere. This is what I'll be selling little, little barrels to your teapot refinery, you know, pumping out asphalt

and diesel what is the potential for like a mass protest in the oil and gas industry like that that's what i feel like that's so that's the thing that's surprised me i don't want to say it's pissed me off but it's like oh my gosh like you guys oil and gas just put the oil man big yeah wrapping the chain around the rig and absolutely like you're like everybody's like oh we're gonna sell we're gonna sell uh uh an esg certified premium natural gas to market right like a person so stop playing within their framework like you are the basis of our economy without you producing the energy we cannot do any of this you have all the leverage right fuck these people esg is such a ridiculous notion because it's like if if and when we get our

permits i'm sequa compliant show me another barrel of oil that can play if i'm meeting sequel i don't need an esg program i'm paying people proper wages i'm not like i'm allowing women to drive i'm not why would you do that i'm not flaring gas i'm not doing anything that all the countries that we get this product from are doing i don't need another program on top of that it's garbage added cost it's added compliance it's it is and people it's just gonna take time for all these college students that think they know everything they're gonna they're gonna have babies eventually and they're going to realize wow i gotta spend money on stuff and it's not just all for me and i gotta spend money on other people and you know it's it every dollar counts and you

know it's it's coming it's someone someone who's got their second kid arriving soon it's like holy shit yeah i got three i got it's crazy what's the difference between one and two uh one and two is way, way bigger of a thing than two to three. Okay. Two to three is like, ah, whatever. No, no, no.

One to two. Yeah, you're in for some stress. Okay. Yeah, but it's good. It's good. No, I'm pumped. It's good. I'm sure,

I haven't met your wife, but I'm sure you guys make a good team. You got, you know. Maybe you'll meet her tonight. Yeah, I'd love that. Yeah. You'll meet her tonight.

No, it'll be good. No, but it's, yeah, well, that's what I wanted to bring my Bitcoin. Like, so you're like, oh, these kids with these college degrees i so one of the most common phrases that we say on this podcast is fix

the money fix the world like we've already described how fucked up the energy industry is yeah energy policy in america is particularly but i think it's a derivative of fucked up monetary policy where and so is the college student with a degree that they want to go do something with that they can't and they want a virtue signal about it. That does not exist if you have cheap money. If you have money ex nihilo.

If you're just able to go to the government and say, I want a loan to go to college for 200 grand. Print money here. Pay me back. That doesn't happen. People actually have to learn

the cost of things and get handed things. In the energy industry too, subsidies. Maybe that's a rabbit hole. What subsidies? There's no subsidies. Subsidies do not exist.

I don't understand what people are saying about subsidies to oil and gas i don't know i don't know of any i would love some subsidies well that's a big so that's something that always trusts me on twitter i believe there are subsidies in the wind and solar industry though right oh solar pays no taxes so solar when they put the solar array back you know on the on the field or wherever it is in california they don't step up the value based on the infrastructure you put on the ground so it's it stays at the same value of just dirt in the desert so they pay no solar paid like 1.8 million in property taxes the last year

the data was reported and in current county and in oil and gas was 200 million that and that's the best way to look current county is the bulk of of california's energy production 70 percent of the energy produced in california comes out of that one county so again that's the one thing i get tripped on i'm like there's so many like people are like oh wind and solar is cheaper than oil and gas i'm like well there's like subsidies and that could be contributing to the low price of the subsidies weren't there all things held equal yeah probably not cheaper and they're like oil gaskets way more subsidies i'm like i don't know if that's true no there's no subsidies there's none the only thing we get are in intangible drilling costs so that's like your

capital expenses to drill a well which is which is like what you do capital expenses for any kind of development i mean it's the tax code it's been in the tax code for 100 years everybody talks about everybody gets it it's just called something different it's idc's in oil and gas and it's called something different for whatever everybody else does it's capital expense it's not there's no subsidy i'm not getting anything to produce my barrel i'm spending a shitload of money to produce my barrel right now but i'm not getting a damn thing from from the state or the federal government except asked to buy uh carbon credits yeah yeah if you get big enough yeah renewable energy credits so this here's here's a crazy thing on that for a geeky operator thing so for thermal

EOR, you're going to put a steam generator out on your site to pump steam down hole to improve your production. So the minute you put a steam generator out there, your carbon intensity goes up. And I said, well, and we have boatloads of environmental consultants. I asked the air guy or whoever the right guy was. I said, well, what if I'm capturing the flue gas from my steam generator and pumping that down hole and I'm emitting nothing? It doesn't matter. It's a steam I'm like, so wait, they don't look at the details? You don't actually track the carbon? Nothing.

And the carbon intensity OpG model comes from Stanford. It's a model from Stanford. Great. Models. A model. A model from a laboratory. And one of their big funders is Saudi Aramco. Go figure.

They're funding California's carbon intensity scores. Saudi Aramco. There's no conflict of interest or perverse incentives there. it's such a shit show clown world clown world is right we need to get away from models freaks there's the models models models that was like one thing

people people are obsessed with models I'm like fucking throw out the models are models good at all maybe maybe like if you're trying to like project cash flow and like benchmark yourself year on year as you're like

growing your company that might be the extent of the benefit of a model right it comes to like global warming the spread of a virus any of it any like for us production our our ceo jim is a 37 year chevron eor enhanced oil recovery steam guru probably the world's foremost expert on steam i'm like so what's our production gonna be it gives us the forecast i'm like oh nice you know and he even says it's like well we're going to know what the geology is on the last well we drill in the field and we're going to know what the production is when we hit peep production that's when we're going to know when you know you know when you know the model is just a little guideline what is it uh it's schrodinger's

production like it is there or it isn't you don't know until it's realized exactly the whole goddamn model industry is another yeah product of this fiat scam that we're living in so and he so he's an honest modeler because it's like when you ask him questions like I don't know this is what the model shows but that doesn't mean shit it but people base their whole companies their lives there

stop looking at the models freaks you get us into so much trouble and they just bog us down think how much time is wasted how much potential economic value is wasted how much right like human intellectual capital is wasted by just being

forced to focus on these models these uh climate change whatever it may be right it's too academic it's not real world no again too much cheap money for these stupid degrees to make models dude it's true i mean i've i've i've i've done some degrees at some expensive universities but i haven't gone in thinking that my mind is gonna somehow be like four hundred thousand dollars smarter i've done it more for the personal experience and knowing that the value of that degree is tied to how i maximize it through the relationships not see what someone's teaching me the experience like partying at college and yeah college was partying i decided undergrad at pepperdine which is like

beach volleyball yeah life was good at 18 to 21 for mike my mom wanted me to pepperdine oh it was brad i was like mom you don't want me to go to but my mom saved a message from the answering machine that i called like my first week of orientation talking about how hot all the babes she's like has this same like oh man please don't play this tape mike's miss mrs umra if you're out there please please send the tapes yeah but that was but then i i went back so i went back i studied energy business at university of Tulsa. And that was a really good degree for me because I had a finance background and there were, you know, engineers, geologists, and all these other folks. Now I don't, can't speak for

them because it was not a super technical degree, but it was more kind of energy business. And I did learn a lot there. And there they taught what's called stabilization wedges on climate. And you'll find this on like in like i think oh you does this um and a couple other so it's like they take these chunks of emissions in certain sectors and they're like okay we need to take out a wedge not zero but we need to like take out a wedge of carbon out of the atmosphere how do we do that and it's it's way less driven towards this zero concept and much more practical yeah like eliminating flare via Bitcoin mining or something like that. Exactly.

But like Flare is not even that big of a problem. In California, there's none. Yeah. But while they report none, there are Flares, which I don't know how they report none, but you see them sometimes. Maybe they buy carbon credits

and it doesn't exist. Yeah, exactly. Carbon credits. That's Oxy's game right there. Occidental. Yeah. What? Yeah.

Again, just leading people down dumb paths where they're wasting capital. What is the carbon credit game? And how does it waste intellectual and financial capital? It's really silly. It's very complicated.

And I don't even fully understand it. And that's what pisses me off because it's very complicated, which creates a barrier to entry for people like yourself. Let's say that you don't know how to operate it, but like smaller players. Breaking in.

It's essentially a compliance cost that creates a moat for bigger players, allow them to profit more. Like, again, government intervention, picking winners and losers, essentially. Who has the capital can hire the people to figure out how to play this complicated game. And for me, I'm like, okay, you know,

I don't work at Oxy. People in the industry that do work there couldn't say this, but from my perspective, Oxy was a California company. They spun off all their assets into CRC, loaded them with debt. CRC went through a bankruptcy and Oxy's out in the Permian. They buy Anadarko. They're a great operator out there, but I don't give a shit about their carbon credits. Why don't you go abandon all your idle wells that you left behind in California to

improve these negative talking points that the industry gets hit with? Idle wells have nothing to do with me as a tiny operator with no idle wells, but Oxy, who leaves 8,000 of them in california then just like peace out california crc you go bankrupt i'll go here and it's like now they're getting credit for these carbon credit you know in 45q and sequestration i mean they're doing co2 floods to enhance oil recovery that shouldn't be a credit they're doing so they're pumping they're pumping co2 to enhance the oil recovery so it's co2 eor so they're They're making more oil with this CO2 process and they're getting credits for sequestration

and they're able to participate in the trade. Who buys these credits? I read an article about it. Why would you ever cut your... That's the thing. Why I become so passionate about this? I got dragged into the oil and gas industry by Bitcoin mining.

And God damn, I was like, yeah, we need cheap energy. Like, oh, these flare stacks. We'll buy your... at the beginning they were giving the oil was doing so well

they were giving us the gas yeah oh right yeah I remember those days what was that like 17, 18 like beginning of 19

as well 19 so still good in 19 yeah you get free gas well they wanted to drill and they were like we don't

we gotta do something with this gas right North Dakota they have very strict flaring regulations to like just take it yeah

and then like yeah as you get further down the path of like figuring out carbon credits I'm like what the fuck are you people doing it's a joke what are you doing over here we don't need all these trading schemes the only people

that get money out of these trading schemes are the big companies that trade the credits yeah the traders that's it and then it's like for bitcoin so like what like bitcoin miners like we're gonna start buying carbon credits like to prove that like bitcoin mine is green because we need to prove that bitcoin like mining does not destroy the environment it's like motherfuckers you're buying electricity if you buy the electricity you can do whatever the fuck you want with it right people are charging dildos all across the country right right or i'm a catholic i don't think you mass should masturbate but you're not going to see me go in and say no you can't charge your dildo okay right if somebody if you're buying the electricity that's one way to

yes it's again it's moral relativism like that's the only drive that point home exactly you got to you got to make it relatable yes people yes they're dildos that they're trying to charge you sick stop masturbating freaks oh man but it's it's i mean that's again clown world you have to you have to paint the hypocritical picture for these people it's like clown world all right like if if a devout catholic or muslim thinks that masturbation is wrong and a sin against god or allah and yet they live in a society where we can all live together and they're not trying to prevent you from buying electricity to charge your dildo right you can't come to a bitcoin miner and say like we don't like bitcoin we use a lot of energy uh we don't think you

should be able to buy electricity and create hashes with the machine like this because it's just and in california it's going to cost you at least like 24 cents plus a kilowatt hour to charge it up so you know you can't be charging it california that's an expense that's an expensive get off right there yeah you don't want to be in california it's expensive out here but it's like like the bitcoin mining industry started going down this path of oh we're gonna buy a car like we need to like tell everybody that we're good we're good we're kind of like stop bending the knees these unproductive hysterics right and then like i get like dragged into oil and gas too and like i'm like you guys are doing the same like we just need to stop the madness right right and we

can do like and that's i've but many people agree with me in the space but there are other people who are like you are you hate the environment you're just like a pro oil shill it's like i'm not i'm a surfer i was telling you this when we were at the like i love the ocean i'm that asshole that cleans up the beaches when i'm working off i yell at people if you litter on the beach right i like to be as efficient as possible with what i'm doing i don't turn my air conditioner on until i absolutely need to exactly 68 set it to 68 or whatever the line is that too low that's too low 70 68 it's my heat is that is that okay oh 60 oh 60 a heat's good yeah babies if they're cold yeah wake up and then i gotta wake up i need 68 at night 68 this is like

the uh this is like the carburetor enthusiasm looking at 80 larry Yeah, exactly. We just need, we need confidence. It needs to be a Curb Your Enthusiasm. I mean, it needs to be. So last week I had, I always try to get people to come to Bakersfield with me because it's like, I drive up from San Diego at four in the morning and I never have, I got my buddies up there, but I want outsiders to come experience it. So I happen to have to a college buddy and his partner they sell uh industrial steam equipment outside the oil patch they came up and then two buddies that own a spill containment company in oceanside i'm like you guys come up too because my buddies are coming up and they drove out to our lease and they were

like you can't get permits out here are you fucking kidding me like out here the pictures you got like cows in the background they munch the grass when we when when we grow anything it's rare we get less than six inches of rain out there but we have to take people to these sites i think and show them like this is desolate this is where you want to be operating yeah it's this is where you happens like there's home there's homes an hour that way to bake into town and not over here you know what they're not gonna hop on a flight to go i kill and get out and go to the rainforest and be like oh this is where we're getting around this is probably not where we should be getting there's so many trees you need to cut down like nobody's doing no no i want to do a flyover in

ecuador someone needs to get a plane and we need to see all this like watershed washout landslides and destruction yeah they don't show us that and the people of ecuador are very nice people i actually worked at a company that was based in ecuador in quito that's why i know guayaquil that's why i know correa was president you're like oh you're marty's just you're on it it's like now i yeah i mean i like to think i'm learning about but the uh yeah it was like like got guayaquil it was like in the mountainous region um yeah it's like like very farmland focused and if people like you have china just using the bell road initiative to come in basically imf right like imf ecuador right in the chinese way yeah and like take their land and their

resources you don't want to support that no you do not buy local buy local and well and now you know china is a big a big jv partner in iraq because so you get bp stepping out of these big plays and then china's like oh well that's good oil we'll buy that there's not enough steroids in the world to get joe biden to make it to a flight over to saudi arabia so she's like all right i'm gonna come you really gotta juice him up yeah crap his pants in that heat oh you would i mean oh man is he even alive who knows he's bernie yeah it's just pure cgi has anybody seen him has anybody physically seen him is there a freak out there has physically seen him outside of a tv i want to know i'm kidding but seriously you have a g going over to saudi

arabia is like hey well and they're doing deals over there so what happens if china says you know what saudi iraq ecuador we don't want to sell any of that crude to california if we got in a dispute so now that's that's what half our half our oil is gone a million barrels is gone every day we're fucked done now i don't know if they can do that because we're buying all their garbage on these container ships that come in every day and just sit there what do you mean garbage well whatever plastic toys they're all like all the all the imports we buy from them you know if we we can't turn them off so i don't know if they could turn off our oil no we're pretty it's like a symbiotic relationship we're sort of dependent we're in bed at this point yeah which is weird

again virtue signaling land of the free but we like to buy ourself from people who have internment camps and it's kind of like like the united states and china had a baby and her name's greta like that the whole generation like we're they're all screwed like they're in this marriage that's going to happen forever they're all very very confused yeah at the very least yeah we've been again i think it all goes back to the money being completely disconnected from reality where we live in a clown world where it's like nothing makes sense anymore

I think we can make sense of things but like people speaking from a policy perspective or in the mainstream they don't simply make any sense you mentioned in the beginning the permitting stuff there's 9,000 permits out there

that are being used not using them so people take that line from John Psaki and Joe Biden are like, oh, you guys have 9,000 permits that you're not using? Like, why is that an idiotic statement to the layman out there? There's so many reasons.

I mean, if you're like, like EOG is always permitting ahead on federal land. I mean, you're permitting ahead on these projects and then I'm... So what is permitting? I guess we'll start there. So permitting generally is, you know, saying, hey, we're going to put a drilling pad here. So for

us, we're permitting that site and the construction of that site. and then you're getting a permit and for us it's filing a notice of intent to drill an noi to drill and then your state agency is saying okay you know here's your permit you have your permit we operate on private land so nothing federal i don't know much about how the federal permitting process goes but the people in wyoming do i can tell you that yeah i mean i'd imagine they're permitting ahead they're they're looking at their acreage position they're saying hey we'd like to drill this many wells this is where we're going to permit these things and whether or not they

drill them that year i mean they might not even get to some of these permits for a few years but they're just permitting ahead of the project just in case so you i could see how she could inflate that number and be like oh there's 9 000 of these things and it's like well it's like the drilled but uncompleted the ducks you know they were kind of still working off uncompleted inventory from well i think it's important 15 and the market craps and you got all these ducks well i think it's important to also highlight like the uncertainty yeah that comes with these permits like just because you have 9 000 permits doesn't mean you have 9 000 potential wells producing oil that right is able to get the market or is even there yeah exactly it's like it's like

back to we're going to know the geology on the last well we drill well what if you permit you know 10 wells and the first one you drill it's like oh man there ain't shit here so maybe all those 10 go away but they're still on the books or to jen saki or who you know an outsider looking at the permits but it doesn't mean they're viable wells or projects no and there's there's a lot of there's so many nuances to oil and that's the frustrating part when you see these politicians talk about it's like there's so much nuance to this there's so every state like texas has the railroad commission which is elected we have cal gem which was renamed when newsom came in the guy got fired and newsom puts his guy in and says don't permit anything so we start our project

before all this and so you vary so wildly from state to state how all this is set up yeah you different flaring regulations north dakota colorado stricter than most um california probably the strictest probably the strictest which is like so wouldn't you want to produce more from the highest rate what's the point what's the point of a sequel or any environmental legislation if you don't encourage production from that region right like oh we got the best laws but can't do it here it's so stupid pure bureaucracy it is we're just gonna it is collect taxes and pay these people right to permit stuff that never gets built yeah and we the operators pay the taxpayers don't pay for calgem we the operators pay their salaries and they always need

more positions filled but somehow they do less and less work and less and less permitting every year because that's what i was saying why would you ever do this why like personally like what made you want to be like an oil man there's something about being like really developing an oil project that like once you're gonna do it you're gonna do it and i've asked my buddies who have who have done it like what does that feel like like what is that feeling like it's the best fucking feeling in the world like when your welcome's it's just it's it's one of those industries where it's like there's romance about the idea of like i can pull out energy from the ground that is just so powerful like for us to know that our product is going to go to local end uses no matter what

every barrel of oil produced in california is consumed in california like it's the definition of buy local so i think there's that part of it for me that's just like i know this is the best thing so i can't do anything else it's like a weird no i know exactly it's is it big am i like the bitcoin like so the mirror image of bitcoin is california oil i wasn't even gonna pull i wasn't even gonna call pull bitcoin into it but you can like that's what i love mining because my mining really drives home the the value prop of bitcoin the fact that it's permissionless that it's this machine here produced hashes that probably probabilistically allow me to potentially add a block of transactions and contribute to the distributed network like

nothing these machines really drive that point home um but no just like bitcoin aside like you have a connection to the earth and to things that matter like being able to turn these fucking lights on this mic on right does not happen without people like you right actually pulling shit out of the ground that combust and creates electricity exactly do all this yeah when i die cremate me and pump me down hole. That was weird. I like it. I like it. No, but you mentioned something that's interesting about kind of the earth and the energy and the opportunity. Like for us, all of this conversation is great, but we still are trying to create a zero emission environment on our lease even you know because it you can do things better so we're looking at

integrating technology to basically create a geothermal battery effect in our reservoir and i think oil and gas operators are going to crack that code before we see like these massive solid state lead batteries or whatever they're trying to do at utility scale i think we're going to figure out how to harness it from the earth before ripping all the earth out what's the idea behind it so i mean high level and i'm not an engineer um but you're you're taking a solar array to heat water and then you're you're flooding your reservoir with that hot water and then you're producing oil and heat and you can spin a turbine at surface with the heat you're producing and you can produce oil so you have a symbiotic solar and yeah oil relationship yeah and and you it's it's

It's the marriage of geothermal and oil and gas and solar. Yeah. All coming together. It'll all come together. And there's other people working on it. This is not like, you know. A premier. It's not us, premier resource management.

It's essentially off-the-shelf technology, but you have to have the engineers. And this is where it's silly that you're trying to get people out of an industry. this is where you have the engineers that have been in it for 35 40 years that understand thermal dynamics and understand how rock heats up and how that happens downhole stuff that like you got you spend four decades learning this stuff at all these people you know at chevron shell texaco wherever they were the sociology major is here to tell you that you're bad i'm bad you're gonna you gotta go i gotta go kick out all those fucking all right yeah kick them out kick him out reload yeah with no experience you wake up 10 years and a whole generation

of knowledge has been gone gone yeah what did freud think though is he gonna help you uh figure out these hard engineering products yeah exactly i don't know i don't know i mean i think i'm i've told my mom like i'm 38 i'm not stopping so like i gotta suck it all out of you you know my partners are 62 i've learned more in the past five years than i have in any school or anything working with my partners who are a reservoir engineer and a petroleum engineer and just have been in it their whole life and to think that you want to lose talent knowledge yeah even younger than that you know the the 45 to 60 range that is really minimal in oil and gas because the 80s were a shitty time so you have you do have a talent gap already in oil and gas but the idea

that you want to lose all that engineering expertise and then try to start over on these pipe dreams is silly it's very silly and all this what gets lost in all this too and again people think i'm just some anti-wind solar renewable guy because i will shit on the front end of the and the back end of those supply chains just because i want people to recognize the trade-offs and the intricacies of it. But there is like last week we had a big event here in the Bitcoin Commons and we had people like Texas does seem to make a lot of sense for wind and solar

in West Texas where it does make sense. And there is a mix, but it's like the mix. You can't just go all wind, all solar everywhere, which is what this Green New Deal movement seems to think is possible. And if the climate's changing, how do we know where it's going to be windy in 20 years? How do we know where it's going to be sunny in 20 years?

How do we know any of that? If it's changing so rapidly. If is the biggest word there. Yeah. And I think broadly, the energy demand pie is growing. So everything can grow. It's going to continue. There's 8 billion people on the planet.

How racist and regressive are these policies too? Hey, we got here. We have iPhones. we have teslas we have lights and streaming technology but you people in sub-saharan africa south america yeah you can't catch up to us no you can you're going to try and use your oil to to create industry get the fuck out of here we're but we're giving their children jobs digging the cobalt out oh yes jobs cancer jobs jobs cancer they don't pay anything but they're working they are they're certainly working they're working hard it's brutal

but that and and and the development is happy they are taking their oil and i mean i see that in the data guiana is the next spot that we're exxon's doing a lot of offshore exploration in guiana so now we're gonna guiana or ghana guiana where's guiana on the on the like uh east side of South America on the northern east side there above Brazil, kind of. And a lot of oil in that Brazil. All around that horn, whatever you want to call it,

of Latin America, South America, it's a lot of heavy oil. And that's what needs to come to market. So we're basically going to tear up all these pristine ecosystems around that horn to pull it into California. Because Becky down the block.

What's the virtue signal? Becky. she drives a Tesla and the kids go in the Yukon to practice but she drives the Tesla to the grocery store they don't have a suburban style Tesla yet okay

it's coming isn't that that big truck that big like paperweight truck that thing's never coming they already pushed back production by a year and that ball bearing went right through the window that was probably the worst product reveal

of all time yeah hey this window is unbreakable let me break it real quick i've seen two rivians jokes the trucks the ev trucks that are eighty thousand dollars or whatever is it like the tiny they look like those honda trucks whatever those honda pickup trucks are that's the other thing too ridge line whatever these things are very low t i don't want a low t vehicle i want a high t high t did you see that that chevy that got caught in the tornado last night here in texas oh car pull up the video please this is this would never happen to a tesla or anything like that there was a tornado just north of the city round rock texas really uh

went over i-35 and somebody's storm chaser caught the video of this fucking badass chevy car's gonna pull it up right now you'll see it on the screen here oh wow he's got it this is like chevy i know i know people were i don't think anybody died i think people are injured and you never want anybody to get injured but like chevy needs to make this commercial go full screen if you can we're watching oh that's it right there i see yeah but rewind a little bit car if you look at it It gets beat up a little bit. Look at this thing.

No way. Look, the tornado knocks it on its side. Just kind of gets nudged. I'm just like imagining the guy in the car like, bumping it. Yeah. You're not going to get that with an EV truck. Wow.

Unbelievable. Like a rock. That is unbelievable. Now he's driving. He's fine. He's going to look like he had like a little tornado fishtail. We're going to turn the, Chevy needs to turn that into a...

No way. Yeah. Wow. Although, you know, the EVs are pretty heavy. They're made of plastic. They would have been sitting on like a chair and like a stealing rear with like a lithium ion battery behind it.

No, it'd be like the old cartoons where he's like the outhouse gets ripped off like the whole cover of the Tesla's gone and he's like sitting there in his seatbelt. The lithium ion battery gets struck by lightning catches catches on fire for two weeks straight oh yeah that's another thing with this they catch on fire like what it was the australia had that tesla plant yeah we we have one up in the bay uh that they can't keep online battery storage it can like store enough battery power for like

a minute or like a half a minute of power hey hey hey we're just around the corner yeah we're we're almost there right moore's law is going to drive us to the point where battery technology is going to far surpass anything that we've seen to date. Anything. 12 years. 12 years.

Yeah. It's always something like that, isn't it? It's always like, oh, well, and then we're going to recycle the batteries. And you're like,

what? We can't even recycle plastic bottles. We're going to recycle these lithium ion batteries? Who's going to do that? And how much energy does that take?

Yeah. Oh, oh. By recycle, we're just going to drive them down to Tijuana. Yeah. Yeah.

And then we're going to do a life cycle analysis. Well, if we have 400 million EVs, then we get economic with our recycling. Oh, yeah. Then we get there. Yeah, we get there. It just so happens that the Congo is a hole in the ground. We don't care about them, though. We can't see them here.

We're going to be doing cruises or tours of these mines. It's going to be a tourist attraction. disneyland congo yes we lost many child slaves here but oh my gosh look at all the evs we have unbelievable and guess what they only last for five years and then you figure out how to recycle them right oh they figured it out right oh yeah they know what to do take it to mexico oh they modeled it out they modeled it out and the model says it's everything's recyclable yes yeah yeah you're just gonna somehow evaporate this lithium ion and all the chemicals that you put in it right and that's gavin newsom has said that the sultan sea in california is the saudi arabia of

lithium so he's willing to go all in on what are you what are the people of california doing what happened like french laundry should have been done should have been done should have been done should have been done it's there's just so many how does that happen there's just so many wacky old people that just vote with a d that's it and then you know the recall was never going to work but um now he's running and it's really no no name opponents you know um it's tough how the fuck is gaff news he like literally looks like michael or patrick bateman like he is that sociopathic it's pretty obvious he is he is and now he can do whatever he wants i mean michael schellenberger's running i love that i like him michael he's rad michael if you're

listening check your dms i have about a hundred in there like come on dude come on come on the show he's great his book i think it's here oh no that's unsettled i thought i saw it i've had i've had coonan on the podcast this is uh coonan came on yeah michael listen to that michael if you're listening i had steve coonan on he was he was cool enough to come on not saying you're not cool but like i think you're like it was this weird tweet about bitcoin asking me the person who wrote San Francisco to come, San Francisco, excuse me, to come on the podcast.

Just some dude. Mike's a Californian. Yeah, I'll go up to San Francisco. I'll campaign for you. I don't like Gavin Newsom. Yeah, I'm down. And the other opponent is Senator Brian Dahl, who's a state senator from Sacramento.

I've met him, really good guy, farmer. And he sees that like ag is getting pushed out of California, production of oil and gas is getting pushed out. So I think he's got the political experience. And then Schellenberger's got, obviously, his experience as an author and advocate. So I would love for one of them to pull it off. I just don't see it happening.

Well, Schellenberger, if you don't come on the podcast, we're going to get Dahl on the podcast. We're going to let him win, okay? Yeah. Yeah. We have that much influence here. He needs money. He needs money. They all need money because Newsom's got like $25 million or something already just sitting there.

Probably made illegally. Yeah. China. China, really? I don't know. China. China. China.

Just say China. Just say China for everything. Yeah, exactly. We've got plenty of time. I thought we were like not even two hours into this. Oh, yeah. Let's go. What do you want to talk about?

I mean, French Laundry. You guys should have kicked him out right away. Yeah, should have been gone. Hey, somebody speaking in the comments out there. Can we embolden the oil and gas industry to come out of this on-your-knees posture? I think what has to happen is... Am I crazy?

Am I Pipe Dreamer? No. I'm going to go to Empower next week and be like, you're all pussies. No, I think the moment has to come where everybody in Texas and elsewhere can no longer think, well, California, you guys just move in here and everything goes to shit. And no, we all need to

fight together on the front lines of where these precedents are being set is my theory. And precedent is being set in California. And whether we as an industry or just as society like it or not the number two is kamala harris who's california the number three is nancy pelosi who is california so i get into it sometimes on twitter with my like 12 followers like hey texans california is running the show whether you like it or not and that's a very texans don't like to hear that they don't like to hear that they do not want to hear that and but it's it's the truth because we've got 53 house seats in Congress. It's California and New York are the country.

Yeah, it's the country. And that's what's... I remember being in Midland, Texas on election night, 2016. And we were just ripping shots at tequila, drinking beer. I mean, it was just this total unexpected thing that Trump was going to win. And we're at the grocery store. Hillary's crying in the back.

Yeah, getting ready to pregame. And I remember because I'm coming from California. I had just gotten in that day and we're getting our stuff to pregame. and the gal checking us out was like, oh, he's going to win. Trump's going to do it. I'm like, really?

How is that even going to happen? Like, no way. And then it happened. And that's what I think we all need to come to this realization. Like the Biden thing happened. Like it's real now. And all the bad stuff that we thought was coming

happened this first year. And if we don't realize that California crazy policies are now DC's policies, we're going to wake up in three years and who knows what's going to go by there's going to be deaths

yeah no doubt the energy policy is going to lead to deaths it's already happening here in Texas yep it's just like

failed grid policy overproduction of unreliable renewables gas lines froze up nuclear sensors failed beautiful shit show if the green new deal people get their way

there will be deaths in America right whether via freezing to death heat stroke or being unable to feed themselves

because people are having to weigh the cost we're killing each other in the gas line that as well like people are like oh dude I saw

a video Snoop Dogg actually posted it on his Instagram but nah we're laughing but they scared the shit out of me some dude in LA

was just like Joe he's like crying sobbing crying he's like Joe I didn't eat today wanna know why I didn't eat cause I couldn't afford gas

to get to my job obviously working like right a job where he gets paid out every day right like that's we're already there right there's one anecdotal example imagine how many of those individuals are out there right that aren't creating videos and then if you $10 gas $15 gas and we haven't even seen inflation food prices rising alongside it like we haven't even seen it yet inflation hasn't happened yet we are talking about it i think i mean there i saw on twitter today um who was it javier uh over at bloomberg was talking about a diesel shortage like well how does all our stuff get in from the port

yeah diesel so how so that's another reason like california policy impacts the middle of middle of the country like all those diesel trailers bringing everything half of our imports in are going to be short diesel and the diesels the main asphalt and diesel are what california heavy oil you know typically goes to for feed style you're taking heavy crude and you're making asphalt to make the roads and diesel to move these products and these are the two things we need right now and you're telling me we can't we can't make them it's really scary like i know we've been laughing and palling around yeah this shit's serious it really is it really but you have to laugh about it. Otherwise you'll just be depressed. Yeah. I mean, because, you know, a lot of the

hardcore environmental activists see how angry they are. Like nobody wants to listen to that all day. Like it's not a, it's not a winning message. No. It's like crying and skipping school and like protesting and woe is me. You're the problem. Yeah. Like my mommy and daddy put me on a sailboat to tell you this. And like, and then that's the person that's going to go and testify in front of Congress? Like, you can't pull out someone that knows the facts. It's like...

You have AOC. Oh, my God. I know. AOC, yeah. She's got a Tesla, I heard. I thought you said chest there for a second. She has both of those.

We're not allowed to talk about her physical assets. Her chesticles, no. We can't talk about those. No. She talks about them, though. She'll, like, say, like, oh, that senator's checking me out.

Why are you checking me out? you misogynist I think we're turning into a pro oil and gas misogynist podcast no I think it's buy local all this stuff is tied together it really is

that's the other frustrating part where you have to laugh is the solutions are very simple right in front of us you don't need like credits and trading schemes and you don't need any of it that's been one of the beautiful things of

Moving to Austin, Texas is the plethora of ranchers that live around here. Buy your local beef. Shout out K&C Cattle Ranch here. Nice. They supplied the beef steak last Friday after the Bitcoin takeover. We had beef that was raised less than 10 miles away from where we're sitting right now. And I bet it was the best tasting beef you could buy. Fucking incredible.

Yeah. You know how far that traveled? You know what the CO2 footprint was? that footprint on that was as minimal as it could be. Exactly. It's that simple. And I think that's how all this needs to be like simplified to people is like,

I do the same. There's a strawberry stand at the bottom of our hill. It's like, we go get the strawberries that were grown five miles up the road. It's like the best tasting strawberries you can buy. And then some of my buddies that came to the lease, they're like, you need to name your product. And I'm like, what would you name it?

They're like, local honey. Local honey. So now I'm going to be selling barrels of local honey. Oh, see, that's stupid things like that. That would get people like, oh, you're selling local honey. It's a positive connotation. People like honey. Put a little B on it.

Can't say local sludge. Yeah. The problem is my barrel, and that's the whole other like ball of yarn that people get so confused about is like, this is a global market at the same time. So when these policies get rolled out, why isn't gasoline prices dropping? like the price of oil dropped last week why it's like well it doesn't work that way it's like it's well let's get into that because i don't think people really understand that like not all oil is fungible right yeah and it trades on the water it trades probably right before it gets delivered

to port it's traded all the way here so you have sweet crude in nigeria you have your heavy crude in california you got tar sands in canada you got light in permian or lighter shale production like how is each one treated differently uh well i mean in the you got to have a certain amount of each and in the refinery and those refineries can't necessarily be rebuilt or uh different sources that easily um but yeah you're you know these gas stations are buying product at a price point and whatever volume they're buying that week and then you know it's not like they're buying every day you know they so if they're locked into a big purchase they're going to be selling it at a higher price and you know we had like that they're greedy yeah exactly they're greedy it's

but we had that blip of like what was it 130 for like four days it was in that 130 rate and then it dropped and people are saying it it dropped it's like well no it was 66 bucks in november yeah it hasn't dropped it went from 130 to like 112 still up 60 percent like what are you expecting the price of gasoline to do. Can we dissect that narrative that, oh, the oil and gas companies have their largest quarter of profits in some time.

They're being greedy in the time of need. Right. DRW broke this down on one of his LinkedIn posts recently. That's why I didn't find you for a while because I'm not on LinkedIn. Right. Yeah, I've been more on LinkedIn.

I only got on... Why are you on LinkedIn? I don't know. LinkedIn's like the worst. I don't need a job. I haven't been looking for a job for like five years. I don't know why. Well, now that I have Twitter,

no, I got Twitter at that. I told you. I said, you got to get on Twitter. I'm like, okay, I guess. So, I mean, I guess. I don't know. I'll talk to anybody. DRW is one of those dudes too.

He's on LinkedIn only. And he broke it down about basically showing from the end of 14 to 2021, one it was shitty so like if you look at the returns over the six years we've just been through it's like minimal yeah it's like three percent i forget what his linkedin post he's so analytical i mean that guy's crazy smart he's based um but yeah it's like you you can't just look at one year like who's i i don't i don't have a lot of tweets that go viral because i don't have a lot of followers yet but i tweeted like who's taxing the record profits of pfizer and moderna

I forget how many hundred or thousand people like it I'm like oh wow that's how Twitter works yeah I remember retweeting it but it's like true

it's like oh they got a government subsidy to to push out an injection that may not have been as advertised yeah it's like

who no one's talking about taxing them they made billions of dollars literally taxpayer money was printed out like boom thrown at them

yeah keep the profits right and they're not legally liable for any potential adverse reactions yeah well now the sec say maybe maybe the public oil and gas companies will be liable for their climate impact that that's coming out i read that in the wall street

journal today it's like what why is the sec worried about climate impact dude again i think these people in the political spectrum many of them not all of them they want to control us it doesn't make any sense shuck schumer came out i was like we need biden to uh to create an emergency order for climate change. Right. Emergency orders. Climate change. We have,

I forget the exact term, but it was essentially like, I think it was, yeah. You need to use your state of emergency. Climate emergency. Was it a climate,

I think it was a climate emergency. Yes. Declare a climate emergency. Declare a climate emergency so that we can force people to buy $70,000 Teslas. Right. Or do whatever we tell them

that's best for the climate because they have degrees in environmental management and they know what we should be doing for the climate. These people have, at the end of the day, their degrees in corruption freeze. They do not care about you. They do not care about the environment

because if they did, California wouldn't be importing, what is it? 70% of our crude. From Ecuador. Well, yeah, 25% comes from Ecuador. 25% comes from Saudi. 25% comes from Iraq. Some from Colombia.

And 15 million barrels from Russia last year. And did you know, no one reports, Gavin Newsom went to Cabo last year and there's this story and I posted, I didn't get any tweets. See, I think Twitter kind of like thumps down certain things. Yeah, when you come at the Pfizer, Moderna, they're like, get the fuck back there.

Yeah, yeah, yeah. But he stayed at this resort mansion that apparently is owned by some Russian oligarch. That was his family vacay in between emergency orders last year. Interesting. Do you have this pulled up car? Is this what you're looking at?

Yeah. Oh, yeah. They got the paparazzi pictures of him poolside or on the beach with his kids. And it's like, dude, is this for real? These people do not care about you. Yeah, there he is. He's on the patio. Back.

Back. We're back. Talk about Gavin Newsom getting close with some Russian oligarchs and they cut your Wi-Fi. They know what we're talking about. Yeah. We're on to something. Maybe we were. How do these civil servants get that rich?

Nancy Pelosi, obviously she's inside our trading. It's pretty obvious. Gavin Newsom. I want to get in that clown car. I don't want to get in there. Those people are miserable. Yeah, that's true. And they're fake psychopaths.

I hope I'm not a psychopath. I'd like to think I'm not. You don't seem that way. I don't. I'm pretty good at judging character. All right, good. You seem good. Car, am I a psycho?

Okay, good. Car confirms too. Yeah. um that being said we have to get there at some point i have to go home absolutely uh wife's got a nail appointment for 45 minutes and then we'll reconvene for dinner perfect what should we tell the freaks out there about oil and gas produced domestically esg whatever the baby how should we end this i i think we all just need to support local production of oil and gas of anything you're buying food groceries anything it's going to get to a point where

where local production is maybe all we have if the supply chain's shut down. So we better start thinking about it and talking about it and supporting it and voting for candidates that support things that are made here. Yeah. Or just don't listen to these idiots

and just start drilling. Right. Start plugging in miners. Yeah. Fuck these people. They hate you. Yeah. The whisper, it's more powerful.

very serious peace and love freaks yeah