TFTC: A Bitcoin Podcast - #440: Climate Change Is A Bad Excuse with Anas Alhajji

Episode Date: August 18, 2023

Marty sits down with Anas Alhajji to discuss energy markets, climate change regulation and subsidies, and whether de-dollarization will push nations toward Bitcoin. Anas on Twitter: https://twitter.com/anasalhajji Anas on Substack: https://anasalhajjieoa.substack.com/ 5:30 - India and UAE oil trade 13:27 - COP 28 and climate change excuses 27:46 - Climate change religion 31:05 - Dishonest numbers 37:05 - Shale oil underperforming 42:02 - “Green” energy can only win by force 48:11 - Why we Bitcoin 49:46 - Near future energy market 56:16 - Impact of subsidies 58:59 - Immigration and Climate arguments don’t mix 1:03:48 - Dollar shortage and Bitcoin Shoutout to our sponsors: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Unchained⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠River⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠CrowdHealth⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Bitcoin Talent Co⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TFTC Merch is Available: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Shop Now⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the TFTC Movement: Main ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Clips ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Website⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Instagram⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Marty Bent: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Podcast⁠⁠⁠⁠

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you've had a dynamic where money's become freer than free when you talk about a fed just gone nuts all 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 And that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Anas, it's been a while. Welcome back.

It's been a while. Thank you. Thank you very much. Thank you for coming back. We were just saying right before we hit record, the macro landscape is pretty volatile right now, particularly in energy markets and more specifically with oil. I mean, we have headlines this week that shale production is not going to be what many thought it could be at this point in time. That's probably driven by a lack of investment in the shale patch here in the U.S. But you were tweeting or, excuse me, DMing me yesterday on Twitter that the springboard of this conversation,

we should probably focus in on what's going on between India and the UAA and how they're settling their oil trade. So I guess let's start there, and then we can jump into the broader landscape of oil and gas markets. Before we do that, since you mentioned the macro, I just want to mention a very important story. As you know, two days ago, Japan announced that their GDP increased by 6%, which is way higher than expectations, and people were shocked by it. We published a short report basically under the title Japan Oil Less Recovery. And what happened is, yes, their GDP grew, but mostly because of exports and mostly because of exports of vehicles. But their domestic issues are in deep trouble and their oil demand been decreasing for several months. So there was no higher growth in oil demand in Japan despite the growth in GDP.

but to go back to india the issue as you know we discussed when we had the earlier podcast about the use of dollar and bitcoin in the oil trade etc well it's been what more than a year now i think a year and a half so what happened now is india was able to buy 1 million barrels and they paid for it in rubies. That's the Indian currency. Here we have to put this in perspective because some people might get fooled by the news. Oil is priced in US dollar.

All they did basically convert the price of one million barrels to rubies and the UAE got paid in rubies in this case. We did talk about this in the previous podcast when we said that oil is priced in dollars no matter what, but countries can receive revenues in other currencies. But a million barrels a day, sorry, not a day, that's a million barrels, a million barrels were sold for about $75 million. There are 3.5 million Indians in the UAE. and they send money constantly to India and they have those several apps they can use. It's cheaper than the banks, et cetera.

And the UAE market, they are well-known basically for their laws which allow for those small shops to exchange currencies. So you walk in the streets, you find some small shops, and you do an exchange. So $75 million are the remittances of Indians from the UAE within 60 hours. So almost like two and a half days of remittances, that's it. That's how small it is. At the same time, there is a massive shortage of dollar in the UAE, in Egypt,

in many countries around the world. So they need that for their domestic market just because there are 3.5 million Indians there. So this is not a big deal. At the same time, everything is happening before before COP 28, because the objective of the UAE is to make this COP 28 a historic event. And they want to make sure that all countries are on board. So it's not only an issue of paying for a million barrels. there are more more to the story than that the uae imports about 30 billion dollars of goods from india every year 30 billion so what is 75 million to 30 billion nothing

and so if i understood that correctly there's a shortage of dollars and so the uae with considering the fact that they have a lot of indian expats living within the ua who need rupees they decided hey for this million barrel trade we're okay settling in rupees because there'll be demand for it here yes and there is another thing basically you need to pay attention to and i don't know how well this is going to go with some audiences by the way but uh if you look at success of Emirates Airlines. Emirates Airlines was on the top of the world for several years. It was one of the biggest in the world. And if you look at Emirates and its success, the Emirates basically is supposed to be the Indian Airlines. I mean, they capitalized

on Indians around the world, literally. Most of Indians who are overseas, they go to India, not on Indian Airlines. They go on Emirates Airlines. So someone was smart enough long ago to realize they can capitalize on that. And it is one of the most successful airlines in the world. Think about it now that someone is trying to capitalize on exchanging currencies instead of making it within India, just like Emirates Airlines making it in the UAE. So, what I'm saying here is, if we see an expansion of this after COP28, then that means there is an effort to move the market of the exchanges from within India to the UAE. And that suits many Indian merchants, too, because of the flip-flop policies of India

on one side, the taxation and other issues on the other side. So the UAE basically provide the shelter for Indian merchants in this case, too. So if this continues after COP28, that means there is an effort to move those shops and exchanges to the UAE so Indians can do the exchange in the UAE, not in India anymore. Okay. And so would that be like a smaller move and a bigger play to really solidify the UAE as a hub in this multipolar world moving forward? I mean, I would not be surprised if that's the case, because if you look at the story of Emirates Airlines, you look at other issues. I mean, look at them in terms of how Russia, basically, or many Russians, basically, live in Dubai and other places simply because of those reasons, too. They have a very solid banking system with connections with all the banks around the world. That's why, basically, Putin asked the Indian companies to pay in UAE Durham.

and for those who took it far away and said, well, now they are ditching the dollar, this is nonsense. Why it is nonsense? Because the UAE dirham is literally pegged to the dollar. Why they want to shoot themselves or reduce their own currency or reduce the value of their own currency in this case. So this is a measured move to serve certain purposes. and diving deeper into cop 28 i mean i think it's become pretty clear that esg is falling

out of favor with many investors and many individual countries and the cop conference is the united nations conference around climate change do you see a big tectonic tectonic shift on the horizon at cop 28 in terms of this we are in our reports basically we we talked about this so many times and we always every time we have a new piece of news we emphasize the point that the narrative is changing and the new news stories coming in they are just supporting that story so the narrative is changing on several fronts and we have to put that in perspective too because we have the european oil majors reneged on everything they said in term of cutting oil and gas production. Remember, they promised that they will cut, they will do this, they will do

this, and then they decided, what the heck, I'm not going to do it. But we have to put that in perspective because it was the European governments who reenacted on their climate change policies and promises. They went back to coal. They delayed some nuclear plants. Of course, we can and discuss whether this is going to be kind of a climate issue or not, because this is a source of dispute among various people. But the idea here is they went back to fossil fuel despite all their promises. They've been fighting African and other countries not to pay subsidies to subsidize consumers for fossil fuel, and the moment prices start going up,

they were first to subsidize fuel. Germany, in particular, paid over a billion dollars in subsidies to subsidize fuel as prices went up. So the framework basically changed because the European governments changed and then the European oil majors changed accordingly. At the same time, we have major pushback from OPEC producers, from India, from China. and, in particular, the African countries. The African countries are really fed up. So if you go back to COP27 in Sharm el-Sheikh in Egypt and listen to the statements they made, they were really fed up.

And that's why we should not be surprised about what happened in Mali and Burkina Faso and the animosity of the French and the Europeans because it could be part of it. Yes, climate change is part of it, but climate change is working both ways in this case and the other way is they are really fed up with the interference of the europeans in their energy mix and their future yeah and so what are your thoughts on this bricks plus meeting uh in south africa i believe it's next week correct and so like does that will that build up to the cop 28 and we'll maybe building off each other uh definitely because the narrative

is being emphasized over and over so in term of the narrative it's going to be solidified in this case so what we're going to end up with a situation is where a more practical approach to climate change than the european approach what europeans basically misunderstood about climate change policies is that it takes time and they want to do what can be done in 150 years They want to do it in like 10, 15 years. There is no way you can do that. And you have democracies. People are being elected or reelected, and those politicians are worried about their re-election.

The other issue, and this is what Europeans fail to see, the number one spender on wind and solar in the world is China, number one. and other countries that come next they come in next with a very large margin with a very large difference so china is way ahead of everyone in spending yet for china to be carbon neutral based on this high spending being number one in the world it needs 211 years so to tell me they have to do it by 2060 does not make any sense why we are fooling ourselves with that india needs about 300 to 400 years and india is not as rich as china when it comes to money so we have serious issues with the narrative and the narrative failed we've seen it last year we've seen what happened in europe last year we've seen the return to coal we've seen the return to

would and people and if you look at the media it the coverage basically was extremely biased for example the living standards of the europeans went down in 2022 why major media sources are not emphasizing that there is a big difference between energy efficiency and energy conservation energy efficiency does not affect your living standards. You use more for less, and your living standards are not affected. But when energy conservation, when you apply energy conservation, your living standards are being affected. So you put the thermostat, for example, at 78 instead of 75. That's inconvenience. That's affected your living standards. So you have a serious problem here. And that's what we had in Europe.

We had a problem with decline in living standards. People must understand one issue, which is kind of – I get surprised every time a politician or a journalist talk about it. In Europe, the United States, India, and China, Japan, South Korea, those countries combined, they represent about 80% of global oil demand. In all those countries, if they double or triple renewable energy, that has no impact on oil demand. Why? Because renewable energy is used for power generation.

And in those countries, oil is rarely used for power generation. So to see a politician or a journalist basically saying, oh, we are going to increase the capacity of solar and wind. Therefore, we are going to reduce our demand for oil, and we don't want those Gulf countries to control us or OPEC. But it has nothing to do with oil in the first place. This is a lie. You look at the other piece of news.

I think this is a very important point. I wrote a few points here. Look at India, for example. The news yesterday or the day before yesterday that 20% of 20% of vehicles in the state of Karla in India are electric and then you see some comments yeah all demand is going to go down opaque countries are going down well most of them are two wheelers and three-wheelers they were already energy efficient they were already using very

little fuel anyway but this is not the issue the issue is many of those used to run on CNG or LPG. But most of them are on CNG, which means that we are moving from gas to electric. We are not moving from oil to electric. So why oil demand will decline? We have, probably I mentioned that on your previous show, one of the major organizations that produce reports on electric vehicles or renewable energy, they issued their annual report saying that this city i'm not going to name anything here but they said this mega city is switching all its buses to electric and that's going to reduce all demand by 60 000 barrels a day i contacted the the guy who is in charge i said look i just read your report and he said yeah

yeah we did this and i said forget about all the sophistication you are talking about in modeling Not a single bus run on diesel or gasoline in the city. All of them run on CNG. So how buses running on gas, that's natural gas, if you switch them to electric, how are they going to reduce oil demand by 60,000? The same issue with a certain state in China. They switched all their taxis.

Excuse me. They switched all their taxis and buses at the beginning to electric, and then they have a massive push for EV sales. And in 2008, I was the one who did the report on this state and the two cities, the two mega cities in it, because they were switching to CNG, and I was studying the impact of switching from gasoline and diesel to CNG what the impact of that the same cars and the same buses are being switched to electric so

the impact on oil is very limited yes they be reported as eating up from ultimate so these are some of the stories that are really hidden in the uh in the media uh the um uh This is, of course, one of the funny stories that we had last week, which is a young author attending a book fair who decided to go nuts because she found out that one of the sponsors is an investment firm that invests in oil and gas. And therefore, she decided to leave and pull her book out of the book fair because she cares about climate change. So she had a press conference, and people can see the picture on the web. She had a press conference, and she was reading from her phone and putting the microphone in the other, in the press conference, without her realizing that the phone is made from fossil fuel and the microphone is made from fossil fuel. So we have a true serious problem going forward, and those who claim that we are going to have a peak oil demand very soon, they are ignoring all those facts.

So we have a serious problem, and when we try to correct it, there is a problem here, Because as I mentioned in a tweet yesterday, we have hope and hype, and the difference is only one letter, one letter in the hope and hype. If you look at the outlooks for oil and gas in the future, government hope to do something. They plan to do something based on those hopes. And then the media take that and make the hype. We need some pragmatic people and pragmatic politicians to come in and say, you know what? This is nonsense.

We have to do this, this, this, this. We need pragmatic analysts to do that. But guess what? The moment you become pragmatic, you will be isolated. The moment you become pragmatic about these issues, your name will be dropped from conferences. Your name will be dropped from, even you will not be quoted in the same newspapers that you've been quoted before. Your name will be, the major, major TV networks will not call you anymore.

You have to conform to the hope versus hype and be somewhere in between to fit in. If you don't fit in, you are out. And this is a serious problem for people like me and others. luckily for me i am financially independent so i don't need anyone and i don't care but i've seen some friends who basically have to keep their mouth shut just because they need to make they need to make the living yeah it's really a pretty terrible situation we find ourselves in and before you mentioned the story of the author who didn't realize the hypocrisy of her protesting as she's holding two petroleum products in her hand that's like another thing i was going to dive into is

even if we do decrease demand for oil as a fuel source i think people really don't understand the petroleum byproducts that make our life possible like me looking at this screen talking through this mic is only made possible via petroleum byproducts and one of the jokes i One of my followers wrote a comment on Twitter. I think it was very funny because everyone was talking about this heat wave. As you know, the heat wave is worldwide. And everyone here in Texas, I mean, we really had terrible weather this summer. And he said, where is the impact of banning plastic straws?

Nothing. So I said, okay, we did this. And so he was just making fun of the fact that the issues are way bigger than what people are focusing on. Yeah, the impact is you use three paper straws for every one plastic straw you would have used. That's the biggest impact. It doesn't really have any effect on the weather. But that, I mean, what do you think is going to really force the pragmatic conversation that you believe needs to happen? Is it going to be pure pricing signals?

Energy is going to get too high, raw inputs. I mean, we've seen it in Europe, the issue basically that we've seen the actual change happening, but the rhetoric did not change. So you see the same politician who wants to open the North Sea for exploration, the same politician who keeps talking about climate change. So the rhetoric, basically, and this is kind of funny because it reminds me of those who are trying to be religious, but they sin. And the more they sin, the more they act religious. So those guys are the same. They want the energy supplies, but they feel they sin, so they give more lectures about climate change. yeah but like you said i mean particularly in europe this is having material effects on

the economies throughout that union i mean germany is in a recession i believe was announced yesterday or the day before that denmark's officially in a recession as well like this energy policy yes but you get to remember you get to remember one fact okay when it comes to climate change and the environment it is a religion people do not leave the religion or convert easily okay they have to go either through period a long period of studying which sometimes take years to convert or a major event that just make them get out of the whole religion so because it is a religion it's very hard to see people changing or converting but what it takes it seriously takes some

political leaders with kind of strong political leaders with guts let me put it this way where they go public and say you know what enough is enough we need to be practical about this we need a balance between energy policy and environmental policy we need to survive we want problem this this this this this where is the issue the issue is if you end up with energy crisis this winter a lot of people are going to die so yes if you believe that people will die from climate change 20 years 30 years 40 years from now but people are dying right now this year so what do you do and it is a fact and i'm going to repeat it twice so i won't be misunderstood on this last

winter in europe in the winter more people died from the energy crisis and energy shortages than COVID and more than the people in Ukraine. In the winter, again, I'm going to repeat that. In the last winter, more people died from energy shortages in Europe than the number of people who died from COVID or the number of people who died in Ukraine. Again, in the winter. That's, I mean, when you put it that way, it's pretty shocking.

And so when you talk about it's going to take politicians that have guts to really have a practical approach to the discussion around energy and the environment and the quote unquote climate crisis, which is more of a religion. Are there any politicians out there that you've seen who are talking in a logical way? Well, there are some. The problem is when they come in and they win the election, they come into a system. so they can make some changes but the changes will will remain uh limited and that's one of the problems we have but at the same time if the media itself is not going to flip and change attitude we have a serious problem uh those who follow me on twitter basically they already read our reports when we talked about how the media basically is playing the game with electric

vehicles if companies or auto manufacturers publish their quarterly reports and they have all the details in terms of sales and percentages and percentage growth so they have all the numbers and they are by law basically required to provide all those numbers like that what you see is you see the major media sources picking up the story and they report everything about the ICE vehicle. ICE stands for Internal Combustion Engine. You see all the numbers. They sold this many cars, and this represents this percentage of their sales, and the growth is 3%. When they come to electric vehicles, they report only percentage change. They don't report numbers. And we already collected a large number of evidence from

from various media sources around the world, not only in the United States, around the world, reporting everything about ICE. But once it comes to the electric vehicles, say, well, sales increased by 145 percent, but no numbers. Or sales increased by 150 percent, no numbers. But look, if they sold 1,000 vehicles only last quarter, now they sold 1500 you can see the percentage change it's large it's only 500 cars

but they don't want to put the number why because if they keep showing the percentages and they are high because we are starting from a low number some people are going to look at the news and say probably i am the only one who is buying not buying electric vehicle i need to buy one but the numbers are very small the same thing when it comes to coverage of renewable energy now I want to be clear for your audience here I want to be clear on one thing global energy demand is growing and been growing at a very high rate for decades and it will continue to do so we do need all energy sources. We do need solar. We do need wind. We do need all transportation technology and we do need electric vehicles and we do need hydrogen vehicles. We do need that. We need all

the technologies that improves the efficiency, whether in production or consumption. So we are not against renewable energy. We are not against electric vehicles or hydrogen vehicles. But what we are against basically is that idea of hope and hype. That's where the problem is. So I just want to clarify this point. We support solar, we support wind, we support electric vehicles, but we don't want the hype and we don't want the lies. Here is another one. Look, anyone who Google investment in renewable energy or anything about renewable energy, most of the reports focus on the capacity they don't focus on actual generation. So if you look at this summer, for example,

actual generation of wind in Texas is less than 10%, but they keep reporting capacity. Yeah, I was going to bring that up. And you've seen this crazy surge pricing in the intraday level. I mean, today I actually just retweeted. It looks like wind's not going to produce again today down in ERCOT. Correct. Correct. So the media keep reporting the increasing capacity and people think, wow, look at expansion and this and this and this. McKinsey, Wood McKinsey basically just published a report and we are going to talk about it in our daily energy report today.

they said that the despite all the hype and despite everything else the biggest employment in the energy sector basically is in oil and gas but you look at the media they keep talking about growth of employment in solar and wind yeah you got to compare on the absolutes there and going back to ercot and that's i think the media will overhype wind and solar in this winter if you look at the irkut charts every time wind has really failed at producing the generation compared to its overall capacity natural gas has really stepped up and been this sort of flexible load that's turned up when wind has really shit the bed but nobody's really uh giving credit to the natural gas within texas for for support

supporting the grid this summer which has seen all-time high demand obviously since you've seen uh a mass exodus of people out of cities like san francisco new york towards austin dallas houston um well we ended up with two and tesla and that tells a lot yeah and i mean in digging deeper into texas and more broadly the u.s and oil and gas production i mean that was the big headline this week is that it's becoming very clear that shale production is not going to be close to where people thought it may be and what in your opinion is driving that is it under investment over the last five years because of this crazy esg policy is it just bad luck in the patch not finding any gushers why is shale underperforming right now i don't think

it's underperforming i i think there is some uh um there is a narrative that's being pushed by certain groups trying to uh basically kind of talk about limited growth of shale this this this there are two facts here the first fact is the limited growth was predicted earlier but hitting a new record of production was predicted too and both of them are correct what those who are what i call narrative pushers uh are ignoring is this if any limitation let's say shield production peaks or it declines it's mostly going to affect the condensates part of it not the crude part of it so i won't be surprised if we cap shale just cap it let's say at 12.5 and that's it and that's the the peak that crude oil production

within it is going to increase why because companies will shift from certain regions and certain zones to drilling in areas where the api is lower than 45 so that's crude anything about 45 is condensate so what they don't realize is we have massive amount of condensates that being counted as crude and the decline is going to come from it why because those NGLs are only they bring only a portion of the revenues of oil sometimes like 40 to 50 percent of the oil so why company will go and drill for more of NGLs while they can go drill for oil and get 100 on that so i think there is a lot of confusion about this but i would like to move to a point that's very important and for the same discussion that we started the show with any person who supports

ukraine and anti-oil and gas at the same time they don't know where they stand seriously you You cannot have it put together. And the reason why, because the only reason why Europe is still together today and why Ukraine is still standing until today is the U.S. share revolution. Without the U.S. share revolution, the world would have been a completely different world today. We would have seen Europe split between supporters of Putin and supporters of the United States. Why?

It was the U.S. shale, gas, and oil that saved Europe. It was the U.S. shale and gas that saved Ukraine. I know some people are not going to like what I said, but this is a fact of life. Anyone who wants to prove me wrong, let's show it. Forty percent of the gas going to Europe right now is coming from the United States. A few years ago, it was zero. Zero. The U.S. was exporting next to zero.

In term of oil now we are we are exporting more than four million barrels a day we are one of the largest exporters of oil in the world and most of it is going to Europe and Guess what at a lower price because without it prices would have been way way way higher So the issue here is there is this political element to the industry that many of those who oppose the industry forget about. And they are enjoying the safety and the security in their countries because of it. And when I say this, I just want to mention a story without mentioning names.

When I was in Ohio, there was a group trying to gather signatures to shut down the nuclear plant near Toledo. And that group was a French group. Which is spinning back up their nuclear facilities. So they're trying to box everybody out of the nuclear market. I don't know. And I'm just showing when we talk about the politics of the political part of it, a lot of people forget that political part.

There was no way on earth that President Trump would reimpose sanctions on Iran and impose sanctions on Venezuela at the same time without the share revolution. Yeah. I mean, this goes back historically. I mean, coal, natural gas, oil, nuclear have all been in a narrative war. What was it? Natural gas, particularly that industry, really launched a propaganda campaign against nuclear to box it out as another cheap energy resource,

which is really unfortunate because, as you mentioned earlier, We should be using all of these energy sources, whether it's coal, natural gas, oil, wind, solar, nuclear. We really need to be leveraging it all to the best of our abilities. Absolutely. Absolutely. And one issue that we need to be aware of basically is it does not need to be shoved in our faces. And that applies to oil and gas too. I'm not talking about solar and wind. It just, we need, one issue, and this is related to electric vehicles too, if we look at technologies and their growth in the last 200 years, a very small percentage of all the inventions basically get to market and they become very successful.

But we have certain technologies that they get spread throughout the world, just like a forest fire. they just spread throughout the world despite all the borders and the tariffs and the taxation and the costumes etc and one of them basically are cars the refrigerators microwaves the stoves etc all of these things that they became widespread worldwide and if you look at all those technology that became successful including tvs and cell phones you find that there are some common elements in them and one of them is that they grew this way globally without government support that's number one so the government never paid the customer to tell him look go buy a tv go buy a phone they never did that okay number two they give a human more freedom

whether freedom of mobility or what any any way you look at it any of those technologies give a human more freedom. And all of them save time. Electric vehicles do not achieve that. Solar does not give me that. Wind does not give me that. They are there simply because they were forced by governments through subsidies and regulations. But in a free market, do we need them? Yes, definitely. Because there are always some areas in the world and some areas within states, et cetera, where they need this technology for various reasons. So they need solar, they need wind, but let us be a choice of the customer, not the choice of a politician who think that he will make the customer better off because he knows more about the customer than the

customer themselves. And the same thing for electric vehicles. We have a serious problem. Those who are comparing electric vehicles to movement from horse and carriage to cars, they are missing the point. Because moving from a horse and carriage to a car, that was a priceless development. Literally priceless. Moving from landline phone to smartphone that was priceless. And I can tell you, people who are my age and older, they can remember this, that you want to go somewhere, but you have a very important phone call you are waiting for, and then you get stranded at home. You cannot go, or you have to ask your father and mother to stay next to the phone just in case so-and-so called, because that's how the way it

works. Now you carry your smartphone with you, even if you are on the top of a mountain, you can make the phone call so it gives you more freedom and it saves you time yeah and digging into the negative externalities that come from these forced actions particularly in the energy sector by the government via subsidies and tax rebates uh i'm dealing with it right here like right above my computer the ocean is less than a quarter of a mile away down here in south new jersey And there's massive campaigns to stop the wind farms that they're trying to build off the coast right here. And it's really being driven by the fact that they started building these wind turbines out in the ocean and whales and dolphins started beaching. They started winding up dead on the shores because all the construction is messing with their sonar internal radars.

And it's funny every day. If I go off island and come on, there's a huge sign like stop the Cape May County wind project. It's killing whales and dolphins. And this is one example of the government trying to use top down central control to force actions on an economy, not really thinking about the negative externalities, whether it be a lack of reliable energy production or the death of an ecosystem because you didn't really think about what that would do. if you just come and plant these things down in the middle of the ocean. So think about it this way. Since 2008 until now, think of the number of solar companies that the government supported and went bankrupt. Recently, the electric bus company

that went bankrupt too, which President Biden himself basically was involved in. And it's all taxpayer money that's just evaporated, just gone. And you go back to that, I mean, the last administration that biden was a part of obama cylindra massive failure and with this bus company yeah you had kamala harris promising everybody that uh school bus fleets would be produced by this company that

went bankrupt within two years it's completely insane and that's i mean you're making a case for bitcoin this is why we bitcoin here in us it's because you give uh the free market back a monetary good that doesn't allow central banks and governments to print this money out of thin air to just throw it at these projects which are becoming glaring glaringly obvious that they're misallocating capital on a large scale um and that's part of the reason why i'm so fascinated about the intersection with bitcoin and energy not only from the mining perspective but from the monetary and capital allocation perspective is that we can finally force uh the free market back into people's lives and then on top of that really hinder the government's

ability to subsidize all this terrible investment they're making in the energy sector well i mean in theory what you said is absolutely correct the problem is they are going to regulate that in a way where they are going to drive everyone out and they're going to this is the problem do you have any hope that bitcoin can can get above that that hurdle get through that that i i don't think so because look i mean i'm going to use the russian example okay and this is extreme of course i understand it is an extreme but people jump from the windows how so things could happen well we'll see we'll see i'm a little bit more optimistic but uh besides that taking everything that we've discussed over the last 50 minutes into

a consideration like where do you see energy prices going the next year two years how is the landscape that we just described we published our oil market outlook in early january and in that outlook basically we made several calls luckily for us every single call was correct so far and i think it was one of the most credible outlooks in the market out there however in that outlook we failed to see a couple of things and because of this failure we were predicting that energy prices or oil prices will increase substantially especially in the fourth quarter of this year uh we've seen the increase but not substantial and we don't think it's going to be a substantial increase anymore we think that prices will go higher than what they are today

but they will be capped and what we failed to see in our outlook despite all the accuracies of other forecasts we failed to see two things first of all we fail to see that china is going to build uh its inventories and its strategic petroleum reserves we thought this will not happen this year but it happened and therefore they are going to use it to or they are using it right now as we speak to prevent price from increasing and therefore this large increase that we were predicting is not going to happen but there will be an increase and the second point we knew and we wrote about this in december that opec plus members are going to import oil from russia and they are going to import oil products from russia and that's going to mess up the

balances and to change things but we did not expect it will be this hot they said the imports from russia were way way higher than what they expected why this is important because in the summer those countries most of them are in hot climates they need additional power generation for cooling and that additional power generation mostly comes from fuel oil or diesel so they use their own and that affect exports and therefore prices go up and what happened now is instead of them making that fuel oil or diesel and reducing exports they are importing that from russia and therefore the the final impact on the market is way less than before so we fail to see those two trends but in general directionally speaking oil prices will increase above current

levels but we are not going to touch 100 simply because china is going to limit the price and that's why we always say in our report and or and in the tweets that i tweet that saudi arabia is going to set the floor in the oil market, and China is going to set the ceiling. For natural gas, we've already seen a large increase globally in the price, not in the United States, but globally, especially for LNG for various reasons. We have a decline in LNG production. We have the threat of a strike in Australia. And of course, we have usually the maintenance programs, etc., in various countries. We already finished most of them,

but they will come again. But the issue here is, here comes the winter. I will not be surprised if we hit another record, another price record for LNG. That's in the spot market, by the way. Simply, if we have

a couple of major hurricanes in the Gulf of Mexico, and then we end up with a cold winter, that will lead to a very large increase and LNG prices. And what happened is what we learned from 2022, that we've seen massive substitution among energy sources in a way that we never seen in a very, very long time. So you have a hot day. We talked about wind not operating on a hot day. And for those who do not

know when the weather is hot it is hot because there is no wind because if there was wind it won't be hot it's funny you're using logic here in us it's uh on a hot day when wind is not operating what you do is you demand natural gas as you mentioned earlier and because those peakers the the power plant that run on gas and to call them peakers and they demand a very very high price and prices in the spot market could go super high now it's very expensive for some companies to do that so what they do is they all of a sudden they increase their utilization of coal plants and reduce their utilization of gas because that's the only way they can save money so all of a sudden we started with wind we moved to natural gas now we move to coal so what we've

seen historically was we had rain, the summer rain in India and China, that flooded the coal mines. Now you cannot go to that, you cannot go from natural gas to coal, and natural gas prices go through the roof, and the only way you can manage is literally to end up with brownout or blackout. You have no other choice. So you go for blackout and brownout, you have all those factories that are recovering in China and they have all those back orders and they want to operate. What they do? They resort to private generation. What is private generation? Those are big massive generators like every generator the

size of a big room. And they run on what? Mostly diesel. Some of them run on LPG but that's liquefied petroleum gases. But most of them run on diesel. All of a sudden the demand for diesel goes up simply because it's hot and there is no wind to give you the generation. So you can see the process of the substitution among all of those. We've seen it before our eyes in 2022 in an unbelievable way. And this is going to be repeated. Yeah. We really, as a society, globally, need to dig into what is the optimal baseload for all these grids and then what do you decide to add on to that as supplements because as we mentioned as we see in texas this summer natural gas is really saving the texas grid uh we really need

to get away from our immersion to coal i think there's a lot of misconceptions around coal particularly being a dirty source but if you look into how the factories are constructed these days they're they're rather clean compared to the the coal power plants that existed a century ago And there's just a lot of fundamental misunderstanding in the average consumer about energy. And like you mentioned, the media and the politicians and even people at the higher echelons of capital allocation institutions really like to muddy the waters around the narrative, which is just extremely unfortunate because... I would like to just remember one fact about the impact of subsidies.

This happened last year in Scotland, and there was a wind farm. and that wind farm basically is heavily subsidized but it gets the subsidies only if it works so for some reason it stopped and what the operators did they brought in diesel the small diesel generators to make them spend why they did that because of the government subsidy if the government subsidy did not exact exist they would not have done that but they literally use diesel generators to spend those we are to spend those turbines so they can show they are working and they can get the uh the subsidy so the way i'm uh i'm trying to frame this is government subsidy and government

intervention in these things is the matter of all else and we have enough data and and enough evidence from around the world to show how bad the subsidies are and how they misallocate resources and they literally threw the society off of that track that it want to go on simply because the subsidies create all kind of things one of them that when you create a massive industry like the solar industry those the companies that went bankrupt what they do they take part of their subsidies and they direct that toward lobbyists lobbyists who will go to those politicians so they can maintain the subsidies and it's getting worse by the day especially when it comes to gm and ford and electric vehicles

yeah yeah it's a really parasitic system at the end of the day and it's again unfortunate for humanity because we can't have logical conversations about these very important topics and the water is muddied by subsidies lobbyist uh cultist religious zealots if you will um but i have hope i have hope i think people are beginning to wise up and i think the strongest driver of people waking up to the reality is pricing whether that's inflation um uh at the at the gas pump or at the grocery store people see these higher prices and they begin to ask questions what's going on here and energy is not the overall driving factor of consumer price inflation at the end of the day, but it's a strong driver. And once people see higher prices,

their grocery bill doubles, triples over the course of a few years, they begin to ask questions and become more open. And that's when the opportunity presents itself for individuals like you and I to say, hey, let's have an adult conversation about this. Here's what's really driving price inflation at the end of the day. You know what? The fear is that what you see in United States and Europe is going to be way way worse in Latin America and Africa and because of that because we if we in the west basically are talking like this and suffering from all these things imagine the suffering of those people and therefore this migration from Africa to Europe and from Latin America the United States is just going to get worse and worse over time

and what climate change cultists, basically, because within climate change, of course, we have a spectrum of people. I mean, we have some really nice logical group, but we have the cultists on the far left. What they don't realize is they want to support those migrants, and I support migration, by the way, but they want to support the migrants. At the same time, they want to fight climate change

and they want to fight the oil and gas industry without realizing the following, and i'm going to give you some numbers some shocking numbers remember when uh the administration brought in those tens of thousands of afghanis from afghanistan yep and and located them in texas and other states the moment they brought them into the united states the energy consumption of each family increased by 70 fold 70 fold and this is permanent it's not like if the guy does not find a job therefore they can cut it to 30 or go back to afghanistan no this is permanent that's it okay the guy who is migrating from central america to the united states the moment he is

in the united states his energy consumption increases by about 30 fold so you want to support immigration and climate change at once you have a conflict you have a serious problem here At the same time, if you look at Ukraine, we have millions of Ukrainians who went to Western Europe. The moment a Ukrainian arrives in Western Europe, his energy consumption increases by fourfold. So you want to support Ukraine but fight climate change at the same time? Think again. I'm not talking about not supporting Ukraine. I'm exposing the nonsense of the climate change arguments. in this case and i'm not denying climate change i'm not i i as as i said earlier we do need electric vehicles we need we need solar we don't we do need wind but we want to be logical about it

yeah no it's like you said the immigration problem is exacerbated by the climate hysterics trying to reduce energy consumption really the logical solution in my mind is just to help those countries pick them up from their pick themselves up from their bootstraps and help them build out reliable infrastructure where they live so we don't have this immigration problem yes they may have local government problems and governance problems but like as we've mentioned throughout this conversation increase energy production and more reliable electricity delivery increases the quality of life and so i think that's where you have to start is if you have a chaotic country whether it be in africa or latin america it's probably partly driven by the unreliability

of energy at the base layer of their economies and if you can simply provide them with reliable electricity a lot of those problems begin to fall to the wayside as people can coordinate and actually be productive throughout the economy you mentioned earlier energy and Bitcoin. I'll tell you a story. This happened yesterday. The president of Egypt, Abdel Fattah al-Sisi, said yesterday that the reason why Egypt is suffering from severe shortages of electricity is the shortage of dollar. Because they can't pay for it, simply? It looks like it. I think probably they are shifting the blame, but in general, we have shortage of dollars throughout Africa and probably if you look at Kenya in particular they they tried

their best basically to do something they couldn't and then they got some help from Saudi Arabia and the UAE where they told them okay I'll supply the diesel and gasoline and pay me six months later because they their currency just collapsed and they don't have dollars but in Egypt I mean this is a very powerful statement for the president to say that the shortages of dollars led to shortages of electricity. So how does Bitcoin play into this in your mind? I don't know.

Since he said this yesterday, I started thinking, but I have no clear idea on how this is going to work. And what's driving that shortage of dollars is Egypt doesn't have enough? No, basically, it was the Fed. It was the Fed with the policies

with the increasing interest rate. That's what it is. Yeah, they're pulling liquidity out of the market. Egypt doesn't have access to as much liquidity. And then on top of that, they probably don't have the exports to bring dollars in. Correct, correct. But this is kind of becoming a very common problem throughout the world, because even we go back, we started the show talking about India and the UAE. Remember, UAE is a rich country. India is a very big country. And yet, because of the shortage of dollar, they resorted to paying in local currency. Yeah. i'm gonna push back against your uh your bitcoin bearishness yes in the u.s and europe i believe that these superstructure governments will push back against bitcoin adoption but i think the last year since we last spoke there's been a lot of developments particularly around bitcoin mining

that really support the thesis that many bitcoiners have been running with for well over a decade which is that countries that aren't on the level of the united states and the european union uh china russia even are the most highly incentivized to acquire bitcoin as early as possible and we had uh we had it revealed earlier this year due to some bankruptcy filings that uh the sovereign wealth fund of bhutan got caught up in that they've been mining bitcoin since 2020 uh and so i think well yes even though the united states and europe may try to prevent their citizens from accessing bitcoin which i think is gonna be hard since that cat's sort of already out of the bag americans hold the most bitcoin in the world

uh you're gonna have these developments on the other side of the spectrum these smaller countries like bhutan uh abu dhabi uh one of their uh i believe it's one of their uh local wealth funds signed a partnership with marathon digital here in the united states to to mine bitcoin um russia obviously iran too iran like i do think the game theory and when you think about it too if they're i'm not sure how much credence i'll put behind the idea that the world's going to de-dollarize in the next few years i think that's going to be very hard but i do think via the weapon weaponization of the dollar um against russia over the last couple years has really began to have people thinking seriously about alternatives

to that system and obviously that's why the bricks plus nations are posturing like they may launch their own gold back and oil back currency whether or not that happens i'm a bit skeptical that they and pull it off but i do think the idea of an alternative to the dollar system has been seeded in people's minds around the world and they may not believe it's bitcoin right now but i do strongly believe at some point in the future it's going to be impossible not to recognize that this apolitical distributed monetary system is really the only solution again and in theory i am with you the only problem is in practice when you look at real life the real life is completely different we as you heard me before and I mentioned this on Twitter and other places I've done a lot

of field work on black markets especially in oil and I did it in several parts of the world and literally when you go to the black market until today the dollar is still the king you go to any mafia around the world they want dollars period so it's still even within the mafia basically it's still uh the dollar and still cash uh i had a kind of a discussion with one of the followers who got angry at me because i said that uh there are some payments made by India in cash to Russia and he gets really angry at that and the issue is you know if you are a law-abiding citizen with the mentality of the law is being there all day long you will never believe people are doing this in the

black market so it's very hard to convince a law-abiding citizen by the black market and what goes on but the fact is among those groups especially the mafia they seriously think that this system of whether bitcoin or anything else anything related to computers basically they think they can be spied on easily so they are scared to death so they would rather to get the cash literally in a private settings uh away from any technology so the fear of technology among those groups is becoming a barrier i'll concede that i can i can definitely see that being uh the case right now but as generation z and generation alpha grows up and i think there's going to be like a

multi-decade transition it'll take time and the last time we spoke you know it's something i completely agree with is the liquidity profile of bitcoin isn't anywhere near where it needs to be to facilitate the amount of trade that we'd like to think would happen on it like we still need the monetization process to to progress pretty significantly a couple orders of magnitude higher than where it is today probably um but yeah i do think it's uh i agree with you on the generational issues uh the problem is uh what the generation issues we end up with a situation where you have a generation who is very sophisticated when it comes to the it technology computers spyware anti-spyware etc all that stuff but they are young enough not to be in the position

of control and making laws yeah and there that's where the conflict becomes yeah the uh the genotocracy is really holding us back right now everybody's it's crazy the average age of your u.s politician is above 55 i believe 60 maybe even which is a shame but i do think the uh the stress particularly the economic stress that is beginning to be felt uh i mean i don't believe that anybody truly believes that cpi or inflation is 3.2 percent year on year i do believe the economic stress is going to push people to a point where they demand change and part of that change will be uh letting the younger generation take control of the levers in the in some regards i hope i'm right i don't want to hope i like to think that uh that's a different type of hope

yeah well not it's always a pleasure speaking with you um the and if you come here to north texas please drop by i will i'll be in dallas at some point this fall so i'll let you know All right. You are welcome to come in. You enjoyed the rest of your Thursday here. And again, thank you. I think your knowledge on international oil and gas markets and energy markets more broadly is very high signal. I just really appreciate you taking some time to educate our audience about what you're seeing right now.

Thank you. All right. Have a great day. That's all we got today, freaks. Peace and love. All right. Take care. Thank you.