WEBVTT - Do fossil fuels play a part in the transition? 0:00:05.519 --> 0:00:08.000 Yelda, Welcome to Shared Lunch, brought to you by Shares's. 0:00:08.080 --> 0:00:10.080 My name is Dan Brown Skill. I'll be your host today. 0:00:10.440 --> 0:00:13.920 We're joined by Andrew Jeffries, the chief executive of Echelon 0:00:14.000 --> 0:00:16.960 Resources Limited, to talk about being a fossil fuel company 0:00:16.960 --> 0:00:20.320 and how it fits into the global energy transition. Before 0:00:20.320 --> 0:00:22.120 we get started, here's some important info. 0:00:22.640 --> 0:00:25.280 Investing involves the risk you might lose the money you 0:00:25.320 --> 0:00:28.600 start with. We recommend talking to a licensed financial advisor. 0:00:29.320 --> 0:00:33.080 We also recommend reading product disclosure documents before deciding to invest. 0:00:33.400 --> 0:00:35.760 Everything you're about to see and here is current at 0:00:35.800 --> 0:00:36.680 the time of recording. 0:00:36.960 --> 0:00:38.400 Andrew, Hello, thank you for coming. 0:00:38.640 --> 0:00:40.879 Jan thank you very much for inviting me. 0:00:40.920 --> 0:00:43.080 Hey, I was having a look at your share register 0:00:43.120 --> 0:00:44.879 the other day and it looks to me like Sharesy's 0:00:44.960 --> 0:00:48.519 users are approximately your fourth largest shareholder collectively. Is that right? 0:00:48.600 --> 0:00:51.320 Yep, that's about right. And they're also quite an interactive 0:00:51.400 --> 0:00:54.720 shareholder I think in terms of people are actually watching, 0:00:55.000 --> 0:00:57.280 you know, watching things and buying and selling the shares. 0:00:57.320 --> 0:01:00.600 So we're here in Wellington. Until recently you were an 0:01:00.600 --> 0:01:04.399 INSIDEX listed company called New Zealand Oil and Gas. You're 0:01:04.440 --> 0:01:07.000 still headquartered here in Wellington, but I think in May 0:01:07.319 --> 0:01:09.960 you shifted the company to the Australian Stock Exchange and 0:01:10.040 --> 0:01:13.959 rebranded as ischelon. Can you talk us through what motivated 0:01:13.959 --> 0:01:17.280 those twin decisions. I assume they're related, and they are 0:01:17.319 --> 0:01:22.080 related in a way. The fact is the so there 0:01:22.120 --> 0:01:24.560 was a couple of things that drove the timing. One 0:01:24.600 --> 0:01:28.440 was that we looked to move to the AX because look, 0:01:28.520 --> 0:01:35.040 exchanges are places where capital comes together to invest in things. 0:01:36.440 --> 0:01:40.440 The enz X tends to be has been quite successful 0:01:40.440 --> 0:01:44.800 in things like zero you know is becoming is quite 0:01:44.840 --> 0:01:49.760 a tech exchange. The AX is very much a resource exchange. 0:01:50.640 --> 0:01:53.880 There's obviously quite a large capital pool in Australia with 0:01:53.960 --> 0:01:58.480 their superannuation system. They tend to have a lot of 0:01:58.560 --> 0:02:04.240 mining and expiation companies, so there's capital available and people. Also, 0:02:04.280 --> 0:02:07.640 there's analysts and people who sort of understand our industry. So, 0:02:07.800 --> 0:02:11.799 for example, in New Zealand, we had no comparable companies, 0:02:12.040 --> 0:02:15.160 so I was the CEO of the largest and smallest 0:02:15.200 --> 0:02:19.320 listed oil and gas explorer, which is great, it's quite 0:02:19.360 --> 0:02:22.680 a fun anecdote, but the reality is that in Australia, 0:02:22.680 --> 0:02:26.679 I've got around about sixty five comparable companies so there's 0:02:26.720 --> 0:02:28.480 actually a pool of people who. 0:02:28.800 --> 0:02:33.760 Have a better understanding of the oil and gas industry. 0:02:34.040 --> 0:02:37.280 So there are just advantages to sitting alongside similar companies. 0:02:37.400 --> 0:02:40.079 You could be compared to each other. Analysts that understand 0:02:40.080 --> 0:02:41.840 one will understand another. That kind of thing. 0:02:42.160 --> 0:02:45.040 So as we go through the energy transition, that transition 0:02:45.120 --> 0:02:47.960 is going to need a lot of capital, and I 0:02:48.000 --> 0:02:52.200 think that the resource market that is the ASX will 0:02:52.200 --> 0:02:55.120 be one of the markets that provides the capital that 0:02:55.160 --> 0:03:01.200 builds the projects that do the mining and processing that 0:03:01.320 --> 0:03:03.080 will build all the machines that are going to make 0:03:03.120 --> 0:03:05.840 the transition work. So you know, we want to be 0:03:06.040 --> 0:03:08.919 very much part of that part of that scene. As 0:03:08.919 --> 0:03:11.960 we'll come to around the role in the name echelon, 0:03:12.560 --> 0:03:16.280 so we're a very science based, engineering based company, got 0:03:16.280 --> 0:03:19.520 a lot of geologists. Echelon is a term that they 0:03:19.639 --> 0:03:23.680 use for things that we may in a size order, 0:03:24.080 --> 0:03:31.520 So things like mountains, fault blocks, formations, geological formations are 0:03:31.520 --> 0:03:35.000 all referred to as on echelon. So it's got a 0:03:35.640 --> 0:03:40.480 it resonates to that piece. It's also about to me, 0:03:40.600 --> 0:03:44.160 it's about the you know, where we're putting our focus 0:03:44.280 --> 0:03:47.120 in terms of looking at where those rocks are. So 0:03:47.160 --> 0:03:51.040 we're looking at markets where we see that there will 0:03:51.080 --> 0:03:56.640 be demand growth, that there's a strong appetite for hydrocarbons, 0:03:58.360 --> 0:04:01.800 and so we're putting our putting our fit into those areas. 0:04:02.080 --> 0:04:06.520 The next thing is it's our values we like to look. 0:04:06.560 --> 0:04:12.640 We have a pretty rigorous scientific team. It's not huge, 0:04:12.640 --> 0:04:16.360 we're not a big organization. We've got twenty people, but 0:04:16.480 --> 0:04:19.599 we put some real rigor into our science, and we 0:04:19.760 --> 0:04:23.920 have some very robust and experienced engineers as well. So 0:04:23.960 --> 0:04:26.400 we feel that we're in an operational in terms of 0:04:26.440 --> 0:04:31.120 the experience, and certainly, having worked globally and I have 0:04:31.200 --> 0:04:34.400 worked with super majors and the next step down, next 0:04:34.480 --> 0:04:38.240 level down companies, I don't think I have ever had 0:04:38.680 --> 0:04:43.480 as experienced and as motivated team as I've got here. 0:04:44.480 --> 0:04:47.680 You mentioned in there about wanting to be more focused 0:04:47.720 --> 0:04:50.280 on the markets where there is more demand and more 0:04:50.320 --> 0:04:52.679 work to do. There's been a lot of talk recently 0:04:52.760 --> 0:04:56.479 about how New Zealand labor government banned oil and gas 0:04:56.600 --> 0:04:59.400 exploration in twenty eighteen, and it seems like there's been 0:04:59.400 --> 0:05:01.400 a sense from and he's like yours, that there's not 0:05:01.520 --> 0:05:04.120 that much work for you to do here. In New Zealand. 0:05:04.200 --> 0:05:07.120 Now is that the case and was that a factor 0:05:07.360 --> 0:05:07.760 in the move? 0:05:08.680 --> 0:05:12.240 Well, there's there's a couple of different sides to that. 0:05:12.320 --> 0:05:14.400 On the one side, there is certainly a lot of 0:05:14.440 --> 0:05:20.200 prospectivity in New Zealand. New Zealand has been underappreciated as 0:05:20.240 --> 0:05:24.000 an exploration venue, mainly because it's what we call a 0:05:24.000 --> 0:05:24.880 gassy province. 0:05:26.360 --> 0:05:29.320 It doesn't sound good, Well, it's a gassy province. 0:05:29.320 --> 0:05:31.000 In the past that wasn't good because it was a 0:05:31.000 --> 0:05:33.719 long way from things and it was predominantly gas that 0:05:33.800 --> 0:05:37.600 you found. So Maui was a great case in point. 0:05:37.640 --> 0:05:39.480 It was at the time of its discovery it was 0:05:39.520 --> 0:05:44.000 the world's largest offshore gas field, but nobody really knew 0:05:44.040 --> 0:05:46.920 what to do with it, and it took a decade 0:05:47.200 --> 0:05:50.040 or so. I think it was discovered, I think in 0:05:50.080 --> 0:05:52.440 about sixty eight, and it was about the end of 0:05:52.480 --> 0:05:55.479 the I think it was about nineteen eighty that it 0:05:55.560 --> 0:05:56.680 actually produced. 0:05:57.279 --> 0:05:58.440 People still wanted oil back. 0:05:58.480 --> 0:06:02.040 People still wanted oil back then it's much easier to transport. Well, 0:06:02.160 --> 0:06:08.960 the world's moved on, and now actually the world is 0:06:09.240 --> 0:06:12.680 keen on gas and a lot of countries are trying 0:06:12.720 --> 0:06:18.240 to reduce their use of coal, in particular by utilizing gas, 0:06:18.480 --> 0:06:21.520 so it's actually a being a gassy province is no 0:06:21.600 --> 0:06:27.599 longer a bad thing. So we've got twenty one sedimentary 0:06:27.600 --> 0:06:30.799 basins in New Zealand. New Zealand's the fifth largest continental 0:06:30.839 --> 0:06:35.240 mass in the world. It's most of it's underwater. We've 0:06:35.240 --> 0:06:40.440 got a huge continental area and of those twenty one basins, 0:06:40.680 --> 0:06:48.200 we've had wells drilled in five and four of them 0:06:48.279 --> 0:06:53.000 have had hydrocarbons in them. Now you say, well, you've 0:06:53.080 --> 0:06:55.720 drilled those basins and you haven't found anything. It took 0:06:56.920 --> 0:07:00.160 thirty eight wells to find the North Sea. And think 0:07:00.160 --> 0:07:01.680 you would have a hard time putting a well in 0:07:01.720 --> 0:07:04.560 the North Sea without hitting something when you look at it. 0:07:04.600 --> 0:07:10.360 But the reality is that exploration is a numbers game 0:07:10.680 --> 0:07:14.240 and you do end up with a lot of unsuccessful 0:07:14.440 --> 0:07:17.760 wells before you get success. So there is prospectivity. New 0:07:17.840 --> 0:07:21.280 Zealand is very under explored. Even the Taranaki Basin is 0:07:21.360 --> 0:07:28.320 under explored in global terms. The other basins Canterbury Great 0:07:28.320 --> 0:07:32.040 South Basin even more so. They've barely been scratched, So 0:07:32.080 --> 0:07:37.120 there is prospectivity there. On the flip side, it's the 0:07:37.200 --> 0:07:41.920 oil and gas industry is like any heavy industry, is 0:07:41.960 --> 0:07:45.520 not property development. We do not come in and do 0:07:45.600 --> 0:07:49.000 something and sell it on and make a big make 0:07:49.040 --> 0:07:53.160 big bucks and with not a care. We come in 0:07:53.440 --> 0:07:57.800 and you become involved in a country. You spend tens 0:07:57.800 --> 0:08:03.080 of millions of dollars obtaining seismic to spend hundreds of 0:08:03.080 --> 0:08:06.280 millions of dollars doing wells, most of which are going 0:08:06.360 --> 0:08:10.880 to be unsuccessful. To spend billions and billions of dollars 0:08:11.280 --> 0:08:17.040 developing infrastructure to then produce those hydrocarbons and to sell 0:08:17.080 --> 0:08:24.040 them all at the same time as with the government 0:08:24.120 --> 0:08:28.200 owning the resource. So at no time does the does 0:08:28.240 --> 0:08:30.400 your oil and gas company own the resource. It's actually 0:08:30.480 --> 0:08:34.000 the country owns the resource. It can't be moved. You 0:08:34.040 --> 0:08:36.920 can't offshore it because it's once you know it is 0:08:36.960 --> 0:08:41.800 where it is. So you then develop a you know, 0:08:41.840 --> 0:08:47.040 you develop a multi decade or relationship with the government 0:08:47.080 --> 0:08:50.640 and with a country, and you know that sort of 0:08:50.720 --> 0:08:53.760 thing requires a lot of certainty. So for investors to 0:08:53.800 --> 0:08:56.320 come in and put the money up to do the 0:08:56.360 --> 0:09:01.760 expiration requires certainty. So the the and I think that's 0:09:02.000 --> 0:09:07.480 very long answer to your question. But the offshore ban, 0:09:08.320 --> 0:09:12.120 while yeah, at the time not a lot of wells 0:09:12.120 --> 0:09:14.200 had been were being drilled. We just had a big 0:09:14.800 --> 0:09:18.360 price crash in the twenty fifteen, so not a lot 0:09:18.400 --> 0:09:21.920 of wells were being drilled. The reality was that it 0:09:21.960 --> 0:09:24.320 was like putting a big signpost in your front lawn 0:09:24.440 --> 0:09:28.520 saying bugger off, we're not interested in having you here. 0:09:30.200 --> 0:09:34.520 What then unfolded so and we knew about this, We 0:09:34.559 --> 0:09:38.280 had experience of this. We had a block off Canterbury 0:09:38.920 --> 0:09:41.440 that had a prospect, the Bark Prospect that we did 0:09:41.480 --> 0:09:48.080 a report on public report on showing the impact that 0:09:48.120 --> 0:09:52.119 it would have, which was several thousand jobs export industry. 0:09:53.760 --> 0:09:56.600 You would have got all the southern dairies off coal, 0:09:58.160 --> 0:10:00.000 you know, it would have been a You would have 0:10:00.040 --> 0:10:03.560 produced around about a billion dollars a year in tax revenue, 0:10:03.600 --> 0:10:11.120 so about enough to run a DHB. We had that block. 0:10:11.600 --> 0:10:14.800 We were lining up with some international partners to come 0:10:14.840 --> 0:10:17.240 and get that. One of those wells stuck in it, 0:10:17.920 --> 0:10:22.079 and within a week those international partners have gone and 0:10:22.200 --> 0:10:25.240 they have not they are not coming back. So if 0:10:25.280 --> 0:10:26.120 they haven't come back at the. 0:10:26.080 --> 0:10:28.560 Point, so you did have permission to explore there and 0:10:28.600 --> 0:10:29.120 work there. 0:10:29.679 --> 0:10:31.720 Even though we did have we had a we were 0:10:31.760 --> 0:10:34.840 coming up to a block decision and the you know 0:10:35.000 --> 0:10:38.880 there just wasn't wasn't a great deal. Companies can look through, 0:10:39.520 --> 0:10:42.600 you know, if they see a government setting that says 0:10:42.720 --> 0:10:45.080 we don't want you around, they can see through that. 0:10:45.120 --> 0:10:46.960 They can go and spend that hundred million dollars on 0:10:47.000 --> 0:10:49.679 an exploration. Well, but then you've got to develop, You've 0:10:49.720 --> 0:10:52.400 got that long relationship you've got to have with the country, 0:10:53.000 --> 0:10:56.559 and if you're not welcome, well you're not welcome. So 0:10:56.559 --> 0:10:59.800 so there is a Look, it's been very well, you know, 0:10:59.800 --> 0:11:03.520 it's it's been great to see the offshore ban reversed. 0:11:04.520 --> 0:11:08.360 The problem is that now with the Labor government saying 0:11:08.400 --> 0:11:12.079 they're just going to whack it back in again. You know, 0:11:12.160 --> 0:11:15.040 what do you do as an international investor, what do 0:11:15.080 --> 0:11:17.200 you do? Will you probably say I'm going to go 0:11:17.200 --> 0:11:21.240 and spend my money somewhere else. So interestingly enough, at 0:11:21.240 --> 0:11:25.240 the moment, the country with the highest offshore capital spend 0:11:25.320 --> 0:11:29.240 in the next this coming year will be Norway, which 0:11:29.280 --> 0:11:34.719 has a very welcoming exploration regime. Look, it's got very 0:11:34.760 --> 0:11:38.959 high tax, it's quite prospective place, so people do explore 0:11:39.000 --> 0:11:42.640 and find things. When they produce, they actually have a 0:11:42.960 --> 0:11:46.760 very high tax regime, but companies don't mind that because 0:11:47.160 --> 0:11:51.480 the risky part is the expiration. So the expiration is 0:11:52.600 --> 0:11:55.840 supported very strongly by the Norwegian government and has been 0:11:55.880 --> 0:11:59.720 for decades. So they've had a very stable regime similar too. 0:12:00.320 --> 0:12:02.560 Up until the offshore band. We would go around the 0:12:02.559 --> 0:12:05.719 world and say to people how similar the Norwegian and 0:12:05.800 --> 0:12:09.760 the New Zealand regime were in many ways in terms 0:12:09.800 --> 0:12:15.439 of stability. So yeah, it's a it's a difficult time 0:12:15.440 --> 0:12:17.600 and it's one of the reasons why we've also looked 0:12:17.600 --> 0:12:21.160 at and invested outside of New Zealand. 0:12:21.320 --> 0:12:23.800 What would it take to bring you back? 0:12:24.960 --> 0:12:28.480 Look, Norway is a pretty good example, you know, there 0:12:28.600 --> 0:12:34.600 is a The Norwegian government actually do support exploration quite strongly, 0:12:35.920 --> 0:12:39.520 not just in terms of waving a flag and you know, 0:12:39.679 --> 0:12:43.400 buying you buying lunches or or whatever. You know, it's real, 0:12:43.880 --> 0:12:49.680 it's real inducements to do exploration and I think. 0:12:49.880 --> 0:12:51.680 Support it across the political spectrum. 0:12:51.840 --> 0:12:54.320 It does appear to be because we've had green governments 0:12:54.360 --> 0:12:57.719 and they still you know, they still support provide the 0:12:57.760 --> 0:13:02.400 same support. Their regime has not changed over the decades. 0:13:03.520 --> 0:13:07.239 The UK has a very similar you know, the geology 0:13:07.280 --> 0:13:14.720 doesn't sort of take any regard to geographical country boundaries. 0:13:15.240 --> 0:13:17.120 The geology is the same on the UK side of 0:13:17.120 --> 0:13:20.559 the North Sea. The UK over the last thirty years 0:13:20.559 --> 0:13:25.000 has played around with its tax system endlessly and they 0:13:25.400 --> 0:13:29.520 there's virtually no spend in the UK or expiration in 0:13:29.559 --> 0:13:33.760 the next year. So you've got Norway biggest spend ever 0:13:34.480 --> 0:13:38.160 and the UK with virtually none, right next to each other. 0:13:38.280 --> 0:13:42.559 Same geology, and that's just down to regulatory just down 0:13:42.600 --> 0:13:43.400 to regular tests. 0:13:43.520 --> 0:13:47.640 What you can explore, which parties support what yep? Okay, 0:13:48.920 --> 0:13:51.120 if you if the band hadn't been put in place, 0:13:51.600 --> 0:13:54.360 do you think you would have new wells up and running, 0:13:54.400 --> 0:13:56.760 a new site up and running today? What might an 0:13:56.800 --> 0:13:58.040 alternate reality look like? 0:13:58.600 --> 0:14:01.000 I think, Look, I think there is certainly one, at 0:14:01.080 --> 0:14:05.920 least I know of one and probably two prospects that 0:14:05.920 --> 0:14:09.360 would have been drilled. Would they have been online now, 0:14:10.240 --> 0:14:12.520 Probably not. You need quite a lot of infrastructure to 0:14:12.520 --> 0:14:15.840 put them online. Would they have been six years further 0:14:15.880 --> 0:14:21.640 down the track? Absolutely, So it's a game where you've 0:14:21.640 --> 0:14:24.280 got the oil and gas expiration game is a game 0:14:24.280 --> 0:14:27.160 where you've got to run to stand still, So you've 0:14:27.200 --> 0:14:29.920 always got to be drilling more wells because it's a 0:14:29.960 --> 0:14:35.160 depleting industry. I know, when I first embarked on my 0:14:35.240 --> 0:14:39.520 career in the early nineties in oil and gas, I 0:14:40.000 --> 0:14:42.040 had a lot of people say to me, well, we'll 0:14:42.120 --> 0:14:48.880 run out in two thousand and it didn't. You know, 0:14:49.160 --> 0:14:52.000 there's and I would imagine a lot of people. Even 0:14:52.000 --> 0:14:54.840 more people are probably getting the same message now. And 0:14:54.880 --> 0:14:58.160 I think we'll come to it potentially later on, but 0:14:58.320 --> 0:15:01.760 I think there is a large you know, we do 0:15:01.880 --> 0:15:05.600 need oil and gas in the system, gas in particular 0:15:05.720 --> 0:15:06.560 through the transition. 0:15:07.360 --> 0:15:08.720 Yeah, so I really wanted to ask you about this, 0:15:08.760 --> 0:15:11.120 and I think lots of OL viewers will be interested 0:15:11.120 --> 0:15:12.720 in this as well. Obviously lots of that are invested 0:15:12.760 --> 0:15:14.480 in you. But another thing shares these hears from its 0:15:14.520 --> 0:15:16.560 investors all the time is that they're really interested in 0:15:16.760 --> 0:15:20.640 ESG and impact investing. That's like a very popular genre. 0:15:22.000 --> 0:15:25.120 So it is interesting. I think being a fossil fuel company, 0:15:25.320 --> 0:15:27.680 you provide a service. People need that service, society needs 0:15:27.680 --> 0:15:31.400 that service. But perhaps sometimes you're painted as the villain. 0:15:31.600 --> 0:15:34.120 And you know, just last week, the UN was two 0:15:34.120 --> 0:15:36.880 weeks ago, maybe the UN Secretary General was in New 0:15:36.960 --> 0:15:39.480 Zealand and went on to the Pacific and people asked 0:15:39.520 --> 0:15:43.080 him about the ban of oil and gas exploration reversal, 0:15:43.360 --> 0:15:45.840 and he said, the only thing I can tell you 0:15:45.960 --> 0:15:48.000 is that any oil and gas that will be discovered 0:15:48.000 --> 0:15:50.960 from now, I am absolutely sure it will never be used. 0:15:51.560 --> 0:15:54.240 You're exploring new fields. You'd like to explore new fields. 0:15:54.400 --> 0:15:57.120 What is the UN Secretary General got wrong there? Why 0:15:57.120 --> 0:16:00.600 do people have this view when you have quite a 0:16:00.640 --> 0:16:01.320 different one. 0:16:01.600 --> 0:16:07.400 Yeah, Look, so there is notionally there are enough oil 0:16:07.440 --> 0:16:11.880 reserves if we you know, let's talk to the oil 0:16:11.960 --> 0:16:14.560 side of the story. First oil reserves in the world 0:16:14.680 --> 0:16:19.440 to meet potential future demand. Eighty percent of those oil 0:16:19.480 --> 0:16:25.200 reserves are in Venezuelan and bitchumen and Canadian oil sands. Now, 0:16:25.280 --> 0:16:29.120 both those resources are going to be very energy intensive 0:16:29.360 --> 0:16:35.560 and environmentally intensive to develop. So my question to people 0:16:35.720 --> 0:16:40.240 is is that really so assuming that you're happy to 0:16:40.280 --> 0:16:42.440 be covered by that the oil reserves are covered, we 0:16:42.480 --> 0:16:46.160 don't have to discover anymore. Are you happy that we 0:16:47.560 --> 0:16:50.560 produce those reserves because that's what you're going to have 0:16:50.600 --> 0:16:53.920 to be relying on, and that's going to be producing 0:16:53.960 --> 0:16:57.000 a lot more CO two because ultimately all of that 0:16:57.160 --> 0:17:00.440 energy that comes for processing has to come from from 0:17:00.480 --> 0:17:08.160 burning things at the temperatures that you need, and it's 0:17:08.200 --> 0:17:11.639 going to be very expensive oil so versus so. To 0:17:11.680 --> 0:17:14.199 put that into perspective, there's a thing called the energy 0:17:14.280 --> 0:17:17.160 return on investment for a barrel of oil. So that's 0:17:17.680 --> 0:17:20.600 how many barrels of oil you get out for every 0:17:20.640 --> 0:17:23.719 barrel of oil and energy that you put in. So 0:17:24.240 --> 0:17:28.480 and oil sands will give you and Venezuelan bitchmen will 0:17:28.480 --> 0:17:32.480 give you around about four or five barrels of oil 0:17:32.480 --> 0:17:37.439 out for every barrel of oil invested. Offshore oil and 0:17:37.520 --> 0:17:42.159 gas will give you around about somewhere between forty and 0:17:42.440 --> 0:17:45.399 eighty barrels of oil for every barrel of oil of 0:17:45.560 --> 0:17:46.280 energy invested. 0:17:46.440 --> 0:17:48.000 So is it fair to say where people are looking 0:17:48.000 --> 0:17:51.680 for oil, they're not necessarily looking for more oil net, 0:17:51.920 --> 0:17:53.440 they're looking for more efficient oil. 0:17:53.680 --> 0:17:55.239 To be honest, I would like to see a lot 0:17:55.280 --> 0:17:58.120 of the Venezuelan bitchmen and a lot of the Canadian 0:17:58.160 --> 0:18:00.520 oil sands stay right where they are. 0:18:00.640 --> 0:18:03.119 Because they're just going to have more emissions associated with 0:18:03.160 --> 0:18:05.959 them perl correct, are more efficient well correct, And then 0:18:06.000 --> 0:18:08.719 I guess going back to that idea of displacing dirtier energy, 0:18:08.960 --> 0:18:12.359 it's better that that is natural gas than it is 0:18:12.520 --> 0:18:16.320 coal or correct a diesel, which we briefly were burning 0:18:16.320 --> 0:18:19.120 in New Zealand the other day just some people's horror. 0:18:19.080 --> 0:18:23.359 And we are mostly burning coal. So look the So 0:18:23.520 --> 0:18:28.600 for the EV owners who are really wanting not to burn, 0:18:29.080 --> 0:18:34.560 not to produce emissions, they really should. Transpower's got a 0:18:34.600 --> 0:18:40.920 fantastic site that tells you at any given time in 0:18:40.960 --> 0:18:44.840 the day, what's producing the power. So if the coal 0:18:44.880 --> 0:18:49.560 fired power station is running, the reality is that you 0:18:49.680 --> 0:18:51.560 have a choice over when you plug your battery in. 0:18:52.280 --> 0:18:54.680 If you plug an in moll of power coal fired 0:18:54.720 --> 0:18:58.280 power stations running, you are the reason the coal fired 0:18:58.320 --> 0:19:01.440 power stations running. So those all of those electrons you're producing, 0:19:01.440 --> 0:19:03.959 it doesn't matter whether who you who you buy your 0:19:03.960 --> 0:19:07.240 power from. All the electrons that you're using are coming 0:19:07.640 --> 0:19:10.719 effectively coming from that coal fired power station. Because you 0:19:10.760 --> 0:19:11.960 are the marginal user. 0:19:13.320 --> 0:19:15.320 You're effectively running your tiesler on coal. 0:19:15.600 --> 0:19:18.080 You are effectively running the Tesla on coal, which is 0:19:18.320 --> 0:19:20.960 look and a lot of people if that's really the reason, 0:19:22.000 --> 0:19:23.280 have a have a bit of a look at that 0:19:23.320 --> 0:19:25.840 Transpower up and you can you can sort of time 0:19:25.880 --> 0:19:27.840 when you're when you're actually plugging in. 0:19:27.840 --> 0:19:29.840 Because a lot of the time, a lot of the time, 0:19:29.840 --> 0:19:30.760 we're not burning coal. 0:19:31.080 --> 0:19:34.359 At the moment with low lie hydro lake sets, unfortunately 0:19:34.400 --> 0:19:38.040 we're burning coal most of the time. But you're absolutely right, 0:19:38.080 --> 0:19:44.679 in normal hydrological year, we are incredibly renewable. 0:19:45.240 --> 0:19:49.160 I think you make a good case for exploration finding 0:19:50.320 --> 0:19:55.000 more more efficient forms of fossil fuels. But let me 0:19:55.040 --> 0:19:57.200 push back on that a little bit, because every time 0:19:57.240 --> 0:20:00.480 you find a more efficient well with cheaper, cleaner energy, 0:20:01.920 --> 0:20:05.880 that makes burning fossil fuels cheaper and cleaner, and therefore 0:20:05.920 --> 0:20:09.000 like reduces the incentive to invest in these big batteries 0:20:09.000 --> 0:20:10.960 that the tech's not quite there yet, but maybe people 0:20:10.960 --> 0:20:12.960 would invest more in the tech. I think some of 0:20:13.000 --> 0:20:15.080 the idea of the oil and gas ban was not 0:20:15.560 --> 0:20:17.520 that we don't need gas, but that by banning it, 0:20:17.560 --> 0:20:20.560 we would fast track the development of other technologies. Now 0:20:20.560 --> 0:20:22.560 that's obviously maybe not the smartest thing to do as 0:20:22.560 --> 0:20:25.800 a tiny country that isn't capable of developing those technologies. 0:20:25.800 --> 0:20:29.480 But on a global network scale, if you keep finding cheaper, 0:20:29.560 --> 0:20:32.600 more efficient forms of fossil fuels, won't that keep us 0:20:32.640 --> 0:20:35.200 on them for longer and delay the transition. 0:20:36.880 --> 0:20:42.000 A Look, it's a very good point, Dan, and I 0:20:42.200 --> 0:20:49.080 think generally, in as humans have moved forward and not 0:20:49.200 --> 0:20:53.119 for yet, we are part of a very privileged group 0:20:53.400 --> 0:20:55.920 who enjoy a Western standard of living. There's a couple 0:20:55.920 --> 0:20:58.280 of billion people who don't have any any you know, 0:20:58.280 --> 0:21:02.280 who were cooking using stuff powered by dung or charcoal, 0:21:03.640 --> 0:21:07.880 which causes a lot of health problems as well as 0:21:08.040 --> 0:21:12.280 probably not being very efficient the you know. So we're 0:21:12.720 --> 0:21:16.440 speaking from that. From that end of things, human progress 0:21:16.440 --> 0:21:19.639 has generally been when things have gotten cheaper and better. 0:21:20.480 --> 0:21:23.880 So I'm very happy. Look, I will be ecstatic if 0:21:24.880 --> 0:21:27.600 technology comes along that puts me out of a job. 0:21:28.080 --> 0:21:32.520 I'm very happy all those folks in those startups that 0:21:32.560 --> 0:21:37.840 are developing fusion power or better batteries. You know, I 0:21:38.400 --> 0:21:41.879 am very happy bring it on, because I think that 0:21:41.960 --> 0:21:47.679 will be a really positive development for humanity. But you know, 0:21:47.960 --> 0:21:53.680 we shouldn't be pushing up the price of things simply 0:21:54.119 --> 0:21:59.640 to try to stimulate something that's you know, that's that's 0:21:59.640 --> 0:22:03.119 not You could do it more effectively, and one of 0:22:03.160 --> 0:22:06.119 the most effective ways of doing it would be to 0:22:06.240 --> 0:22:10.320 put a global price on carbon. You have, full stop. 0:22:10.400 --> 0:22:12.359 If we could have a global price on carbon. That 0:22:12.400 --> 0:22:16.480 would be and then everybody or governments would then say, look, 0:22:16.480 --> 0:22:19.200 we'll put the global price on carbon and will stop 0:22:19.240 --> 0:22:23.240 stuffing around with all the other settings. That would be 0:22:23.440 --> 0:22:27.120 phenomenal and we would embrace that as a I know 0:22:27.240 --> 0:22:30.320 most of the oil and gas industry folks that I 0:22:30.359 --> 0:22:32.879 talked to would absolutely love that because it would give 0:22:32.920 --> 0:22:38.119 you certainty, it would give a level playing field, you know, 0:22:38.200 --> 0:22:41.200 it would be it would be a really positive, positive thing. 0:22:42.200 --> 0:22:45.760 But saying that you will restrict the world from having 0:22:45.800 --> 0:22:49.800 access to a resource that they actually need and you 0:22:49.800 --> 0:22:54.359 will push up the world's prices for energy is a 0:22:54.359 --> 0:22:56.640 pretty hard thing to do, particularly to the people who 0:22:57.359 --> 0:22:59.879 you know, it is the poorest people who end up 0:23:00.400 --> 0:23:03.480 bearing the bearing the problem, which is. 0:23:03.560 --> 0:23:05.720 I guess you know what. We are to a certain 0:23:05.760 --> 0:23:08.879 degree witnessing here in New Zealand where we tried to 0:23:08.920 --> 0:23:12.560 push gas out of the system. It didn't work. We 0:23:12.640 --> 0:23:15.080 have some manufacturers shutting down. We're bringing it back into 0:23:15.080 --> 0:23:20.440 the system. Ultimately, we tried to make it move faster, 0:23:20.560 --> 0:23:23.160 we raise prices, but it didn't end up working. That's 0:23:23.160 --> 0:23:24.800 the sort of thing you're thinking about there, yep. 0:23:24.960 --> 0:23:26.800 And look, it's not it's not this is not a 0:23:26.840 --> 0:23:31.119 New Zealand a New Zealand thing. Australia has done very 0:23:31.200 --> 0:23:33.160 much the same thing on the East Coast of Australia. 0:23:33.200 --> 0:23:36.560 You're saying the same, you know, the same argument play out, 0:23:37.760 --> 0:23:40.760 and that will that is impacting their energy prices quite 0:23:40.760 --> 0:23:44.600 a lot as well. Now we happen to be you 0:23:44.600 --> 0:23:48.320 you know, you could argue that could be accused of 0:23:48.400 --> 0:23:52.760 profiteering from that by continuing by we've upped our investment 0:23:52.800 --> 0:23:57.040 in Central Australia, which is gas that's feeding into that 0:23:57.400 --> 0:24:00.679 East Coast market, feeds into the Northern term market, but 0:24:00.720 --> 0:24:03.919 also the East Coast market at the same time that 0:24:04.040 --> 0:24:06.640 is allowing us to drill more wells. We will try, 0:24:06.920 --> 0:24:09.040 you know, so we're trying to bring on more supply 0:24:09.960 --> 0:24:13.040 to meet that demand because the demand really has to 0:24:13.119 --> 0:24:16.360 be met otherwise you will shed demand and unfortunately you'll 0:24:16.400 --> 0:24:18.919 shed the people. It'll be the people who can't afford 0:24:18.920 --> 0:24:23.880