WEBVTT - Biden to Release U.S. Oil Reserves 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.680 plus technology, politics, economics, all partnising the power of Business 0:00:13.680 --> 0:00:17.160 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.440 analysts in more than twenty countries. You can download Bloomberg 0:00:20.440 --> 0:00:23.479 Business Week and iTunes, SoundCloud, or Bloomberg dot Com. You 0:00:23.480 --> 0:00:25.439 can also listen to our radio show at two pm 0:00:25.440 --> 0:00:28.400 Eastern Time on Bloomberg Radio or watch us on YouTube 0:00:28.400 --> 0:00:31.720 search Bloomberg Global News. Right now, we're gonna head out 0:00:31.760 --> 0:00:36.559 to Davidson, North Carolina covers some of the days COVID headlines, 0:00:36.600 --> 0:00:39.440 which includes deaths in Europe from COVID nineteen expected to 0:00:39.440 --> 0:00:42.880 reach two point two million by March based on current trends. 0:00:42.880 --> 0:00:45.159 That's coming from the World Health Organization putting out a 0:00:45.200 --> 0:00:49.080 warning as I also pushed for more vaccine nation uh Meantime, 0:00:49.120 --> 0:00:52.000 Germany's top health official reiterated that the country cannot rule 0:00:52.040 --> 0:00:56.200 out any measures to contain the fourth wave. So let's 0:00:56.240 --> 0:00:58.920 get to it with Dr Dave Westerner, Professor Biology at 0:00:58.960 --> 0:01:01.840 Davidson College. On the phone from David's in North Carolina. 0:01:02.560 --> 0:01:04.560 Dr Westner and nice to have you here with Ed 0:01:04.640 --> 0:01:08.040 Ludlow and myself. So when you see the days headlines, 0:01:08.600 --> 0:01:10.600 you watch what's going on in Europe, I kind of 0:01:10.640 --> 0:01:12.640 ask all of our guests, is what's going on in 0:01:12.680 --> 0:01:15.280 Europe going to happen here in the United States? Can 0:01:15.360 --> 0:01:20.040 we make that assumption? I think we can, thank you 0:01:20.120 --> 0:01:23.040 having back again. But yeah, I think we're already starting 0:01:23.040 --> 0:01:26.560 to see cases go up throughout the United States. We're 0:01:26.560 --> 0:01:29.520 seeing death scoops at a unlesser rate, but that's going 0:01:29.560 --> 0:01:32.160 up also. So yeah, I think that what's happening in 0:01:32.160 --> 0:01:34.240 Europe now very well could be what we see over 0:01:34.280 --> 0:01:37.479 the next few months here Western. Do you get any 0:01:37.520 --> 0:01:40.640 sense that American officials are sort of complacent? You know, 0:01:40.680 --> 0:01:43.759 you had um Jeff Stains from the White House saying 0:01:43.800 --> 0:01:46.120 that you know, we have vaccines, we have boosters, we 0:01:46.200 --> 0:01:49.320 have the therapeutics if we need them, you won't see 0:01:49.760 --> 0:01:53.000 what's happening in Europe happen here. Why won't we see 0:01:53.000 --> 0:01:57.360 it happen here? Well, I think they have the vaccines, 0:01:57.440 --> 0:02:01.640 they have those those U nctioned belable in Europe as well. 0:02:01.840 --> 0:02:04.840 I think that's a UM on my optic way of 0:02:05.400 --> 0:02:07.600 looking at it. Um, Yes, we have the vaccines, we 0:02:07.640 --> 0:02:10.920 had the boot boosters that we're rolling out. Um but 0:02:11.000 --> 0:02:13.639 all the all the data suggests that we're going to 0:02:13.680 --> 0:02:15.440 see the same kind of of an increase here that 0:02:15.480 --> 0:02:18.400 we're that we're seeing elsewhere. Well, and it's interesting. I 0:02:18.440 --> 0:02:19.720 guess we all have to figure out as we go 0:02:19.840 --> 0:02:24.040 make our way through at this point. Um, It's funny. 0:02:24.440 --> 0:02:26.720 I saw something I was reading in this morning, Dr Wester, 0:02:27.200 --> 0:02:29.080 and it's like, well, wait a minute, you're six months 0:02:29.080 --> 0:02:32.480 after your second vaccine. Does that mean you're not vaccinated anymore? 0:02:32.520 --> 0:02:37.000 Are you not protected? Yeah? I think we should be 0:02:37.000 --> 0:02:39.960 clear about that. These vaccines are are really good vaccines. 0:02:40.520 --> 0:02:43.000 If you go back to a year ago, a year 0:02:43.000 --> 0:02:45.000 and a half ago, a lot of people were saying 0:02:45.160 --> 0:02:47.600 if we had a vaccine that was sixty or seventy 0:02:47.600 --> 0:02:50.040 percent effective, that would be a win. And we've got 0:02:50.080 --> 0:02:56.360 a couple vaccines that are much better than anyone anyone anticipated. Initially, 0:02:56.919 --> 0:03:00.880 the waning immunity that we're seine, but the and Maderna 0:03:01.120 --> 0:03:04.840 vaccines are certainly concerned. But even six months out, we're 0:03:04.840 --> 0:03:08.960 seeing vaccines that are seven effective. So it's certainly not 0:03:09.040 --> 0:03:12.960 the case that six months after your second shot you're 0:03:13.800 --> 0:03:18.160 functionally unvaccinated. Um, there's still even even without the booster, 0:03:18.360 --> 0:03:21.519 there's still a good deal protection six months out. I 0:03:21.520 --> 0:03:23.320 wonder if there's a weak spot though, right, is it 0:03:23.400 --> 0:03:26.840 if you're part of the unvaccinated portion of society that 0:03:26.880 --> 0:03:29.919 you're most at risk. Is it that you know, broadly, 0:03:29.960 --> 0:03:34.560 we should all still be wearing masks. I think that's 0:03:35.960 --> 0:03:39.760 I guess broadley is a is a if the term um. 0:03:39.800 --> 0:03:42.760 I think that a certain circumstances, yes, masks should still 0:03:42.800 --> 0:03:45.480 be worn. If you're in a crowded indoor setting, it's 0:03:45.480 --> 0:03:47.240 probably a good idea to have a mask on, even 0:03:47.280 --> 0:03:51.600 if you have both the two jobs. You've gotten that 0:03:51.600 --> 0:03:54.480 that that booster shot recently. Yeah, I think we're at 0:03:54.480 --> 0:03:57.920 a point now where, yes, we have a lot of 0:03:57.960 --> 0:04:03.600 interventions that are decreased severe disease, decreasing hospitization, decreasing deaths. 0:04:04.080 --> 0:04:06.000 But we're not out of the woods, and we shouldn't 0:04:06.000 --> 0:04:08.680 assume that that we are out of the woods just yet. 0:04:09.640 --> 0:04:14.040 And what about mixing and matching the CDC's recommendations, UM 0:04:14.200 --> 0:04:17.680 allow I guess right for mixing match dosing for booster shots. 0:04:17.680 --> 0:04:20.360 And certainly I think it's safe to say that many 0:04:20.360 --> 0:04:23.400 of coming off the J and J one suggests, you know, 0:04:23.440 --> 0:04:26.839 you get fiser and Maderna. Um, what's your guidance on 0:04:26.880 --> 0:04:30.160 that or your thoughts on that. Yeah, there's there's no 0:04:30.200 --> 0:04:33.720 evidence to suggest that mixing and matching is a bad thing. Um, 0:04:34.160 --> 0:04:37.240 We've seen nothing indicating that if you had two Fiser 0:04:37.279 --> 0:04:42.840 shots initially, the Maderna shot is going to be disadvantageous 0:04:43.080 --> 0:04:46.279 in any way. It appears that mixing matching is perfectly visible. 0:04:46.920 --> 0:04:51.000 Um in either case if you had the same booster 0:04:51.080 --> 0:04:53.760 as your original two shots, or if you have one 0:04:53.760 --> 0:04:57.400 of the others. Um, immunitique goes up dramatically within within 0:04:57.440 --> 0:04:59.359 a week or two of that about booster shots. So 0:04:59.400 --> 0:05:04.520 there doesn't see to be any any any downside to 0:05:04.680 --> 0:05:08.400 mixing and matching the vaccine. Dr Wessner, I'm always curious, 0:05:08.560 --> 0:05:11.880 you know, you teach biology. I love biology. I wasn't 0:05:11.920 --> 0:05:14.000 doing this. I might be a doctor. That was something 0:05:14.000 --> 0:05:17.240 that was certainly on my radar. UM, but I do 0:05:17.360 --> 0:05:22.720 wonder how teaching of biology and against a backdrop of 0:05:22.960 --> 0:05:27.479 the pandemic and the creating of a vaccine, Um, how 0:05:27.520 --> 0:05:29.719 it's changed or what's the interaction with students, what does 0:05:29.760 --> 0:05:34.040 students want to know and understand. It's been really interesting 0:05:34.040 --> 0:05:36.680 for me in that role because you know, we can 0:05:36.839 --> 0:05:40.200 we can talk about biology with a real life example 0:05:40.200 --> 0:05:43.160 that's playing out in real time, which has really been 0:05:43.360 --> 0:05:47.640 been testing, and I think it makes the the topic 0:05:47.800 --> 0:05:50.000 that much more real in both the lots of biology 0:05:50.040 --> 0:05:53.599 we're learning in class and the biology of happening in 0:05:53.640 --> 0:05:56.120 the real world. That makes it more more real, more 0:05:56.360 --> 0:06:00.480 more understandable. Um, I guess. So, yeah, that's really good, 0:06:00.760 --> 0:06:05.119 an interesting situation to talk about something that's that's happened 0:06:05.240 --> 0:06:09.159 in real time as we discussing it. Well, Carol makes 0:06:09.160 --> 0:06:11.800 a good point, which is education essentially right. You know, 0:06:12.279 --> 0:06:16.800 in general population two people understand the science behind the vaccine. 0:06:16.839 --> 0:06:20.200 Have they spent the time researching the reasons for taking 0:06:20.279 --> 0:06:22.400 or whether to wear a mask or not. Are you 0:06:22.440 --> 0:06:25.479 just kind of concerned that people don't take COVID seriously enough? 0:06:27.920 --> 0:06:30.599 I think a lot of people don't. Um, yeah, I 0:06:30.600 --> 0:06:33.680 think a lot of people, you know, will say anecdotally, well, 0:06:33.880 --> 0:06:35.760 I had a friend who was sick for a couple 0:06:35.760 --> 0:06:38.640 of days. But but that was that was it. So 0:06:38.880 --> 0:06:42.400 I think there there has been this um, this attitude 0:06:42.400 --> 0:06:45.120 among a segment of the population that it's something that 0:06:45.160 --> 0:06:48.279 we don't have to really take that that seriously. But 0:06:48.279 --> 0:06:50.479 if you look at the numbers, UM, you all can 0:06:50.720 --> 0:06:53.880 can think back to the big surge UM in New York. 0:06:53.880 --> 0:06:56.320 I mean it was the health care system was overwhelmed, 0:06:56.720 --> 0:06:58.760 UM and we could get to that point again. I 0:06:59.000 --> 0:07:02.400 think it's it's very serious disease. It's much more transmissible 0:07:02.440 --> 0:07:06.160 than the typical insluenda virus is uh. It's a much 0:07:06.160 --> 0:07:10.200 more serious illness than we see typically within sluenza. UM. 0:07:10.320 --> 0:07:12.080 So yeah, I think we have to remember that that 0:07:12.200 --> 0:07:15.960 this is a very serious infectious disease and and we 0:07:15.960 --> 0:07:19.320 we can't we can't forget that at this point in time. Yeah. 0:07:19.320 --> 0:07:21.400 I gotta say, in terms of mask wearing, I feel 0:07:21.440 --> 0:07:25.200 like I will wear one forever. Uh No, just because 0:07:25.280 --> 0:07:27.920 it's it's it's interesting in terms of just basic colds 0:07:27.920 --> 0:07:30.720 and things. Um, I've seen more people getting sick as 0:07:30.760 --> 0:07:33.560 things have ease, and it's it was really nice to 0:07:33.600 --> 0:07:35.640 go through a full year and not even have a 0:07:35.680 --> 0:07:39.200 common cold. Yeah, if you look at the deploya season 0:07:39.320 --> 0:07:42.280 last year, I mean, BLEU was almost non existent throughout 0:07:42.320 --> 0:07:44.280 the High States and a large part of that was 0:07:44.360 --> 0:07:48.200 because we weren't gathering. There weren't large groups of people indoors, 0:07:48.840 --> 0:07:51.600 people were wearing masks when they were out. UM, and 0:07:51.680 --> 0:07:55.480 just generally those precautions are going to prevent the transmission 0:07:55.520 --> 0:07:59.600 of respiratory diseases. Uh. This year, how do you know that, Carol? 0:07:59.680 --> 0:08:03.600 You were more more cases of flu certainly, and we 0:08:03.640 --> 0:08:05.880 had the past couple of couple of years. UM. And 0:08:05.960 --> 0:08:09.600 to a large extent, that's because people are gathering, more 0:08:09.600 --> 0:08:12.000 people are out, more people aren't wearing masks like they 0:08:12.160 --> 0:08:15.920 like they Well, so maybe maybe things will change permanently 0:08:16.000 --> 0:08:19.040 after I mean we've seen that before with infections US, 0:08:19.280 --> 0:08:22.840 that things changed permanently, UM, And maybe some aspect of 0:08:23.400 --> 0:08:28.480 mask wearing or limited gatherings will be a permanent change. Hey, listen, 0:08:28.480 --> 0:08:31.120 I wanted to share with you. A frequent listener and 0:08:31.160 --> 0:08:34.600 watcher of our show on YouTube, Uh shared with me 0:08:34.640 --> 0:08:38.080 a story, UM, Ryan, thank you, Uh, and just took 0:08:38.080 --> 0:08:40.319 a look at what's going on in Michigan right now. 0:08:40.559 --> 0:08:42.880 The Henry Ford Hill System is seeing COVID nineteen cases 0:08:42.880 --> 0:08:46.480 store by fifty percent in three weeks, putting a major 0:08:46.520 --> 0:08:50.440 strain on staff and patients at the Detroit based network 0:08:50.440 --> 0:08:54.520 of five major hospitals in southeast Michigan. It's uh the 0:08:54.600 --> 0:08:57.200 latest US hot spots seven day case rate of more 0:08:57.240 --> 0:09:01.160 than six D per hundred thousand. That's triple the national average, 0:09:01.559 --> 0:09:05.120 you know, And so we see this, we often talk 0:09:05.160 --> 0:09:08.600 about this being a disease of the unvaccinated. UM, what 0:09:08.640 --> 0:09:11.520 do we finally do to get the unvaccinated to believe 0:09:11.559 --> 0:09:15.480 the message? In your view, that's a really good question. 0:09:15.679 --> 0:09:18.520 And there's gonna be some fashion of population that you're 0:09:18.559 --> 0:09:22.960 not going to reach. I think that's that's becoming clear. UM. 0:09:23.000 --> 0:09:25.160 But I think in back the eggs point earlier, the 0:09:25.320 --> 0:09:28.240 education is key. We have to get the word out 0:09:28.240 --> 0:09:32.040 that these vaccinities are safe, they've gone through clinical trials, 0:09:32.440 --> 0:09:36.440 they are extremely effective, UM, and not have people get 0:09:36.440 --> 0:09:39.960 lost in the noise of oh, immunity wanes over time, 0:09:40.559 --> 0:09:42.720 so I shouldn't get a vaccine. UM. I think we 0:09:42.800 --> 0:09:47.160 have to get that that word out to that fague population. 0:09:47.559 --> 0:09:51.599 This is Bloomberg Business Week with Carol Masser and Bloomberg 0:09:51.679 --> 0:09:55.280 Quick Takes Tim Stinovic on Bloomberg Radio All right, So 0:09:55.360 --> 0:09:57.199 let's get to it. Let's see what Dr ellen Wald 0:09:57.280 --> 0:10:00.000 has to say. She's back with US, President of transfer 0:10:00.000 --> 0:10:03.600 All Consulting Senior Fellow at Atlantic Council's Global Energy Center. 0:10:03.679 --> 0:10:06.840 She wrote the book Saudi Inc. On the history of 0:10:06.880 --> 0:10:10.520 a Ramco and Saudi Arabia UH, and she has also 0:10:10.559 --> 0:10:15.520 been a Bloomberg opinion contributor. She's back with us from Jacksonville, Florida. Hey, Ellen, 0:10:15.640 --> 0:10:17.560 so nice to have you here. I have to ask 0:10:17.600 --> 0:10:20.640 you about a couple of things the President said. Um, 0:10:20.720 --> 0:10:22.880 he said that he's making the largest ever release from 0:10:22.920 --> 0:10:27.040 the spr will provide the supply that we need? Will 0:10:27.080 --> 0:10:30.160 it and will it make a difference? Well, that's a 0:10:30.280 --> 0:10:33.840 very interesting question because, Um, part of part of the 0:10:33.840 --> 0:10:38.000 issue is do we really need more supply? Uh? Is 0:10:38.040 --> 0:10:40.760 the reason why prices are higher really due to a 0:10:40.920 --> 0:10:44.079 lack of supply? And it doesn't seem like anyone is 0:10:44.160 --> 0:10:50.160 having trouble getting gasoline or getting crude oil, So it's 0:10:50.160 --> 0:10:53.720 not clear that the issue is really one of supply. Um. 0:10:54.200 --> 0:10:58.120 Perhaps the release will have an effect on the market 0:10:58.200 --> 0:11:01.520 and will encourage the market to to lower prices, although 0:11:01.720 --> 0:11:05.600 we haven't seen that happening yet. The biggest drop in 0:11:05.800 --> 0:11:10.520 oil prices actually happened last week, um, in reaction really 0:11:10.559 --> 0:11:13.240 to the announcement that we were going to see more 0:11:13.559 --> 0:11:19.360 uh COVID lockdowns in Europe. Today, actually prices rose in 0:11:19.440 --> 0:11:24.200 response to the spr release. So, um, why are prices up? 0:11:24.400 --> 0:11:26.480 Why are prices up when we do this release. It's 0:11:26.480 --> 0:11:29.720 been a little bit of a conundrum today. I feel like, yeah, well, 0:11:29.760 --> 0:11:31.640 I think it has to do a lot with market 0:11:31.679 --> 0:11:37.360 perceptions because this release has been telegraphed and a lot 0:11:37.360 --> 0:11:39.719 of people will basically waiting to see, Okay, how much 0:11:39.800 --> 0:11:42.080 is it going to be and what other nations were 0:11:42.120 --> 0:11:45.480 going to be involved in this coordinated release. And it's 0:11:45.520 --> 0:11:49.400 possible that what was announced was not nearly as significant 0:11:49.440 --> 0:11:52.360 as the market was hoping for. And so that's why 0:11:52.360 --> 0:11:56.960 we're seeing this price reaction. Yeah, choreographed, as he said, 0:11:57.280 --> 0:12:02.040 will telegraphed almost because of that curious reaction in the market. 0:12:02.880 --> 0:12:06.560 You remember when something that happens, how deeply political the 0:12:06.600 --> 0:12:10.679 oil market is, you know how sensitive it is domestically 0:12:10.800 --> 0:12:13.880 for voters. But also one thing we haven't talked about 0:12:13.960 --> 0:12:16.840 yet is OPEC plus. You know, they could easily turn 0:12:16.880 --> 0:12:20.400 around and change their existing plan in terms of their 0:12:20.400 --> 0:12:23.240 supply into the market, what should be we'll be looking 0:12:23.280 --> 0:12:27.679 for with OPEC class Oh, absolutely, and and gasoline prices 0:12:27.720 --> 0:12:32.000 are always something that's political, especially in the US. Seems 0:12:32.040 --> 0:12:36.200 always seemed to connect higher gasoline prices with the administration 0:12:36.280 --> 0:12:40.120 that's in office and tend to blame their administration regardless 0:12:40.160 --> 0:12:43.000 of whether they have any role over it at all. 0:12:43.120 --> 0:12:47.840 So it's definitely a political political issue in the United 0:12:47.880 --> 0:12:51.120 States when it comes to PA plus. Though, it's very 0:12:51.120 --> 0:12:54.839 interesting because UM the amount that is being released for 0:12:55.040 --> 0:12:57.760 the amount that has UM that that we've heard as 0:12:57.760 --> 0:13:01.120 being we still haven't heard from China and South Korea 0:13:01.160 --> 0:13:05.280 if they're going to be making any releases, is about 0:13:05.360 --> 0:13:10.240 as much as three months of UM the supply that 0:13:10.360 --> 0:13:14.160 OPEC would be increasing. So OPEC has been increasing its 0:13:14.280 --> 0:13:17.439 production by four thousand barrels a day for several months 0:13:17.440 --> 0:13:21.320 now and plans to continue that. The interesting twist though, 0:13:21.480 --> 0:13:24.720 is that OPEC is supposed to meet next week on 0:13:24.760 --> 0:13:28.880 Thursday to decide if they're going to continue their increases 0:13:29.480 --> 0:13:33.680 for for January. So some people think that this could 0:13:33.840 --> 0:13:37.600 potentially throw OPEC kind of for a loop, and will 0:13:37.640 --> 0:13:40.440 OPEC decide maybe they want to rein it back in. 0:13:40.880 --> 0:13:43.120 I think that OPEC is really going to be looking 0:13:43.200 --> 0:13:46.120 at the market overall. They're going to be looking at 0:13:46.120 --> 0:13:49.480 our oil stock pile starting to build as opposed to 0:13:49.520 --> 0:13:53.079 being drawn down, and they will probably look pretty carefully 0:13:53.080 --> 0:13:57.199 at what's going on in China and um, what Chinese 0:13:57.440 --> 0:14:00.880 industrial production is like, in Chinese demand and is like 0:14:00.920 --> 0:14:05.320 they don't make their decisions just based off of gasoline prices. 0:14:04.800 --> 0:14:07.480 But ellen, if it's not a supply issue, then what's 0:14:07.520 --> 0:14:10.520 going on? And the President talked about taking some action 0:14:10.559 --> 0:14:14.079 on gas gasoline prices unacceptable for gas firms to pocket 0:14:14.120 --> 0:14:17.480 gains that gap between wholesale and retail gas prices. Is 0:14:17.520 --> 0:14:19.800 there something fish going on? Just got about forty five 0:14:19.840 --> 0:14:23.520 seconds or so. Yeah, Yeah, it really doesn't appear to be. Remember, 0:14:23.560 --> 0:14:27.160 there's more that goes into gasoline than just wholesale gasoline prices. 0:14:27.200 --> 0:14:29.760 There's the prices ethanol which has gone up. There are 0:14:29.760 --> 0:14:32.000 the price of other adds which has gone up, and 0:14:32.040 --> 0:14:35.520 there's just general inflation. Plus there's just the price of 0:14:35.520 --> 0:14:38.640 oil which has gone up. So there's a lot that 0:14:38.680 --> 0:14:41.360 goes into this and it doesn't necessarily mean that there's 0:14:41.400 --> 0:14:45.920 some kind of anti competitive collusive behavior going on. And also, 0:14:46.000 --> 0:14:48.960 as Ed pointed out, therey is in London, right, it's expensive. 0:14:49.400 --> 0:14:52.040 We're seeing it as well. This is a just quickly, Ellen, 0:14:52.160 --> 0:14:56.200 it's a global issue. It's not just a US issue. Yeah, 0:14:56.240 --> 0:14:59.120 it's definitely a global issue. And in some areas it's 0:14:59.160 --> 0:15:02.240 even more pernount out US gas and places in the 0:15:02.320 --> 0:15:05.840 US are traditionally much lower than elsewhere in the world, 0:15:05.960 --> 0:15:09.040 so I'm part of It's also taxes, um, A lot 0:15:09.080 --> 0:15:14.400 of states have increased their gasolene taxes over recent years. 0:15:14.440 --> 0:15:16.480 Some really great perspective. Ellen, we knew when we saw 0:15:16.520 --> 0:15:18.360 the story we wanted to reach out to. So thank 0:15:18.360 --> 0:15:21.600 you so much. Have a great and safe Thanksgiving. Dr 0:15:21.640 --> 0:15:24.400 Ellen wal She's president of Transversal Consulting. Check out our 0:15:24.440 --> 0:15:28.119 book Saudi Inc. That deals with Saudi Arabia and Oromco. 0:15:28.800 --> 0:15:32.440 You're listening to Bloomberg Business Week with Carol Messer and 0:15:32.520 --> 0:15:37.360 Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So, climate change, 0:15:37.800 --> 0:15:41.080 we know what it's done. It's created flooding, droughts, unusual 0:15:41.080 --> 0:15:45.040 weather patterns and wildfires. It's a story. Uh, And there's 0:15:45.040 --> 0:15:47.120 actually a story that digs into this. It can be 0:15:47.160 --> 0:15:49.600 found at business week dot com. It looks at how 0:15:49.960 --> 0:15:52.480 wildfires are getting worse and then one company that has 0:15:52.560 --> 0:15:55.120 all the chemicals to combat them. That story written by 0:15:55.160 --> 0:15:57.600 Bloomberg News Technology report to Austin car he's on the 0:15:57.640 --> 0:16:00.480 phone in Boston and also joining us of our business. 0:16:00.520 --> 0:16:02.240 We get at a Joel Webber. He's in our Interactive 0:16:02.240 --> 0:16:06.640 Brokers studio, a company I hadn't heard about and yet 0:16:07.080 --> 0:16:11.080 publicly traded and is sort of in a solutions business. Um. 0:16:12.720 --> 0:16:15.360 And you know, of all the places that we're probably 0:16:15.400 --> 0:16:19.200 desperate for solutions, it's with wildfires, which seemed to only 0:16:19.240 --> 0:16:22.360 be getting worse. And here we are in um November 0:16:22.400 --> 0:16:28.040 and California still is that peak peak wildfire fears? And 0:16:28.080 --> 0:16:32.840 so so Austin like, tell us what exactly, uh, this company, 0:16:32.960 --> 0:16:36.920 Perimeter Solutions, is up to. Sure, Yeah, so you've probably 0:16:36.920 --> 0:16:39.920 seen on the news during big wildfires all these planes 0:16:39.960 --> 0:16:42.360 that are making humongous drops of all that red stuff 0:16:42.920 --> 0:16:45.960 that's all retardant made by this one single retardant maker 0:16:45.960 --> 0:16:49.320 at the biggest one of the US UH called Perimeter Solutions. 0:16:49.760 --> 0:16:53.280 And just to give it some context, they actually for 0:16:53.400 --> 0:16:57.240 US agencies alone produced about fifty million gallons of the 0:16:57.360 --> 0:17:01.440 retardants last year. With the fire slaves and booming um, 0:17:01.480 --> 0:17:03.760 the retardants business is booming as well, and that's why 0:17:03.840 --> 0:17:06.000 just two weeks ago they went public in evaluation of 0:17:06.040 --> 0:17:09.080 about two billion dollars UM. So for this story for 0:17:09.119 --> 0:17:11.280 Business Week, we spent a lot of time learning about 0:17:11.280 --> 0:17:14.399 this sole source contractor for the federal government, how they 0:17:14.440 --> 0:17:16.600 got so big in the retardants business, and a new 0:17:16.640 --> 0:17:19.480 Stanford engineered chemical that they're putting out that it might 0:17:19.560 --> 0:17:22.080 end up changing the game for how we address wildfires 0:17:22.080 --> 0:17:28.080 in the country more so. Um So. Yeah. The the 0:17:28.119 --> 0:17:30.000 product that you see dropped out of planes is called 0:17:30.160 --> 0:17:32.840 FoST Check, and it basically boxes all the fires in, 0:17:33.160 --> 0:17:35.120 but it's not as effective. After it reigns a small 0:17:35.160 --> 0:17:37.159 amount or when there are tons of high winds, it 0:17:37.480 --> 0:17:39.960 usually actually goes away and it's not effective after a 0:17:40.000 --> 0:17:42.800 couple of weeks, and at that point, like you've seen 0:17:42.840 --> 0:17:45.959 in California, another big fire can just happen again. Um. 0:17:46.080 --> 0:17:49.480 On the other hand, they have this new chemical called Fortify, 0:17:49.760 --> 0:17:52.520 which again was engineered by Stanford scientists, and it's this 0:17:52.640 --> 0:17:56.040 white gel that's applied before the wildfire season and sticks 0:17:56.080 --> 0:17:59.280 on places where they're really high risks of ignitions. UM. 0:17:59.280 --> 0:18:02.360 We actually have uns of data about where fires originate 0:18:02.440 --> 0:18:04.320 because we happen to have a lot of wildfires now 0:18:04.359 --> 0:18:07.800 in the US and in places like vegetation around utility 0:18:07.840 --> 0:18:12.040 polls or highways or railroad tracks. Um, we can apply 0:18:12.160 --> 0:18:14.560 the solution now with this chemical jael that will last 0:18:14.560 --> 0:18:17.920 for months and ideally prevent those fires from happening. As 0:18:18.160 --> 0:18:22.720 one perimeter UM executive told me, uh, he had said 0:18:22.720 --> 0:18:25.320 that we'd rather be fighting wildfires when they're just four 0:18:25.359 --> 0:18:27.400 inches tall rather than forty feet tall. And I think 0:18:27.440 --> 0:18:29.920 that's the promise that Perimeter is trying to pitch the 0:18:29.960 --> 0:18:32.840 government on going forward. You're in London right now, but 0:18:32.920 --> 0:18:36.560 California's your home. You've seen this. Yeah, this story really 0:18:36.600 --> 0:18:38.560 hit home for me. I enjoyed reading it, not just 0:18:38.600 --> 0:18:40.679 because of the products. You know, I've I've experienced the 0:18:40.760 --> 0:18:43.399 fires and the side effects of the fires. But the 0:18:43.600 --> 0:18:45.399 great thing about your story is you talk about the 0:18:46.000 --> 0:18:48.359 people that are using the product, the farmers, you know, 0:18:48.520 --> 0:18:51.840 the wine growers in Napa Valley. Um. But it seems 0:18:51.840 --> 0:18:54.000 like this company is the only product in town. Is 0:18:54.000 --> 0:18:56.120 this thing affordable? Is it? You know? Is this something 0:18:56.160 --> 0:19:00.239 that everyday landowners can actually get hold of. It is 0:19:00.240 --> 0:19:03.080 something that landowners can get ahold of. But I mean 0:19:03.160 --> 0:19:06.200 it's really a product UM that it's going to take 0:19:06.240 --> 0:19:08.320 some time to get adoption. And I think the larger 0:19:08.359 --> 0:19:11.440 market is actually utility giants like P G and D, 0:19:11.600 --> 0:19:14.480 or insurance companies or railroad companies that you know, they'd 0:19:14.560 --> 0:19:17.000 rather maybe spend a few million dollars up front on 0:19:17.040 --> 0:19:20.760 this product rather than billions of dollars and liabilities later on. 0:19:21.320 --> 0:19:23.720 But in this story, we did interview one local community 0:19:23.720 --> 0:19:26.080 that had used it uh and for one mile stretch 0:19:26.119 --> 0:19:30.120 had cost about thirty thou dollars. Obviously that's an expensive application. 0:19:30.520 --> 0:19:32.720 But when we talked to local fire departments, what they 0:19:32.760 --> 0:19:34.240 said is we'd love to use more of it. I 0:19:34.240 --> 0:19:36.880 talked to one in near San Diego that had seen 0:19:37.640 --> 0:19:39.680 huge ignitions go from a few dozen in the last 0:19:39.680 --> 0:19:42.240 couple of years down to zero after they applied the product. 0:19:42.359 --> 0:19:44.040 But what they basically said is we'd love to use 0:19:44.080 --> 0:19:46.919 more of it, we just can't afford it. So so 0:19:47.000 --> 0:19:51.320 Austin UM, what other products are they? I mean, this 0:19:51.400 --> 0:19:54.440 company just when public, I mean, do they have two products? 0:19:54.440 --> 0:19:56.760 Do they have more? What's under what's in development like 0:19:57.160 --> 0:20:00.240 and and exactly how competitive of the space is this 0:20:00.400 --> 0:20:02.399 at this point, since this problem seems to only get 0:20:02.440 --> 0:20:05.560 worse and worse, So they do this company, Perimeter Solutions, 0:20:05.600 --> 0:20:08.600 does make a ton of different retardants, whether they're gels 0:20:08.680 --> 0:20:11.800 or phones, or powder or liquid concentrations, and and they 0:20:11.800 --> 0:20:15.840 all have different uses by the fire department or private 0:20:15.840 --> 0:20:18.960 companies and homeowners. Um. But to be honest, they're really 0:20:19.000 --> 0:20:21.160 the only game in town. I mean, just to give 0:20:21.200 --> 0:20:24.800 you a sense, they about half per cent or so 0:20:24.880 --> 0:20:27.480 of their fire safety products are consumed by the US 0:20:27.800 --> 0:20:30.720 government in the state of California alone. Um, they're pretty 0:20:30.800 --> 0:20:34.320 much a virtual monopoly. And that's one of the big criticisms. Uh, 0:20:34.359 --> 0:20:39.440 they're the only approved, federally approved product that the US 0:20:39.480 --> 0:20:43.000 Force suit uses for aerial drops those big planes. And 0:20:43.080 --> 0:20:44.960 I only talked to one competitor in the issue that 0:20:45.000 --> 0:20:46.800 they said is it takes so many years to get 0:20:46.800 --> 0:20:50.199 on that retardants list to be approved. That it is 0:20:50.480 --> 0:20:54.360 very advantageous for Perimeter Solutions and their primary flagship product, 0:20:54.840 --> 0:20:56.800 which is that red stuff that drops out of planes, 0:20:57.160 --> 0:20:59.520 and so we haven't seen much competition. It costs about 0:20:59.520 --> 0:21:01.400 three dollars a gallon for that stuff they drop out 0:21:01.400 --> 0:21:03.919 a plane and so far there they continue to be 0:21:03.960 --> 0:21:06.400 the sole source provider to the US government, have been 0:21:06.400 --> 0:21:08.720 for almost two decades. All Right, I gotta ask you 0:21:08.760 --> 0:21:10.399 if you're if you're going to end up spray in 0:21:10.480 --> 0:21:13.800 my vegetables and stuff, is it safe? It's a it's 0:21:13.800 --> 0:21:16.199 a really good question, Carrol, and and and there is 0:21:16.280 --> 0:21:18.639 a lot of environmental concerns. I will also say just 0:21:18.880 --> 0:21:21.080 it's it's kind of very on to watch. I went 0:21:21.119 --> 0:21:23.440 to air bases, I've I've seen this stuff preyed in person. 0:21:23.520 --> 0:21:25.760 And whether it's the red stuff dropping from planes or 0:21:25.760 --> 0:21:28.679 the new white chemical fortify, to just see it doused 0:21:28.760 --> 0:21:31.840 all over the planet, UM, it's pretty eye opening. And 0:21:31.880 --> 0:21:34.040 when I talked to the company, they say, look, the 0:21:34.080 --> 0:21:36.680 stuff that's in here is ammonium phosphate, which is the 0:21:36.720 --> 0:21:39.679 same stuff that's used in fertilizers. UM. So it actually 0:21:39.760 --> 0:21:42.080 might make your garden grow a little bit faster. But 0:21:42.160 --> 0:21:45.159 the downside of it is that it can UH. Studies 0:21:45.200 --> 0:21:47.400 have shown that it's it's if it's dropped in water 0:21:47.440 --> 0:21:51.160 areas that can kill fish. UM. It can also spurn 0:21:51.760 --> 0:21:54.359 algae blooms and invasive plans that can be disruptive to 0:21:54.359 --> 0:21:56.679 the natural environment. But the larger truth is there just 0:21:56.720 --> 0:21:59.560