Speaker 1: Midland is the capital of the Permian oil region. Everything
Speaker 1: in Midland is about oil and about money. The main
Speaker 1: tourist attraction is a petroleum mussoon in front of the
Speaker 1: petroleum Club in the town.
Speaker 2: You have this massive display.
Speaker 1: They say, let's make oil great again, mogag and the
Speaker 1: also the display goes on, they say today is a
Speaker 1: great day to drill for oil.
Speaker 3: That's Hoavier Blast. He's a columnist for Bloomberg Opinion and
Speaker 3: he reports on the oil industry for years. Javier has
Speaker 3: traveled to the region of West Texas that's an epicenter
Speaker 3: of the shell oil drilling bonanza that has powered the
Speaker 3: US economy, shaken up global energy markets, and shaped geopolitics
Speaker 3: for more than a decade.
Speaker 1: And I was talking to executives and said, well, is
Speaker 1: it really a great day to drill for oil? Because
Speaker 1: you are not really nearly as much as you used to.
Speaker 3: Now the beginning of the end is within sight and
Speaker 3: Wall Street is demanding its share of the bounty before
Speaker 3: it's over.
Speaker 1: And that kind of really tailwind that the shale revolution
Speaker 1: has been for the US economy and US politics is
Speaker 1: not going to be there.
Speaker 3: I'm Westkasova today on the big take what if anything
Speaker 3: can replace the great American oil boom? Jabier, Can you
Speaker 3: start by telling us why the Shell Revolution in the
Speaker 3: US turned out to be such a transformative thing.
Speaker 1: For about twenty years, we thought that US oil production
Speaker 1: was on a secular decline, that the US was going
Speaker 1: to produce less and less every year, and that it
Speaker 1: was going to rely on the international market, and that
Speaker 1: means really buying more from places like Saudi Arabia and
Speaker 1: this Willa and.
Speaker 2: Opeg more and more.
Speaker 1: And then when the Shell Revolution started about twenty years ago,
Speaker 1: that was really throwaway and completely reversed. The US production
Speaker 1: started to increase every year. The US was pumping more oil.
Speaker 1: When you put all in total, the US was producing
Speaker 1: about eight million bars a day and today is producing
Speaker 1: about twenty million bars a day. The US went from
Speaker 1: being energy poor to be so rich that it can
Speaker 1: esport his energy overseas. It was just a once in
Speaker 1: a several generations transformation.
Speaker 3: And all of that oil production had an enormous effect too.
Speaker 3: And oil prices both in the US in a global
Speaker 3: oil market, well.
Speaker 1: I would say that three things happened thanks to the
Speaker 1: Shell Revolution. The first one is that oil prices were
Speaker 1: lower than otherwise. We don't have a counterfactual to say, oh, well,
Speaker 1: oil prices without share would have been twenty or thirty
Speaker 1: or fifty percent higher. But we know that the shelled
Speaker 1: Revolution adds a lot of supply into the market and
Speaker 1: that kept prices lower than otherwise. For the US economy
Speaker 1: was also a massive boom. It was a lot of
Speaker 1: investment going into Texas, New Mexico, Dakota, Oklahoma. It was
Speaker 1: highly intensive on capital but also highly intensive on manpower.
Speaker 1: All the sudden unemployment in the oil path went to
Speaker 1: record lows.
Speaker 2: It was just full employment.
Speaker 1: Workers from outside those states were flowing into Texas for jobs.
Speaker 1: Driving a track in West Texas was paying one hundred
Speaker 1: and fifty one hundred and seventy thousand dollars a year.
Speaker 1: And also it changed politics the US. All the southern
Speaker 1: have a stronger hand on global geopolitics. The White House
Speaker 1: all the way from the seventies have been always constrained
Speaker 1: on what it could do against oil countries because it
Speaker 1: was was fearful that prices will go through the roof
Speaker 1: Casoline prices is a price that every Americans see every day,
Speaker 1: and it can't really topple a government or lose an election.
Speaker 1: All of a sudden, Shale changed that, and the White
Speaker 1: House for the first time could go and say to Venezuela,
Speaker 1: we are going to imposetions on you. Say to Russia,
Speaker 1: We're going to impose antions on you. Say to Iran,
Speaker 1: either you negotiate with US a nuclear deal, or we
Speaker 1: are going to go and restrict the way that you
Speaker 1: can esport oil. And that have never happened in US
Speaker 1: politics for at least thirty forty years.
Speaker 3: And also in that mix, of course, is Saudi Arabia
Speaker 3: and the other OPEK producing nations.
Speaker 1: The US all of a sudden became a rival to
Speaker 1: Saudi Arabia and OPEK. It was like the US for
Speaker 1: the first time has the same force. They were equal
Speaker 1: in this kind of battle for the control of the
Speaker 1: oil market, to the point that OPEK launched a price
Speaker 1: war against the shale producers if float the market in
Speaker 1: twenty fourteen fifteen, trying to drive prices down to a
Speaker 1: level that will bank rap the US shale industry.
Speaker 4: OPAK refused to yield its production to shale rivals, and
Speaker 4: the collapse in oil prices is having a ripple effect
Speaker 4: across global markets. The decision in Vienna sent crude features
Speaker 4: to four year lows and shave ten percent of the
Speaker 4: price of oil this week. At these levels, some shale
Speaker 4: producers could lose money, and that.
Speaker 1: Was really a realization by Opek that they have lost
Speaker 1: control of the market, that they needed to go nuclear.
Speaker 1: They really went all in to try to regain control
Speaker 1: of the market, tried to bank rap the industry because
Speaker 1: this competitor was too strong for Opek.
Speaker 3: And that did not work.
Speaker 2: It didn't work.
Speaker 1: Because yes, a lot of companies went into bankruptcy, prices collapse.
Speaker 1: Dust drilling also fell sharply, but the companies that emerged
Speaker 1: from that became leaner, fitter, faster, and very soon Opek
Speaker 1: found that shale auction was booming again, that the US
Speaker 1: was sporting oil overseas, and that the market.
Speaker 2: Was flooded with oil.
Speaker 1: And that's the reason that from an average of around
Speaker 1: one hundred dollars for a few years from twenty ten
Speaker 1: to around twenty and fourteen, oil prices in the following
Speaker 1: five years average about half of that.
Speaker 3: For listeners who might not be as familiar with what
Speaker 3: shale drilling is, can you explain why it was a
Speaker 3: revolutionary and how it's different from traditional oil drilling.
Speaker 2: Put it in very simple terms.
Speaker 1: Traditional oil drilling, you drill a vertical pipeline a hole
Speaker 1: in the ground, and you go vertical down and you
Speaker 1: are aiming to heat a spot that is basically under
Speaker 1: your feet. What shale formations look like is more like
Speaker 1: a tiamizou cake. There are many malli layers of productive
Speaker 1: strata with oil, but they are very compressed and the
Speaker 1: rock is non porous, so to reach them you have
Speaker 1: to go vertical, and then you need to turn around
Speaker 1: and go horizontal underground for a very long length and
Speaker 1: then blast the rock with water, sand and chemicals to
Speaker 1: fracture that rock and to get the oil flowing. That's
Speaker 1: what we call fracking. And drilling that way was unthinkable
Speaker 1: about thirty years ago. Even at the very early days
Speaker 1: of the Shelle Revolution. The industry as a whole was
Speaker 1: deeply sceptical that this was gonna work. And you know,
Speaker 1: we all were skeptical. So I remember hearing about this
Speaker 1: about fifteen years ago, and I was thinking, So, they're
Speaker 1: gonna drill a hole vertically, and they're gonna go horizontal
Speaker 1: for about fifteen thousand feet and they're gonna blast it
Speaker 1: and they're gonna get the oil getting out of the ground,
Speaker 1: and this is gonna work. And I was like, oh god,
Speaker 1: that is really very difficult. I don't see how this
Speaker 1: is gonna work. Oh boy, how wrong I was. Many
Speaker 1: people in the industry were a slow realized the potential.
Speaker 1: But it was a bunch of Maverick oil executives whould
Speaker 1: really try these first. It was not big Oil, This
Speaker 1: was not Trevron or Exomobile. This was a bunch of
Speaker 1: people in places like North Dakota and West Texas who
Speaker 1: pioneered this technique.
Speaker 3: And the thing that made it such a big deal
Speaker 3: was that just at a time when a lot of
Speaker 3: people were thinking that the US oil reserves are kind
Speaker 3: of largely tapped out, they were able to access these
Speaker 3: pockets of oil that beforehand would have been way too
Speaker 3: expensive to try to get into. It wouldn't have been.
Speaker 2: Worth the cost.
Speaker 1: You think about the Permian oil, which is this region
Speaker 1: in West Texas southeast New Mexico. Oil companies have been
Speaker 1: drilling there for about one hundred years. Indeed, twenty twenty
Speaker 1: three marks the one hundred anniversary of oil production. What
Speaker 1: we do think commercial oil production in the region. So
Speaker 1: people were thinking that the results were mostly exhausted, that
Speaker 1: the shale formations were too difficult technically to tap. And
Speaker 1: this new techniques, as I said, the horizontal drilling combined
Speaker 1: with the fracking, is what really untapped the reserves. The
Speaker 1: oil was there, the oil was just waiting for someone
Speaker 1: to find a way to do it.
Speaker 2: There is a catch here.
Speaker 1: It is expensive to do and because of the nature
Speaker 1: of those reserves.
Speaker 2: Oil production is a gusher for a.
Speaker 1: Few days and then it comes down very very quickly,
Speaker 1: and that was what made shale different.
Speaker 2: But also very complicated.
Speaker 1: And you want another bars of production, you need to
Speaker 1: drill another well, and another well and another well. So
Speaker 1: the oil industry found itself and a bit of a
Speaker 1: thread meal and a thread meal that it was just
Speaker 1: running quite fast.
Speaker 3: One of the things you write is that after these
Speaker 3: kind of innovative companies got in there and were able
Speaker 3: to pioneer this new way of drilling, then everybody wanted
Speaker 3: to get in on it.
Speaker 1: Shale became the hotels area of the oil in the street.
Speaker 1: It attracted capital from Wallace Street packing. These pioneers, the
Speaker 1: early cowboys, but then everyone figured out this is the
Speaker 1: place to be so very quickly. Chevron have had properties
Speaker 1: in the Permian for many, many years, as long as
Speaker 1: seventy five years ago. They never sold the ackage, but
Speaker 1: they kept their achraage on their books, basically thinking that
Speaker 1: their value was pretty much zero. And all of a
Speaker 1: sudden they were like, hold on second, we own lane
Speaker 1: alongside where these other guys are producing a lot.
Speaker 2: We can't do that.
Speaker 1: So Big Oil kind of figure out, well, let's join
Speaker 1: the revolution, and that's where Chevron started doing it, Conoco
Speaker 1: Philev started doing it, and then ultimately Exxon also arrived
Speaker 1: there and also joined the Shelle Revolution, to the point
Speaker 1: that you look at what Exon is doing today, the
Speaker 1: Permia and West Texas is really where they are drilling
Speaker 1: the most, and they're putting quale lots of their capital
Speaker 1: at play.
Speaker 3: After the break, oil companies set growth aside to focus
Speaker 3: on making money for shareholders. However, before the break you
Speaker 3: were talking about one of the drawbacks of this show
Speaker 3: revolution was how much money it took to drill these wells,
Speaker 3: and that started causing a lot of tension between the
Speaker 3: companies and the investors in those companies.
Speaker 1: To understand that tension, I went to Midland, Texas. That
Speaker 1: is a relatively small town population about one hundred thousand people,
Speaker 1: and that's actually where George Bush Senior settled and created
Speaker 1: his first oil business before many years later went into
Speaker 1: politics and finally became the President of the United States.
Speaker 1: And you can see it Midland. There is a desire
Speaker 1: to make money for an oil that's the problem. There
Speaker 1: is the pressure to make profit. This shale revolution was
Speaker 1: fantastic for the United States as a whole. The economy benefited,
Speaker 1: but investors lost a lot of money. The companies needed
Speaker 1: to reinvest so much of their profits to keep up
Speaker 1: with that thread meal of drilling wells and drilling wells
Speaker 1: to increase production that at times, very early days, they
Speaker 1: were putting back into drilling fifty percent of their profits.
Speaker 1: That went up to eighty percent, that went up to
Speaker 1: one hundred percent, and very soon they were borrowing money
Speaker 1: because they needed to reinvest one hundred and fifty percent
Speaker 1: of their profits to continue drilling. And for a few years,
Speaker 1: Waller Street was happy with that. It was similar to
Speaker 1: the technology industry. You put money early, you take the
Speaker 1: losses because.
Speaker 2: You want to grow.
Speaker 1: You are expected at some point you achieve a critical
Speaker 1: mass and then you don't need to grow that much
Speaker 1: and you can start making money.
Speaker 2: But that never really happened with shale.
Speaker 1: All the time, the companies needed to reinvest a lot
Speaker 1: of money and drill more and keep lossing money. So
Speaker 1: at some point Wall Street said enough is enough. It
Speaker 1: was held by the fact that oil prices collapsed during
Speaker 1: the pandemic, and then the industry went into a massive restructuring.
Speaker 1: Companies abandoned these targets of growing and growing and they
Speaker 1: focus on returning money to shareholders, and drilling has come
Speaker 1: down massively in West Texas and across the United States.
Speaker 1: Prices for oil remained quite high by historical standards. It's
Speaker 1: still seventy to seventy five dollars a barrel, but drilling
Speaker 1: has come down significantly, and it's about half of what
Speaker 1: used to be at the peak of the revolution.
Speaker 3: You have the striking line in one of the pieces
Speaker 3: you've written about this, and you called the shale boom
Speaker 3: the most profitable example of capital destruction the energy industry
Speaker 3: has ever seen.
Speaker 1: I say that because I think it was very profitable
Speaker 1: for the United States as a whole. You think that
Speaker 1: consumers benefited because they enjoy lower gasoline prices and also
Speaker 1: lower gas prices the economy as a whole benefited by
Speaker 1: the increasing investment capital investment shale is a process that
Speaker 1: requires a lot of money to be spent on everything
Speaker 1: from chemicals to steal to manpowered et cetera, et cetera.
Speaker 1: And it was also great for the White House and
Speaker 1: American politics in the terms of giving the US a
Speaker 1: very strong handing energy geopolitics. But it was capital destructions
Speaker 1: in the sense that Wallace Street lost a lot of money.
Speaker 2: About for each dollar.
Speaker 1: That investors put in shale, they recovered only fifty cents.
Speaker 3: You also write that as wall Street started demanding profits
Speaker 3: that production was no longer going to satisfy them. The
Speaker 3: industry started to consolidate very rapidly.
Speaker 1: We have seen quite a lot of mergers and acquisitions,
Speaker 1: and this goes back to the origins of shale. It
Speaker 1: was not the big oil companies, It was the smaller companies.
Speaker 1: It was the mavericks, a bit of the cowboys. The
Speaker 1: shale industry is full of great characters, CEOs who created
Speaker 1: their companies for nothing and then created these multi billion
Speaker 1: dollar oil companies. But that was good for the early
Speaker 1: days for a lot of experimentation, for a lot of losses,
Speaker 1: but for a lot of excitement and growth. When you
Speaker 1: need to deliver return size matters, consolidation came. Companies needed
Speaker 1: synergies do more with less money, and we have seen
Speaker 1: a lot of emergency and acquisitions in the shale path.
Speaker 1: And also we have seen the big oil companies like
Speaker 1: XO Mobile have entered into the shale industry and have
Speaker 1: both others to very very quickly grow haer.
Speaker 2: Has that worked.
Speaker 3: Has the consolidation now given Wall Street what it wants?
Speaker 3: Are they able to now make money.
Speaker 1: For the first time, We're beginning to see Wall Street
Speaker 1: making money from shale. It has helped obviously that oil
Speaker 1: prices were high last year. But we have seen is
Speaker 1: that companies are no longer reinvesting in the majority or
Speaker 1: even more than what they are making in profits into
Speaker 1: new production. Now that has come down and companies are
Speaker 1: aiming to reinvest something between thirty thirty five percent all
Speaker 1: the way to fifty percent. But the other half of
Speaker 1: the money that they are making is being sent to shareholders,
Speaker 1: whether it's dividends or buy backs special dividends. But Wall
Speaker 1: Street is getting the money obviously, that has a price,
Speaker 1: and the price is that shale cannot growth production nearly
Speaker 1: as fast as it did. Don't get me wrong, shale
Speaker 1: production is still growing and probably it's going to grow
Speaker 1: for a few more years, but the rate of growth
Speaker 1: has slowed down significantly. It is even slower that we
Speaker 1: will be expected at similar prices.
Speaker 2: We're beginning to see even a.
Speaker 1: More of a slow down trend in twenty twenty three
Speaker 1: that's going to go into twenty twenty four. And it
Speaker 1: was very interesting on my last trip to the Permian
Speaker 1: was how openly people in the industry that have for
Speaker 1: many years basically only talk about growth, we're talking for
Speaker 1: the first time that US oil production is gonna pick.
Speaker 1: There is no agreement when it's gonna happen, but everyone
Speaker 1: now sees this peak looming in the horizon. I think
Speaker 1: that probably the consensus is in the industries that is
Speaker 1: gonna happen in the next three to five years, somewhere
Speaker 1: between twenty twenty six and twenty twenty eight. But US
Speaker 1: oil production that has been growing all the way since
Speaker 1: two thousand and eight now may peak. And that is
Speaker 1: a huge change in the industry because also means that
Speaker 1: unless oil demand stops growing, if the US cannot growth anymore,
Speaker 1: we have to go somewhere else for oil, and that's
Speaker 1: gonna be where the US was back thirty years ago
Speaker 1: into the Saudi Aravian Opek hunts.
Speaker 3: When we come back, why peak shell oil might actually
Speaker 3: be a problem for the transition to clean energy. You
Speaker 3: said that if the man for early and the US
Speaker 3: keeps growing and production and falls, we're going to need
Speaker 3: to go elsewhere for that oil. But what we're seeing
Speaker 3: now is a lot of talk about transitioning away from oil,
Speaker 3: and in fact some of that actually happening. And you
Speaker 3: write that the shell revolution bought the world time for that.
Speaker 1: What do you mean by that, Well, you think about
Speaker 1: when the revolution started. It is around the time that
Speaker 1: Tesla was really starting to become the company.
Speaker 2: That we now today.
Speaker 1: They were not ready to mass market electric b because
Speaker 1: we didn't have yet the technology on batteries that we
Speaker 1: have today.
Speaker 5: Tesla is best known for it's one hundred and nine
Speaker 5: thousand dollars all electric roadster. The company apparently wants to
Speaker 5: take advantage of investor interest in green technology and battery
Speaker 5: powered vehicles.
Speaker 1: Back fifteen twenty years ago, we were still completely reliant
Speaker 1: on internal combustion engines of cars powered by gasoline and diesel.
Speaker 2: We didn't have.
Speaker 1: Really the option that we are beginning to see today
Speaker 1: that we can move into the electrification of transportation into
Speaker 1: electric vehicles, whether it's Test, Louder any other brand. And
Speaker 1: if we have not had shale and demand was increasing
Speaker 1: and the supply was a bit stuck, nan but we
Speaker 1: will have found ourselves and the global economy is with
Speaker 1: much higher prices, much higher inflation, we will have had
Speaker 1: an economic problem.
Speaker 2: So in some ways shale gave the whole.
Speaker 1: Economy a bit of time to get ready for a
Speaker 1: world where at some point in shale is not going
Speaker 1: to be there.
Speaker 3: We talked a little bit earlier about geopolitics and oil,
Speaker 3: which is always front and center. Certainly with Russia's were
Speaker 3: in Ukraine, the politics around oil and using oil sort
Speaker 3: of as a weapon has come up, and so that
Speaker 3: is still very much a big part of this conversation.
Speaker 1: It is and if you think about the sansiens that
Speaker 1: the G seven impost on Russia, crippling the ability of
Speaker 1: the Kremlin to sell his oil, and then the health
Speaker 1: that the United s that is provided to Europe sporting
Speaker 1: a lot of liquify natural gas that would have not
Speaker 1: been possible without shale. At the same time, there's also
Speaker 1: the limits of shale. Shale is not a magic pill
Speaker 1: that solves every energy problem. It helps, but it doesn't
Speaker 1: really give you the magic solution that is going to
Speaker 1: make the US energy independent and Europe is not going
Speaker 1: to have to buy anything from Russia. It is a
Speaker 1: very large energy system, but it really helps increasing production
Speaker 1: and therefore giving the system more flexibility.
Speaker 3: So if you look out into the future, which I
Speaker 3: know you always do, what do you see? What is
Speaker 3: your forecast for how this plays out?
Speaker 1: There are two skulls of thoughts, and I'm going to
Speaker 1: tell you what the two are out there. And then
Speaker 1: where I said, there is a school of thought that says, well,
Speaker 1: this is not a problem. Shale grow slows down and
Speaker 1: ultimately picks in the next five years.
Speaker 2: But so is oil demand.
Speaker 1: Because of electrification, evs, electric veh course, we're going to
Speaker 1: start needing less and less oil.
Speaker 2: So even if the.
Speaker 1: US is not growing production, that's not a problem because
Speaker 1: oil demand is gonna stop growing also and it's gonna fall.
Speaker 1: The other school of thoughts says, well, actually oil demand
Speaker 1: growth is going to prove more sticky that people think, yes,
Speaker 1: we are going to start electrifying our big course. But
Speaker 1: if you think of all the oil that we use,
Speaker 1: only about our quarter is gasoline. A lot of the
Speaker 1: other oil is for things that they cannot be really
Speaker 1: easily electrified. You struggle to electrify the big tracks that
Speaker 1: move in diesel, You struggle to electrify all the construction equipment,
Speaker 1: the petrochemical industry, aviation, et cetera, et cetera. And oil
Speaker 1: demand may continue growing beyond twenty twenty six to twenty seven,
Speaker 1: even all the way into the twenty thirties, and perhaps
Speaker 1: it stops growing, but it doesn't really fall very very quickly.
Speaker 1: That's the second score of thought, and that is the
Speaker 1: more worrisome one, because that will mean that the US
Speaker 1: is going to have to go back to Soudia, United
Speaker 1: Arab EMI days and open countries.
Speaker 2: I am more on the second one.
Speaker 1: I'm a bit worried that the energy transition is not
Speaker 1: going at the base that we need both to fight
Speaker 1: climate change but also to avoid high prices later this
Speaker 1: decade and into the twenty and thirties.
Speaker 3: And if that comes to pass, Americans who have not
Speaker 3: had to think about energy security in a long time
Speaker 3: certainly might have to. Do you think that that's something
Speaker 3: that we should all be worried about.
Speaker 1: I think that we should be worried about because the
Speaker 1: US has had these kind of wake up moments all
Speaker 1: the sudden politically that they were really unexpected. No one
Speaker 1: really saw it coming, the oil crisis in the seventies
Speaker 1: and eighties, and when it came, it really basically became
Speaker 1: the major subject for some presidencies. I mean, Jimmy Carter
Speaker 1: presidency was a lot of it about oil prices and
Speaker 1: gasoline prices and dealing with the Middle East.
Speaker 6: It's a problem that we will not be able to
Speaker 6: solve in the next few years, and it's likely to
Speaker 6: get progressively worse through the rest of the century. We
Speaker 6: must not be solf a short timid If we hope
Speaker 6: to have a world for our children and our grandchildren,
Speaker 6: we something must balance our demand for energy with our
Speaker 6: rapid and shrinking resources.
Speaker 1: So the last few presidencies have it easy in some
Speaker 1: ways because they.
Speaker 2: Have not to really worry about oil.
Speaker 1: I mean, all of a sudden, the United States was
Speaker 1: sporting It was almost a problem of riches I mean
Speaker 1: Barack Obama if he could have gone back to the
Speaker 1: seventies and early eighties and telling Jimmy Carter oil is
Speaker 1: not the longer a problem. We are actually exporting oil
Speaker 1: everywhere and helping.
Speaker 2: Europe et cetera, et cetera.
Speaker 1: And I worry that perhaps come back in five years time,
Speaker 1: a president in the White House is going to have
Speaker 1: to worry again about oil in a major way, and
Speaker 1: that kind of really tail wind that the shale revolution
Speaker 1: has been for US economy and US politics is not
Speaker 1: going to be there.
Speaker 3: So what is the answer from a policy perspective? If
Speaker 3: oil production is naturally going down, and if electrification and
Speaker 3: other forms of renewable energy aren't rising quickly enough, is
Speaker 3: there a policy solution that can bridge that gap.
Speaker 1: The most obvious one is to reduce gasoline consumption as
Speaker 1: quickly as you can, So you can do that different ways.
Speaker 1: You can try to speed up production of electric vehicles,
Speaker 1: speed up the logistics of electric vehicles, because I think
Speaker 1: that a lot of people worry about where to charge
Speaker 1: those electric vehicles. You could tax gasoline and make it
Speaker 1: more prices so people use it less. But all of
Speaker 1: those policies have a lot of handicaps. I'm not a politician,
Speaker 1: but I know that I will not win a single
Speaker 1: boat if I was running for office promising to increase
Speaker 1: taxes on gasoline significantly. So what I will say is,
Speaker 1: in some ways politicians have had it a bit easier
Speaker 1: the last few years thanks to shale that has kept prices.
Speaker 2: Lower than otherwise. Doing the energy transition.
Speaker 1: In a situation in which prices are going higher for
Speaker 1: gasoline and other refined products, it's going to be more
Speaker 1: difficult because people are going to blame the transition on
Speaker 1: those prices, even if it's not completely related.
Speaker 2: And I fear.
Speaker 1: That the public support for any transition may wane if
Speaker 1: prices go up.
Speaker 3: Javier, thanks so much for coming on the show.
Speaker 2: Thank you so much for having me.
Speaker 3: Thanks for listening to us here at The Big Take.
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Speaker 3: Our original music was composed by Leo Sidrin. I'm Westcsova.
Speaker 3: We'll be back on Monday with an another big take.
Speaker 3: Have a great weekend.