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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.

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Speaker 3: I'm Joe Wassenthal and I'm Tracy Alloway.

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Speaker 2: Tracy, I think at least temporarily, some of the trade

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Speaker 2: related headlines are quieting down, and so it's sort of

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Speaker 2: time perhaps to understand. I don't want to say new normal.

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Speaker 2: I just don't. That's like jinxing it a little bit,

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Speaker 2: but like what the new environment looks like for some

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Speaker 2: of the industries that have been whipsawed and affected over

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Speaker 2: recent weeks and months.

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Speaker 3: Yeah, ninety days, for investors, executives and podcasters to kind

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Speaker 3: of catch their breath and consider the new environment, That's

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Speaker 3: how I would describe it, and then it will probably

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Speaker 3: all change again.

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Speaker 2: It'll chain We're never going to run out of fresh

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Speaker 2: material and fresh stories to talk about.

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Speaker 4: You know.

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Speaker 2: There's always this thing. People are always surprised that there

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Speaker 2: is this phenomenon which seems to occur in markets in

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Speaker 2: which Republican presidents tend to not be great environments for

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Speaker 2: the oil industry. Like people think, oh, yeah, here we're

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Speaker 2: gonna have this pro oil president come in, but pro oiled.

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Speaker 2: I don't know what that means.

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Speaker 4: But if it means.

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Speaker 2: More pro drilling, pro liberalization of energy regulations, then often

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Speaker 2: that means lower prices and less profits, and then you know,

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Speaker 2: you get an environment where you get a Democratic president

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Speaker 2: who wants to constrict expansion, focus more on alternatives, and

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Speaker 2: then profits go up. Anyway, the pattern seems to be

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Speaker 2: repeating now, and oil prices have done pretty badly since

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Speaker 2: the start of the year.

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Speaker 3: Yeah, so this is something we've been watching. We've been

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Speaker 3: writing about it in the old Lots newsletter. There was

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Speaker 3: that great report out from the Dallas Fed their regular

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Speaker 3: energy survey, and it had a bunch of quotes from

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Speaker 3: anonymous oil officials that were really kind of extreme in

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Speaker 3: various ways, and I think one of them kind of

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Speaker 3: nailed the theme, which is that you can't really have

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Speaker 3: fifty dollars per barrel oil and US energy dominance. It's

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Speaker 3: like it's incompatible in various ways. So I think we

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Speaker 3: should talk about that tension.

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Speaker 2: We should absolutely talk about the tension. In addition to

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Speaker 2: the supply, and we know that OPEC is pumping more,

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Speaker 2: they are all the input costs going up, particularly from

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Speaker 2: tariff affected companies in the US. What does it steal tubular.

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Speaker 3: Tubular components, Christmas trees. Those are the little collections of

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Speaker 3: valves and spools.

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Speaker 2: Yes, so we're going to get into all that. This

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Speaker 2: double whammy, so to speak. We have seen a bit

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Speaker 2: of a rebound as we're talking about this. On April thirteenth,

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Speaker 2: twenty twenty five, at ten oh seven am Eastern time,

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Speaker 2: the price of a generic barrel of West Texas Intermediate

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Speaker 2: sixty two dollars and ninety six cents. I don't know

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Speaker 2: how profitable it is at that level, but we have

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Speaker 2: the perfect guest, someone we spoke to a few years

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Speaker 2: ago when the industry was under very different conditions, but

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Speaker 2: someone who has a very sort of granular understanding of

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Speaker 2: the industry. We're going to be speaking with Peter Churtsak,

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Speaker 2: and he's currently the founder and president of Studio dot Energy.

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Speaker 2: Previously as a managing director at art Financial, which did

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Speaker 2: investing in the oil industry. So an expert in the space,

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Speaker 2: has written books about the energy industry, energy transition periods

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Speaker 2: and so forth. So, Peter, thank you so much for

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Speaker 2: coming back on odd lots. Well, I'm delighted to be back.

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Speaker 4: Thank you.

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Speaker 2: Sixty two dollars and ninety five cents. Now, can the

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Speaker 2: industry make money at these levels? Who's making money at

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Speaker 2: these levels?

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Speaker 4: Well, the industry is composed of many, many players that

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Speaker 4: have many different geographic land holdings and therefore many different

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Speaker 4: extraction methodologies and different grades of oil. So, you know,

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Speaker 4: sixty two ninety six, if we think of it as

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Speaker 4: an average price, is sort of okay. It's marginally profitable

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Speaker 4: for a large part of the industry, but there's no

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Speaker 4: questions that higher cost producers start falling off the map.

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Speaker 4: And what you also see is things like stripper wells,

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Speaker 4: wells that are very low productivity start to get shut

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Speaker 4: in at these levels. And then there's the boardroom discussion about, well,

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Speaker 4: what is the longevity of these prices? You know, the

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Speaker 4: sixty two ninety six is and actually it was only

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Speaker 4: about a week or two ago. It was in the

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Speaker 4: high fifties. Yeah, you know, it's it's you sort of

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Speaker 4: look at that in the boardroom and you just say, okay,

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Speaker 4: is this going to last a quarter or is it

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Speaker 4: going to last a year? And you'd probably say, you

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Speaker 4: know what, I'm going to wait a quarter before I

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Speaker 4: start making any major decisions on my budgeting.

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Speaker 3: What's the funding environment like right now, because I remember

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Speaker 3: if you look back at the shale oil boom in

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Speaker 3: the sort of twenty tens, this was the big driving force, right,

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Speaker 3: like everyone I wanted to invest in oil, and so

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Speaker 3: we had this big boom and then we had oversupply

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Speaker 3: and prices crashed. And now all the energy companies say

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Speaker 3: they want to be really disciplined when it comes to

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Speaker 3: capital spending. They want to return more money to shareholders.

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Speaker 3: I don't know our shareholders interested in that particular proposition.

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Speaker 3: And is funding still like a little bit difficult to get.

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Speaker 4: Yeah, So let's talk about that because it's really important.

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Speaker 4: You know, the equity funding which was so much a

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Speaker 4: part of the shale revolution. You know, it started really

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Speaker 4: in the Bocking around two thousand and nine, moved into

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Speaker 4: the Permian around twenty eleven, and more broadly, and there

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Speaker 4: was a lot of equity financings. That sort of money

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Speaker 4: just came in at low cost. The capital things really

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Speaker 4: started to change, as you pointed out Tracy in twenty

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Speaker 4: fifteen sixteen, with the price wars, the drop and the

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Speaker 4: price per barrel as the Saudis tried it to take

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Speaker 4: their market share back, but there was another moment that

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Speaker 4: was really important. That was around circa twenty seventeen eighteen,

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Speaker 4: and that was when the whole end of oil narratives

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Speaker 4: started to occur, right, that was and if you wind

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Speaker 4: back to Elon Musk, the models was coming out and

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Speaker 4: starting toning traction, lots of buzz about electric vehicles, and

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Speaker 4: it was as if the end of oil was nigh

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Speaker 4: within ten years. And so investors sort of the combination

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Speaker 4: of hey, you guys aren't making money in the oil

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Speaker 4: and gas industry. The prices are low, and by the way,

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Speaker 4: it's a sunset industry. Therefore, just give us your cash

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Speaker 4: flow or a significant portion of cash flow. We'll put

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Speaker 4: the money elsewhere, right, And that was the sentiment. And

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Speaker 4: that sentiment, you know, recently started to come back post

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Speaker 4: invasion of Ukraine and the geopolitical elements sort of coming

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Speaker 4: back and the price of oil rising above seventy dollars.

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Speaker 4: It made it okay, well let's have another look. And

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Speaker 4: then the sort of the demise of the whole ESG

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Speaker 4: type narrative. But you know, this latest oil price d

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Speaker 4: office sort of taken the resurgence off what do you

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Speaker 4: call it? The sentiment has sort of turned a little

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Speaker 4: I'm gonna just watch this. I've seen this movie before.

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Speaker 2: What does it take Like oil isn't going to go

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Speaker 2: away in ten years obviously, but there was a unique

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Speaker 2: set of conditions in the twenty tens. They're also the

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Speaker 2: technological gains. Do is the cheap capital like has that

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Speaker 2: gone forever? Or is the industry so cyclical and so

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Speaker 2: boom and bust that it's plausible that at some point

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Speaker 2: we see another crazy drilling war, Like it feels like

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Speaker 2: maybe I'm naive to think that that can't be recovered

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Speaker 2: because people in the oil industry they're a little bit crazy,

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Speaker 2: and you can never count out the possibility that they

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Speaker 2: all go gung ho for expansion again at some point

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Speaker 2: in the future.

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Speaker 4: Well they it's a great point because of this that

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Speaker 4: it's sort of like, Okay, we've seen this movie before. Yeah,

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Speaker 4: if you recall, like it just only been in the

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Speaker 4: last couple of weeks. At Opek plus is basically which

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Speaker 4: is it released Saudi Arabia basically saying Okay, we're going

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Speaker 4: to open up the taps another four hundred and eleven

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Speaker 4: thousand barrels per day on top of the six hundred

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Speaker 4: or so so at a time when the economy is weak,

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Speaker 4: and you sort of question the motivations. Okay, are these

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Speaker 4: guys trying to take back the market share that they

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Speaker 4: feel that they're lost. We saw that movie back in

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Speaker 4: twenty fifteen. But to be able to go gung hosts say, Joe,

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Speaker 4: you need capital. You need to be able to replicate

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Speaker 4: the low cost of capital era of the twenty tens,

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Speaker 4: which was coupled with low inflation, low interest rates. We

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Speaker 4: don't have that. We don't have that circumstance right now.

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Speaker 4: So the planets are not aligned for a gun co drilling.

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Speaker 4: And I think that the oil and gas executives are

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Speaker 4: much more savvy today that they sit in the boardroom

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Speaker 4: table and say, Okay, I'm going to watch this. I've

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Speaker 4: seen this before. And by the way, in the world

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Speaker 4: of corporate governance, it's shareholders who really oversee the board,

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Speaker 4: and the board overseas the management. So ultimately the shareholders

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Speaker 4: are the ones that are deciding whether or not the

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Speaker 4: industry's going to go gung hole. And right now the

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Speaker 4: sentiment is now.

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Speaker 3: You know, Joe made the point earlier in the intro

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Speaker 3: that one of the strange realities that we all live with.

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Speaker 3: Seems to be that the oil industry leans Republican. I

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Speaker 3: think that's fair to say. Meanwhile, the price of oil

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Speaker 3: tends to do better under democratic administrations, And in fact,

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Speaker 3: our Bloomberg colleagues had a really good piece out I

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Speaker 3: think just this week. It was called Trump's thirst for

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Speaker 3: Cheap Oil irks and industry he loves to praise, and

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Speaker 3: in it they quote a guy who owns a sort

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Speaker 3: of oil components store in Texas, and he has this

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Speaker 3: really funny quote where he says, we make our money

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Speaker 3: during democratic administrations. I killed it during Clinton, Obama and Biden.

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Speaker 3: I said that at the country club, and I thought

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Speaker 3: somebody was going to kill me with a butter knife,

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Speaker 3: which is hilarious. But like, what is the attraction? What

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Speaker 3: is the Republican pitch to the energy industry which seems

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Speaker 3: to resonate potentially in the face of reality.

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Speaker 4: Yeah, it's great. I mean from a statistical perspective, if

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Speaker 4: you want to get into the details, in correlation does

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Speaker 4: not imply causality. In other words, I'm a little suspicious

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Speaker 4: that democratic administrations are the cause of greater prosperity for

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Speaker 4: the oil and gas industry because the overlay of the

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Speaker 4: technological revolution of horizontal drilling, fracking and all that stuff

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Speaker 4: has nothing to do with political administrations, nor does it

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Speaker 4: necessarily have to do with other major factors, but it

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Speaker 4: does speak crazy to the tensions you're talking about. I

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Speaker 4: read that article as well, and there's no question that

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Speaker 4: the Trump administration and then the lead up even to

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Speaker 4: the last election, the rhetoric was a drill, baby, drill.

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Speaker 4: The industry was very closely aligned with the Republican narratives,

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Speaker 4: and particularly with the narratives of reducing regulations and getting

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Speaker 4: rid of ESG and all that kind of stuff, But

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Speaker 4: there wasn't a lot of narrative about necessarily what they're

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Speaker 4: going to do with the price right on prices set globally,

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Speaker 4: and that's a whole other dynamic that comes into play.

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Speaker 2: What's happening. So you're based in Calgary and obviously one

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Speaker 2: of Tracy mentioned that Dallas fed Energy survey, and part

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Speaker 2: of the concern for the US based players is that

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Speaker 2: their cost of goods very you know what is it

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Speaker 2: the stibil tuber tubular component. Sorry, I don't know why,

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Speaker 2: I can't remember. Prices are going up, et cetera. Can

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Speaker 2: you talk a little bit about input costs and what's

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Speaker 2: happening there on sort of both sides of the US

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Speaker 2: Canada border.

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Speaker 4: Yes, this is a big issues, the trade wars, the tariffs,

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Speaker 4: and you know, you can get it into the details

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Speaker 4: and call it tubular goods and valves and so on,

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Speaker 4: but ultimately we're talking about steel. Yeah, and we're talking

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Speaker 4: about the raw inputs that are fundamental to building facilities,

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Speaker 4: to drilling, to product tubing and so on and so forth.

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Speaker 4: So when the Trump administration started the trade wars effectively

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Speaker 4: and the tariffs slopping tariffs on steel, well, yeah, the

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Speaker 4: input costs are ultimately going to go up until such

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Speaker 4: time as their desires in other words, the Trump administration's

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Speaker 4: desire to domesticate or repatriate the steel industry to the

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Speaker 4: point where it's competitive with the cheaper steals from the

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Speaker 4: rest of the world. So there's no question that you're

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Speaker 4: going to see inflation in the oil field, and there's

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Speaker 4: often a lag. I mean, the story is only a

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Speaker 4: couple months old, right, three months old, Like you will

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Speaker 4: see the permeation of higher steel and steal product prices

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Speaker 4: into places like the oil field over the course of

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Speaker 4: the year. So yeah, stay tuned for the costs. You know,

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Speaker 4: we've talked earlier about the sixty two dollars and whether

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Speaker 4: or not that's economic. Well, it becomes less economic when

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Speaker 4: the core inputs to the oil field start going up.

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Speaker 3: Where are we in the sort of oil technology upgrade cycle,

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Speaker 3: because I remember a few years ago, I guess again

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Speaker 3: coinciding with the shale boom, there was this big drive

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Speaker 3: for standardized components and that was starting to bring down

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Speaker 3: some of the costs for producers. Yeah, are people still

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Speaker 3: doing that? Like, do we still have big upgrades taking place?

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Speaker 4: Well? There are. Again, it depends upon the extraction methodology.

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Speaker 4: So there's two sides to this. One is the grilling

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Speaker 4: the exploration completion side of the business. So I think

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Speaker 4: there's still more surprises coming there. It's just amazing in

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Speaker 4: terms of the types of wells that are being grilled

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Speaker 4: a couple miles down, several miles across and then horseshoeing

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Speaker 4: back to be able to recover more and more oil

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Speaker 4: and natural gas by the way, and which means that

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Speaker 4: the capital cost per foot that you drill, the capital

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Speaker 4: cost per barrel that you liberate, goes down by virtue

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Speaker 4: of technology, only to be offset by we just talked

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Speaker 4: about the capital input cost of then developing the facilities

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Speaker 4: to be able to extract, process and distribute the oil

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Speaker 4: out of the ground. You know, getting back to your question,

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Speaker 4: there's the subsurface technologies which continue to surprise. I think

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Speaker 4: there's more to come in that. And above ground, what's

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Speaker 4: happening is the drive for greater efficiencies, to turn the

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Speaker 4: oil field more into a manufacturing operation and to drive

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Speaker 4: cost down through scale. Hence you've seen the consolidation of

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Speaker 4: the industry happening. Scale doesn't matter, and so you know

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Speaker 4: there's a lot going on from the perspective of process

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Speaker 4: and efficiency drive to bring costs down, only to be

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Speaker 4: offset by the as I said, the input costs going

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Speaker 4: up and then the pressures of price going down, which

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Speaker 4: is the number one dominant variable which then dictates whether

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Speaker 4: or not there's a margin squeeze, a profit margin squeeze

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Speaker 4: or not.

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Speaker 2: Can you talk a little bit more about the discovery

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Speaker 2: process and you know, what tech looks like in May

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Speaker 2: twenty twenty five versus a twenty fifteen or two thousand

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Speaker 2: and five, and like what specifically, like what specific tech

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Speaker 2: is being employed so that these companies can gain greater

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Speaker 2: visibility into what's happening underneath the Earth's surface.

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Speaker 4: Yeah, well, that's a good bracketing. Two thousand and five,

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Speaker 4: the industry was still dominated by vertical wells. You drill

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Speaker 4: a well in the ground, and it's like throwing darts

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Speaker 4: at a board, you know. The geophysics, in other words,

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Speaker 4: the ability to map the subsurface and understand where the

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Speaker 4: oil is or the gases, it was pretty good, but

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Speaker 4: it was still sort of a hit and miss type

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Speaker 4: of thing, and that was the way it was for

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Speaker 4: over a century. The advent of more precise horizontal drilling,

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Speaker 4: which was really nothing new in two thousand and five,

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Speaker 4: but it really started to take root with better instrumentation,

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Speaker 4: better mechanics, you know, mechanical instrumentation and so on, and

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Speaker 4: the ability to position the drill bit was a major advance.

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Speaker 4: And then by twenty and fifteen it was okay, you're

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Speaker 4: driving this drill bit down into the ground, you're bending

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Speaker 4: at ninety degrees and you're going out. And then from

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Speaker 4: twenty fifteen to today, ten years it's like, okay, let's

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Speaker 4: go down, and now the subsurface looks like a fork.

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Speaker 4: It doesn't look like a single well, and the importance

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Speaker 4: of this can't be understated because now you're exposing more

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Speaker 4: surface area of a well, you know, instead of one

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Speaker 4: vertical well with say, I don't know, twenty thirty feet

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Speaker 4: of exposure in a vertical cylinder. All of a sudden,

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Speaker 4: now you have miles of exposure of a well going

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Speaker 4: out horizontally and then forking and then now even making

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Speaker 4: U turns and horseshoeing back. I mean, it's just incredible

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Speaker 4: what we can do. You can think of a drill bit,

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Speaker 4: which is the solid steel pipe. It seemingly but it's

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Speaker 4: more like now a piece of spaghetti going down and

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Speaker 4: winding around to make sure that we optimize it. I

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Speaker 4: would say one more thing that's super important is that

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Speaker 4: the technology is now a game. That the extraction methodologies

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Speaker 4: become much more technical, and the ability to focus on

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Speaker 4: extracting the maximum amount out of a reservoir using these

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Speaker 4: new geologic penetration technologies is just amazing. So there's more

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Speaker 4: to come in my opinion, and I never want to

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Speaker 4: underestimate the ability of the technology to get better.

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Speaker 3: So on the pros and cons of the current environment

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Speaker 3: for oil producer's point, I guess you have technological advances

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Speaker 3: that are still happening. You also have from the Trump

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Speaker 3: administration some regulatory changes, and I think there's something about

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Speaker 3: co mingling. I think they call it so a regulatory

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Speaker 3: change that would I guess allow oil producers to pull

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Speaker 3: crude out of multiple reservoirs. But are the regulatory changes

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Speaker 3: enough to offset some of the higher costs we've been discussing.

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Speaker 4: Well, that's a good question and one to be seen.

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Speaker 4: I mean, generally speaking, the number one regulatory issue is

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Speaker 4: to be able to drill a well, complete it and

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Speaker 4: bring the oil and gas to market as quickly as

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Speaker 4: possible because of the time value of money. Time is money,

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Speaker 4: and so the removal of barriers to be able to drill,

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Speaker 4: produce and sell oil and gas is a big deal.

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Speaker 4: And so you know, we're sort of seeing some of that.

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Speaker 4: But you know's the big difference between what the Trump

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Speaker 4: administration can do it a federal level versus what companies

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Speaker 4: have to do at the state level. And it's the

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Speaker 4: same in Canada. Here there's really federal regulations are overlaying

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Speaker 4: on top of provincial regulations, so we call it the

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Speaker 4: pancaking of regulations is also problematic and so to the

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Speaker 4: extent that pancaking is reduced and regulatory drag in terms

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Speaker 4: of the time it takes to do things is reduced.

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Speaker 4: Oh and particularly it's not just the drilling and extraction process,

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Speaker 4: it's then building of the pipelines to get the commodities

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Speaker 4: to the market.

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Speaker 2: What's the state of pipeline politics these days, because I

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Speaker 2: know that seems to go in and out of favor,

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Speaker 2: but maybe tell us about Canada, what is the state

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Speaker 2: of the appetite to expand pipeline networks.

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Speaker 4: Yeah, that's a great question. So it was definitively out

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Speaker 4: of favor for Canada fifteen years, starting to come back

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Speaker 4: into favor within the Canadian public. And we now now

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Speaker 4: have a new prime minister, Prime Minister Mark Kearney, and

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Speaker 4: he has indicated that, okay, we're ready to think about

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Speaker 4: pipeline and export facility development and infrastructure development. It's I

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Speaker 4: would argue, more biased to the natural gas side, and

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Speaker 4: particularly LNG liquefied natural gas exports off our west coast.

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Speaker 4: But what was considered almost unthinkable, say five years ago,

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Speaker 4: is all of a sudden invoked and it's largely driven

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Speaker 4: frankly by the trade wars to desire for sovereignity here

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Speaker 4: in Canada over our oil and gas supplies, and the

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Speaker 4: need to diversify our markets away from the United States

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Speaker 4: because for seventy years or longer, the United States has

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Speaker 4: been our number one, in fact, our only market or

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Speaker 4: oil and gas.

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Speaker 2: It's pretty striking tracy that Mark Kearney of all people.

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Speaker 2: I mean, it sort of does tell you a lot

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Speaker 2: about how the winds are changing. That Mark Kearney is

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Speaker 2: also you know, sort of on board or much more

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Speaker 2: comfortable with pipeline expansion.

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Speaker 3: Yeah, it's it's a shift for sure. Peter. Since you

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Speaker 3: mentioned LLNG just now, can you sort of give us

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Speaker 3: the state of play there as well, because this is

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Speaker 3: something that's also been coming up, I guess, like the

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Speaker 3: differing fortunes of crude oil versus LNG in North America.

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Speaker 4: Yeah, Well, to get the North American sense, you've got

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Speaker 4: to get the global sense. So which commodity is growing

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Speaker 4: faster and in demand, and it's natural gas. Natural gas

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Speaker 4: continues to grow quite handsomely. Oil is starting to level out.

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Speaker 4: I don't think it's peaked yet. I think we've got

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Speaker 4: a few years before oiled consumption peaks. But natural gas

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Speaker 4: continues to rise, and we also now see the expansion

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Speaker 4: of liquefied natural gas, certainly from the United States. In Canada,

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Speaker 4: our first big terminal opens up potentially in a couple months,

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Speaker 4: and more to follow. Globally, LNG, whether it's Australia, the

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Speaker 4: Middle East and other places is growing, and so it's

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Speaker 4: becoming competitive, but the competition is also matched by growing demand.

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Speaker 4: So LNG is definitely the hydrocarbon fuel of the future

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Speaker 4: in terms of growth, and I think you're going to

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Speaker 4: see more. And then you talked to earlier Tracy about regulation.

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Speaker 4: I think that the Trump administration is definitely on board

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Speaker 4: with reducing regulatory drag on building loquified natural gas terminals.

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Speaker 4: And I think the drill baby, drill narrative is much

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Speaker 4: more tuned to natural gas than it is to the

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Speaker 4: oil side of the equation.

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Speaker 2: Does the expansion of LNG export terminals raise prices domestically

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Speaker 2: for domestic consumers of natural gas stay in the US.

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Speaker 4: Yes, And the reason is because for the past several decades,

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Speaker 4: natural gas has been bottled up in North America, and

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Speaker 4: particularly the last I would say fifteen years with the

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Speaker 4: shale revolution and the liberation of prolific amounts of natural

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Speaker 4: gas here in North America. It's made our prices here.

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Speaker 4: I mean it's what is it, three dollars an mmbtu,

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Speaker 4: something of that order, three point fifty Maybe I don't

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Speaker 4: know what it is today, maybe you can pull it up,

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Speaker 4: but whatever it is, I mean, globally, the price is

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Speaker 4: much higher. It can be eight nine dollars, depending upon

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Speaker 4: the geopolitical state of the world. Yes there's liquefaction costs,

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Speaker 4: Yes there's transportation costs, but there's no question that there

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Speaker 4: was an imbalance in supplying demand in North America that

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Speaker 4: has kept the price low. The producers have adapted to

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Speaker 4: that and can make money off of it. But the

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Speaker 4: whole desire to export globally is to liberate North American

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Speaker 4: gas into the global market and raises the price. So

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Speaker 4: you're going to see the prices rise, and the forward

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Speaker 4: curves are indicating that already.

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Speaker 3: So I have to confess I rewatched Armageddon last week.

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Speaker 3: Such a good movie. I can see why people think

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Speaker 3: it was like secretly sponsored by Exxon though. But just

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Speaker 3: on this note, Peter, the first time we ever spoke

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Speaker 3: to you on all thoughts, I think a big chunk

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Speaker 3: of our conversation was about talent in the energy space

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Speaker 3: and actually securing workers who want to get into the

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Speaker 3: oil industry and how difficult that was in the current environment.

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Speaker 3: So fast forward, let's see when was the last time

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Speaker 3: we spoke to you.

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Speaker 2: I think we've twenty twenty one.

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Speaker 3: Twenty twenty two. Okay, so fast forward three years. What's

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Speaker 3: the talent picture like right now?

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Speaker 4: Yeah, So there's two components to the talent. One is

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Speaker 4: the downtown office workers, these geologists, geophysicist engineers, and that

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Speaker 4: talent pool. So that talent pool was definitely and there

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Speaker 4: was concern because of the retirement profile, the aging of

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Speaker 4: the expertise and the last decade where again we were

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Speaker 4: talking earlier about oil and gas being perceived as a

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Speaker 4: sunset industry, so why would any young person ever want

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Speaker 4: to go into this business? And so it was creating

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Speaker 4: a situation whereby there could be like a real talent shortage,

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Speaker 4: and you know, talent is still hard to come by. However,

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Speaker 4: one of the things that's happened again technology has never

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Speaker 4: sees surprise, is that the combination of new digital processing

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Speaker 4: technologies AI and so on, means that whereas it used

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Speaker 4: to take three geologists to do a job function now

435
00:26:01,400 --> 00:26:03,560
Speaker 4: you can do it with two or potentially even one.

436
00:26:03,760 --> 00:26:06,880
Speaker 4: So actually, what we've seen in the drive for efficiency

437
00:26:07,320 --> 00:26:09,840
Speaker 4: that we discussed earlier as well, it's not just confined

438
00:26:09,840 --> 00:26:14,520
Speaker 4: to the field, it's also in the office, so seeing

439
00:26:14,600 --> 00:26:18,680
Speaker 4: actually reductions in workforce. But we'll see what that does

440
00:26:18,720 --> 00:26:23,719
Speaker 4: to productivity. But generally speaking, there is this uncomfortable balance

441
00:26:23,720 --> 00:26:26,840
Speaker 4: in my opinion, between the supply and demand of labor

442
00:26:27,600 --> 00:26:31,520
Speaker 4: in the field blue collar workers. The issue is is

443
00:26:31,520 --> 00:26:34,600
Speaker 4: that if there's better jobs that are not away from

444
00:26:34,600 --> 00:26:36,399
Speaker 4: home so to speak, because there's you know, working on

445
00:26:36,440 --> 00:26:39,119
Speaker 4: a drilling rig going in and out as hard, particularly

446
00:26:39,160 --> 00:26:41,399
Speaker 4: if you have a family that has not been as

447
00:26:41,480 --> 00:26:43,800
Speaker 4: much of a problem, and there's sort of a stabilization.

448
00:26:43,880 --> 00:26:46,160
Speaker 4: For example, if you look at the US oil rig

449
00:26:46,200 --> 00:26:49,239
Speaker 4: count over the course of the last while, I mean,

450
00:26:49,240 --> 00:26:52,160
Speaker 4: it hasn't really grown that much. In fact, it's say,

451
00:26:52,160 --> 00:26:54,520
Speaker 4: if you'll go back to since the last time we talked,

452
00:26:54,640 --> 00:26:56,879
Speaker 4: the number of rigs that are active have fallen from

453
00:26:57,400 --> 00:27:00,840
Speaker 4: six seven hundred down to five hundred, less than five hundred.

454
00:27:01,280 --> 00:27:04,879
Speaker 4: I think it's the precarious balance at the moment. The

455
00:27:04,920 --> 00:27:07,920
Speaker 4: saving grace is It's still of a very high paying

456
00:27:07,960 --> 00:27:11,080
Speaker 4: industry relative to other industries, so that does tend to

457
00:27:11,119 --> 00:27:11,919
Speaker 4: attract people.

458
00:27:12,480 --> 00:27:16,800
Speaker 3: The one other thing I was wondering while watching Armageddon

459
00:27:17,040 --> 00:27:20,440
Speaker 3: and all these drillers on an asteroid saving the world.

460
00:27:20,720 --> 00:27:25,520
Speaker 3: Is there a competition from geothermal nowadays for workers.

461
00:27:25,440 --> 00:27:29,080
Speaker 4: Kennidley, I haven't followed the rig count in geothermal. I

462
00:27:29,119 --> 00:27:31,800
Speaker 4: don't think it's that big personally compared to the oil

463
00:27:31,840 --> 00:27:35,840
Speaker 4: and gas industry. Could there be competition going forward, potentially, yes,

464
00:27:35,960 --> 00:27:38,040
Speaker 4: but I don't see it as being that big, but

465
00:27:38,080 --> 00:27:39,919
Speaker 4: I could I could be wrong. Yeah.

466
00:27:40,080 --> 00:27:45,040
Speaker 2: Also, speaking of careers, someone DMed me this yesterday on

467
00:27:45,119 --> 00:27:48,320
Speaker 2: Twitter and I confirmed it, which is that if you

468
00:27:48,400 --> 00:27:52,840
Speaker 2: go to the careers page for Chevron, there is a

469
00:27:53,080 --> 00:27:58,200
Speaker 2: literally two openings that are being advertised in the United States.

470
00:27:58,640 --> 00:28:01,360
Speaker 2: I think this is like office jobs, and then there

471
00:28:01,480 --> 00:28:06,040
Speaker 2: is a lot of openings in for software developers and

472
00:28:06,200 --> 00:28:10,120
Speaker 2: other things like that in both India and the Philippines,

473
00:28:10,480 --> 00:28:13,800
Speaker 2: also Sri Lanka, also Buenos Aires. How much of these

474
00:28:13,840 --> 00:28:17,800
Speaker 2: sort of like the office jobs in the industry, thanks

475
00:28:17,800 --> 00:28:21,919
Speaker 2: to technology of various flavors, is capable of just simply

476
00:28:22,000 --> 00:28:23,560
Speaker 2: being moved offshore.

477
00:28:23,880 --> 00:28:26,000
Speaker 4: I think quite a bit. I mean, it's like the

478
00:28:26,080 --> 00:28:30,560
Speaker 4: digital revolution, which seems like an old, antiquated term continuous

479
00:28:31,840 --> 00:28:33,800
Speaker 4: and now it's ahi and I think we're going to

480
00:28:33,800 --> 00:28:36,560
Speaker 4: see more displacement of white collar workers in the office

481
00:28:37,119 --> 00:28:39,920
Speaker 4: as a consequence of this. I mean very much the

482
00:28:40,040 --> 00:28:46,320
Speaker 4: art of exploration and mapping the subsurface and engineering you

483
00:28:46,320 --> 00:28:49,880
Speaker 4: can now do with fewer people and more technology.

484
00:28:50,480 --> 00:28:54,080
Speaker 3: So I'm very conscious that we're having this big discussion

485
00:28:54,120 --> 00:28:56,800
Speaker 3: about oil and I think we've only mentioned Opek a

486
00:28:56,840 --> 00:29:02,040
Speaker 3: couple times and we're recording this on May thirteenth. President

487
00:29:02,040 --> 00:29:04,440
Speaker 3: Donald Trump is currently in the Middle East. I think

488
00:29:04,480 --> 00:29:08,800
Speaker 3: he's in Saudi Arabia right now as we speak. What's

489
00:29:08,880 --> 00:29:11,800
Speaker 3: the state of Opek at the moment. I'm aware there

490
00:29:11,800 --> 00:29:15,080
Speaker 3: seems to be this market share war and there's been

491
00:29:15,120 --> 00:29:19,600
Speaker 3: discussions about boosting production yet again, but what's the overall

492
00:29:19,640 --> 00:29:22,800
Speaker 3: picture and what is it that Trump might want to

493
00:29:22,840 --> 00:29:25,680
Speaker 3: get out of Saudi at least when it comes to

494
00:29:25,720 --> 00:29:26,120
Speaker 3: the oil.

495
00:29:27,080 --> 00:29:31,959
Speaker 4: Yeah, Well, it's the Opek situation is really complicated on

496
00:29:32,000 --> 00:29:35,800
Speaker 4: its own, let alone with what the President may or

497
00:29:35,840 --> 00:29:40,800
Speaker 4: may not stay behind closed doors and want. So backing

498
00:29:40,880 --> 00:29:42,880
Speaker 4: up to the question, what is the state of Opek?

499
00:29:43,000 --> 00:29:48,040
Speaker 4: The state of OPEK is that the cartel sets quotas

500
00:29:48,480 --> 00:29:51,560
Speaker 4: for production. So I mean in any country. In most

501
00:29:51,560 --> 00:29:54,920
Speaker 4: countries this would be illegal, certainly in western countries. But

502
00:29:55,080 --> 00:29:58,440
Speaker 4: there's a global cartel which has been around since the seventies,

503
00:29:58,800 --> 00:30:02,120
Speaker 4: and that is the open At Cartel, which has expanded

504
00:30:02,160 --> 00:30:05,400
Speaker 4: into Opek plus to include the Russians and a handful

505
00:30:05,440 --> 00:30:09,800
Speaker 4: of other countries over the last couple of years. Overproduction

506
00:30:10,240 --> 00:30:15,240
Speaker 4: amongst some of the members has always been a running theme. Recently,

507
00:30:15,400 --> 00:30:19,360
Speaker 4: Kazakhstan has been overproducing right, and that has made the

508
00:30:19,360 --> 00:30:22,640
Speaker 4: Saudis not very happy. The Saudis are the largest producer

509
00:30:22,680 --> 00:30:27,480
Speaker 4: in OPEK and really the leading country within the cartel,

510
00:30:27,880 --> 00:30:31,680
Speaker 4: so to teach them a lesson, basically they said, okay,

511
00:30:31,720 --> 00:30:35,600
Speaker 4: we're going to ramp up production and try and drive

512
00:30:35,600 --> 00:30:39,520
Speaker 4: the price down so that it brings into line all

513
00:30:39,560 --> 00:30:42,360
Speaker 4: the various members of OPEK. This is not a new story.

514
00:30:42,480 --> 00:30:45,960
Speaker 4: This happens periodically and so that's the state of play

515
00:30:46,000 --> 00:30:49,880
Speaker 4: within OPEK. And so that comes at a time when

516
00:30:49,920 --> 00:30:53,520
Speaker 4: global demand is weak as a consequence of the trade

517
00:30:53,520 --> 00:30:57,600
Speaker 4: war and the uncertainties therein. And so the combination of

518
00:30:58,480 --> 00:31:03,720
Speaker 4: tenuous demand combined with opening up the valves a bit

519
00:31:03,880 --> 00:31:07,800
Speaker 4: to teach some of the members of OPAKA. Lesson has

520
00:31:07,880 --> 00:31:10,160
Speaker 4: led to the fall in the oil price from seventy

521
00:31:10,160 --> 00:31:14,600
Speaker 4: bucks down to sixty or sixty two today. What President

522
00:31:14,720 --> 00:31:17,680
Speaker 4: Trump will say behind closed doors, I mean, as you said,

523
00:31:17,720 --> 00:31:22,200
Speaker 4: he his objective has a lot of tension, as you

524
00:31:22,240 --> 00:31:24,200
Speaker 4: pointed out at the beginning of the show, because on

525
00:31:24,200 --> 00:31:27,000
Speaker 4: one hand, he wants to keep gasoline prices low at

526
00:31:27,000 --> 00:31:30,200
Speaker 4: the pump, say around the low three dollars level per gallon.

527
00:31:30,680 --> 00:31:33,440
Speaker 4: At the same time, if you keep the price of

528
00:31:33,480 --> 00:31:38,040
Speaker 4: oil too low, the whole drill, baby drill narrative falls apart.

529
00:31:38,200 --> 00:31:41,200
Speaker 2: So therein lies the tension, right And I don't know

530
00:31:41,240 --> 00:31:43,400
Speaker 2: how sure you're supposed to even take it anymore.

531
00:31:43,440 --> 00:31:44,960
Speaker 4: I don't even know if people talk about it.

532
00:31:45,560 --> 00:31:48,280
Speaker 2: But there was like part of Scott Besson's you know

533
00:31:48,400 --> 00:31:52,080
Speaker 2: three three three plan is the plan you know, expand

534
00:31:52,200 --> 00:31:55,880
Speaker 2: oil production by another three million barrels per day in

535
00:31:55,920 --> 00:31:59,320
Speaker 2: the US. That was one of the threes. And right

536
00:31:59,400 --> 00:32:02,080
Speaker 2: now I think it's pretty clear we're going the exact

537
00:32:02,200 --> 00:32:04,880
Speaker 2: opposite direction. Just going back to the trade war for

538
00:32:04,880 --> 00:32:09,080
Speaker 2: a second, from the just the North American perspective, what

539
00:32:09,240 --> 00:32:13,760
Speaker 2: are the impacts. You mentioned Canada wanting to diversify its

540
00:32:14,120 --> 00:32:17,760
Speaker 2: export partners and so building out more export capacity. But

541
00:32:17,880 --> 00:32:20,720
Speaker 2: when it comes to energy, what are sort of the

542
00:32:20,800 --> 00:32:25,320
Speaker 2: first order impacts of the tariffs in terms of the

543
00:32:25,360 --> 00:32:26,880
Speaker 2: flow of energy across the border.

544
00:32:27,360 --> 00:32:30,840
Speaker 4: Yeah, that's a great question because it's multi dimensional. Okay,

545
00:32:30,880 --> 00:32:34,400
Speaker 4: So the US produces about twelve million barrels per day

546
00:32:34,400 --> 00:32:39,160
Speaker 4: of oils skewed toward the light barrels. Light light oils

547
00:32:39,200 --> 00:32:43,280
Speaker 4: like West Texas Intermedia. Canada exports to the United States

548
00:32:43,720 --> 00:32:46,480
Speaker 4: four million barrels per day for a total of sixteen

549
00:32:46,520 --> 00:32:49,040
Speaker 4: and then you make up the other four by importing

550
00:32:49,040 --> 00:32:51,920
Speaker 4: from various countries like Mexico and so on, so to

551
00:32:51,920 --> 00:32:54,080
Speaker 4: bring it up to your twenty million barrels per day

552
00:32:54,360 --> 00:32:58,360
Speaker 4: of consumption. So we are a very significant component of that.

553
00:32:58,800 --> 00:33:00,560
Speaker 4: Most of our barrels that we sent to the United

554
00:33:00,600 --> 00:33:04,560
Speaker 4: States are the heavy barrels which are refined in the

555
00:33:04,560 --> 00:33:08,160
Speaker 4: Midwest and in the Gulf Coast, and those refineries there

556
00:33:08,200 --> 00:33:12,960
Speaker 4: are very much tuned to refining, you know, in other words,

557
00:33:13,040 --> 00:33:17,280
Speaker 4: the recipes for heavier oils, not lighter oils. So you know,

558
00:33:17,360 --> 00:33:22,560
Speaker 4: initially when the tariff war broke out back post inauguration,

559
00:33:23,560 --> 00:33:26,720
Speaker 4: it was like, we're going to put ten percent tariff

560
00:33:26,840 --> 00:33:29,840
Speaker 4: on Canadian oils coming in. Well, that would have definitely

561
00:33:30,480 --> 00:33:34,000
Speaker 4: increased costs to the refiners, which would be passed on

562
00:33:34,600 --> 00:33:39,160
Speaker 4: to the consumers at the gas pump. In part. Now

563
00:33:39,200 --> 00:33:41,200
Speaker 4: some of it would have had to be borne by

564
00:33:41,400 --> 00:33:43,960
Speaker 4: the producer as well. It's all very complicated, but the

565
00:33:43,960 --> 00:33:46,960
Speaker 4: bottom line is it's inflationary because effectively, a tariff is

566
00:33:47,000 --> 00:33:50,400
Speaker 4: a tax and somebody's got to pay, and ultimately, if

567
00:33:50,400 --> 00:33:53,880
Speaker 4: it's passed on to the consumer, they're going to pay. Now,

568
00:33:53,960 --> 00:33:57,240
Speaker 4: we don't have that ten percent right now because the

569
00:33:57,280 --> 00:34:01,720
Speaker 4: trade wars have simmered somewhat of late, but that has

570
00:34:01,840 --> 00:34:06,000
Speaker 4: not prevented Canada from thinking, okay, wait a minute, we

571
00:34:06,080 --> 00:34:10,400
Speaker 4: can't be reliant on one customer. NBA one on one says,

572
00:34:10,520 --> 00:34:14,040
Speaker 4: don't be reliant on one customer. It's concentration risk, so

573
00:34:14,160 --> 00:34:17,960
Speaker 4: let's start looking for other Customers's that's where it's at with.

574
00:34:18,040 --> 00:34:21,160
Speaker 2: The Trump administration coming in. One of the things that

575
00:34:21,280 --> 00:34:25,239
Speaker 2: we've seen is all these companies in all kinds of

576
00:34:25,239 --> 00:34:29,520
Speaker 2: different industries feel very comfortable dropping a lot of their

577
00:34:29,600 --> 00:34:32,839
Speaker 2: sort of I guess you'd call more liberal commitments, whether

578
00:34:32,840 --> 00:34:36,880
Speaker 2: we're talking about ESG or DEI, and we see banks

579
00:34:36,880 --> 00:34:39,719
Speaker 2: and never withdrawing from all these groups, and at least

580
00:34:39,760 --> 00:34:43,480
Speaker 2: the big oil companies you know, paid lip service or

581
00:34:43,840 --> 00:34:48,680
Speaker 2: had various greening or climate initiatives or decarbonizing their own

582
00:34:48,719 --> 00:34:53,560
Speaker 2: supply chains. In some sense, would you say, like broadly

583
00:34:53,719 --> 00:34:58,240
Speaker 2: like were any of those but they ever serious about

584
00:34:58,280 --> 00:35:01,759
Speaker 2: them and buy and large like does the industry sort

585
00:35:01,800 --> 00:35:06,000
Speaker 2: of feel liberated at this point to not have to

586
00:35:06,040 --> 00:35:08,840
Speaker 2: spend effort and time talking about these things.

587
00:35:09,160 --> 00:35:12,160
Speaker 4: You know, it's a great question, and it doesn't have

588
00:35:12,200 --> 00:35:15,719
Speaker 4: a simple answer because the oil and gas industries in

589
00:35:15,760 --> 00:35:18,360
Speaker 4: both Canada and the United States, as I mentioned earlier on,

590
00:35:18,440 --> 00:35:22,719
Speaker 4: are quite diverse. There's hundreds of companies. Yeah, and there's

591
00:35:22,880 --> 00:35:28,280
Speaker 4: various attitudes towards things like climate change, decarbonization, ESG across

592
00:35:28,320 --> 00:35:31,920
Speaker 4: the board. So much as certainly we can point to

593
00:35:33,000 --> 00:35:37,279
Speaker 4: certain CEOs, whether it's in larger small companies that are

594
00:35:37,280 --> 00:35:40,560
Speaker 4: delighted by dropping all these things and thought they were

595
00:35:40,600 --> 00:35:43,920
Speaker 4: nonsense to begin with, there are certainly other CEOs that

596
00:35:44,000 --> 00:35:49,200
Speaker 4: take it seriously and have made conscious efforts to decarbonize things.

597
00:35:49,239 --> 00:35:51,279
Speaker 4: So there's no you know, I hate to fall into

598
00:35:51,400 --> 00:35:54,600
Speaker 4: sort of these binary answers to questions like that where

599
00:35:54,600 --> 00:35:57,600
Speaker 4: I say, yeah, the whole oil industry is relieved, because

600
00:35:57,600 --> 00:36:00,840
Speaker 4: that's not the case. I think that there's definitely a

601
00:36:00,880 --> 00:36:03,640
Speaker 4: full spectrum of attitudes, and I think that's true in

602
00:36:03,640 --> 00:36:07,879
Speaker 4: any industry, but particularly this one. By and large, there's

603
00:36:07,960 --> 00:36:13,040
Speaker 4: a certain set of policies regulations that the industry will

604
00:36:13,080 --> 00:36:15,600
Speaker 4: be relieved to get rid of, because if nothing else,

605
00:36:15,680 --> 00:36:18,920
Speaker 4: the reporting burdens became so onerous that you need an

606
00:36:19,120 --> 00:36:21,880
Speaker 4: entire department to report on these things, and that's costly.

607
00:36:22,600 --> 00:36:26,040
Speaker 4: So there's no quick and clear answer. But generally speaking, up,

608
00:36:26,360 --> 00:36:30,719
Speaker 4: I personally think the industry was overregulated from many dimensions,

609
00:36:30,920 --> 00:36:32,880
Speaker 4: but that's not to say that I don't feel that

610
00:36:32,920 --> 00:36:34,640
Speaker 4: some regulations are necessary.

611
00:36:35,840 --> 00:36:37,720
Speaker 3: Joe, I'm going to ask a peak oil question.

612
00:36:37,800 --> 00:36:38,960
Speaker 4: Okay, good, I'm going to do it.

613
00:36:39,120 --> 00:36:41,799
Speaker 3: No, Okay, it's not really peak oil, although it does

614
00:36:42,000 --> 00:36:44,280
Speaker 3: have the word peak in it. But I was looking

615
00:36:44,280 --> 00:36:47,640
Speaker 3: through some comments from oil companies recently, and I saw

616
00:36:47,680 --> 00:36:52,600
Speaker 3: the CEO of Diamondback Energy say that as a result

617
00:36:52,880 --> 00:36:56,000
Speaker 3: of the activity cuts in the oil industry, it is

618
00:36:56,160 --> 00:37:00,319
Speaker 3: likely that US onshore oil production has peaked and will

619
00:37:00,360 --> 00:37:03,520
Speaker 3: begin to decline this quarter, and there's actually a decent

620
00:37:03,560 --> 00:37:07,840
Speaker 3: amount of discussion about US production actually peaking and now

621
00:37:08,000 --> 00:37:12,239
Speaker 3: coming down. Is that roughly correct? Peter, would you say

622
00:37:12,280 --> 00:37:14,839
Speaker 3: that US onshore oil production at.

623
00:37:14,840 --> 00:37:18,719
Speaker 4: Least has peaked, Well, I would answer that by first

624
00:37:18,719 --> 00:37:20,960
Speaker 4: of all saying there's no shortage of oil in the

625
00:37:21,040 --> 00:37:25,920
Speaker 4: United States underground, like that there's massive amounts of oil.

626
00:37:27,080 --> 00:37:32,000
Speaker 4: Has oil production, in other words, extracting oil peaked at

627
00:37:32,040 --> 00:37:35,640
Speaker 4: twelve million barrels per day? My answer is at sixty

628
00:37:35,680 --> 00:37:40,920
Speaker 4: five dollars or so, yes, at current levels of capital

629
00:37:40,920 --> 00:37:46,280
Speaker 4: inflow from investors, yes, Does that mean that it can't grow?

630
00:37:46,640 --> 00:37:50,279
Speaker 4: The answer is now, we talked earlier about technological improvements.

631
00:37:51,160 --> 00:37:53,720
Speaker 4: It depends upon the geopolitics of the world. It depends

632
00:37:53,800 --> 00:37:56,920
Speaker 4: upon the price of oil. Therefore, the price goes back

633
00:37:56,960 --> 00:38:01,319
Speaker 4: up to seventy five dollars, and that investors see that

634
00:38:01,360 --> 00:38:03,520
Speaker 4: there's money to be made in the business, you'll start

635
00:38:03,520 --> 00:38:07,960
Speaker 4: to see more growth and potentially competitive the ability to

636
00:38:07,960 --> 00:38:11,600
Speaker 4: compete even more with other other producers and jurisdictions around

637
00:38:11,640 --> 00:38:14,239
Speaker 4: the world. So there's no short answer again to this

638
00:38:14,320 --> 00:38:18,000
Speaker 4: kind of question, say, has oil peaked? Oil production peaked

639
00:38:18,000 --> 00:38:20,760
Speaker 4: in the United states taken the answers, Yes, at sixty

640
00:38:20,760 --> 00:38:24,080
Speaker 4: five dollars, and under the current conditions, it's peaked in

641
00:38:24,120 --> 00:38:24,720
Speaker 4: my opinion.

642
00:38:25,200 --> 00:38:28,319
Speaker 2: Peter tired second, thank you so much for coming back

643
00:38:28,360 --> 00:38:31,160
Speaker 2: on odd lots, and we'll catch up with you in

644
00:38:31,200 --> 00:38:34,240
Speaker 2: a few years under what will probably be a totally different,

645
00:38:34,680 --> 00:38:39,120
Speaker 2: unforseeable set of conditions. Well, thank you so much. I'd

646
00:38:39,120 --> 00:38:54,080
Speaker 2: love to come back, Tracy. I want to look at

647
00:38:54,120 --> 00:38:57,640
Speaker 2: some of all this technology, like the idea of what

648
00:38:57,800 --> 00:39:00,279
Speaker 2: we think of as a sort of simple steal pype

649
00:39:00,400 --> 00:39:04,680
Speaker 2: actually being more like spaghetti that can you turn underground.

650
00:39:05,200 --> 00:39:06,680
Speaker 2: I want to I want to learn more about how

651
00:39:06,680 --> 00:39:07,120
Speaker 2: that works.

652
00:39:07,239 --> 00:39:08,360
Speaker 3: Yeah, that's amazing.

653
00:39:08,560 --> 00:39:09,560
Speaker 2: I know it's incredible.

654
00:39:09,680 --> 00:39:12,400
Speaker 3: It would have been useful when when they were trying

655
00:39:12,440 --> 00:39:17,000
Speaker 3: to destroy the asteroid. Yes say that, Okay, Well, I

656
00:39:17,040 --> 00:39:19,520
Speaker 3: thought one of the one of the important things out

657
00:39:19,560 --> 00:39:23,560
Speaker 3: of that conversation, and I still think it's underappreciated in

658
00:39:23,719 --> 00:39:26,640
Speaker 3: sort of oil market history, is just how much the

659
00:39:26,680 --> 00:39:30,359
Speaker 3: shale boom was really a capital market story as well

660
00:39:30,360 --> 00:39:33,880
Speaker 3: as a technology story and a cost cutting story and people,

661
00:39:34,080 --> 00:39:39,800
Speaker 3: you know, standardizing little individual valves and reducing costs that way.

662
00:39:39,840 --> 00:39:43,040
Speaker 3: But I think that's sort of the key at the moment,

663
00:39:43,160 --> 00:39:46,719
Speaker 3: like how do you entice capital back into an industry

664
00:39:46,760 --> 00:39:50,800
Speaker 3: which has been burned multiple times and which, as Peter said,

665
00:39:51,040 --> 00:39:55,959
Speaker 3: at the current level of oil prices, just doesn't necessarily work.

666
00:39:56,400 --> 00:39:58,879
Speaker 2: And I guess the other question maybe that could bring

667
00:39:58,920 --> 00:40:02,239
Speaker 2: more capital to the n space is if more of

668
00:40:02,320 --> 00:40:05,880
Speaker 2: these LNG export terminals in both the US and Canada

669
00:40:06,000 --> 00:40:09,279
Speaker 2: were to open up and that gap and people have

670
00:40:09,360 --> 00:40:12,799
Speaker 2: been like, there's never been a global price of LNG

671
00:40:13,040 --> 00:40:15,919
Speaker 2: because of the infrastructure hasn't been there, and there's been

672
00:40:15,920 --> 00:40:18,000
Speaker 2: this glut in a way that's been very good for

673
00:40:18,440 --> 00:40:23,000
Speaker 2: US electricity consumers, this glut of LNG that hasn't been

674
00:40:23,040 --> 00:40:26,400
Speaker 2: able to make it outside of the borders. But with

675
00:40:26,520 --> 00:40:29,840
Speaker 2: pipeline politics changing, and it really is striking that someone

676
00:40:29,840 --> 00:40:34,759
Speaker 2: like Mark Karney is warming to pipeline expansion for various reasons.

677
00:40:35,160 --> 00:40:40,000
Speaker 2: With pipeline politics changing, with export terminal likely to be

678
00:40:40,120 --> 00:40:44,040
Speaker 2: more built, you could imagine at least on the LNG side,

679
00:40:44,440 --> 00:40:48,040
Speaker 2: a lot of money looking to exploit that persistent, that

680
00:40:48,120 --> 00:40:51,000
Speaker 2: persistent global price ARBs, so to speak.

681
00:40:51,040 --> 00:40:53,759
Speaker 3: Well, this is a big theme, right and I think

682
00:40:53,800 --> 00:40:55,759
Speaker 3: I said it on the podcaster. It was in my

683
00:40:55,880 --> 00:40:59,520
Speaker 3: question but the differing fortunes between crude versus LNG right

684
00:40:59,560 --> 00:41:02,000
Speaker 3: now just feels so so striking.

685
00:41:02,000 --> 00:41:07,239
Speaker 2: Totally, like maybe we're getting somewhere close to peak oil demand.

686
00:41:07,960 --> 00:41:12,480
Speaker 2: But as Peter said, LLNG is clearly or it looks

687
00:41:12,520 --> 00:41:16,040
Speaker 2: like it is going to be the hydrocarbon of the future.

688
00:41:16,120 --> 00:41:18,440
Speaker 2: So when we think drilling, et cetera, we still mostly

689
00:41:18,440 --> 00:41:21,840
Speaker 2: think oil, but maybe we have to reshift our mindset

690
00:41:21,960 --> 00:41:23,360
Speaker 2: towards natural gas.

691
00:41:23,400 --> 00:41:26,200
Speaker 3: If LNG is going to be the hydrocarbon of the future.

692
00:41:26,440 --> 00:41:29,200
Speaker 3: I feel like we really need a benchmark to look at.

693
00:41:29,280 --> 00:41:29,480
Speaker 4: Right.

694
00:41:29,600 --> 00:41:32,160
Speaker 2: Well, we're gonna yeah, we need a global price, right

695
00:41:32,200 --> 00:41:35,000
Speaker 2: but that you know, by the time there's a global price,

696
00:41:35,040 --> 00:41:36,360
Speaker 2: then the art will be closed.

697
00:41:36,560 --> 00:41:41,399
Speaker 3: If anyone's working on a global LNG price, get in touch,

698
00:41:41,520 --> 00:41:43,880
Speaker 3: I'd be interested. Yeah, all right, shall we leave it there.

699
00:41:43,960 --> 00:41:44,680
Speaker 2: Let's leave it there.

700
00:41:44,840 --> 00:41:47,200
Speaker 3: This has been another episode of the All Thoughts podcast.

701
00:41:47,320 --> 00:41:50,000
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy.

702
00:41:49,800 --> 00:41:52,680
Speaker 2: Alloway and I'm Jill Wisenthal. You can follow me at

703
00:41:52,680 --> 00:41:55,480
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704
00:41:55,560 --> 00:41:59,279
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705
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706
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707
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708
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714
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