Live from NAPE with Doomberg and David Blackmon! This was an absolute blast, and it was wild to see the number of people stopping by to meet Mr. Doomberg! It was awesome! Great hat tip to David for scheduling this during NAPE!
Doomberg is the top Energy Finance Market Substack in the world, and I truly enjoy all of his articles. Great in-depth reporting from a pure analytical background. Today is absolutely no different.
Thank you, both Doomberg and David, for an excellent discussion! – Stu
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Highlights of the Podcast
00:19 – Doomberg stresses learning from past mistakes.
01:28 – Analysts observe a shift due to cheap hydrocarbons.
02:50 – Surplus US natural gas suggests bullish economic future.
08:30 – Global energy development persists despite emission efforts.
11:49 – Political decisions disrupt energy trade dynamics.
16:58 – Regulatory restrictions impact energy markets.
19:28 – US hydrocarbons boost economy and job creation.
20:40 – Germany expands gas production to offset nuclear shutdowns.
21:35 – Hydrogen seen as emissions solution.
23:35 – Carbon taxes more likely in compliant nations.
24:03 – Wind industry struggles amid EV demand.
32:17 – Tech drives fossil fuel production, cost reduction.
35:29 – Rising US oil production weakens OPEC.
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We disavow any mistakes in the transcript unless it makes us funnier or better looking.
David Blackmon [00:00:08] Hey welcome to the energy question with David Blackmon. We’re on the floor of night today. First day of the trade show has just opened up, and we’re so lucky to have as our special guest to kick off the night, trade show Doom Burg, the beautiful, wonderful green chicken who is one of the smartest people I’ve ever seen, one of the smartest analysts about economics in the energy space. Going today, he has he has a fantastic Substack that everyone needs to read and subscribe to. Doomberg, how are you today.
Doomberg [00:00:41] David? Stu doing fantastic. Great to see all the action at the trade show. Was just joking with you off air. How I’d have to show up to one of these in person someday. That’s like a good time.
David Blackmon [00:00:50] Yeah. Yeah. We’ll have to get you live in one of those mascot suits someday. That’d be awesome. That would be awesome. Well. Man, it’s so eventful in the energy space right now. You have, I actually, I think it’s your most current piece, called cogent analysis. Terrific analysis of how people predicting recession or kind of missing out on what’s going on in the energy space currently. And I wanted to start by just giving you a chance to talk about that piece and, and tell everyone what your thought process is there.
Doomberg [00:01:28] Yeah. This is a one of several pieces we’ve written on the topic in recent months. Look, as analysts, sometimes you get things wrong, and when you get things wrong, there’s there’s two ways to approach that. One is, you attack people for telling you you’re wrong, and the other is you try to figure out what it is that you got wrong, learn from it, and get better. And, I’d say about 18 months ago we were firmly in the recession is coming camp and US oil and gas production looks to be turning over camp. Both of those turned out to be wrong, and we put one and two together and came up with three. The fact that we’re swimming in cheap hydrocarbons probably is a good reason why we’re not in a recession. And, the first piece we wrote on this topic, well, we came to this conclusion after researching the natural gas market for our November gloom zone, where we we saw the coming glut of liquefied natural gas around the world. And that caused us to ponder whether, energy had flipped from sort of net short to net long, which I think everybody would agree. It probably has. And so we wrote a piece on January 6th called Slick Landing, where the social preview was solving the mystery of the missing U.S recession. And then we followed that up with this piece, motivated by Biden’s move to pause new export approvals, of LNG terminals, which, at a minimum, is signaling to the market that, you know, that this glut of natural gas will persist. And, it’s just hard to argue with that when you have a forward integrated manufacturing powerhouse like the US still does. We like to talk as though everything is done in China, but in reality, we make a lot of stuff here. When you have, a forward integrated manufacturing sector that is wholly tied into the natural gas market, and natural gas is trading for two bucks, a million BTUs, or, as we like to say, for a four pack of chicken nuggets. Yeah. No, no, it’s it’s it’s hard to it’s hard to imagine how the U.S. goes into a recession. Look, it’s political, it’s cynical long term. It’s a very bad decision. But both things can be true. The ban on LNG and the continuing glut of trapped gas in the US is bullish for the economy. It’s probably bullish for Biden’s political prospects. And at the same time, in the long term, it’s a disastrous decision. And as analysts, I think we can’t be tied to any desired outcome. You have to see the pieces on the board and play the next month.
David Blackmon [00:03:48] Yeah. I was talking with Steve Reese, who was, he consulted, about that decision here a few minutes ago. And, you know, one of the things I’m concerned about and I wonder if it’s reasonable, is it seems to me, because the Biden administration has done so many actions like this, which are just kind of, politically motivated decisions in the energy space that aren’t really consistent with, U.S. policy of the past. It could be damaging, our reputation as a country, as a reliable trading partner, in damaging, the ability of companies to make major investments with confidence that they know, there’s going to be some consistency of application, in the U.S legal structure. And I wonder, what do you think about that?
Doomberg [00:04:37] I certainly agree, but I think even more important in the short term is the consequence on investment. I mean, the one thing that investors need is regulatory certainty. And it almost really doesn’t matter what the rules are. Just don’t change them. Especially don’t change them midcourse. Right. And it becomes harder to finance these projects. And your comment about losing our reputation abroad I think the venture. Global situation doesn’t help in that regard, and hopefully that gets resolved pretty soon. But from the political perspective, I think we could see natural gas rollover because at $2 a million BTU, it’s hard to justify, you know, new investment in the sector. And if we do, just as the entire downstream industry got addicted to this stuff, then the whiplash could be pretty, pretty substantial. And so it’s not a good decision. It comes at a bad time for the industry. It comes in an opportune time for Biden. And somebody on his team knows commodities. I think the move to empty the SPR worked out well for him politically, and this probably will work out for him.
Stuart Turley [00:05:38] Somebody on their team knows somebody does.
Doomberg [00:05:41] Yeah, I ask him. I would say, you know, back when Biden was a little more, I’ll choose my words carefully. Back in when Biden was a little more head, a little bit more spring in his step, let’s put it that way. Yeah. We used to jokingly refer to him as Joe Biden. D comma DuPont. I mean, he comes from a state that is heavily dependent on commodities and chemicals, and he knew that industry quite well. I, I personally interacted with his staff on several occasions. And yeah, this was a this was a politician who understood the critical role the price of gasoline at the pump played in his reelection campaigns. And, and, you know, whatever whether you thought he was, authentic or not. It I mean, find me a politician who is, frankly, on either side of the aisle. But he did know commodities, and I think he has played this particular situation. Well, if you are narrow, consideration is short term and political expediency.
David Blackmon [00:06:33] Right.
Doomberg [00:06:34] And so.
David Blackmon [00:06:35] And so, yeah, from that standpoint, I think it is smart politics. I don’t think there’s any doubt about that. He’s shoring up his base. He’s, you know, appealing to young voters who don’t really understand what’s happening, much about what’s happening in the world. And, so, yeah, from political standpoint, I just worry about it from a long term impact. Sure. You know, on the economy.
Doomberg [00:06:55] But let’s let’s not forget under Joe, John Kerry’s watch, you know, the famed climate czar, the the United States has set record production for oil, record production for petroleum products, record production for natural gas and record refinery runs. And so the the far left aspect of his base was agitating for this pause, the Bill McKibben crowd and and so on and tick tock influencers and all that. But we also wrote, about this when the news first broke. Look, but there’s a lot of people downstream and natural gas that were agitating for this move to the chemical industry, power producers, all these people that are now going to get dirt cheap natural gas and.
Stuart Turley [00:07:38] Yeah.
David Blackmon [00:07:39] So now so back to what we were doing. Sorry about the interruption, folks. I in my zeal to introduce the episode, I forgot to mention Stuart Turley, the head of the sandstone Group, is with us. And he also has his energy news podcast, which is going crazy. But, Stu had a question for Dune burg while we were, while we were disconnected.
Stuart Turley [00:08:02] You know, your Substack is, I think, the number one in the world. And, I love being a subscriber. Your your thought is out there, but with the LNG market changing so much and the EIA has come out and said the only reason that we are, reducing our CO2 emissions is the main, primary reason is a reduction in coal and then the increasing of natural gas plants. And how do you see these, regulatory issues through, legislation, through regulation against the entire energy space as they’re having to go through carbon tax, declaring all the stuff because that cost is going to get thrown back to the, consumers? Isn’t that crazy about the legislation through regulatory actions? Sure.
Doomberg [00:08:58] That just one minor correction, we’re number one in finance in the world. I don’t know where we are in on the entire Substack platform because they don’t release that leaderboard. But if they did right, we would get competitive pretty quickly now. So to your questions too, I don’t think we’re going to reduce our carbon emissions at all. I think we have, a little rule we called Bloomberg’s postulate, which says every, every, ton of fossil fuels produced around the world will be burned by somebody somewhere. And local restrictions, merely shift who gets the privilege of doing so? And take coal, for example. Yes. The U.S has reduced its, nationwide emissions because it has displace coal with natural gas, but we’re just exporting coal. And, the developing world will greedily accept the tonnage of coal that we refuse to burn, and they’ll burn it over there. And yeah, our our view is all primary energy development is additive. There is an infinite demand for energy at reasonable prices. Because energy is life, your standard of living is defined by how much energy you personally get. A harvest and all humans everywhere want a higher standard of living. And there’s 5 to 6 billion people on the planet that have a standard of living that we would consider unacceptable. And they aspire to climb Maslow’s hierarchy of needs, just like we have done. And who are we to forbid them from doing so? And so if Europe discards coal and the US discards coal, while Indonesia and India and China will burn it, I mean that China is adding coal plants at an impressive rate. We are going to roll the dice on climate change. Whatever your views are on whether carbon emissions matter and whether CO2 concentrations in the atmosphere affect the climate and whether humans are predominantly responsible. We’re going to roll the dice. And so our view is the money that we are wasting on trying to prevent it should be saved up and spent on remediating as things arise. Yeah. Yeah, that’s that’s the only sane policy because China doesn’t care about climate change. Just building, how many scores of gigawatts of, of of coal facilities.
David Blackmon [00:10:59] Other than 46GW, right. That are it’s insane right now.
Doomberg [00:11:02] It’s crazy. And they’re going to burn every molecule they get their hands on whether we do or not. Right? I mean, it’s silly.
David Blackmon [00:11:09] Well, it is silly. And and to prove your postulate right, I mean, we just saw the news story at Reuters, Tuesday, I guess it was, that over the last two years, the coal industry in the United States has had the two biggest years for total value of coal exported, since 2017. And this is during the Joe Biden administration.
Doomberg [00:11:32] Yeah. Well, we didn’t shut down the mines. We just shut down the power plants.
David Blackmon [00:11:36] Right?
Doomberg [00:11:36] The coal had to go somewhere. I mean, we are mining less than we used to. It is getting harder to site new mines. And all of those things are political choices but integrated across the world. Now, I read a bit, Rupert did a little interesting story about China’s attempts to crack at shale resources. You know, like people assume that, the Chinese are just sitting around allowing themselves to be dependent on energy imports from the Middle East that runs through various choke points, and they’re not doing anything about it. Look, they have a they have a petroleum university, an entire university dedicated to petroleum engineering. And the last I checked, it had 15,000 enrollees. We had well. We we had 600 graduate across the whole country in the US last year up there. This is why when people talk about like Russia and their inability to produce, come on that this techno arrogance on the on our part over here is a real challenge. I they are going to steal whatever technology they need, and do whatever they can to achieve energy independence. It’s a project, on par with their semiconductor efforts, on good things, national strategic priorities. Now, look. We can Pooh Pooh their efforts, and we could downplay them and we could assert Western technical superiority. But that’s not going to change the reality on the ground.
David Blackmon [00:12:47] So it’s not and nothing’s going to change here in terms of policy. When you replace John Kerry with John Podesta. Oh, no.
Doomberg [00:12:55] That’s a bizarre appointment. I that’s really I mean.
David Blackmon [00:12:58] You knew it was coming. Did you I mean, that was obviously what was going to happen, right. I mean, I think it was a foregone conclusion.
Doomberg [00:13:05] When you want to talk about positions that are unnecessary. I mean, oh, God, you know, but I digress. And to the main point, you know, we’ve done a lot of analysis here, around the, BTU per capita, you know, of a of a, of a nation and where various countries are and we call them the, the seven, the poorest, largest population countries not in the G7. And there’s like four and a half, 5 billion people that are living on, on a, on a weighted average basis on a one. One eighth of what we do in the U.S. like. And, and they are ten times our population and let’s say one eighth the energy use. Right. Will we kidding. Like we will be producing more oil, more gas, more coal in 2040 than we do today, or there’ll be a lot of dead people. Those are the two choices.
David Blackmon [00:14:00] Well, but you know what? There’s people in the movement who would be just fine with that. I think, you see that that kind of rhetoric coming up more and more often out of the climate change movement, the need to reduce population. And you see, by their actions, they’re taking actions designed to make that happen.
Doomberg [00:14:17] It’s a very slippery slope. It’s dangerous thinking. There is no doubt that amongst the hardcore environmentalists from the 60s and 70s, there is an ugly strain of Malthusian thinking at the heart of their of their beliefs. I don’t think the average person who is concerned, or has been made to be concerned about the environment, understands the true consequences of the Malthusian logic chain. But once presented with those consequences, they would be appalled by it, of course. And, correctly so. And this is what we call the soft left, the sort of the soft left and the soft right and the soft left, you know, gets fed their news from various social media sites and curated by algorithms, and they’ve been made to be concerned about climate change. And when push comes to shove, I mean, they’re not going to make a major change in their standard of living or their lifestyles, to accommodate. And this is why we’re seeing a totally predictable move to the right in Germany, and elsewhere. And frankly, Biden getting ahead of it here, like Biden’s actual decisions, are inconsistent with John Kerry’s rhetoric.
David Blackmon [00:15:24] Yes, they are.
Doomberg [00:15:25] And so, again, we play this game, but ultimately we know how it has to end. And so that’s what makes for look makes for lots of things to write about. So in a way it was bullish for us.
Stuart Turley [00:15:39] It had so much material in my plate.
David Blackmon [00:15:43] Stew, I interrupted, you made it go.
Stuart Turley [00:15:45] You know, when we sit back, I want your opinion, delivered on, California. My beloved weirdness that is out there, Gretchen G came rolling over and had two big meetings with, Governor Newsom, and that besides talking about importing of hair care products. And they were actually, I believe that, China has increased, David. And you have to correct me. Wrong. Over a million barrels per day of downstream, refining capabilities. Newsom has been reducing the rate, has just totally killed the oil and gas and refining business. And I’ve heard rumblings that there are contracts coming for California to buy diesel and gasoline from China. Tell me that’s not good for the environment.
Doomberg [00:16:41] Yeah. These are the types of situations that arise when you have, the Jones Act in the US, which limits the ability to move, liquids and gases from, Gulf Coast refineries to the northeast or California, where we lack pipeline. So as an even more perverse example, the the relative shortage of diesel in the northeast last year was, corrected because we imported refined diesel from India. And where did India get the oil? They got it from.
Stuart Turley [00:17:09] Russia, of course.
Doomberg [00:17:11] Yeah. So, these types of absurdities, look, we were we kicked a few feathers, earlier, late last year, early this year, when we wrote a series, a series of articles saying peak oil was a myth. One a classic example of why we believe people is a myth is how much reserves and resources we’re sitting on in California and off the Pacific coast and off the coast of Florida that are just off limits. Alaska. These are people. Choices. Today, the Democrats dominate California. If if gasoline goes to $20 a gallon. Guess who’s not going to be dominating politics in California for very long? And so these but these political decisions could be wiped away. Look, I we’re all for, global trade. Yep. Who cares where it’s refined? If it’s cheaper to refine it in China and have it show up here. Now, there is some national security concerns, and we I believe the market fails to price those, but the US is an energy juggernaut. I mean, let’s let’s not kid ourselves. We even under Biden. From Trump to Biden, we have added two and a half Saudi Arabia’s gas and oil and and now it’s insane. We produce. You know, if you go for the the wider definition of oil, which includes condensates and angles and in our view, you know, any hydrocarbon that finds its way into the refinery network. We’re producing 20 million barrels a day.
Stuart Turley [00:18:30] Yeah.
Doomberg [00:18:32] More than any country has ever produced, ever 20% of global supply. We’re producing something like between 25 and 30% of all the natural gas in the world, as we wrote in this most recent piece. U.S. natural gas is 6% of all global energy. Bigger than.
Stuart Turley [00:18:47] I think. Wow. Is that much.
Doomberg [00:18:49] Bigger than every country’s consumption on Earth except for China and India. And I believe in 23 we probably passed India. Natural gas alone in the US is just an enormous energy machine. It. I’m pulling up the numbers because, you know, with various units, in exit joules. 35 exit joules of natural gas production in the US versus 604 exit joules of global consumption across oil, natural gas, coal, nuclear, solar, wind, biomass and hydro. So this is why we’re not in a recession. I mean, we’ve all thank.
David Blackmon [00:19:23] You, Joe. Biden.
Doomberg [00:19:24] We’ve injected this into the veins of our manufacturing base at a time when, for national security reasons, we’re embarking on a massive construction boom of new manufacturing facilities, which is now starting to work its way into the jobs report. And so, you may have thought we were going to a recession, maybe even secretly wanted one, because you wanted Biden to lose the election or whatever your preexisting biases. The facts are unsurprising when you have a sea of cheap hydrocarbons. So natural gas is roughly $12 a barrel oil on an energy basis. Today in the US, we have an enormous amount of it. What’s it advantage it and we sorry. No. Go ahead.
Stuart Turley [00:20:02] Go ahead. In in in the EU, Germany this morning, just announced that they’re approving a nuclear as their path forward from their energy department. Well, they just open their nuclear is just up all their lives. Is that.
Doomberg [00:20:21] True? I’m pulling that up.
David Blackmon [00:20:23] I haven’t seen that.
Stuart Turley [00:20:24] I haven’t seen it in. It’s absolutely in lieu that I’m like, okay, I industrialization of Europe.
David Blackmon [00:20:33] I thought, I thought Germany was going to natural gas.
Stuart Turley [00:20:36] Yeah.
Doomberg [00:20:36] That’s that’s what I saw. They they approved ten gigawatts of natural gas after you.
David Blackmon [00:20:40] Guys doing nuclear.
Doomberg [00:20:41] Nope. UK is going to nuclear.
Stuart Turley [00:20:42] That’s. I thought it was.
David Blackmon [00:20:43] You know, Germany is going to natural gas.
Stuart Turley [00:20:45] Germany had gone to that my while.
Doomberg [00:20:47] We’re writing that piece next. Or perhaps we got so I could give you a few details.
Stuart Turley [00:20:50] Oh guys. Absolutely. Yeah.
David Blackmon [00:20:52] That they wait to see.
Doomberg [00:20:53] They, they are, they just approved, I believe, ten gigawatts expansion of natural gas to roughly, roughly offset what they turned off arbitrarily and voluntarily, in the nuclear second. But to make matters even funnier, they’re pretending as though these plants will be sort of, capable of accepting hydrogen or hydrogen in with their natural. So they’re, they’re marketing this as, a hydrogen economy, enabling investment.
Stuart Turley [00:21:23] What a scam. It’s ballooned up for a reason.
Doomberg [00:21:28] A hydrogen is interesting. We have, we have sort of mixed views on the molecule. And I don’t know if you saw a recent piece where we, you know, that this this whole concept of drilling for hydrogen, natural hydrogen. Right? Yeah. Surprise to us. Yeah. So we keep an eye on hydrogen. Hydrogen burns clean. It’s got a lot of energy on a on a gravimetric basis. It’s very energy dense. And we do produce a ton of it today. We know how to handle it. You know, it’s it’s a precursor for fertilizer. And it’s used pretty extensively in the refinery network. And, and so, hydrogen is interesting. The natural arc of humanity is to go from wood to coal to oil to natural gas, which you could if you chemically, you could see that the ratio of hydrogen to carbon is increasing as you go from left to right in that arc. And the natural end point is if natural hydrogen is real, which it might very well be, just using hydrogen directly and, and circumventing the carbon emissions altogether. Now, as we said in the piece, of course, you could tell that it might be real because environmentalist are already lining up to oppose it.
Stuart Turley [00:22:27] Of course.
David Blackmon [00:22:28] Because it doesn’t benefit their rent seeking industries. Right? I mean.
Doomberg [00:22:31] Exactly, it’s going to be interesting to see that the knots they twist themselves into, to turn hydrogen from savior to villain, but it’s inevitable.
David Blackmon [00:22:39] It’s inevitable that that’s going to happen. Of course.
Stuart Turley [00:22:42] It will. And and Mr. Doomberg, with the, sliding, the BP announcing that they’re getting out of, some of the, wind and or something so much, and, I believe they’re now moving the carbon tax as that group, in order to replace their money grab. If you want to crawl, I think you have to almost assume it’s a wealth transfer or whatever it is on the, high inflation, the cost of energy. And I don’t know why that seems to be that way, but it seems like they’re they’re pushing more carbon tax and carbon, things. And it’s going to affect the consumers even more. Is that a bigger thing?
Doomberg [00:23:30] Yeah. Probably unlikely to happen in the US. I think we see it in countries like Canada and Europe. Yeah. Where the population’s a little more pliable.
David Blackmon [00:23:41] How’s that working out in Canada, by the way?
Doomberg [00:23:43] How’s help on that? Canada? We can do a whole podcast on our audio. Prime Minister Justin Justin Trudeau, who is.
Stuart Turley [00:23:52] A Batman.
Doomberg [00:23:53] A popular punching bag, for us, and we wrote a piece in September of last year called Win Bagrie where we predicted the, imminent demise of the wind industry. And I think that piece has aged well.
David Blackmon [00:24:06] Yes. It has. No doubt about it, I so I wrote a piece, I guess it was in the Daily Caller. Right. Ready just yet? We’re kind of talking about how the wind industry is really struggling now. I mean, it’s to me, it’s really kind of teetering on the verge right now. And the EV industry is having all these problems. It’s still growing. And people need to understand demand for EVs is still rising. It’s just that it’s kind of flattening out. And, I know there isn’t a single aspect of this energy transition that’s envisioned. And the Green New Deal and the Biden policies that’s really working out right now for the Mister.
Doomberg [00:24:48] I enjoyed that piece in the Daily Caller yesterday. Also in your piece, this morning on the, crazy politician in Canada.
David Blackmon [00:24:56] Yeah, we can talk about him too, but.
Doomberg [00:24:58] Making making it illegal to criticize one.
David Blackmon [00:25:01] Yeah, we’re all going to be in jail from this podcast that that guy gets us.
Stuart Turley [00:25:05] Watch him. You know, I’d like to see your passport, Mr. Dymburt. Yeah.
Doomberg [00:25:11] Which which one?
David Blackmon [00:25:12] How do you arrest the cartoon? That’s what.
Doomberg [00:25:14] I, you know, back to window. I think there’s a real scandal there, which we have made reference to in that piece. This whole IRS, retooling of existing wind turbines, long before their, their life, was expected to, to come to its natural and, merely to get more money out of the government. And so now we have these giant turbine blades, accumulating in landfills all over the country, a total waste of money. You could it. It’s really a scandal. Like, it’s a it’s a grip. Now, the offshore industry, I think, is dead. Good. Dead and buried. Like, that’s just not going to happen.
David Blackmon [00:25:51] Now, that’s the best news I’ve heard all day.
Doomberg [00:25:53] Onshore is is perhaps a different story, but I still think that they’re. These turbines are stationary, future liability risks for these companies. And, and it’s it’s.
David Blackmon [00:26:05] Yeah. So decommissioning, these offshore projects when, whenever that’s actually done is actually going to somebody told me it’s actually going to cost more than building that, right?
Doomberg [00:26:18] I mean, who knows? If.
David Blackmon [00:26:20] You if you actually do it right.
Doomberg [00:26:21] It’ll be all covered up. So it doesn’t matter. It just it just can’t work. I mean, I it is one of those things, like the, the opposition to them, the NIMBYism, which is totally real and totally understandable.
David Blackmon [00:26:34] Yeah.
Doomberg [00:26:35] Friend, friend Robert Bryce has that amazing. Well.
David Blackmon [00:26:39] He’s done such great work.
Doomberg [00:26:40] Great with that amazing. Cancel projects, list of wind and solar local opposition. And his, his his documentary that you referenced in your piece is more fantastic.
David Blackmon [00:26:51] Everyone needs to watch it.
Doomberg [00:26:52] Yeah, it’s called juice, power, politics and the grid. If people listening want to go see it, we’re always happy to promote a good work of our property team. It’s a really great documentary. And so. Yeah, it in the end. These policies are luxuries of the wealthy. Let’s be honest.
Stuart Turley [00:27:10] Wow. And the way you say that.
Doomberg [00:27:12] And so we can tinker around with wind and solar and EVs and pretend like it’s going to make a difference. And we could put a couple of vanity solar panels on our roof to tell our neighbors that we care more about the environment than they do. And we could have our third car be, a Tesla. As long as we don’t go on long trips with it. Sure. And, you know, 0 to 60 time is really important to saving the environment, apparently.
David Blackmon [00:27:36] Yeah. Is there any more overrated selling point for any car in history than to talk in an EV?
Doomberg [00:27:43] Look, I mean, if you want.
David Blackmon [00:27:44] In a big city and stop and go traffic in 30 miles.
Doomberg [00:27:48] This is always rub me the wrong way, you know? I mean, first of all, we’re big believers that if battery materials have their limiting constraint, then we need to manage that constraint. Then plug in hybrids make a lot more sense and designs exist. And you could go 4050 miles on battery alone. And most people don’t travel that much in a given day. And you don’t have to worry about range anxiety because you fill up with gasoline and look on a on a gallon of gasoline abated per kilogram of battery basis. Right. Toyota’s got it right. The Prius soft hybrids, plug in hybrids.
Stuart Turley [00:28:18] So this is going to lead the charge with the, hybrids.
David Blackmon [00:28:23] Oh, yeah.
Doomberg [00:28:24] Yeah. Well, they happen. Yeah. And they’ve got a lot of heat. They’ve got a lot of heat for not going for the EV. Yeah, I think, I think the, the EV bubble stock phenomenon caused a massive mal investment in the auto industry. That’s going to set it back ten years. Oh yeah. Everybody was chasing that multiple because they believe, you know, board of directors saw what happened with Tesla stock and and decided that they needed to have their own strategy. Yeah. And, we’re seeing it now. You know, the there’s a the. The fundamental incompatibility with the American way of life. And electric vehicles makes their inevitable. The they will be a niche product. I mean, a few percentage points of demand, but that’s about it.
David Blackmon [00:29:09] Well, you don’t think we’re all going to be living in a 15 minute city with mass, public transportation in 20 years?
Doomberg [00:29:16] I’m more likely to be be driving around in a power stroke diesel retro restomod, than I am to be living in a pod somewhere. Yeah. Yeah. Eating eating bugs. As we might say.
Stuart Turley [00:29:28] I’m sorry. My Ford, 250. I’m looking to get a 350 because I can, I can’t tow everything that I need to tow or actually do work. With the Dodge Ram. This will crack me up. It’s got a six cylinder in it, and it’s a full EV. And then six cylinder does one thing. It’s like an old World War two technology. It charges the batteries. And.
Doomberg [00:29:58] How many, how many cybertruck’s can we put you down for us to?
Stuart Turley [00:30:01] Yeah, I’ll take two. Yeah, yeah, yeah, only because it’s bulletproof. Mr.. Yeah. Because, my podcast, you know, I’m like a hunted man.
David Blackmon [00:30:12] You know, the Cybertruck. And I actually admire Elon Musk in a lot of ways. And I don’t like the badmouthing. That is the dumbest design I’ve ever seen. It’s it’s a Delorean. It’s a Delorean.
Doomberg [00:30:23] You know, he’s got his fans.
David Blackmon [00:30:25] Yeah. Well, no, I know it’s.
Stuart Turley [00:30:27] I never buy one, honestly, to support him. I love Twitter from that standpoint that I put out some controversial, in. Michael Young was, the war correspondent, and I put that on Twitter, and, and in 12 hours, it had 100,000 views, for a two hour video for them to register it and that people sat through it 12 hours, that thing. You gotta get that censored on LinkedIn.
David Blackmon [00:30:59] It’s single source of doubt.
Stuart Turley [00:31:01] And YouTube problems, but it’s critical. So I want to support that. So Mr. Denver just said that it would have to be my third victim.
David Blackmon [00:31:13] So I know we’re probably already over 30 minutes, but I want to do one more thing. And we kind of touched on it earlier is, is we have this phenomenon now, and I talked about it last week where we have a rig count that’s, you know, getting close to kind of record lows, almost 499 the last two weeks, according to Baker Hughes. At the same time, we have a kind of, well, a booming production of both oil and gas in the United States, where we’re producing all this natural gas, folks with about 120 active natural gas drilling rigs and and all together, there’s 499 United States. What is your take on that? What what do you see as the reason why our industry has been able to so dramatically increase production overall while laying down rigs? I mean, there’s no question that’s what’s happened.
Doomberg [00:32:09] I think this speaks to the broader question of. One. The massive powerhouse of technology embedded within the fossil fuel industry, and the deflationary impact of the continuous improvement mindset that these scores of thousands of professional engineers, PhDs, technicians and field workers that do the dizzying array of work that keep, keep the lights on and make modern life possible for us. There’s a massive amount of technology embedded in the industry. Continuous improvement. It’s it’s, you know, as price takers, the only the only real, knob they have to turn is cost. And that that knob gets turned a lot. Secondly, we have radically underestimated that. And in fact, part of our arguments around the whole PCE boil stuff is that it’s difficult to look at backwards looking data, without properly correcting for the exponential growth in technology. And so what does a recount mean today versus what it meant five years ago, versus what it meant ten years ago? It just it makes using old indicators to predict the future very challenging because the underlying change, the dynamic nature of the industry. It truly is. I mean, of course I’m biased. I spent 20 years in and around the sector, and I have many friends who work there. And I have a visceral appreciation when, I flip on a switch and the light comes on or I turn a knob at my natural gas fireplace in my living room, fires up. And so I appreciate those people. I don’t begrudge them. In fact, I think, our lack of respect for the industry is one of the great catastrophic errors of our society. Yeah. And so I like to remind people at every opportunity that, if you think Apple and Google and Facebook or the technology companies, you’re, you’re, you’re missing out on a whole bunch of fascinating science and technology you’re talking about all.
David Blackmon [00:34:06] Over this show.
Doomberg [00:34:07] Floor. It’s absolutely you guys know better than anybody you’re living in it. And I think these people are heroes. Yeah.
David Blackmon [00:34:13] I always have one.
Stuart Turley [00:4:14] Last question real quick. Mr. Newberg, when we take a look at the Dart fleet, you know, you have the six, 5 to 600 tankers that Venezuela, Iran, Iraq, they all use it in order to bypass the sanctions. And, Iran went from 400,000 barrels a day to, 3.1 or.
David Blackmon [00:34:38] Something like that.
Stuart Turley [00:34:39] Something like that. And if you got by going around the insurance, companies in the UK, they’ve self insured these tankers, you get tetanus from even looking at that. I mean, if they have a rag or something they’re going to get hold of this. But the second order and that is the pricing matrices are boiled. It looks like it’s never a supply. And demand is what it seems like with mainly with OPEC, OPEC. Because a lot of that oil was coming outside the OPEC, pricing structure.
David Blackmon [00:35:16] The bifurcating market.
Stuart Turley [00:35:17] And so is OPEC. Now last call, this is actually, in your opinion, will pricing even figure down.
Doomberg [00:35:26] Well I mean it’s ultimately supply and demand in the physical markets that drives everything. And then you layer over that some paper trading and some sentiment and and so on. But I would say the the weakening of OPEC is predominantly because of the rise of the US more than anything else. Oh, okay. Okay. I think, you know, NGL production alone would make it the second or third largest OPEC producer just with our natural natural gas liquids.
David Blackmon [00:35:50] And with that.
Doomberg [00:35:51] Yeah. And so you know, when you’re, when you go from, when you add two and a half Saudi Arabia’s you become stronger geopolitically and your economy does better. That’s pretty simple. That’s the level of analysis that we’d prefer to just stay at. Nice and simple.
Stuart Turley [00:36:05] Yeah, I like it.
David Blackmon [00:36:07] Well, Dan Burke, I can’t thank you enough for this. I, really appreciate you and what you’re doing. I just thank you, are a tremendous public service, and you yourself are a hero. You know, we talked about these folks being heroes. No, really. You really are. Because of the the tremendous amount of really true information you’re putting out into the public domain to offset so much of the propaganda in the media. And I just really can’t thank you enough for being on the show.
Doomberg [00:36:37] Well, it’s nice of you to say, but we are capitalists first and foremost. And so if anybody listening to this would like to become paying subscribers, they could head over to Doom Burger Comm and sign up. You know, sir, we we’re more than happy to sing for our supper on podcast like this, but we make our money by, publishing our newsletter. And so if people are interested, please head on over. David Stew is fantastic. Enjoy the rest of the show. It looks like a great time.
David Blackmon [00:36:59] Thank you, thank you, thank you sir. Have a great.
Stuart Turley [00:37:01] Day next time, sir.
