00:03:39.160you need plastics that go into everything.
00:03:41.800You need petrochemicals that enable modern civilization.
00:03:46.080And, you know, this is a very new thing.
00:03:49.160The oil industry started here in Pennsylvania or down in Pennsylvania in 1859.
00:03:53.500So this is 150, we're 150 years into the mass scale hydrocarbon world.
00:03:59.600And this world that we live in is enabled by and is paid for modern civilization, sits on top of hydrocarbons, 90%.
00:04:07.820And you get people, especially in Europe, which kind of annoys me, I'm from Ireland, I was born in Ireland, you get people complaining, why is energy so expensive? And even senior policy level and political leaders, and they have no base level understanding of the reality of, this is where we get it.
00:04:24.020they think it's, we just put more solar panels. That's their answer to everything, which is fine.
00:04:28.580You put up solar panels and that's great as an additive, nice thing to have. But 90% of the
00:04:36.360world's energy comes from oil, natural gas, and coal. And it has 50 years ago, it has today,0.69
00:04:42.280and it will 50 years from today. Well, that is, so when you say that we are living in a kind of
00:04:49.080simulation, the simulation you're describing is one in which people don't know that.
00:05:52.480It is the essential fertilizer for growing crops globally, all crops.
00:05:59.340And with the Hormuz situation this year, because you had a nat gas production comes out of Qatar, you had a disruption in fertilizer production because natural gas is what produces fertilizer.
00:06:13.120That's going to result in next year, 2027.
00:06:15.680Usually there's a lag because crop cycles or seasons.
00:06:18.720that that lag is going to be one of the kind of the the more laggy effects of the Middle Eastern
00:06:24.860situation with Iran this year but so it's not only energy it's also food and there's just the0.71
00:06:30.640the simulation that most people in the world are living in especially in western civilization is
00:06:35.380that they have gotten or just are not aware of the fact that hydrocarbons are nine out of ten
00:06:41.160portions of the energy that they consume and for also for food all of the food pretty much most of
00:06:48.600the food that you eat today and it doesn't matter what kind of food you might say oh well i eat you
00:06:52.120know vegetables well that's also fertilizer goes into that as well there's fertilizer used in every
00:06:56.280crop and all of the world's food is dependent on natural gas and so we can go back to you know this
00:07:02.760why is natural gas used in in uh as a fertilizer it was a discovery in europe in the 1910s was a
00:07:08.860the uh haber bosch discovery we take it it used to be uh back in the 1800s this is why how all new
00:07:44.280And this discovery around 1910, you could take natural gas, which is a hydrocarbon, and when I say hydrocarbon, these molecules contain hydrogen and carbon from amoeba millions of years ago, or animals millions of years ago, buried underground, basically with pressure and heat over millions of years, it turns into crude oil or natural gas or coal, one of these hydrocarbon fuels.
00:09:00.040comes from that hydrocarbon ecosystem.
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00:09:57.540So you're saying if we were to shut down natural gas production globally, six billion people would starve to death?
00:10:07.100Pretty much. Yeah. And I was in New York yesterday. New York has banned drilling for nat gas.
00:10:14.320New York state sits on top of a field, a nat gas field that runs right through West Virginia, Pennsylvania, the Marcellus and Utica, the names of the hydrocarbon basins.
00:10:26.840New York City has, if you go to Manhattan, New York, you'll see these big power stations, four big power stations on the east side of Manhattan.
00:10:37.640And so all of the electricity, and there's a big one in Queens and a few others, but those big power stations in Manhattan, they run on natural gas.
00:10:45.360New York State has banned natural gas, drilling for natural gas.
00:10:48.300They sit on top of a huge amount of natural gas.
00:10:51.260They've also banned the pipelines to deliver natural gas, new pipelines.
00:10:54.560So they're cutting off their nose to spite themselves in that they're denying the fact that the reality is all of the electricity in Manhattan or New York City comes from that gas, but then they ban sourcing that fuel and they ban the piping of that fuel to the source of what turns on the lights.
00:11:11.060I mean, that is absurd, that whole, you know, it's a distortion of what environmentalism is.
00:11:18.600Environmentalism should be, you have a sustainable environment where you don't create negative consequences and pollution into it, but you also have to be aware of, you need energy just to live in modern civilization, and you need energy for food.
00:11:32.500You need natural gas for food and it's enabled the food supply for people living in the West.
00:11:41.640Luxury civilization is dependent on it and not just luxury civilization.
00:11:44.980Also, the developing world, China and India are similarly dependent.
00:11:48.260There's no one sneaking away, getting a trick of secretly building the solar panels and wind turbines that they're getting away with some magic.
00:13:52.480And the reason being is that Europe has shut down a huge portion of their energy system for ideological reasons, not for base reality reasons.
00:14:04.360They've turned it off because they kind of, in an energy sense, they kind of hate themselves.
00:14:10.240And it's like self-flagellation of let's shut down all the coal plants, let's shut down all the nuclear plants, let's try and move off that gas and replace it with solar and wind, which I'm not knocking solar and wind, they're good.
00:14:21.560But, and then they turn around and go, why has our electricity gone up by, you know, 200% this year or 100% this year? And there's a kind of a disconnect there. And it's amazing that just the level of lack of knowledge of basic energy economics.
00:14:42.300and this is because of political pressure from green parties in europe like where did this come
00:14:49.720from this idea that you have to destroy your own civilization there there has been a lot of
00:14:56.640ideological capture there there has been a different movement i mean there's the environmental
00:15:01.720movement kind of started in the u.s back in the 60s um can i just stop you right there and just0.58
00:15:07.300to be clear our environment is disgusting this country is much dirtier europe is much much0.79
00:15:12.300dirtier than it was 30 years ago i mean i visit a lot i know and so there's no actual concern for0.98
00:15:18.780the environment for like trees and cleanliness and keeping graffiti off your buildings and cleaning
00:15:23.900up your streets like it is dirtier and the u.s is way dirtier we've had unconstrained development
00:15:28.240so like none of this helps the environment just i just want to be clear about terms like no matter
00:20:21.120And by making you dependent on the government,
00:20:25.300by controlling or trying to shut down energy production,
00:20:28.460it makes you even more dependent on the government.
00:20:31.400And Europe has been far more ideologically captured.
00:20:35.740And the reason for that is, of course,
00:20:37.080the centralization of power in Brussels and the EU.
00:20:40.780People don't know who they're voting for in Europe anymore.
00:20:43.080They're voting for the blob in Europe.
00:20:45.340And, you know, if you ask your average person in Ireland or England or Ireland or France or Spain who their MEP is, their member of the European Parliament, they have no idea.
00:20:55.180They might know their local member of their local national parliament, but the blob in Brussels, they can get away with a lot of these kind of control, especially of how people consume and use energy.
00:21:07.080And the net result is they pay 10 times more for energy in Europe than they do in the US.
00:21:12.380So the bureaucracy of our banking system makes running a small business a lot harder than it should be.
00:21:17.780When entrepreneurs need capital, traditional banks drag them through weeks of red tape and paperwork.
00:21:22.380It's highly frustrating if you've done it.
00:21:24.580Working with Cardiff is totally different.
00:21:27.580Cardiff is America's favorite small business lender because it's built specifically for independent business owners who move at a very fast pace.
00:21:35.320Cardiff has loaned over $12 billion to small businesses across the country,
00:21:39.460cutting out the delays that big banks inherently put in the way.
00:25:48.080Europe used to buy a lot of its natural gas from Russia.
00:25:51.220They famously built the Nord Stream pipeline across the Baltics, these two big pipelines.
00:25:56.240One never became active, Nord Stream 2.
00:25:57.920One was destroyed in unusual circumstances, I'll put it that way, five months into the Russia-Ukraine situation.
00:26:05.320Yeah, the U.S. government took it out.
00:26:08.880It made Europe dependent on the U.S. exporting natural gas.
00:26:15.900So it basically, you know, there's a theory, you know, one theory behind a potential, you know, situation where, you know, that was a very difficult operation for someone to knock out an undersea pipeline.0.61
00:29:15.580I mean, the U.S. benefited hugely from that situation.
00:29:18.600It also was a little bit of revenge of Trump on those European leaders, Merkel and that, that mocked him and laughed at him when he warned them about them being overly dependent on Russia.
00:29:30.340So how much more LNG does Europe buy from the U.S. from what about 10 years ago?
00:30:09.280It basically became a new production method back in 2005, roughly, at scale.
00:30:14.080then you had horizontal drilling where you can drill down. It used to be, that was, it sounds
00:30:18.100old school now, but now you can turn the drill bit and steer it sideways for three or four miles.
00:30:23.500And you can produce a huge amount more oil and gas that way than you could hit before that. And
00:30:28.700the US oil and gas production had been declining since the early 1970s to 2005. With fracking and
00:30:34.760horizontal drilling, it transformed the oil and gas industry. And the US now produces roughly a
00:30:39.740quarter of the world's oil and a quarter of the world's natural gas that's up from under 10 percent
00:30:45.000so it's doubled over the past 15 years and it it didn't happen because there was no government
00:30:51.140policy that really enabled this this is the oil and gas industry realizing this new technology
00:30:55.340transformed the space and um fracking was banned you go to france i think brands fracking i mean
00:31:01.040and fracking it was a new technology 20 years ago in 2005 it transformed as i said the u.s oil and
00:31:06.240gas industry um now uh and it was like one well in a hundred back in 2005 was fracked now it's all
00:31:13.300all wells that is the default method of production of oil and gas in the us is you frack and you drill
00:31:18.800sideways that's you know they you have a fracking crew and and it's a hugely uh uh interesting
00:31:25.480technology you know that development um but it's it's transformed the us into a global superpower
00:31:30.920And that also then has kind of changed the U.S.'s view on foreign adventures and going up against foreign oil producers.
00:31:39.980Because the U.S. had been in decline since the early 1970s as an oil producer, and now we're net exporting oil and making Europe dependent on that gas.
00:31:50.580If the U.S. shuts off, you know, the U.S. released an SPR back in earlier this year, and you know who benefited most from that SPR release?
00:31:59.580not the US, Europe, they import 90% of their oil. And so all those SPR crude oil releases,
00:32:07.660they went into European refineries and Europe went, thank you, sir, to Trump, you know,
00:32:11.480to the US administration. So Europe is hugely dependent on the US for energy. And because of
00:32:19.100that, I mean, oil has steered every war over the past 150 years, has been at the core of and
00:32:26.220enabling, just like it's enabled civilization with food and oil and natural gas, it's also
00:32:31.560enabled every, the political sphere and geopolitics. And Europe is now, it's kind of,
00:32:39.620it's dependent hugely now on the US. And they made that decision. They made that choice. They
00:32:44.360banned energy production pretty much in the North Sea. I mean, they'll say, oh, they technically
00:32:49.020didn't ban it, but they made it such that you can't drill in the North Sea. I mean, the difference
00:34:21.600sorry 385 a gallon in Denmark in Europe it's $12 a gallon I mean these guys are for gasoline yeah
00:34:29.160yeah and Denmark is obviously the kind of the is a high price point in Europe but roughly in Europe
00:34:34.820it's four times or three or four times gasoline and and people it's so weird because I mean
00:34:40.580there's in the region in Scandinavia famously off Norway there's massive energy reserves yeah
00:34:46.580Norway is a very, they're as based in terms of energy economics as more so, I'm glad they exist in that environment, but they're not part of the EU.
00:34:57.340They never joined the EU because they knew what they would have to be, they would have to join into that blob of no energy production and self-hatred in terms of energy production.
00:35:06.760And so Norway is in Europe, but it's not part of the EU.
00:35:09.720They deliberately stayed out there in the EE, the European Economic Area.
00:35:13.220So it's kind of like a junior version of the EU.
00:35:16.360And because they realized that the blob in Brussels,
00:35:18.780they have no idea about how energy works.
00:35:21.160They're so disconnected and they're blind to it.
00:35:24.200And so Norway is a very good example of,
00:38:31.580the same price everyone's buying it for, correct?
00:38:33.800Pretty much, yeah. The difference is just tax, yeah.
00:38:36.680So you tax things in order to discourage their use? That's why cigarettes are $20 a pack?
00:38:41.820Yeah. And I noticed recently I was reading something about, in Australia, they tax cigarettes or something ridiculous, like $20, $30 a pack.
00:38:49.260The amount of illegal, untaxed cigarettes now in Australia is like, it's 80% or some ridiculously high.
00:38:54.260And they lecture you like you're a bad person.
00:38:56.160Yeah. And I mean, tax has an impact. We were talking about it earlier that, you know, I grew up in 1980s Ireland.
00:42:48.900So to give you a sense of just over four, but the world's average is around four barrels per person per year.
00:42:54.800And so because Europe is more dense, remember they consume 10 barrels per person per year versus the US, you can build a lot more trains in Europe.
00:43:03.980Everyone thinks trains in Europe and bicycles are more popular because they're just greener.
00:43:09.100No, it's because you get a lot of population living closer together.
00:51:47.380To see leaders intentionally punish the people they lead is a dark thing to watch.
00:51:51.580And that's what you're watching, I think.
00:51:53.600I mean, to take the cloudiest part of the United States and clear-cut forests in order to build solar panels in the cloudiest place in the United States tells you the point of this is like not to help people at all.
00:52:04.540I think that energy policy globally, especially in the West, it is definitely not designed to help people at all.
00:52:46.340If they're helping people on energy policy would be to step back, to reduce government involvement in energy policy and allow to operate more freely.
00:54:22.260And China, they bought 2 million barrels a day from Venezuela, 2 million barrels a day of sanctioned crude from Iran, 2 million barrels a day of sanctioned crude from Russia, and they bought it all at a $10 to $20 per barrel discount because Europe and the U.S. transferred that money.
00:54:37.940So all you did was lower energy costs for China?
00:56:20.000I mean, my God, if they did, we would all be in trouble.
00:56:22.180If those sanctions and things like that worked, we'd be paying, if they stopped Iranian production, Russian production, Venezuelan production, it would hurt us all.
00:56:33.500You know, it's like, but China has been sitting there quietly, buying up this $20 per barrel discounted crude from those three sanctioned countries, saying nothing, secretly saying thank you very much.
01:01:45.520It is the most, it's similar to, yeah, it's abundant and it's an easy material to handle.
01:01:54.700You know, it doesn't require, natural gas is a challenging material to handle because you have to, if you want to ship it overseas, you've got to compress it into a liquid or cool it down to a liquid.
01:02:05.720That's a very expensive process, incredibly.
01:02:07.960That's why, one of the reasons why Europe is $30 natural gas, we have $3 natural gas.
01:02:13.400The big difference is that, well, European, you're banned natural gas production, and so they don't produce any, but they've decided to be dependent on others.
01:02:24.260But natural gas is a situation where you've got, it's very hard to transport.
01:02:28.700The most ideal fuel of all is oil, because it's a liquid, it's dense, you can, it's enabled so many different, it's one of the most ideal energy sources is crude oil.
01:02:42.680And it's the refined products of crude oil, diesel, gasoline, all the others, you know, plastics.
01:08:46.300There's a huge amount of nat gas under there.
01:08:48.180There's also, in terms of potential, there's pipelines that are blocked that people are not allowing.
01:08:54.940Those two things, just uncracking the nat gas production in the U.S., that truly will make the U.S. such that it will not just disconnect the U.S. from physical energy, it will also price disconnect.
01:09:08.280because remember, Europe is $31 nat gas.
01:17:20.660you can't just turn on a dime like that
01:17:22.860I think what they do, it's the most simple answer.
01:17:26.120They dipped into their reserves that they were using.
01:17:28.900They'd built up from all the sanctioned oil from those three countries that they'd gorged on for the prior five years ahead of Taiwan 2027.
01:17:36.440They dipped into that, and they dipped into that big time.
01:17:39.800They had no choice because they can't survive.
01:19:44.000Two, they really did want to save their economy by just releasing crude oil from their own stockpiles into the world, into the domestic refining space.
01:19:54.940The other one is that they didn't want high oil prices.
01:19:59.980I mean, oil looked at one stage like it was going to go straight to $300 a barrel.
01:24:01.660$10, $20 a barrel, and the Chinese would love nothing more than the EU to flagellate themselves even further.0.94
01:24:09.240More sanctions. Put a $20 cap on Russian oil.0.79
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01:24:24.140So, the main reason I want to have this conversation, of course, was the war, which has heightened the world's awareness of how important energy is and how hard it is to have a civilization without it.
01:24:38.420And this war, and both wars, the war against Russia and the war against Iran have both reminded us of that.
01:24:45.380So, what effect have those wars had on global energy?
01:24:49.660i mean it's obviously it's because of um it being the regions that they are in um it's had
01:24:59.060effect on crude oil and and natural gas so coal you can just put that aside so that's again a
01:25:04.960third of the world's energy that's not involved in this whole situation put that aside so it's
01:25:08.520oil and natural gas and um the world the world or the energy market kind of war gamed out the
01:25:15.540shotting of the Strait of Hormuz for a long time.
01:25:17.580And it kind of did happen a little bit in the 1980s.
01:25:20.100You had the tanker wars when Iraq and Iran were fighting.
01:25:23.000And there were, I think it was a huge number of tankers that were knocked out in that war.
01:25:29.860The U.S. was escorting tankers in and out of the straits at that time.
01:25:35.520And so there was kind of an awareness that the vulnerability was there of the whole choking
01:27:06.140Brent is a derivative of West Texas Crude.
01:27:08.920So it's kind of, there was a window of 15 years where Brent took over because this is before fracking, you know, before that 2005 revolution and U.S. crude production was declining and Brent took over for about 15 years between 2005, 2020.
01:27:25.420But now that has flipped back to WTI crude in the U.S.
01:27:32.460I look at WTI every morning, first thing I look at, and you can tell how geopolitically changed the world is overnight by just looking at that one thing.
01:29:57.000You know, like Nord Stream, Qatar, you know, if you were to be conspiratorial about it, you could just knock out all of Qatar and then the U.S. would benefit even more.
01:30:06.600So it's kind of an interesting kind of secondary effect that this situation has kind of been very positive to the U.S. economy because the U.S. is a huge net gas and oil producer.0.70
01:30:19.720But anyway, so the oil market initially priced in a quick win, and then Iran started attacking
01:30:26.400all the production facilities, in particular refineries in the Persian Gulf.
01:30:30.300And these refineries produced a lot of diesel, and that was kind of the second effect, was
01:31:16.400It had that impact much more than significantly just because Asia consumes more diesel, Europe consumes more diesel.
01:31:27.260It was basically a, it seems kind of like a kind of convoluted thing, but basically the world had more gasoline capacity in refineries than it did have for diesel.
01:31:40.840So diesel was more tight as a global situation than gasoline.
01:31:44.560How hard is it to switch a refinery's proportion of gasoline to diesel to all the other refined products?
01:38:51.400Then it came into tankers because no one would, in their right mind, send a tanker through the Straits of Hormuz when there's an act of war and Iran is targeting tankers.
01:47:32.640Like, you don't want to destroy civilian infrastructure or dual-use infrastructure in Iran that's just to be negative and punish these people.
01:47:45.800You can't hit these tankers every day.
01:47:47.940We're not going to negotiate with you even as you do that.
01:47:51.000And then the third thing, I think going back to kind of the original scene of this war, I mean, Trump, the U.S. government killed the Ayatollah and his family back in late February.
01:54:33.360why they haven't you know he's been maimed or he can't speak or or legitimately they're afraid0.70
01:54:37.940for him you know being killed by the u.s or israel the u.s should remove itself in that game
01:54:42.540and say we don't play that game but uh basically the uh normalize the entire situation and
01:54:50.160triage the tanker situation normalize the uh iran as a proxy nuclear power i mean it's sad to say
01:54:59.300but it is what it is and there you can knock out the dust but put some uh guard guard wheels around
01:55:06.260it and like pakistan the u.s controls pakistan's nuclear uh supposedly uh nuclear weapons and um
01:55:15.140yeah that would that would be it just just do those things and uh you don't need to go
01:55:19.060in and do a large uh you know all this escalatory talk of we're going to bomb huge things and make
01:55:26.180make it a big spectacle spectacle no these are small incremental things that can be done and
01:55:30.600iran is um is looking for an out also they don't want this situation to escalate you know i remember
01:55:36.62010 years ago when instagram kind of kicked off they had the rich kids of tehran these were all
01:55:41.500like these uh these rich kids driving ferraris around tehran they're just normal people like
01:55:46.620you and i mean i don't drive for it but they're normal people that have you know we we should
01:55:51.600We should treat them with dignity and respect and realize that they want to escalate, de-escalate the situation as much as we do.
01:56:00.320And they're great at, their media game throughout this whole war has been amazingly good.
01:56:05.980I mean, they're trying to, you know, they put out that 1,000 page or whatever it was, number page document saying, here's the legitimate reasons why, their grievance document, if you will.
01:59:13.960I don't think the loss of those bases is a bad thing.
01:59:16.220I think they basically did what the U.S. should have done.
01:59:18.800Those military bases, they were exposed targets for years.
01:59:22.140They shouldn't exist in the modern drone warfare.
01:59:25.120So they kind of did the U.S. a favor by shutting those bases down.0.95
01:59:28.880The U.S. should still, when I say, everyone talks about the U.S. walking away from the Middle East.0.92
01:59:32.480The U.S. is not going to walk away from the Middle East.
01:59:34.040The U.S. still needs to be there and protect those countries because we need energy prices to remain low.
01:59:42.480That's at its core level, but also just for general stability as the hegemon globally and to stop China becoming the hegemon, especially in the Middle East.
01:59:51.900So the U.S. is not going to walk away from the Middle East, no matter what Iran wants or needs or thinks they're going to do.
01:59:57.680Those bases, whatever, they're sunk costs, they're written off.0.84
02:00:01.940The U.S. is going to have to come up with a more kind of even like Iranian-inspired mosaic, mobile-based structure to defend the Middle East, the non-Iranian side.0.91
02:00:12.060But the U.S. and Israel have to accept that Iran is there.0.92
02:05:20.740So the fertilizer industry has been hit by natural gas out of guitar being shut down and sulfur.
02:05:27.720And the problem with sulfur is that Canada has a huge amount of sulfur,
02:05:30.960but it takes a while for the supply chains to turn a huge industry to point to Canada
02:05:36.140because Canada has to rail it out and get it to fertilizer production facilities.
02:05:40.440And so the net effect is that fertilizer prices have gone up by 300% or 400% this year.
02:05:47.480And it doesn't really have a big impact in developed economies.
02:05:50.520Even places that are not developed economies as much, like Russia and Ukraine, they produce a lot of wheat.
02:05:57.320The U.S. produces a huge amount of grain, these huge food exporters of the U.S., and especially to places like China.
02:06:03.980China imports a huge amount of Western food.
02:06:07.240So it doesn't really have as direct a big impact in the West, Western farming, but it's a huge impact in places like India, poor countries.
02:06:14.440And for those people, the main variable on their crop yield is fertilizer, and that has just gone up by 300%.
02:06:21.620So that will impact a lot of countries next year when crop cycles come through next year.
02:06:27.040And I don't think it's, I mean, people always talk about famine in the most extreme case.
02:06:31.420There will be less food produced next year.
02:06:33.540It's not going to affect the West, like America, or it'll just become slightly more expensive food.
02:06:40.120But you will get, you know, a lot of the world is still living at the breadline, if you will, and that is going to have a real impact.
02:06:48.520So that's why stopping this now as quickly as possible and reverting to a more quote-unquote normal situation is not just urgent for energy prices.
02:06:58.360It is going to have an impact, and that impact is going to be on, you know what's going to happen?