About this transcript: This is a full AI-generated transcript of Trump’s Energy Crisis Causes Food Shortages, Skyrocketing Prices, and Global Suffering. What’s Next? from Tucker Carlson, published November 6, 2026. The transcript contains 24,632 words with timestamps and was generated using Whisper AI.
"thank you very much for doing this we have searched far and wide for people who understand energy energy markets um the energy business uh and you came highly recommended so i'm grateful that you're doing this where would you say we are globally with energy right now just give us the overview if..."
[00:00:00] Speaker 1: thank you very much for doing this we have searched far and wide for people who understand energy energy markets um the energy business uh and you came highly recommended so i'm grateful that you're doing this where would you say we are globally with energy right now just give us the
[00:00:23] Speaker 2: overview if you would yep um well to put kind of a a big perspective on things because people have been kind of in living in a delusional world i believe in energy over the past 20 25 years the world gets 90 of its war of its energy from hydrocarbons oil natural gas and coal it's 90 still still even china europe the us the last 10 is nuclear and a little bit of solar and wind and everyone talks about electrification of the world and uh putting solar panels up on your roof and all of that that's you know going to be the energy transition as it's been marketed um that that is kind of a marketing pitch there there has been additional uh solar wind uh energy generation capacity put in place over the last 25 years but that's been additional to that core undercoring
[00:01:15] Speaker 1: 90 percent of hydrocarbons oil gas 90 of energy in the world comes from oil coal and gas 50 years ago and today in 2026 same percent roughly yeah and the other 10 is nuclear and then what we refer to as renewables solar and wind yep wow so solar wind are not even 10 percent like what no what percent five
[00:01:40] Speaker 2: percent five percent globally so five six percent and it depends on the country but on a global scale five or six percent and you go back 10 years ago it was around five or six percent and so wait a
[00:01:50] Speaker 1: second we spent trillions of dollars on this and received endless lectures about it and we're still
[00:01:55] Speaker 2: only at five percent yeah and in 20 years time it'll still be five or six percent oh so the whole thing was a lie then that's what you're saying it's it's there's a reality to the additional capacity has been added but global demand for energy is growing with global population and the only energy source that's been able to keep up with that demand for energy globally has been hydrocarbons and the three hydrocarbons are oil a third of the world's energy coal a third of the world's energy roughly and natural gas a third of the world's energy and that that that realization is kind of i i have this idea people say oh are we living in a simulation whatnot people have no connection with base reality and the base reality is that we are still living in a hydrocarbon world we have been living in a hydrocarbon world it's enabled amazing civilization developments over the last 100 150 years but people are disconnected from that reality and they think if you ask anyone you know how does china get its electricity people will say oh it's isn't it solar they have the best solar industry and they have wind turbines and all that no 60 of china's uh energy comes from coal uh 80 of india's energy comes from coal 80 of india yeah yeah and they're growing rapidly and it's all coal and so this wholeer than thou and i i can understand no one want even people that work in the oil and gas industry everyone wants to be environmentally conscious people live in the real world you know even people who work in the oil and gas and coal industry so no one wants to pollute but we also live in a world where you need energy to operate everything it's and not just energy you need plastics that go into everything uh you need petrochemicals that enable modern civilization and you know this is this is a very new thing the oil industry started here in pennsy or down in pennsylvania in 1859 so this is 150 we're 150 years into the mass scale hydrocarbon world and this world that we live in is enabled by and is paid for modern civilization sits on top of hydrocarbons 90 and 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 and even senior policy level and political leaders and they have no base level of understanding of the reality of this is where we get it they think it's we just put more solar panels that's their answer to everything which is fine you put up solar panels and that's great uh you know as a an additive nice thing to have um but 90 of the world's energy comes from oil natural gas and coal and it has 50 years ago it has today and it will 50 years
[00:04:31] Speaker 1: from today well that is so when you say that we are living in a kind of simulation the simulation you're describing is one in which people don't know that correct people have disconnected from where their
[00:04:42] Speaker 2: energy comes from that enables everything where their food comes from uh everyone talks about the fertilizer crisis because of the hormones shut down this year uh fertilizer uh 80 of the world's food that's grown everywhere across the entire world comes from natural gas natural gas because remember it's 30 of the oil to 30 nat gas 30 roughly is coal that 30 of nat gas that makes urea and ammonia and all of the fertilizers and if those fertilizers didn't exist it's basically ammonia and urea or nat gas in a bag it uses fertilizer if that didn't exist we would have uh we have say the world's population is eight billion we could only support maybe two billion if we didn't have nat gas so not only is it the energy system wait what yeah there would be if you turn off nat gas production natural gas production it's very closely very similar to the oil industry it's one third of the world's energy uh that it produces night nitrogen in the form of urea and ammonia it is the essential uh fertilizer for uh growing crops globally all crops and with the hormone situation this year uh because you had a nat gas production comes out of qatar um you had a disruption in in uh fertilizer production because natural gas is what produces fertilizer um that that's going to result in next year 2027 usually there's a lag because crop cycles or seasons um that that lag is going to be one of the kind of the the more laggy effects of the middle eastern situation with around this year but so it's not only energy it's also food and there's just the the simulation that most people in the world are living in especially in western civilization is that they have gotten or just are not aware of the fact that hydrocarbons are nine out of ten portions of the energy that they consume and for also for food all of the food pretty much most of the food that you eat today and it doesn't matter what kind of food you might say oh well i eat you know vegetables well that's also fertilizer goes into that as well there's fertilizer used in every crop and all of the world's food is dependent on natural gas and so we can go back to you know this why is natural gas used in in uh as a fertilizer it was a discovery in europe in the 1910s was a the uh haber bosch discovery we take it it used to be uh back in the 1800s and this is why how all knew this this situation is back in the 1800s um if you wanted to put nitrogen into a crop nitrogen is one of the essential nutrients for growing any kind of crop pretty much and uh you used to have to rotate crops it's a very slow process you put down tubers and it was a very you had to do cycle by cycle every few crop cycles you had to plant or nitrogen fixing uh to get nitrogen from the air and pull it into the soil otherwise you would exhaust the soil you would exhaust the soil within a season or two and your yields would drop down and um this this discovery around 1910 you could take natural gas which is a hydrocarbon and when i say hydrocarbon it's these molecules contain hydrogen and carbon from amoeba millions of years ago or animals millions of years ago buried underground uh they basically with pressure and heat over millions of years it turns into crude oil or natural gas or coal one of these hydrocarbon fuels and um around 1910 i was discovered how to use uh natural gas um and you take the nitrogen from the air you use the hydrogen that comes from the hydrocarbon of natural gas and you can make um a fertilizer which basically you can put the nitrogen into the ground with the powders and things like that to uh as a fertilizer and it increased crop yields by five or six hundred percent over time five or six hundred percent so everyone goes why did the population grow because cheap energy and cheap food because of natural gas those two reasons that's why how we live in this world today and it kind of it doesn't annoy me but it it um disturbs me when people are disconnected from that base reality base reality is 90 of the world's energy today and 50 years from now and 50 years in the past and and a similar proportion of food comes from that hydrocarbon ecosystem most people don't
[00:08:52] Speaker 1: like thinking about life insurance it's one of those topics you tend to kind of put off but if you're married you've got kids you've got people who depend on you you probably should think about what would happen if you weren't around and that's why we've partnered with ethos they've made getting life insurance super easy you can do the whole thing online you don't have to sit down with an agent or go through a medical exam you get a quote in seconds apply in just a few minutes and in some cases you get coverage the same day you just answer a couple of simple health questions you get up to three million dollars in coverage some policies can be yours for as little as 30 bucks a month so it's a good deal if you've been putting off life insurance because you thought it would be a very complicated expensive process you should probably check out ethos take a couple of minutes get your free quote online at ethos.com tucker ethos is ethos.com tucker application times obviously vary as do rates but we think it's pretty good so you're saying if we were to shut down natural gas production globally six billion people would starve to death pretty much yeah i'm and i was in new york yesterday
[00:09:59] Speaker 2: new york has banned drilling for that gas the new york state sits on top of uh a field a uh a uh nat gas field that runs the right through west virginia pennsylvania the marcellus and utica and the the names of the hydrocarbon basins new york is new york city has uh if you look at go to manhattan new york you'll see these big power stations four big power stations on the the east side of manhattan those run on natural gas and so all of the electricity for and there's a big one in queens and a few others but those big power stations in manhattan they're on natural gas new york state has banned natural gas drilling for natural gas they sit on top of a huge amount of natural gas they've banned it they've also banned the pipelines to deliver natural gas new pipelines so they're cutting off their face to spar 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 banned sourcing that fuel and they banned the piping of that fuel to the source of what turns on the lights i mean that is absurd that the whole uh you know it's it's a distortion of what environmentalism is environmentalism should be you have a sustainable environment where you don't create negative consequences and pollution into it but you you also have to be aware of there's you need energy to just to live in modern civilization and you need energy for food you need natural gas for food and uh the uh it's enabled the food supply for people living in the west luxury civilization is dependent on it and not just luxury civilization also the developing world china and india are similarly dependent there's no one no one's sneaking away getting a trick of uh uh secretly building the solar panels and wind turbines that they're getting away with some magic there is no magic it is oil
[00:11:46] Speaker 1: natural gas and coal it's it's interesting that the two wars in progress threaten the world's natural gas
[00:11:53] Speaker 2: supply a lot of it yeah 20 is out of qatar of the world's uh lng liquefied natural gas right which is
[00:12:00] Speaker 1: the process by which the gas becomes liquid so it can be transported by ship correct you just cool it down into a liquid it's it's the same fuel it's just in a different form yeah yeah and what's
[00:12:10] Speaker 2: interesting about you know um in the u.s natural gas the u.s is is produced around a quarter of the world's natural gas um the us i just looked at this morning nat gas is around two dollars fifty if you look at asia by what unit uh per mmbtu it's like the gallon equivalent of natural gas but two dollars fifty and uh in europe it's 31 dollars the same unit and in asia it's around 31 dollars and it's basically that energy blindness of europe i mean asia has got a separate issue in that they use uh they don't use nat gas as much as europe does but the reason they say that the discrepancy between the u.s being a major energy producer and it has become so over the last 15 years before that it was the u.s was struggling up until 2005 2009 um but that disconnect between those who are truly energy blind i mean you guys i was kind of mentioning manhattan being energy ignorant if you will of what real base reality energy is europe is even doubly so they they're paying 10 times more for their electricity than the u.s is and it's primarily 10 times yeah and and you get these get these same situations where i'm from ireland and i was reading you know legacy press over the last few months and people are confused about why is our they say in ireland and similarly in all of western europe why is our electricity so expensive and i'm kind of shocked of the fact that people kind of go well you're paying 10 times that the price of natural natural gas compared to the u.s and the reason being is that europe has they shut down a huge portion of their uh energy system for uh ideological reasons not for base reality reasons they've turned it down i turned it off because uh they kind of in an energy sense they kind of hate themselves and 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 but and then they turn around and go why has our electricity gone up by you know 200 this year 100 this year and uh that there's a kind of a disconnect there and um it's it's a it's it's amazing that that it uh that just the level of of lack of knowledge of basic energy economics and this is because of political pressure from green
[00:14:34] Speaker 1: parties in europe like where did this come from this idea that you have to destroy your own civilization
[00:14:42] Speaker 2: there there has been a lot of ideological capture there there has been a different movement i mean there's the environmental movement kind of started in the u.s back in the 60s um can i just stop you
[00:14:54] Speaker 1: right there and just to be clear our environment is disgusting this country is much dirtier europe is much much dirtier than it was 30 years ago i mean i visit a lot i know and so there's no actual concern for the environment for like trees and cleanliness and keeping graffiti off your buildings and cleaning up your streets like it is dirtier and the u.s is way dirtier we've had unconstrained development so like none of this helps the environment just i just want to be clear about
[00:15:18] Speaker 2: terms like no matter what they tell you yeah yeah and so the original environmental kind of the modern environmental movement started in the 1960s in california yeah california had a real smog problem and um uh you had and legitimately had a small had an environmental issue lived in los angeles at the time and they the uh this is before the epa existed as a concept or as an organization and in the 1960s california had an issue and they created the carb ca or b california area resource board and they clamped down on the amount of sulfur and other pollutants that were really in oil back then and they also remove lead from gasoline lead is uh you know had been added to gasoline from the 1920s it's a it's a neurotoxin you know lead is obviously and uh but it improves the octane of gasoline but california was leading for legitimate environmental reasons this is all a very uh good reason to kind of uh start a uh an environmental movement and it started in california and it did really clean up the air in california they removed they got ultra low sulfur diesel they uh brought everyone had to put in catalytic catalytic converters and those catalytic converters um they didn't you know lead in gasoline did reduce iq levels back in the when it was in the 1920s to 1960s or 80s and uh the lead wasn't removed because of that reason that's kind of the the dirty little secret of the uh the the business is that it was removed because if lead damages the catalyst in the catalytic converter so anyway california did clean up its air in the 1960s and it was a cutting out it was you know they were the the leading uh edge of that movement and then epa was established and they became a federal kind of environmental movement um and then but what happened was that movement kind of was then captured by uh political agendas and and uh social agendas and ideologies that were independent of environmental reasons it became more of uh control of pop of controlling how people think and behave and so environmentalism is a good thing and was a good thing and it had a good origin story and had a good impact in the 1960s and 70s in the starting with california but then over the past 50 years it's been captured by political movements that have wanted to uh have a kind of a controlling effect on society and some of the things you know and you can see it morph into over time back in the the 2000s you had a big movement against fracking remember you had that matt damon movie someone turned on the faucet and flames came out of the the faucet because of not gas and that doesn't happen i'm sorry that was a propaganda that movie and the myth and and but that was kind of when the fracking industry started a portion of uh the us oil and gas industry started and um it was kind of a novel new technology it is by the way the core reason us has become energy independent over the last 20 years has become because of fracking and horizontal drilling but anyway um if you fast forward it there was the anti-fracking lobby and so all these kind of ideologies trying to stop different pieces of technology now it's the anti-data uh the uh data center lobby so it basically there's there's a there's a stop oil uh group like what i i look at that group and i think you know uh that's a death cult a so a social death cult because you remove you stop oil we all die we stop natural gas we all die and it's not just we in the west everyone the india and china that's where we get all our food from fertilizer so all of these different movements have been about an element of control because there's there's a kind of a feel good like who who is anti-environmental no one even people work in the oil and gas industry they love the environment they're just normal people like you and i and but it's been a capture of that environmental movement has been captured by you know the the carbon capture you know the net zero growths in europe and in the uk all these countries have destroyed their economy under the auspices of taking care of the environment ignoring base reality of energy production and where all that energy really comes from and ultimately it's been about uh it's been the environmental movement has been captured by control people who want to control how you live how much energy you buy what your carbon credits are today what's your you know your your your welfare uh check from the government to make you dependent on the government because then they can control you and even in new york i was talking to a friend of mine there yesterday in manhattan and uh they get a hundred dollar check from the government for um because their electricity bill was too high and i thought hang on a second excuse me you got a what and so every every taxpayer i guess in new york and get a hundred dollar check and meanwhile they're banning pipelines that are bringing that fuel to new york they're they're banning natural gas production which is the fuel that's burned in those power stations and natural gas is a very clean fuel and um it's it's uh they they're by making you dependent on the government by controlling or trying to shut down energy production it makes even more dependent on the government and uh so and europe has been far more ideologically captured and the reason for that is of course the centralization of power in in brussels in the eu people don't know who they're voting for in europe anymore they're voting for the blob in europe and uh you know if you ask your average person in ireland or england or ireland or france or spain um who their mep is their member of the european parliament they have no idea they you know they 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 uh especially of how people consume and use energy and the net result is they pay 10 times more for energy in europe than
[00:20:59] Speaker 1: they do in the us so the bureaucracy of our banking system makes running a small business a lot harder than it should be when entrepreneurs need capital traditional banks drag them through weeks of red tape and paperwork it's highly frustrating if you've done it working with cardiff is totally different cardiff is america's favorite small business lender because it's built specifically for independent business owners who move at a very fast pace cardiff has loaned over 12 billion dollars to small businesses across the country cutting out the delays that big banks inherently put in the way with cardiff there is no long wait if your business has been open for at least a year and makes at least 20 grand a month in revenue that's revenue not profit then you can get up to five hundred thousand dollars in same day funding it's that fast cardiff's online application takes three minutes there's no impact on your credit score you just get to see your options and you get approved and funded before the workday ends so we are not and would never encourage people to go into debt but there's no way to run a business without borrowing money it's just a fact skip the legacy bank delays and get up to five hundred thousand dollars in saving day capital right now at cardiff.co slash tucker that's cardiff dot co co tucker real growth fast funding cardiff borrow better what effect does that have when a society begins to pay 10 times more than it used to for energy you can't you don't have
[00:22:20] Speaker 2: economic growth i mean everyone looks at europe and says why is there no economic growth in europe because they've killed their they are killing their energy and industry and that means people don't have
[00:22:33] Speaker 1: everything's expensive families they don't have houses they don't have children expensive everything
[00:22:37] Speaker 2: becomes expensive oil gas coal and it may you you don't necessarily see the energy being produced that's kind of the the reason it's so uh dangerous for people to be energy blind is that um people don't see where their food comes from or where their energy is produced and so they just think oh things are more expensive everything building a house is more expensive uh buying a car is more expensive uh everything it becomes more expensive it just becomes part of the the background noise of living of life becomes that everything is a little bit more expensive and the real reason is that energy in europe has been has been deliberately made more expensive than it needs to be and um there's one part of it is control another part is you've got a um a kind of social agendas that have pushed energy blindness because people don't want you to know that 90 of your oil and gas or 90 of your energy comes from oil gas and coal they want you to think it's solar and wind because you can kind of see those things you know spinning and so it makes people feel like something's been done but it's there's
[00:23:42] Speaker 1: nothing being done so what explain what you can't see so let's start here 10 years ago europe let's just say western europe the country's americans vacation and got its energy from where where's the yeah where'd the
[00:23:56] Speaker 2: energy come from from germany spain belgium france uk uh a third came from oil and that oil came from oil is a global market so it's always been a global market um it's it and that comes from russia uh the middle east uh western africa so oil kind of comes from a little bit i mean it's it comes a little bit from everywhere oil that's a third of european uh energy 10 years ago five years ago even today 30 is oil global uh then they've got yeah natural gas um europe used to buy a lot of its natural gas from russia they famously built the north stream pipeline across the baltics uh these two big pipelines one never became active north stream two and one was uh destroyed in uh unusual circumstances i'll put it that way five months into the russia the us government took it out it it made europe uh uh dependent on the us um exporting natural gas so it basically you know there's 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 um did ukraine really do that five months after the war started you know they i don't know if they have the uh the skills to do something like that so i wouldn't
[00:25:17] Speaker 1: say say it was the us just for argument's sake and not ukraine well just for the record we were told that fox news and the whole world was told that russia took out its own pipeline because russia is so evil that having run out of people to hurt they decided to hurt themselves they told us that that was on the front page of the new york times i was encouraged to repeat that lie i didn't but yeah wow i mean that just shows you how stupid they think people are
[00:25:48] Speaker 2: i don't know if it's if it's uh stupidity i think it's more of um that it's it's more of narrative setting if you kind of set a kind of a dystopian view of information that everything is absurd everything everything right becomes like you don't believe anything like there's no it's it's almost like they know you're going to laugh at that putin would destroy his own pipeline but then it kind of makes people who read that think well why do i believe anything you know it's kind of like a you've sets people into this the the mush of believing uh being more malleable to to uh right they're turning the
[00:26:29] Speaker 1: population to nihilists because they're nihilists are easier to control yeah but say it was say it was
[00:26:34] Speaker 2: the us government just let's put it out there um and uh it did make uh europe much more dependent on uh the us and it goes back to also you know trump uh we were talking this morning breakfast is a very um uh has a very he operates in a very people say he's transactional he's not you know in terms of he's not strategically i think he's strategic also but he's very transactional like a business yeah it's not ideological yeah and then but he's also very he's a very uh personal uh he's he takes things personally and as he you know he's a normal human being and so he got he became president of you know inspired by seth myers mocking him back in the in 2011 at the correspondence dinner um when trump won uh the first uh uh time he was president um you had uh angela merkel and all the european leaders openly laughed at him they mocked him and uh when he told them he chastised them there's a famous nato meeting where they were mocking laughing at him he was warning them do not be dependent on russia for nat gas and then also at the same time push russia you know threaten russia with uh you know weapons on russia's border via nato and other uh structures and um they mocked him openly mocked him and laughed at him so i think that uh europe um you know they you know was it the us that knocked out north stream i mean the us benefited hugely from that situation it also uh was a little bit of revenge of trump on those european leaders merkel and that that mocked him and laughed at him um when he warned them about rushed them they've been overly dependent in russia um so how much more lng
[00:28:14] Speaker 1: does europe buy from the u.s from what about 10 years ago it's a huge amount more it's it's doubled
[00:28:21] Speaker 2: at least really yes yeah yeah it's very much and and the u.s um and it's growing every day and the europe is becoming uh a a a hugely energy dependent vassal of the u.s um i mean the u.s did make a decision back in 2005 um it didn't make a decision it happened in 2005 starting that the u.s oil and gas industry was transformed by two things you had fracking which basically you pump water at high speed or high pressure underwater and fracks it basically became a new production method back in 2005 roughly um at scale and then you had horizontal drilling where you can drill down at your speed that was it sounds old school now but now you can turn the drill bit and steer it sideways for three or four miles and you can produce a huge amount more oil and gas that way and then you could hit before that and the u.s oil and gas production had been declining since the early 1970s to 2005 and with fracking and horizontal drilling it transformed the oil and gas industry and the u.s now produces roughly a quarter of the world's oil and a quarter of the world's natural gas that's up from under 10 so it's doubled over the past 15 years and it it didn't happen because there was no government policy that really enabled this this is the oil and gas industry realizing this new technology transformed the space and um fracking was banned you go to france i think brands fracking i mean and fracking it was a new technology 20 years ago in 2005 it transformed as i said the u.s oil and gas industry um now uh and it was like one well in a hundred back in 2005 was fracked now it's all all wells that is the default method of production of oil and gas in the u.s is you frack and you drill sideways that's you know they you have a fracking crew and and it's a hugely uh uh interesting technology you know that development um but it's it's transformed the u.s into a global superpower and that also then has kind of changed the u.s's view on foreign adventures and going up against foreign oil producers you know that because 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 we can we if the u.s shuts off uh uh you know the u.s released an sp or back in earlier this year and you know who who benefited most from that sp release not the u.s europe they they import 90 of their oil and so all those sp all those sp or crude oil releases they went into european refineries and europe went thank you sir to trump you know to the u.s administration so it it uh europe is a is hugely dependent on the u.s for energy and because of that i mean oil has has uh steered every war over the past 150 years has been at the core of and enabling just like it's enabled civilization with food and you know oil and natural gas it's also enabled um every the the political sphere and geopolitics and um and europe is now is kind of a is dependent hugely now on the u.s and they made that decision they made that choice they they banned energy production pretty much in the north sea i mean they'll say oh they technically didn't ban it but they made it such that you can't drill in the north sea um i mean the difference between europe and the u.s is very striking energy in the u.s if you buy a piece of land you buy the the land under this table in the u.s as a private individual you you own that land the whole way down to the core of the earth all the minerals anything's in there gold oil whatever you you own it everywhere in the world outside of the u.s in europe uh the government owns it you own the the surface down to a few feet the dirt the dirt the surface there everything below that is owned by the government and are you going to risk your private capital to drill and uh you know in a very the oil industry is is uh you know it's it's not risk free there's a lot of dry holes that are drilled and and there's a huge amount of capital risk and capital required to do that uh business um you're not going to drill it when the government's going to take it all why would i do that i'm going to you know so that's why the u.s also has a hugely booming oil and gas industry the government just stepped back there are environmental controls and you can sue an oil and gas company if they pollute your water it doesn't happen but you as in they don't pollute uh water tables like the environmentalist groups say you know can happen but um the u.s just the government stepped back let and in a lot of parts of the u.s it didn't happen in all of the u.s it didn't uh but the government stepped back and the oil industry and nat gas industry flourished um and just let them do the thing and look at the situation nat gas oil is i filled up my tank here yesterday in maine it was uh 345 i'm sorry 385 a gallon in denmark in europe it's 12 a gallon i mean these guys are for gasoline yeah yeah and denmark is obviously the kind of the is a high price point in europe but roughly in europe it's four times or three or four times gasoline and and people it's so weird because
[00:33:22] Speaker 1: i mean there's in the region in scandinavia famously off norway there's massive energy reserves
[00:33:28] Speaker 2: yeah norway is a very um there is based and in terms of energy economics as more so uh i'm glad they exist in that environment but that they're not part of the eu they never joined the eu because they knew what they would have to be they would have to join into that that blob of no no energy production and self-hatred in terms of energy production and so uh norway is in europe but it's not part of the eu they deliberately stayed out there in the ee uh the european economic area so it's kind of like a junior version of the eu and because they realize that the blob in birth in brussels they have no idea about how energy works they're so disconnected and they're blind to it and uh so norway is a very good example of um uh they you know produce a lot of oil and gas um so europe has a lot of energy resources there they just don't use it and it's uh it's hurt them and that's why why they have no economic growth and you know a lot of the reasons why buying everything houses electricity um they have no money because they're uh they've made their energy uh they've taxed the health i mean that difference between 385 in here in maine and 12 in in denmark is tax it's not because the oil is it's the same thing it's the exact same molecules in denmark as maine it's just that they they tax the hell out of it there and it's it it's it uh has destroyed there is destroying their economy um energy is the fundamental bedrock of everything owning a home has always been the
[00:34:57] Speaker 1: core of the american dream it's the asset that families work their lives to build place of stability security and actual wealth but too many homeowners right now are stuck swiping credit cards to cover groceries paying a survival tax of 20 interest or more so we're against that we always say that but you can't buy a house without debt right now almost anybody has to take out a loan so the question is who you're going to get a loan from why are you handing your money to big banks when you can keep it for your family our friends at american financing have a better way they're helping homeowners tap into their hard-earned equity they're supporting americans looking to fulfill the american dream of owning a home american financing saves its customers an average of 800 bucks a month that's nearly ten thousand dollars a year it's not just a loan it's a total financial reset and so american financing is worth looking at they're called america's home for home loans for a reason find out more at 800-685-5696 800-685-5696 or visit americanfinancing.net tucker so the idea was that you yeah because i mean it's priced on the international market so you know denmark's buying oil at the same whatever the brand crude prices or whatever however you're marking it the same price everyone's buying it for correct pretty much yeah the difference is just tax yep so you tax things in order to discourage their use that's why cigarettes are 20 a pack
[00:36:24] Speaker 2: yeah and you know so i noticed recently i was reading something about in australia they tax cigarettes or something ridiculous at 20 30 a pack uh the amount of illegal untaxed cigarettes now in australia is like it's 80 or some ridiculously high and they lecture you like you're a bad person yeah and i mean tax has an impact we were talking about earlier that you know i grew up in 1980s ireland ireland unemployment at the time was uh 22 percent yeah it was it was bad we joined the e when it was it was a legitimate thing we joined the eu and it was the eu that that did it for a good reason when we are in the 70s in the 70s we joined 1973 ireland had a protectionist environment back then we made shoes and weird stuff there was no economic reason for ireland to do that so we joined the eu and we had three percent unemployment in 1973 by 1985 or late 80s it was around 22 23 percent so it went up 20 percent because we had to drop all the tariffs all these companies went bankrupt but what happened the what ireland could have gone socialist ireland would never really go that kind of like weird socialism but what ireland did was and was one of the most uh great uh government decisions i think in history for a western european uh economy is that ireland the income tax rate was 65 percent or something ridiculous corporate tax rate was 40 or something very high ireland just it was so desperate we're going to go bankrupt this is in the middle 80s um ireland just said let's uh cut tax to zero or as close to zero as possible corporate tax zero i just we're that we're that desperate anyway we're going to default next year let's see what happens and true to remember the laugher curve with reagan you know where you cut taxes growth uh uh takes off uh ireland cut its corporate tax rate to zero and income tax cut hugely as well and we had 23 percent unemployment what happened the next year boom and it's boomed for the last 50 years since or 40 years since it was basically proof that tax has a real yes impact and um it was there was no lag it didn't even take 10 years five years eight years it it was the next year as soon as ireland made that pivot to become a low tax environment economic growth took off and um hasn't looked back since i mean there were a few you know issues over time with uh the housing crisis you know everyone had that great 2008 but um it it was a a proof point of tax
[00:38:47] Speaker 1: you know creates incentives i mean it's so the reason you tax hydrocarbons is to get people to use
[00:38:53] Speaker 2: them less use less of them but that hasn't worked no it hasn't not at all you know the the interesting thing is that if you go back over time uh global population is now eight billion roughly give or take eight three all right three if you go back over time 50 years ago you're generations back i mean say 50 years is a generation roughly safe just for argument's sake um today the world every person per capita in the world consumes four barrels of oil today 2006 50 years ago it was four barrels of oil 50 years before that it was four barrels of oil so doing the tax situation all it does is that true it's four barrels of oil per capita that's across the entire world china india it's four barrels of oil per person and you've got a and that's never changed no not at all it hasn't changed in the last hundred years and the oil industry is not that old it's four bars that's amazing and what's interesting is that the us in the us the us consumes the us is a very unusual place in that there's a lot of space here compared to europe here's a very dense place you've got uh the us consumes around 20 uh barrels of oil per person so remember the global average is four the us per person per year the us is 20 so the us is quite up there but the us you've got spread a spread out population a lot of commuting driving to and from school and offices and whatnot i mean everyone thinks of the us to be new york city no there's everyone lives in you know distant from their place of work or so the us consumes 20 a day barrels of sorry 20 barrels of oil per year per person um europe consumes 10 half and then because it's a more dense place they don't drive as much and china is around four so to give you a sense of just over four but the world's average is around four barrels per person per year and so because europe is more dense they remember they consume 10 barrels per person per year versus the us um you can build a lot more trains in europe the whole you know everyone thinks trains are in europe or more and bicycles are more popular because they're just greener no it's because you get a lot of population living closer together europe is a very very dense place and the us is not i mean you have dense spots of the us but in general the us is much more spread out and um we're going to denmark denmark is one of the most densely populated places in the world or that portion of europe and so there you can tax people put a lot of taxes on gasoline because they're it's usually it's it's a more easily thing easy thing to tax um and then also politicians lie about it they just say hey it's the oil companies making that money no they're the four of that eight sorry eight of that twelve dollars is going to the government four goes to the industry that gets it out of the ground that refines it that produces it that has to transport it um eight of the twelve is going to the government and um so most people in europe they're disconnected from the energy market i don't want to kind of harp on europe as as but it's they're they are the most um extreme uh signs of that energy blindness
[00:41:50] Speaker 1: that just complete unawareness of well let's just take the uk for example so the uk had a pretty robust oil and gas industry based in the north sea that's where the brand yeah starting back in the 1970s oil field was there which is now defunct i think um but they're not extracting from the north sea is that because there's no energy left there no there
[00:42:10] Speaker 2: is there is all there i mean it's look at norway norway is still producing what happened in the uk also from the north sea also from the north sea it's the same roughly the same oil fields and gas not gas fields and what happened in the uk was that um you did have oil fields when you drill them they do decline they they're non-renewable resource so they do decline so you've got to constantly go exploration and production you've got to go and drill and explore and you take some risk because you can drill a dry hole or um so there's a lot of uh uh capital to be risked there but in order to encourage people to risk that capital you know say say oil today say roughly 100 dollars a barrel uh to produce that oil is uh 60 70 dollars a barrel in the us it depends on where you're producing and you know if it's onshore offshore different environments but say it's 60 dollars a barrel um and so you know just before the hormone situation oil was 50. so you know there are periods of time where you can lose money for years as an oil producer and so to risk capital to go and produce energy you have to have some sort of profit incentive to do that the uk in the 1980s 1990s up to today removed all that incentive they basically they're a country where you drill a hole in the ground off even offshore as long as you're in the uk that money goes to the crown it goes to the british government and so there's no incentive i'm not going to drill in the north sea when there's these you know they they're they call windfall taxes and whatnot um no one's going to risk money in that environment to to drill up build a rig offshore and uh but you know helicopter everyone out there every every few weeks and uh you might drill a dry hole um it's a you know the the norwegians understand how it kind of works and they've kind of created a more um uh profit incentive for part of that oil and gas industry to take that risk but um the us has kind of proven they're like the ireland ireland proves that the laffer curve low taxes economic boom it just works the us uh proves the fact of stand out of the way give private individuals the rights to the profits if they risk capital and look what happens the us becomes one of the largest energy producers in the world it is sorry not one of it is the largest now energy producer in the world for oil and that gas and just by step stepping back and just let these guys do what they're they're going to do they they're they are regulated there's controls around in terms of environmental but the uk regulated remove the profit incentive no oil production or not gas it just dwindled to almost nothing the brent brent crude um you know the brent crude is kind of the price people quote on television 110 to borrow and there's the wti crude index which is west texas intermediate and uh the brent crude it does that field stopped producing a long time ago 20 years ago and so now the the they change the underlying way that pricing works such that uh us crude uh tran goes transatlantic and sets the price for brent so brent crude is actually now set by west texas intermediate set by the us crude oil market and so even with that brent crude as a price people say oh it's the international benchmark which historically it has been but it's also it's now set by the us the us barrels that move across the atlantic just like the us natural gas moves across the atlantic we sat here in the us the price of oil in europe and by extension the world and because the us the government stepped a little bit back gave people the authority to just take the profit risk uh on production and it worked it's very it was a very simple thing and it's the proof is here here we are um and no it was not all the us parts of the us washington new york state then here up here in new england maine and so on banned nat gas you know production just like europe did it was a very and even california you know the the two coasts california and new england in the us have got the same energy blindness as europe the eu writ large um in that as i said all the electricity for the northeast i just i was coming here driving my car this morning i passed four propane tankers uh you're driving past me on the road um the electricity here is either is oil uh or sorry it's nat gas or coal and so the um people the regulations here and in california have crushed the energy industry in parts of the us and similar to what has happened in europe um and as i said it goes back to a combination of ideology and um i don't want to say ignorance because ignorance would imply that the information is not about available out there and highway energy is produced it's more ideology than anything else
[00:46:54] Speaker 1: in late october ai bot hackers launched millions of cyber attacks across the world and governments worldwide suddenly took down their websites to protect them so think about that that means government can't keep its own systems running that makes you wonder about your own bank account how is that safe from the next cyber attack so if it wasn't clear before october it should be clear now you need some of your wealth outside of the system and for thousands of years there has been a consistent solution to that metals gold and silver they've held their value through all recorded history they are real you can hold them in your hand they don't depend on the internet to keep working and unlike paper money no government can print more they can't be devalued by politicians you don't have to be rich to invest in metals you can buy a silver coin for under a hundred dollars buy one a month and it adds up and if gold is felt out of reach it's more than 25 below its high in january and major institutions protect it they hoard it and they all think it's climbing back to historic levels next year the government of china is stockpiling gold why because they don't understand money oh no because they believe in it so don't wait to take your financial future into your hands you can't count on the system to protect you obviously we found a battalion metals to give americans more control over their wealth and to bring honesty back to the metals business it is not a ripoff we are taking a tiny percentage we are transparent about that we're not selling you gold at twice the spot price we're selling it like three points over spot price and making it very very easy for you so buy gold and silver at fair transparent prices at battalion metals dot com slash tucker shipped right to your house if you want that's battalion metals dot com slash tucker it's the impulse towards towards self-harm to see leaders intentionally punish the people they lead is a dark thing to watch and that's what you're watching i think i mean to 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
[00:49:03] Speaker 2: the point of this is like not to help people at all i think that energy policy globally um especially in in the west um is it is definitely not designed it's not designed to help people at all it's it there's that that is not no part of the the consideration it actually it's it's more it's designed how can we get con because the the political class know that energy is essential to modern life and so it's a method of control if we control how people consume and produce energy we can control a lot more of their lives than uh otherwise and it's um so yeah it's it's it's more the energy policy is more ideological it's not to help people if they're helping people an energy policy would be to step back to reduce government involvement in energy policy and um allow to operate more freely another good example is sanctions oh my god it's sanctions over the past on energy sanctions on oil so europe you couldn't even this is so crazy europe uh just before uh just during the uh invasion russian invasion ukraine europe put these sanctions on uh russian um oil crude oil exports and they set the price at 60 dollars per barrel versus uh russian exports and um that's they put those that it didn't change hardly one bit what russia produced in terms of crude oil it was basically self-harm on russia big on europe they set these uh the price to 60 dollars the price went to 70 and europe basically starved themselves of crude oil i mean you couldn't believe this the how badly europe has used things like sanctions and energy policy it they have done almost everything you could possibly do wrong um in terms of energy policy and all those sanctions and the us is not uh has fallen into the sanctions trap also imposing sanctions on uh venezuela iran on their oil production and russia and so what has happened those three countries russia iran venezuela the us and europe put oil sanctions uh trying to restrict by economics um how much oil those countries could export those countries it didn't restrict one barrel of exports you know who bought all that oil china they bought two million bras a day from venezuela two million barrels a day of sanctioned crude from iran two million bras a day of sanctioned crude from russia and they bought it all at a 10 to 20 dollar per barrel discount because europe and the us
[00:51:38] Speaker 1: transferred that money so all you did was lower energy costs for china yeah and it enabled china
[00:51:43] Speaker 2: china's been gorging on the sanctioned oil from those three countries for the last five or six years so
[00:51:49] Speaker 1: i mean again back to your point that you can't ascribe decisions like that to ignorance because the information is available it's demonstrable it's obvious i mean just look at russian venezuelan iranian oil output and you're like well where's the oil going it's being bought at a discount by our main geopolitical rival china yep so you can't say that they don't know that that's happening so you have to at a certain point if it continues to happen assume it happening is the point of the exercise like this is an effort to help china over the west like how is it not that i think i think that um
[00:52:28] Speaker 2: there's there's and it it showed the limits of control of the blob if you will the deep state the blob the bureaucracy there's they they think they can control energy markets writ large globally yes they cannot and so they that was kind of it showed where that that that control ability they kept doing it because these are these are not uh uh quick moving entities the eu i mean they make a decision and it's it goes in place and it stays there for five ten years and it they're very slow moving bureaucracies and the oil and gas industry showed the limits of the the stupidity if you will of that uh uh those decisions and it i think they thought that they could somehow control the oil industry and and and we say industry just oil production globally they can't and um they shouldn't i mean my god if they did we would all be in trouble if if uh if if those sanctions and things like that worked we'd be paying if they stopped uh iranian production russian production venezuelan production it would hurt us all you know it's it's like uh and but china has been sitting there quietly buying up this 20 per barrel discounted crude from those three sanctioned countries saying saying nothing secretly saying thank you very much eu and us for these sanctions they've been so great china has been building a strategic stockpile of oil and china's uh say the world is 100 million barrels per day of crude oil china is uh consume 16 million barrels they import 12 of that so they're huge oil imports they don't produce that much oil um they've been building up their stockpiles ahead of taiwan 2027 i mean it's a publicly not acknowledged uh invasion plan of taiwan or control plan of taiwan for next year at least it that was the plan two years ago and three years ago um and as part of that they needed to uh bolster their inventory of crude oil ahead of that 2027 invasion of taiwan and they've they've been using sanctioned barrels from those three countries to fill their stockpiles and china went from uh almost very little strategic storage four or five years ago to now they have 1.5 billion barrels of oil in storage underground salt caverns and to put that in perspective the us spr has 300 million roughly china has 1.5 billion so it's it's got five times and that storage that china's built up has happened all of it pretty much with sanctioned oil cheaply created by the us sanctions and uh european sanctions uh on russia iran and venezuela china's gorged in that oil to build up their spr ahead of a taiwan uh 2027 invasion and so it's sanctions don't just aren't necessarily uh economically irrational they also have side effects that you basically are doing an economic transfer and enabling china to build up strategic reserves and strategically it creates all these side effects that china now is sitting on it they still need to store more i think that than they have but they've been enabled to build a huge reserve ahead of uh a potential planned you know alleged plan for 2027.
[00:55:43] Speaker 1: so the sanctions why i mean if you wouldn't mind stating the obvious why would china want to stockpile energy before moving on taiwan because all of their ships you know everyone has this myth about
[00:55:55] Speaker 2: china being solar and electricity and whatnot and they do produce a lot china gets electricity 60 of their energy comes from coal 20 is oil and the balance is natural gas 20 natural gas and then they have solar and wind even china are under 10 and nuclear under 10 so they're in the same 90 hydrocarbon world but that 20 oil is for all of their ships are diesel i mean they do have nuclear powered vessel but they're all of their ships are diesel all of their military equipment are diesel and or some are gasoline but they and they're importing 12 million barrels a day if if they didn't have a strategic reserve they would be done within 20 days 30 days of if they were blockaded if you blockaded malica and singapore or hormos it's already blockaded but if you blockaded those and you could if china was trying to invade taiwan they wouldn't have the oil for their ships within three or four weeks and so that that was why they've built up a stockpile that they need that oil to power their navy and their military equipment and they do have electric electrical equipment and vehicles but not the hardcore navy military equipment that they need for an invasion what percentage of china's electricity is produced by coal it's it's it's around i think it's up in the 70s 70 percent most overwhelming yeah why coal it's cheap it's cheap that's that's the the actually a very good question to ask about why and any of this like why oil why coal way and the first thing is cheap why does india make 80 percent of its use 80 percent of its electricity from coal it's cheap coal is the cheapest way to produce electricity and not just anywhere it's in the u.s the u.s produces a one-third of the u.s uh energy consumption is coal and coal has got a bad rap and i'm you know i'm gonna be not careful here but you know coal um back in the 60s and 70s back when the smog issue was around and the coal industry did really transform and yes there's this whole thing of marketing word of clean coal um but basically when you burn coal uh the most dangerous thing the most immediately dangerous thing is uh sulfur sulfur going into the atmosphere and it falls it turns into sulfuric acid acid rain it's not it's in that and this lead comes out of the coal also but what the coal industry did not just in the u.s but globally has put scrubbers on all of their the towers that uh uh where they burn the coal and um those scrubbers can remove pretty much most or all of the uh pollutants that come out of coal the only downside is it's it's uh it's uh it's very expensive to put those scrubbers on and whatnot but coal gets a bad rap but it's cheap it is so cheap and um it's still why is it so cheap because it's so abundant it's it's uh it's abundant it is the most it's it's similar to uh to uh to um yeah it's it's abundant and it's easy it's an easy material to handle you know it's it doesn't require natural gas is a a challenging material to handle because you could 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 that that's a very expensive process incredibly that's why one of the reasons why europe is thirty dollar gas gas natural gas we have three dollar natural gas the big difference is that well european your band natural gas uh production and so they don't produce any whether they've decided to be dependent on others and um but natural gas is a is a situation where you've got it's very hard to transport the most ideal fuel of all is oil because it's a liquid it's dense you can uh it's uh it it's enabled so many different uh techniques that's it's the most one of the most ideal energy sources is crude oil and it's the refined products of cruise crude oil diesel gasoline uh all the others things plastics it's it's a uh it's it's in everything um but yeah going back to your original question coal is cheap that's why it's the base load it's one third of the world's energy is coal one third oil one third uh natural gas and that other ten percent this year last year 50 years ago has been uh all the others nuclear nuclear is very expensive just because of all the regulations solar and wind they're they're not uh the economics of solar wind are dependent on location you know what the oil and gas industry these are uh sharp guys and women who are uh they'll make a dollar if they can and so if you look at the biggest build out of solar in the us is texas in oil country you know it's and because people are realizing okay there's a good there's a uh a uh it's sunny in texas a lot during this most of the year and um solar panels are cheap from china i mean we're basically we don't want to become too dependent on china for those uh solar panels but um you're basically kind of technically importing coal because that energy to produce those solar panels was built by china gets 70 percent of electricity from coal and so those solar panels are really disguised coal and china basically is willing to uh do that for now in terms of building solar panels no one else really at scale in the world builds solar panels or any other uh of these quote-unquote environmentally friendly uh uh energy sources what about wind turbines wind turbines i mean that's it's the very very that's tiny in terms of the global energy it's tiny it's like a few percent and it's very difficult to scale and uh you've got issues with it's too can be too windy not enough wind or or it can be uh it's a very unreliable energy source it i'm not knocking them because it they are useful in some parts of the world at some times of the day it's some you know they're they're an additional energy source it's a good thing to have but it's it's not a baseload we can run our society off that energy source um you know that for all good and bad people you know intense it's hydrocarbons we have we depend and need hydrocarbon production and maybe with ai we come up with uh you know uh fusion or uh uh uh some new um technology over the next 50 years or 40 years but right now there's no uh no alternative we're and we should just appreciate that and just and be okay with that make peace with that how many uh
[01:02:27] Speaker 1: how many countries have deep coal reserves for the big countries
[01:02:30] Speaker 2: i mean how much coal is there in the world and there's a lot a lot more like we're never gonna we're not gonna run out in the next 50 100 years um a lot of australia produce a lot of coal yeah um or has a lot of coal has a lot of cold yep um uh china itself china itself produces a lot of coal the us produces a lot of coal in you know the appellate in appalachia wyoming wyoming yeah it's less than it has been because you know what destroyed the coal industry uh everyone thinks you know mike bloomberg walks around he's you know he's he is who he is the ex-mayor of new york stalinist midget
[01:03:05] Speaker 1: well no he's been called that i i'm not i'm not endorsing the title but yeah he has been called
[01:03:11] Speaker 2: he he you know he he banned straws in new york let's put it that he's one of those guys yeah and um he but uh he you know railed against um coal the coal industry in the us and he you know claims are one of his you know he says that he you know helped destroy the coal industry the coal industry coal production mining in the us was destroyed by fracking and and uh natural gas cheap natural gas it was undercut it wasn't coal wasn't destroyed by burning coal wasn't destroyed by environmentalists it was undercut by the gas industry in the in the us that discovered fracking and horizontal drilling and drilling these wells sideways that was amazing technology development back in the early 2000s and um and that fracking as well you're pumping these wells with water and cracking the rock a couple of miles down um that's what killed the coal industry in the us the environmental regulations were more on putting scrubbers because gas became cheaper than coal not gas became cheaper and it's one of those interesting things people in the us say gas and as an oil guy energy guy always make sure gasoline is the stuff you put in the car right not gas is the so when people if you say gas to an energy person they always think you're talking about not gas um because it's but it's a yeah gas natural natural gas and no one ever talks about it it's like a hidden fuel because it's in pipes no one ever pumps it you can it just gets goes to the power station it's one third of us electricity of energy not even electricity energy is from nat gas and it's the it just hums along behind the scenes no one ever complains the earlier on this year was ten dollars per mmbtu because it was a cold snap up here sorry down in texas and it's now three dollars per mmbtu but no one complained when it was ten it's the third of the u.s energy uh supply was ten dollars now it's three and it's because you know diesel gets a lot of the attention this year but it's um not gas is uh it's probably you know everyone talks about energy independence it's probably the fuel that can most make the u.s truly energy dependent because oil production you know one of the problems trump's had this year was um he dumped all the oil crude oil from the spr that went to europe pretty much which for good or bad because it goes into the international bucket or basin of oil the oil oil market is very global because you can ship it around natural gas is not as well connected it's very expensive to ship it you have to cool it down and compress it and so but if you want the us to be truly energy independent nat gas is that fuel and basically and it's that has not been unlocked in the us look at the whole northeast there's a huge amount of nat gas under there there's also uh in terms of potential there's pipelines that are blocked that people are not allowing that those two things just uncracking the nat gas production on cracking nat gas production in the us will that is truly will make the us such that um it will not just disconnect the us from physical energy it will also price disconnect because remember europe is 31 nat gas uh the us is three so if the us increase the us can become energy independent as well as price independent of the rest of the world and the only field to do that is really nat gas um oil is always going to be linked to the world coal pretty much is going to be linked to the world but nat gas because it's so difficult to ship it's kind of for good or bad it's trapped in the us there are some exports but it's very expensive so that is the fuel for true energy independence is nat gas as i said no one talks about it because it's it's under it's in pipes it goes into the power station people in manhattan ban it and they don't realize hang on that's the reason the light works um they what they're you know banning the fuel that makes the light work um and so it's um that is kind of it's an interesting fuel in that regard and it's um it's it's production is growing at a rapid rate in in the us even at three dollars it's so cheap nat gas it not gas cheap nat gas killed the coal industry that did not mike bloomberg nat gas killed the coal industry and nat gas can actually can continue to transform we've got energy demand growth over the next five or ten years because the us now is learning that just like ireland learned when you cut taxes if you increase energy production in the country and make it cheap energy your economy grows and it doesn't matter is it if it just it happens it's like people because that the cost of doing everything becomes cheaper so whether it be a data center or it becomes a a factory making something you know from china's making something because they've got cheap energy they use coal that's their cheap energy the us if we increase nat gas production that's how you get manufacturing back to us at least to a certain extent there's some manufacturing that's been lost you know pretty much forever unfortunately or at least for the foreseeable future but you can at least stop the the drain of manufacturing out of the us with cheap energy i mean you'll get uh people will build things here with just cheap energy um so yeah it's it's not gas trying to gasify some of its coal yeah there was a big thing of it this year you know when that is can you explain that yeah it's actually it's an interesting because again these are oil gas coal are hydrocarbons so you can turn coal into crude oil you can turn coal into that gas you basically have to heat it and put it under pressure and those hydrocarbons and even oil refineries do this as well they transform the hydrogen carbon atoms into a different hydrogen carbon atom and so coal is hydrocarbon in solid form nat gas is kind of the most pure form methane another form of hydrocarbon and so and oil is the same and so you can change by heat and pressure like just simple it's a relatively simple chemical reaction coal into nat gas coal into gasoline the problem is it was made famous in the 1930s in germany that's where it was fischer tropes was the technology germany had no oil at the time a tiny amount and it the oil basically defined world war ii japan going down to india they had coal and so what they tried to do is it is a very expensive process it it costs uh 200 a barrel to do that process to turn coal from coal coal into uh crude oil into gasoline so it's very expensive 200 a barrel and so you can technically do it and it's it's uh it's called the fischer tropes process and germany did it out of desperation south africa did it you know everyone says okay china does this now they're not economic idiots they're not going to pay i do a process that costs 200 a barrel so they do it they have it available but they don't do that scale because it's a very expensive process and you don't necessarily do it with coal you can convert other parts of the energy space into gasoline so you can coal gasification or coal turning cold uh coal to liquids as the people call it in the industry um the you can do it but it's a very expensive process but china is basically a very basic terms of oil consumption they can they import crude oil they just like a any other place they boil it which is basically what oil refinery does you boil it and it separates into naphtha gasoline diesel heating oil all the way down to asphalt yeah down to asphalt and they do the old school i mean it's a very the oil industry uh it's very basic you basically boil this crude and the different crudes you know venezuela's got heavy oil it's basically like tar three quickly you've got some very light oil out of west texas all this is very light it produces a lot of gasoline very easily in a refinery you don't have to boil it that much kind of thing and canada produces a lot of heavy oil so crude oil is a there's people define it by weight is it light or heavy crude oil but it's um china basically just buys uh oil and refines it they don't get into the cold to liquids is a very expensive you kind of only do it in desperation i think that one of the reasons they they do it at a small scale very small scale is that they do it just to in case they are cut off from oil the oil from the middle east in a war situation that they would at least have some oil because remember they import 12 million barrels per day of their 16.
[01:11:14] Speaker 1: so why did they curtail almost shut down their oil imports when the war in iran started
[01:11:21] Speaker 2: that's you know that's the biggest question in the energy space this year or oil space because it didn't matter like which analyst you talked to or which oil company talked to or which people you know people in government that should supposedly have deeper knowledge you know from
[01:11:36] Speaker 1: various means um how how did china and why did they do that i'm glad to hear you say that because i asked a lot of people including in the us government what is this and some apparently hadn't even thought about it i thought it was one of the weirdest things i'd ever seen and there's no consensus on
[01:11:52] Speaker 2: why it is a very unusual thing i mean basically china caught their they consume 12 million imports 12 million barrels per day they dropped it at one stage to six and you could then people said okay that's a that's a lot they'd have their oil imports and you you can't just do that you like but they did but they did and so people said well where did they get that extra six million barrels from because they cut their imports and remember they were getting two million from venezuela of the six two million from iran gone two million from russia kind of restricted with the sanctions and so but anyway they they cut their imports by two six million bronze per day and one is they have that big strategic 2027 taiwan and people haven't people in outside of china have no idea how much oil is in there people estimate because you can count the barrels and tankers going to china from the middle east people estimate it's one and a half billion barrels remember the us spr is five times less 300 million so people they definitely dipped into that strategic reserve um because they had to save their own economy you know they they need to transport their manufacturing economy they have to transport diesel trucks and cars and um so they dipped into that strategic reserve um and which kind of set back their taiwan 2027 strategy a year or two maybe longer because they were building that up ahead of 2027 so they dipped into that strategic reserve um they then everyone says okay they did coal to liquids they did i'm i'm very skeptical of these other reasons coal to liquids they did they told everyone to drive electric cars no now even in china you can't tell people drive your you know the the byd today you know they don't use tesla as much over there but you can't tell people to drive an electric car you can't force that kind of behavior but people put this out there as a as a reason i think the main thing they did was they dipped into their own reserves and no one knows how much they did people say oh they maybe only reduced it by one million you know of the six they ate in just a little bit and they were relying more on uh they cut their petrochemical productions i mean a huge portion of oil and gas globally goes into petrochemicals making plastics and uh and making fertilizer also but uh making plastics and there people were saying oh they diverted crude oil from petrochemicals plastics into gasoline and again technically you can kind of do that very expensive awkward process to do you can't just do it on a turn on a dime like that i think what they do it's a most simple answer they dipped into their reserves that they were using they'd built up from all the sanctioned oil from those three countries that they'd gorged on for the prior five years ahead of time 120 27 they dipped into that and they dipped into that big time they were they they had no choice because they can't survive their their their economies kind of fragile they've got a housing crisis pretty much slow moving housing crisis but it's going through their economy they've got a debt crisis they've got a huge uh their debt gdp is huge if you add in all of their debt levels like government debt personal debt um so they had to kind of save their economy and they they have a record of doing this they did this in uh the financial crisis 2008 they pumped a huge amount of money into their uh domestic manufacturing economy uh in an emergency way immediately following 2008 so they basically dipped into that strategic reserve in a big way and people say oh they didn't know that no one really knows i don't know um no one really knows um if i were at you know an intelligence organization i would try and determine how much oil i'm sure there are people that know know that well
[01:15:32] Speaker 1: i've heard that that's exactly what i have heard but it doesn't explain why why did they do that one to save their economy they need because the oil is a critical part of their no no why did they have their imports why did they cut their imports in half well they were one there was a blockade and
[01:15:52] Speaker 2: they couldn't get the oil they physically couldn't get the oil out of the persian gulf and so that was one thing they were they were back in march of this year exports from the middle east were zero from the
[01:16:04] Speaker 1: through the street oh i remember but they couldn't increase it from russia no they couldn't or west
[01:16:09] Speaker 2: africa no i mean you you can technically do it but you have to the ships have to go the whole way around africa and it becomes and you have to get the tankers and it becomes a logistical nightmare and china is trying to build pipelines to russia very that's a very long distance and the oil and gas industry and long distance and oil and gas means expensive and it's also a very cold harsh environment look at you've got to heat the pipes or put diluents in there to enable to flow so one was technically china couldn't get access to the crude oil at that time and that now just china a lot of southeast asia and asia in general india um one was that two they really did want to save their economy by just releasing crude oil from their own stockpiles into the uh into the world into the uh the uh uh domestic refining space the other one is um that they didn't want high oil prices i mean oil looked at one stage like it was going to go straight to three hundred dollars i remember and so they um it does the oil industry operates in a margin that they basically didn't want them to contribute to that two three hundred dollar price spike and so uh they decided they just decided they're relatively centralized government not to import and it just made a decision and they had a stockpile that they could use and they had these other marginal things like the electric cars i don't believe that those are at scale a big reason and they just dipped into that stockpile and then there's also the economic thing of china has been buying that twenty dollar sanctioned oil at a discount for the past five years um when oil went over 100 and they've historically they stopped their imports and so every time it goes 100 even right now we're at you know 105 or 110 china's imports over the past two weeks have dropped off a cliff to almost again and so they're economically rational i mean everyone thinks of them as being communist or whatever they're they are they know the value of a dollar or yuan or whatever and so but they're they're they basically stop buying they buy below 70 and they stop buying above 100 and and it's true it's a simple thing they they and they stop buying as it was uh once we got above 100 back in feb march they stop buying and so they don't want to buy expensive oil these are naturally that culture in china is a naturally trader instinct and they stopped um and so they they i think it was just a bit a combination of they dipped into their reserves to how their their imports dropped they dipped into their stockpile it set them back in terms of their taiwan invasion plan um so you know people think that you know trump was playing 5d or 8d or whatever the d is chess um it did it did have the side effect of knocking them back and also venezuela knocked them back in terms of china was buying almost two million bras a day of venezuelan oil venezuela everyone forgets but that was only this year it was back in january of this year fourth there you go it's it seems so long ago but that knocked that was a basically a uh you know the don roe doctrine knocked china out of the western hemisphere but also not two million barrels a day of sanctioned discounted oil to the china was going where's venezuela oil going now the u.s all of it yeah i mean it's not i'm not saying it's good or bad it's it it's it's just that's what reality is and it's going there and uh you know china had invested a huge amount of uh billions of dollars in in uh into venezuela china had also invested billions of dollars into iran they built this hormuz bypassing pipeline called jask jsk that went around uh uh the street of hormuz it's never been used it was about to be completed by this year and um but china basically has been the whole belt and road initiative they've been applying that to the oil and gas industry and you know uh russia i think is kind of still independent of that influence of china i mean china russia will sell their oil to anyone but they haven't been kind of captured by that belt and road initiative economics iran was captured by it by chinese that belt and road initiative venezuela was captured by it um and china doesn't care about venezuela's politics or people or they care about the economics they don't care about iranian politics religion israel that whole situation they don't care they basically can you get me cheap oil below 70 dollars a barrel how do i get that oil and uh if if you could ask the eu to put more sanctions to discount it even further please that would be a a bonus because all that money is not going to europe it's just going straight into the pockets of beijing to restate your point which
[01:20:34] Speaker 1: seems provable western sanctions against outlaw countries help china's economy directly and it is
[01:20:43] Speaker 2: there's and china would love for more european sanctions and u.s sanctions western sanctions
[01:20:49] Speaker 1: which western politicians brag about continuously western populations feel good about i think it makes
[01:20:56] Speaker 2: them it's a it feels good it's a feel-good policy all help china's economy directly yes and it's quantifiable 10 20 a barrel and the chinese would love nothing more than the eu to flagellate themselves even further more sanctions put a 20 cap on russian oil so the main reason i want to have
[01:21:18] Speaker 1: this conversation of course was the war which is heightened the world's awareness of how important energy is and how hard it is to have a civilization without it and this war in both wars the war against russia and the war against huran have both reminded us of that so what effect have those wars had on
[01:21:37] Speaker 2: global energy i mean it's obviously it's because of um being the regions that they are in um it's had effect on crude oil and and natural gas so coal you can just put that aside so that's again a third of the world's energy that's not involved in this whole situation put that aside so it's oil and natural gas and um the world the world or the energy market kind of war gamed out the shutting of the strait of hormuz for a long time and it kind of did happen a little bit in the 1980s you had the tanker wars yes when iraq and iran were fighting and there were i think it was four was a huge number of tankers that were uh knocked out by in that war the u.s uh you know escorting tankers in and out of the uh straits at that time and so there there was kind of an awareness that the vulnerability was there of the whole uh choking of hormones um the oil market immediately in feb 28 uh assumed it was going to be a week or two though and you can tell how 26 this year of this year of 2026 um and it was because you can tell there's the forward curve which is the price of oil as you go out into the future so you could tell that the market in the front of the curve was very high and then but you it was backward aided they call it but very low a few only a few months forward and so even the oil market itself and the oil market is hyper geopolitically aware and and very reactionary it's kind of like almost prediction markets yes existed but it's it's oil markets to use futures and options to do the same thing as prediction markets do and so the oil market was saying they're pretty accurate you think those markets are pretty accurate in their predictions they're accurate in the very short term they're very short-term aware like so the first thing i do when i wake up in the morning is i look at the price of wti yeah i can tell if if iran has been hit that's i just looked this morning it was like down at you don't look at brent you look at yeah yeah yeah i mean brent is there's an issue of
[01:23:32] Speaker 1: manipulation there and yeah well i've noticed but it's uh it's wti look at wti so just for people watching this if you've made it this far in the interview and you're interested in understanding energy markets wti is west texas west texas yeah yeah west texas intermediate and west texas midland
[01:23:50] Speaker 2: crude is also what's what now sets the price for brent crude yeah so it actually it's brent is a derivative of west texas crude so it's kind of uh there was a window of 15 years where brent took over because this is before fracking you know before that 20 2005 revolution and um us crude production was declining and brent took over for about 15 years between uh 2005 2020 but now that that has flipped back to wti crude in the u.s yeah that's the global benchmark and uh so yeah so sorry interrupt i 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 i can tell if there's a war or whatever and just by looking at that one thing or so i look at other things well that's the first thing i look at the price of crude and uh back in in february uh we went from 60 wti up to you know we got up into the hundreds and very quickly but the curve the forward curve you can trade crude oil out into the months ahead for delivery futures curves months ahead that price was uh going down to like eighty dollars seventy dollars so the front was 120 you go out three or four months it was back down to 80 you can so the the market was predicting this thing is going to be quick the oil market was predicting and which i think you know trump went into this also thinking was going to be quick and the us intelligence agencies and they they the the the blob the deep state everyone thought that this was going to be really quick because we were just coming off maduro in uh you know early january in venezuela uh there was kind of a it uh everyone thought this would be a hit and your one and done would be out within two weeks just eliminate a few politicians of the top layer which i think was strategically a terrible thing to do yeah uh but it basically and the old market very quickly um rallied and then once it wasn't over in two weeks because iran went to that mosaic structure where they basically distribute control of their military throughout the entire country the irish irish embassy used to and so it went to that you know words you can't slice off the onion layer by layer at the top it just doesn't work and iran has developed this method of working for the last 30 40 years since the late 1970s and uh they uh that's when uh and iran started retaliary retaliating with drones that's when uh the oil market went oh okay this is going to be a more protracted thing they started hitting hitting golf golf production facilities and they hit a guitar's natural gas uh lng plant which is still out and will be out for the next three to five years that's a guitar's main source of uh of revenue is that lng plant and uh they knocked half of its production out and that's guitar produces 20 of the world's lng so you know that's course that's what that gas will go to europe natural gas and will go to asia that's gone now for three to five years again who benefits from this the us net gas industry you know like nordstream guitar um you know if if you were to be conspiratorial about it you could just knock out all of guitar and and then the us would benefit even more so it's kind of a an interesting kind of secondary effect that this in this uh situation hormones has kind of been a very positive to all the us economy because the us is a huge net gas and oil producer but anyway so you had the oil market initially priced in a quick win and then iran started attacking all the production facilities and particular refineries in the persian gulf and these refineries produced a lot of diesel and that was the kind of the second effect was the diesel uh the price spiking crude oil the spread between diesel and crude or gasoline and crude is called the crack spread that blew out to diesel to crude used to be diesel used to be ten dollars refining margin above crude it went to a hundred and it stayed there since that's crazy and that's because of reduced refining capacity there's they knocked out two million barrels per day of persian
[01:27:44] Speaker 1: gulf refining capacity and but why would it have not the same effect on jet fuel gasoline heating oil
[01:27:51] Speaker 2: the rest it just it the that the the world the us produces is a lot more gasoline dependent than diesel and so it just it was the way of um the world's supply and demand system for gasoline and diesel it it it had that impact much more than uh uh significantly just because asia consumes more diesel um europe consumes more diesel it was basically uh a it it seems kind of like a a a kind of convoluted thing but basically the the world had more gasoline capacity in refineries than it did have for diesel so diesel
[01:28:30] Speaker 1: was more tight as a global situation than gasoline how hard is it to switch a refineries proportion of gasoline to diesel to all the other refined products extremely difficult oh really yeah you can
[01:28:42] Speaker 2: switch two or three percent from diesel molecules that come out of a you put crude oil in you can move a slight two or three percent of the barrel into from diesel into gasoline or vice versa so it's a very very difficult thing to switch oh wow and so yeah so but everyone talks about diesel but gasoline margins went from 10 15 to 60 so gasoline did also rally a lot that's that refining margin and um so diesel went to a hundred dollar spread over crude so you've got a crude at 100 diesel is 200 a barrel gasoline your crude at 100 you had gasoline at 160 a barrel so it did cause a rally in crew in gasoline also it was just that diesel was much more tighter it's it's as a reaction and then that was combined with and i know people knocked trump for blaming uh ukraine and uh russia ukraine did start hitting all these russian refineries and that did start coincidentally with the first half of this year when the hormones situation so that knocked another two million barrels per day of refining capacity out of europe and um the world as i said is 100 million bars per day of production you knock four million barrels per day of refining capacity out um it does have an impact and it's it uh it uh it basically caused diesel prices to spike why would ukraine do that because the cia helped them well obviously i mean
[01:30:05] Speaker 1: this that thank you for pointing that out right it's not i mean crane's not an independent actor ukraine
[01:30:09] Speaker 2: everything in ukraine hits pretty much in russia is approved and signed off well that's factually true
[01:30:15] Speaker 1: what you said and thank you for saying it um why would the us intel community want to reduce russia's refining capacity when it affects the price of diesel fuel and gasoline in the united states
[01:30:29] Speaker 2: um i think that even though they're very sophisticated entities the you know cia and other entities in the us uh government um sometimes i don't think they think about the effect they're they're energy blind to a certain extent as well i didn't think that they would thought it would have they thought it would just like sanctions in russia they thought that if we just target russian refineries we can kind of damage russia and it wouldn't affect global markets i think they themselves are you serious they they they thought that they could just target pinpoint target these russian refineries and oil refineries are easy to target they're big pieces of equipment and yeah and they thought they're exposed too and they did want to create a little bit of uh uh pressure on russia putin to come to the table this year trump wants out of ukraine and russia that whole situation he wants out of it as everyone should want out of it it's it's it's not a uh that war should never have started but everyone wants out except for a certain few vested interests you know you know europe again here we go talking negatively about europe but it's uh uh uh the cia or whoever was providing the targeting information um they didn't think about the impact on diesel now they realize that of course and um because they thought it was just two million barrels per day of refining capacity of a hundred it can't have that much of an impact it did it immediately did and so um you know the cover about blowback it this blowback was in the energy market and so it was a mistake the cia should never have targeted those refineries they did and uh but they provided all the targeting because they do want to pressure putin to come to the table they want to pressure zelensky by elon musk flipping on and off the starlink button every other day that seems to be doing now um and they're these are kind of the two pressure points that they're applying uh they're applying you know they're trying to destroy russian revenue with refineries and zelensky's defense with the starlink turning it on and off every few days to try and force these guys to come together and at least have some sort of a ceasefire and uh that was kind of the original thought process behind it i think they were surprised by how much diesel prices rallied it's a really interesting explanation and it happened at the same time as hormones if they did this one hormones when that was not happening diesel would not have
[01:32:37] Speaker 1: spiked as much how much uh oil and natural gas is making its way out of the gulf now so now it
[01:32:44] Speaker 2: depends on day-to-day you've got you you have a pipeline it was a pipeline that the saudis built it's called the east-west pipeline back in the 1980s because of the original tanker war iran-iraq tanker war back in the 1980s and can you explain where it goes it goes from all of the oil and gas and pretty much oil let's talk about crude oil in saudi is produced on the edge of the persian gulf so on the east side of saudi arabia but saudi arabia is a big piece of land that goes the whole way all desert there's no greenery there whatsoever all the way over to the red sea and the red sea is you know they've got issues there with the hothis and whatnot over the past few months but basically um all of the oil production is trapped in the persian gulf and but the red sea is kind of one place they can get it out outside of the hormones so generally um the 1980s they built this pipeline as kind of a backup plan and it was a seven million barrel per day capacity pipeline again scale the world produces a hundred million barrels per day the saudi uh produced 10 of that hundred so now they're not as big as these two the u.s produces 25 so but of the 10 the saudis produce they could get seven of this out through this pipeline but they didn't use to do this because uh this pipeline usually run at two to three million barrels per day of the saudi 10 and so they kind of use it as a backup plan and uh why is
[01:34:05] Speaker 1: it cheaper to ship it through the gulf yeah and you've got to pump it across all these pumping
[01:34:09] Speaker 2: stations and also um if you're a buyer from china their main or asia from saudi for them to send a tanker the whole way into the red sea it's and past uh yemen and and it's very much more dangerous area it's more confined and so it was cheaper for the tankers pipeline shipping is is uh is cheap also but uh if you were to buy the oil from the red sea at the end of this east west pipeline is a dollar per barrel nowadays it doesn't seem like that much but it was a dollar a barrel more expensive it was cheaper to buy it from the persian gulf um for china and so saudi used to produce um or oil all the those gulf producers are in trapped inside the persian gulf that's it's kind of the same oil basin that whole region clearly it's it and uh even you know people talk about tehran even tehran tehran is is the almost the other edge of iran to where their oil is produced their oil is also produced at the edge of the your karg island and i've noticed it's also down by the coast it's the same reservoir it's a pretty much yeah it's the same basin there but it's a different reservoirs some of them are connected like kuwait and iraq their reservoirs are connected but it's the same uh basin it's the same you know they i said you know this the same millions of years ago it was it was created at the same time low spot yeah and so basically um it was uh some of them are connected but anyway the um the uh when uh it the whole situation kicked off um the first surprise was the issue of refineries then it came into tankers because um the uh no one was in their right mind send a tanker through the straits of foremost when the active there's an act of war and iran is targeting tankers these are civilian tankers these are not military tankers right and iran was hitting them and uh would hit the occasional one and they're hitting them cheaply they don't send these twenty fifty thousand dollar drones to hit them and uh so you had the you had the spike in crude first that was the first wave they had the spike in refined products diesel was the most extreme one but because you hit these refineries combined with the russia uh hits and refineries then you had the spike in tanker rates and these tanks went from you could hire a super tanker super tankers like two million barrels a day two sorry two million barrels capacity a super tanker they call them in the oil industry vlcc's very large crude carriers but they're these buildings effectively carrying two million barrels of crude and uh these things you could um hire them for uh fifty thousand to a hundred thousand dollars per day that's the day rate they call it um uh before in january february this year now it's 1.5 million barrels 1.5 million dollars per day so we went from a day per day from a hundred thousand dollars per day to 1.5 million uh dollars per day and the reason the tankers have gone up is that first of all you don't want your you can't get insurance you can get technically get insurance but the insurance rates have gone up they did self-insure by raising their fees saudis uh is this well they self-insured that a lot of the tankers that are doing this route they it's like a speed run of the streets of hormuz you hug the coast of the uh of oman yeah and uh you speed run and the only people doing that are the saudis because they have their own tankers so they're not paying other people to do this uh and the emiratis have their own take and they yeah the uae have got their own tankers the abu dhabi and so those guys are half of the tanker run and basically they're at speed when i say at speed these are super tankers that are full of two million barrels of crude they can't move at speed but they're trying to they move as fast as they technically possibly can into the persian gulf grab the oil load it and come back out and usually before february they would then continue on to china or continue on to asia somewhere and now they don't they stop outside the gulf of oman they lighter they load the crude onto another tanker and they go back in again and do that loading so those super tankers now this doing this uh speed run into the persian gulf and the persian gulf is 20 million bronze per day of x uh persian gulf x produces 20 million barrels per day um the east west pipeline that was built in the 1980s they ramped that up from three to seven so they got some oil coming out of that pipeline extra oil um they got some oil out of this there's another pipeline to frijera so they got another million barrels per day out of that so they they cranked up all the alternative bypass pipelines so that was that compensated a little bit for the streets of formula that's been shot and then the big one is they started doing these uh tanker runs speed running into in and out of the gulf and doing what's called ship to ship transfer sts outside the gulf of oman what i mean what's that journey like it's a few it's a few days it's a highly risk what are they paying these crews to do that they're paying them i think it was in the ft a few weeks ago they're paying them um for each run which takes a few days they're paying the captain i think a hundred two hundred grand per run i mean they're taking their lives under risk they're right now today iran is hitting one to two tankers a day hitting so they're hitting the engine room a surprising thing and there are some spills as a result of this these are carrying crude oil um these tanks one to two tankers a day and that is the real thing that can't be sustained i know besant and trump have got these these uh economic sanctions and pain points that's going to take too long that that you know uh that operation that financial operation that goes back to the sanctions things it doesn't really work it causes immediate pain those sanctions they close down money transfers and try to sanction companies that deal with iran but that's not going to be that's not a long-term sustainable i want to say long-term i'm talking about we need to resolve this within three to six months max before it gets it things just are things are already bad they're they need to start recovering because it's flowing through to food and fertilizers but iran's hitting one to two tankers a day right now today in november 2026 there are only 1 000 super tankers in the world getting killed in these attacks yes and they're unfortunately crews from india philippines uh these are just civilians these are not military people they're these are civilian tankers they're you know they're marine i know you're you mentioned your father was in the marines are they this civilian marines um these are just uh people just earning it you know working um iran is treating them like military hardware they're hitting them and so that can't be sustained and so one of the things to stop that because iran you know the u.s reaction so far has been to do these mass kind of firework style campaigns dropping the mother of all bombs trump's talking about things like that iran is very there's a very well-educated population surprisingly and they historically have been a higher median iq than we do yeah the most one of the most successful ethnic groups in the u.s is our iranian obviously the persians yeah yeah they actually think they may be the number one you know everyone thinks it's like the asian population it's the iranian americans persian americans and um so these guys are very they're rational like they actually there's a kind of a logic to what they're doing they're also highly you know they've got a religious aspect to it but uh i think that this hitting one to two tankers a day you you annualize that that's going to knock out the entire global fleet of tanks because they can be repaired they're not completely knocked out of commission but the repair takes three or four months uh the us basically has to make every tanker hit matter and so one way to do that is iran has 150 power generation stations i mean this is an energy war you say to iran just and you don't uh uh secretly do this you tell that iran is a there's a direct price to pay uh for every tanker you hit we knock out two power stations start with tehran they've got five major ones and just make it each incrementally painful to stop that tanker hitting situation because iran is hitting civilian infrastructure going through a uh you know on a civilian purpose there's no military purpose for this and the us should just make every hit painful stop it to stop that ahead of negotiations and everything but to kind of write the world's uh economic situation in terms of energy there has that has to stop and that's one way to do it iran has 150 power stations you continue to iran to do that for another month or weeks or months you know if you do it for another week you hit uh seven tankers uh we're gonna hit 14 power stations there should be some sort of it's a tit-for-tat retaliatory strike you don't tell them which power stations but you make it economically energy painful that's one thing the us could do and to try and stop those tanker hits because that's it's like triage you have that is the most important thing is to stop those tankers being hit on a daily daily basis now because it just can't be the i said you can't do this for months it's you can do the economic war behind the scenes whatever but the tanker market the physical base tanker market can't wait six months it has to stop that has to stop today um and how many oil tankers super tankers are there in the world there are around 9 000 oil tankers in the world 1 000 of these super tankers the two million dollars on the planet yeah i mean it's it's a i mean two million bars is a big amount of crude if the world is 100 million broads per day of oil production and not all of it is tankered you know some pipelines and yes so but the but 9 000 tankers in the world 1 000 are super tankers and but if you hit one a day that's you know annualize that that's uh four or five hundred a year you know there's a big chunk of the super tanker you just can't that has to be stopped and the other way is that you can stop the iranian army the irgc iran has five refineries just knock them out just like a take the cim they know where they are these are not hidden things or secret things and just within 20 days the iranian economy energy wise the financial side is the best in strategy of this like the sanctions thing it's a very messy long term it creates all these weird side effects like china gorging on that free oil or discounted oil and you could just knock out there are five refineries within uh and within 20 days that country ceases it stops operating as in they can't diesel trucks gasoline cars motorbikes the entire economy it physically can't operate so the us has got options all this talk about nuclear weapons that don't do that it's not necessary it's iran is an extremely vulnerable on an energy side economy and these things also are repairable like you don't want to destroy civilian infrastructure or dual use infrastructure in iran that it's just to be negative and punish these people you basically want to say stop we let's stop let's parlay let's take a take a breath here you can't hit these tankers every day we're not going to negotiate with you even as you do that um and then the third thing i think i think going back to kind of the original scene of this war um i mean trump the u.s government uh killed the ayatollah and his family back in late february early march and then when onion layer tried to wipe out another layer that kind of behavior i don't think is not that that's that that is not conducive to getting a balanced negotiation first of all it's it's i love
[01:45:04] Speaker 1: there should be there should be there should be kind of behavior is not conducive to getting a negotiated settlement no it's not murdering their religious leader no it is murder i mean but but
[01:45:14] Speaker 2: here's the thing trump did it killing old people trump back in marsh said what you know people were asking him the logic behind going to war and what i know you you talked to him beforehand um but he said i got him before he got me that's what he said about at the ayatollah it's just that's just a child talking that's absurd i'm sure but it doesn't even if it were that i'm sure there were people in whispering in his ear that that were the truth for the fact that there were yeah and so there are
[01:45:37] Speaker 1: all kinds of flatterers and whispers and liars around him mostly in the israeli lobby all telling him this lie that they're trying to kill you and you have to kill them as a sign of good faith the
[01:45:45] Speaker 2: u.s should have a policy revert back to it used to be a policy us not to uh intentionally uh kill
[01:45:51] Speaker 1: or assassinate foreign leaders that needs that was our policy up until we did this i mean we have assassinated as you know foreign heads of state but we always lied about it and pretended we didn't and i think you know there's some value in upholding the standard even if you don't meet it
[01:46:06] Speaker 2: there you go and it does matter because i think that every leader in iran and there are you know as i said they've got that mosaic structure but they you can't negotiate with someone under that kind of
[01:46:18] Speaker 1: threat and it's not just it wasn't just during a peace negotiation that we did this yeah as you know
[01:46:23] Speaker 2: it was a surprise that was that was i mean that was just it was a wrong i mean is it right around to kill anyone but but just as a as a strategic negotiating kind of tactic that was that just
[01:46:35] Speaker 1: doesn't work you send in fake negotiators into a fake negotiation and then you kill the elderly head of their religion and his family in the opening salvo and then by the way in case they didn't get the point you double tap a girl's school like that's not the kind and then you demand unconditional surrender which our president did unconditional surrender whatever that means yeah i mean that's you went all in and you failed so where what do you do now i think there
[01:47:03] Speaker 2: needs to be a restatement of u.s policy and trump could do one of his executive orders and whatnot just signed or whatever it says that u.s and no one endorsed even secondarily via the u.s like cia or whatever should get it back into that business of killing politicians elect politicians even if we don't like the election or whatever you know for whatever reason stop that that is not good it's not good for ethically and morally but it's also a very basic military strategy you don't you know that was why you would never kill the generals you wouldn't go you need someone to parlay with and it destroys for a whole variety reasons that should be a key component of this stage one stop the daily tanker wars two by saying you hit one we're going to knock out two power stations let's see how long you know that's going to quickly stop i mean if it doesn't iran is making a rational decision to wipe out their own power grid okay i mean they're not i think that you need to have some tit-for-tat escalation there because that needs to be stopped right now that's triage two you tell the iranians we are no longer going to endorse what publicly do we're not going to endorse um even on a secondary base secondary basis with other entities you know doing that um we're not going to support it endorse it or promote it stop we're not doing that anymore that the us doesn't do that i should go back to that uh doctrine because you can't negotiate on that basis um and then once once the tree the situation is triaged okay then then we can go back and talk about all these other issues we have the iran wanting this silly toll we're not doing the toll they want their money you know who who owes iran more money china has they've been buying all this discounted sanctioned crude over the last five years they have 60 billion dollars of in yuan i mean the the fact that the iranians were stupid enough to sell their oil for yuan but anyway they've got it locked up in china 60 billion dollars works way more than the us has got locked up in nasa's for so who if so if iran wants to pay someone that someone wants to pay around that toll china can pay the toll a dollar a barrel whatever it is take it out of china's money they're the guys who've been taking advantage of iran over the last five ten years and so but let's put it back on the table you want the toll have it be a toll that's employ addressed by the gcc put the toll as gcc plus iran manage that toll but that's something the other countries on the persian gulf in other words yeah yeah put them all on the on the on the toll and have an equal share of of this iraq yeah yeah a dollar a barrel and get them all sharing that toll yeah okay but no other party outside of the persian gulf is going to contribute that toll so you've got the assets getting money from china first they're your biggest debtor if you will iran uh the toll make it a gcc toll put that in place um we're not going to target your your political infrastructure and even nefariously do it really have it as a a real thing you know where there's even secondary parties are not going to target that and um let's come to some sort of a uh a situation an agreement on the nuclear situation we're not trump talks about bombing you know the pickaxe mountain and mountain and all this nonsense i mean let's put go back to and it's probably discussed trump go back to the the uh the prior un's uh inspections situation with iran have iran treat iran by the way as if it's a nuclear power because even if you take all that dust out you think they aren't going to now try with every means possible to get one of those nukes from north korea or five of those nukes or pakistan and in other words treat them as if they're as if they are a nuclear power iran is a major power in the middle east accept that as a reality you can't crush it you're not going to defeat it uh militarily it's too expensive to boost the ground let's come to an agreement where that we treat them as if they're a nuclear power constrain it if you will um ideally i mean this is me personally i hope they don't go back to the ayatollah regime and all of that i would prefer iran it's they tried the civilian uh rebellion back in january it's probably going to end up being a military hunter like pakistan controlled by the irgc they'll have the ayatollah you know they've they've keeping that guy out of uh out of sight you know people speculate why the son of the ayatollah why they haven't you know he's been maimed or he can't speaker or legitimately they're afraid for him you know being killed by the us or israel you actually remove itself in that game and say we don't play that game but uh basically the uh normalize the entire situation and triage the tanker situation normalize the uh iran as a proxy nuclear power i mean it's sad to say but it is what it is and there you can knock out the dust but put some uh guard guard wheels around it and like pakistan the us controls pakistan's nuclear uh supposedly uh nuclear weapons and um yeah that would that would be it just just do those things and uh you don't need to go in and do a large uh you know all this escalatory talk of we're going to bomb huge things and make it a big spectacle spectacle no these are small incremental things that we've done and iran is um is looking for an out also they don't want this situation to escalate you know i remember 10 years ago when instagram kind of kicked off they had the rich kids of tehran these were all like these uh these rich kids driving ferraris around tehran they're just normal people like you and i i mean i don't drive for it but they're normal people that have you know we we should they want we should treat them with dignity and respect and uh and realize that they want to escalate de-escalate the situation as much as we do and they they're great at their media game throughout this whole war has been amazingly good i mean they're they're trying to you know they're they put out that uh 1000 page or whatever it was number page document saying here's the legitimate reasons why their their grievance document if you will and they said you know we don't have a we don't have they're trying to spin the us word of we don't have a problem with the people of america we have a problem with the government and i'm thinking hang on a second for 50 years or 47 years since they've death through america so you only met the government didn't mean the people of america in other words iran they're not you know the the innocent party in this whole escapade either they they've got they've done some terrible horrible terrible things and you know then they say oh but the shah is the what about the shah before the current regime was even worse no not really the shah supposedly he killed he had you know people tortured and killed during his time but he was maybe 2 000 people 3 000 people there's a great book i read recently the cauldron it's called and just talks about the shah yeah he was a dictator pretty much i'm a king figure but he um and he was us supported because the us just needs someone stable in that environment but the uh the um the irgc killed 20 30 000 people in january of this year the shad over a 40-year period tortured killed 2 000 people i mean so no one is innocent in this whole situation let's stabilize it for the energy markets perspective there's a way out of this it doesn't involve new using nuclear weapons or doing these weird showy things it revolves it revolves around accepting that they're a rational player they have legitimate concerns that uh you know we've kind of adopted the israeli style massad style kill all the politicians first no the us should just back away from that go back to 1980s style and yes there were some behind the scenes things happening but don't as a policy make it a crime it was never really a crime in the past but make it as close to a crime as possible to kill or assassinate a foreign leader or especially their family i mean that is just not a good it's not a
[01:54:54] Speaker 1: western understanding of justice at all the family didn't do anything it's not a crime to be someone's
[01:54:59] Speaker 2: child yeah and trump said again said i got him before he got me i mean okay you know george w bush used the same logic back in iraq when it were iraq too he said uh he why did he go after into iraq and iraq too you know they used the disguise of uh weapons of mass destruction a lot but the one thing that sticks to me at that time is that george w said he tried to kill my daddy and you know that when in fact
[01:55:26] Speaker 1: it was the israeli government that plotted to kill george h.w bush and that came out in victor ostrovsky's memoir from assad officer's memoir i think that's a fact uh so you know whatever it's a complicated world a lot of bad players in it but stability has got to be the goal let me ask you though do you think the united states and israel can accept an ending to this war in which the current iranian government or some version of it remains in control there no or certainly fewer american bases on the gulf like america is not keeping the peace in the gulf going forward we
[01:56:01] Speaker 2: can't even keep the straight open yeah i don't think the loss of those bases is a bad thing i think they they basically did what the u.s should have done those military bases they were exposed targets for years yeah they don't they shouldn't exist in the modern drone warfare uh so they kind of did the u.s uh a favor by shutting those bases down the u.s should still when i say everyone talks about the u.s walking away from the middle east the u.s is not going to walk away from the middle east u.s still needs to be there and protect those countries because we need a a uh the energy prices to remain low with this at its core level but also to just for general stability as the hegemon and globally and to stop china becoming the hedge fund especially in the middle east so the u.s is going to is not going to walk away from the middle east no matter what iran wants or needs or thinks they're going to do those bases okay whatever those they're sunk costs they're written off the u.s going to have to come up with a more uh kind of even like iranian inspired mosaic mobile based structure to defend the middle east the the non-iranian side but uh the u.s and israel have to accept that iran is there it's a it's can't be defeated and iran good on them they shouldn't be defeated i mean they're they can do whatever they want as long as they don't assault especially with nuclear weapons the rest of the world they can do whatever they want their independent country so the u.s we just
[01:57:20] Speaker 1: and israel but accepting what you just said which seems demonstrable i mean the geography of iran is ultimately its power and the fact it's a cohesive country basically and an ancient civilization but just saying even saying that out loud is so um contrary to what we have been told for 40 years and what even policymakers are saying now like we you know we can't accept this government we can't accept iran as a nation i mean they're gonna have to right but do you think they can i i don't know i
[01:57:54] Speaker 2: i don't think it's a matter of if they can they have to they have no choice we have no choice but to accept iran as it is sometimes you know it's like north korea would the u.s love to you know they have nuclear weapons in north korea rocket boy and so would they would the u.s love to destroy north korea and would everyone around them the japanese and south koreans yes of course but it just is what it is and sometimes you take the draw and you walk away and just allow it to exist it's sad but that's just there's a limit to your power because you're not god yeah and it's not that's not a bad thing no i agree everyone thinks that the u.s has to has to intervene everywhere no no you basically there's a payoff structure here where you don't sometimes it's not worth intervening it's just in you not in u.s interest and that in iran is a classic case of that north korea is another case where you do as much as you need to but you stop when it the payoff stops working and uh iran is one of those situations where we need to get to walk away from the situation when i say walk away we're going to walk away with those bases okay tell iran they're gone i mean but we're going to have them still defend highly defend the eastern side the western side of the persian gulf but um we still need to be there the us still needs to be there and defend oil production out of and natural gas production um one is a bulwark against china and and what they're doing but two because it does affect global energy prices and all of our allies as well as our selfish own needs we need to defend that side um and even if you ignore take israel out of the equation we still need to be in the persian gulf we need to be in there even if israel israel i think messes with the mind of the u.s military in terms of tactics like the thing about assassinating leadership the u.s shouldn't do that and shouldn't get into that but the actual physical logistics of defending those countries the u.s still needs to be there irrespective of israel if israel didn't exist the u.s unfortunately still needs to be there
[01:59:53] Speaker 1: i don't think that's crazy at all so my my last question is about uh global food supply and prices and you said at the outset that there's just a huge lag because the growing cycle between the constriction of certain inputs fertilizers and outputs like you don't see the consequences right away what are we going to see in the next couple of years um so the one of the two of the big things
[02:00:19] Speaker 2: that were knocked out this year most fertilizer is not gas in a bag natural gas is that one third of the world's oil production qatar was knocked out this year half of its production with big net gas producer and um there's because of that uh the feeds the thing that makes the fertilizer that gas has gone up in price as i said it's only two dollars in the three dollars in the u.s it's
[02:00:40] Speaker 1: thirty dollars in asia the price of natural gas what i just sorry again starting to interrupt you what percentage of global food supply is directly traceable just to the nation of qatar oh sorry no it's a qatar just qatar which is one of the biggest gas producers it's one-fifth of the
[02:00:55] Speaker 2: world's lng so it's a decent chunk it's it's like of of the world's food it's a fifth of of terms of lng and and uh ammonia production it's just funny so you've got a country of 400 000 people
[02:01:07] Speaker 1: because it's just tiny little country one of the smallest countries yeah and is responsible indirect but kind of directly really for like a huge percentage of global food supply
[02:01:16] Speaker 2: yes and also not just not gas you have sulfur yeah what you know a lot of heavy crude oil produces a lot of sulfur and you have to remove that sulfur and sulfur is pretty much free you can buy the salt like someone will give you away the sulfur if you go up to canada they desulfurize those oil sands that they yes take up they have to do so they have mountains of this yellow brick sulfur the problem with sulfur is that it's not the actual material itself is kind of free they would love to give it to you go up to canada and get it but the challenge is the uh persian gulf sulfur is used to make a natural most fertilizer is natural gas goes into urea and ammonia and sulfur and so sulfur is kind of free pretty much because the side and side byproduct of the oil and gas industry but the problem is it's not produced um in all places around the world and a big source of sulfur is also uh the middle east and getting sulfur out so the fertilizer industry has been hit by um natural gas out of guitar being shut down and sulfur and the problem with sulfur is that canada has a huge amount of sulfur but it takes a while for the supply chains to turn a huge industry to point to canada because canada has to rail it out and get it to fertilized production facilities and so the net effect is that um fertilizer fertilizer prices have gone up by three or four hundred percent this year and it doesn't really have a big impact in developed economies like even places like not developed economies as much like russia and ukraine they produce a lot of wheat and the us produce a huge amount of grain these huge food exporters of the us and especially to places like china china imports a huge amount of western food um so it doesn't really have as direct a big impact in the west western farming but has a huge impact in places like india poor poor countries and for those people the main uh variable on their crop yield is fertilizer and that is just going up by 300 so that will impact a lot of countries next year when crop cycles come through next year and i don't think i mean people always talk about famine and the most extreme case uh there will be less food produced next year it's not going to affect the west like america or um it's just we it'll just become slightly more expensive food but you will get you know it's high you know a lot of the world is still living at the bread line if you will and uh that is having going to have a real impact so that's why stopping this now as quickly as possible and reverting to a more quote-unquote normal situation is is not just urgent for energy prices it is going to have an impact and that impact is going to be on the it's you know what's going to happen no one will talk about it it'll just happen under the radar people will be hungrier and especially in poorer countries places like india and places like the africa and no one will really talk about it and it'll just be uh into the background of the next year or two but that's actually already it's unfortunately baked in that's not you'll see people move i mean you saw
[02:04:13] Speaker 1: you know in the 19th century finns moved to sweden in then also you saw the irish move to the united states like food reasons food yeah and so you're gonna see survival migration every time food prices
[02:04:26] Speaker 2: reach a certain threshold people move yep yep you've got you've got uh it's it goes back to this kind of the thing i began with as that you know everyone is so disconnected on where their energy all of like 90 of their energy people have this misconception where it comes from but also in terms of food people also don't realize how it's not fragile the the oil industry and natural gas everyone thinks they're fragile they're very they're not they're very robust just as proven by this year the persian gulf they're they're not a fragile space but they do have a price the market price sensitivity they're the market global market for food and the global market for energy um they they have impacts and some of those impacts are very very bad for especially poor countries um you know it's it's uh it's it's um and i hope that people can have a realization of that people in europe people in the u.s that have a that that rail against reality they're really against how food is produced how energy is produced um should kind of have a not not a uh you know remember there was that uh uh when uh jd vance was complaining to zelensky as like you're not grateful i think that the world as a whole is kind of not grateful for where its energy comes from and it's not not appreciated of us because it um it's it's it should be something that people should learn more about and understand and appreciate and um it will because of that it will affect how people deal with their own lives and and reality you know they could it's it's a very fundamental part of the world we live in is oil and gas and coal and food and we didn't leave that world it still exists underpinning modern civilization it's just that people have disconnected themselves and are living in this simulated world where it's all uh solar panels and wind turbines that's not reality that's like still four or five percent of the world's energy and that people need to kind of anchor themselves however they do it into understanding where their food and and oil comes from and sometimes they're forced to because the situation in persian gulf this year but um it's uh it's uh yeah it's a kind of an interesting kind of um blind spot energy blindness
[02:06:52] Speaker 1: morgan downey one of the great experts on the topic author of oil 101 thank you very much that was great
[02:06:57] Speaker 2: thank you tucker you