WEBVTT 1 00:00:09.039 --> 00:00:12.439 Hello, and welcome to the Texas Tribune Tribcast for Tuesday, 2 00:00:12.519 --> 00:00:16.879 January twenty seventh. I'm Eleanor Klebanoff, wearing real pants for 3 00:00:16.920 --> 00:00:20.600 the first time since Thursday. If anything could get me 4 00:00:20.719 --> 00:00:24.039 into the office in an ice storm or a post 5 00:00:24.079 --> 00:00:27.559 ice storm, it is Tribcast. I am not joined this 6 00:00:27.559 --> 00:00:30.760 week by my usual co host, Editor in Chief Matthew Watkins, 7 00:00:31.120 --> 00:00:33.200 whose love of tripcast is not as strong as mine, 8 00:00:33.359 --> 00:00:35.679 and he would not put on hard pants to come 9 00:00:35.719 --> 00:00:36.320 in and do this. 10 00:00:37.439 --> 00:00:37.520 No. 11 00:00:37.640 --> 00:00:40.759 I believe he is slightly inconvenienced by Austin schools still 12 00:00:40.799 --> 00:00:44.240 being out and a little bit of our post ice 13 00:00:44.240 --> 00:00:47.880 storm chaos. But we are not here to talk about 14 00:00:47.880 --> 00:00:50.039 the ice storm this week. We are looking at how 15 00:00:50.119 --> 00:00:53.359 a decision made hundreds of miles away in Washington, d C. 16 00:00:53.960 --> 00:00:57.439 And executed thousands of miles away in Venezuela can have 17 00:00:57.600 --> 00:01:01.600 huge impacts here in Texas. Of course, talking about oil, 18 00:01:02.320 --> 00:01:04.760 a huge part of our economy, a bigger part of 19 00:01:04.799 --> 00:01:08.519 our lore as a state, and to discuss what the 20 00:01:08.560 --> 00:01:12.200 impact of the Venezuela upheaval will have on Texas. I'm 21 00:01:12.239 --> 00:01:15.799 joined by Texas Tribune Energy and Industry reporter Paul Cobbler, 22 00:01:15.840 --> 00:01:16.640 thanks for joining us. 23 00:01:16.680 --> 00:01:19.439 Hey, Eleanor, thanks for having me. I am also wearing 24 00:01:19.519 --> 00:01:21.519 pants for the first time in quite a few days 25 00:01:21.560 --> 00:01:23.799 and feeling like a human again, so that's definitely nice. 26 00:01:23.840 --> 00:01:25.519 And it's important that we say that because we're sitting 27 00:01:25.519 --> 00:01:27.560 behind a table, so people can't tell if we're wearing pants, 28 00:01:27.599 --> 00:01:29.280 but we are, and we'd like to be clear about that. 29 00:01:30.799 --> 00:01:33.959 And our other guest, Jack Balaysia, the executive director of 30 00:01:34.000 --> 00:01:37.239 the Kay Bailey Hutchinson Center Energy Center at the University 31 00:01:37.239 --> 00:01:37.879 of Texas. 32 00:01:38.159 --> 00:01:39.519 Jack, thanks for joining us. 33 00:01:40.359 --> 00:01:42.519 Thanks owner, Paul, I'm glad to be here. Thanks for 34 00:01:42.560 --> 00:01:42.920 having me. 35 00:01:43.920 --> 00:01:46.879 Jack served as vice president and general counsel for Exon 36 00:01:47.000 --> 00:01:50.239 Mobile from twenty ten to twenty sixteen. Prior to his 37 00:01:50.239 --> 00:01:53.640 two decade career at Exxon, Jack was in private practice, 38 00:01:53.640 --> 00:01:57.519 specializing in oil and gas business litigation and First Amendment law. 39 00:01:58.159 --> 00:02:00.359 He is also and I should I want to put 40 00:02:00.359 --> 00:02:02.560 a disclaimer on how we ended up getting Jack on 41 00:02:02.599 --> 00:02:05.359 the podcast. I said to Paul, we're going to do 42 00:02:05.359 --> 00:02:07.920 an episode on oil in Texas and Venezuela. 43 00:02:08.159 --> 00:02:09.039 Who do you recommend? 44 00:02:09.479 --> 00:02:12.120 He said, there's this guy at the Kay Billy Hutchinson Institute, 45 00:02:12.199 --> 00:02:16.759 Jack Balaysia, I said, fantastic. We should perhaps loop in 46 00:02:17.159 --> 00:02:21.919 our ace investigative reporter, Kate McGee Balaysia. You guys probably 47 00:02:21.960 --> 00:02:26.039 know Kate McGee as our you know, phenomenal investigative reporter, 48 00:02:26.800 --> 00:02:31.560 my desk mate, perhaps what you might call, in popular parlance, 49 00:02:31.599 --> 00:02:35.000 my work wife. She is, in the eyes of the 50 00:02:35.120 --> 00:02:39.360 law more formally married to her actual husband, Michael Balaisia. 51 00:02:39.400 --> 00:02:40.759 Who is your son, Jack, right? 52 00:02:41.439 --> 00:02:42.439 Correct? Correct? 53 00:02:42.439 --> 00:02:44.919 And to be clear, I just know Jack as an 54 00:02:44.919 --> 00:02:48.439 expert on Texas oil and yes, and now I know 55 00:02:48.479 --> 00:02:49.719 he wears multiple hats. 56 00:02:49.879 --> 00:02:52.719 Yes, and side note. 57 00:02:53.400 --> 00:02:56.080 As much as I love Kate, we love Michael, one 58 00:02:56.080 --> 00:02:57.759 of my favorite people on the planet. 59 00:02:57.879 --> 00:02:58.759 So big fan. 60 00:02:58.840 --> 00:03:01.319 Well that makes that makes three of us, big. 61 00:03:01.120 --> 00:03:04.960 Fan of the Balasia household. But that is again also 62 00:03:05.000 --> 00:03:07.039 not what we're here to discuss. So Jack, maybe you 63 00:03:07.080 --> 00:03:08.840 can start just tell us a little bit about the 64 00:03:08.960 --> 00:03:12.759 Ky Balasia I'm sorry, the kay Bailey Hutchinson Energy Center 65 00:03:13.039 --> 00:03:14.319 and the work you all do there. 66 00:03:14.840 --> 00:03:18.960 Yeah, you bet. The Kay Bailey Hutcheson Energy Center was 67 00:03:19.000 --> 00:03:21.599 started about eleven years ago on campus. It was a 68 00:03:21.680 --> 00:03:24.759 joint project of the Law School and the Business School. 69 00:03:25.560 --> 00:03:29.240 Today with the Engineering School and the Geoscience School participate 70 00:03:29.319 --> 00:03:35.840 as contributors to to the to the Center. Our goal 71 00:03:35.919 --> 00:03:39.680 at KBH is to try to encourage students who are 72 00:03:39.800 --> 00:03:44.080 studying all aspects of energy, whether it be renewables, all 73 00:03:44.199 --> 00:03:48.759 and gas, geothermal, nuclear. We want to make we want 74 00:03:48.800 --> 00:03:51.919 to make the University of Texas a safe place to 75 00:03:52.000 --> 00:03:54.840 study all kinds of energy. So we want to help 76 00:03:54.919 --> 00:03:59.000 students who are pursuing careers in any of the energy 77 00:03:59.039 --> 00:04:02.360 fields that are that are available. Last year we touched 78 00:04:02.400 --> 00:04:06.599 about a thousand students through some of our programs. That 79 00:04:06.759 --> 00:04:08.919 number keeps going up, and of course our goal is 80 00:04:08.960 --> 00:04:12.520 to have it continue to grow. We have a Student 81 00:04:12.560 --> 00:04:16.199 Advisory Council where students can participate in our activities and 82 00:04:18.279 --> 00:04:21.800 have an Energy Studies Minor, which is a summer program 83 00:04:21.800 --> 00:04:25.759 that allows students to have a concentrated curriculum and energy 84 00:04:25.800 --> 00:04:30.360 that goes on their transcript. We have a graduate Fellows 85 00:04:30.399 --> 00:04:33.120 program right now. It's limited to the Law School and 86 00:04:33.160 --> 00:04:37.600 the Business School where we select high achieving students to 87 00:04:37.680 --> 00:04:41.959 participate in the Fellows program and write op eds and 88 00:04:42.240 --> 00:04:47.160 research papers on energy issues. And then probably our biggest, 89 00:04:47.519 --> 00:04:50.480 our other big event is our symposium We have an 90 00:04:50.519 --> 00:04:54.560 annual symposium every year. We just had our eleventh annual 91 00:04:54.600 --> 00:04:59.480 symposium in September Exceon Mobile CEO Darren Woods was our 92 00:04:59.600 --> 00:05:04.279 keynote speaker, and we had the largest audience we've ever had, 93 00:05:04.279 --> 00:05:07.000 almost seven hundred people. So that's kind of what the 94 00:05:07.040 --> 00:05:12.279 center does. We continue to grow our programs to increase 95 00:05:12.360 --> 00:05:18.199 participation and it's just it's a way to encourage students 96 00:05:18.560 --> 00:05:21.279 who are interested in energy careers at the University of 97 00:05:21.319 --> 00:05:23.040 Texas Amazing. 98 00:05:24.279 --> 00:05:27.160 Let's sort of just talk about where the oil industry 99 00:05:27.199 --> 00:05:31.680 stands right now in Texas. I know oil prices have 100 00:05:31.759 --> 00:05:33.560 sort of been down, Paul, I don't know if you 101 00:05:33.600 --> 00:05:35.959 want to sort of set the table on where the 102 00:05:35.959 --> 00:05:39.399 oil industry, let's say go pre Venezuela going into twenty 103 00:05:39.439 --> 00:05:40.000 twenty six. 104 00:05:40.120 --> 00:05:40.959 How are things looking. 105 00:05:41.120 --> 00:05:45.120 Yeah, so I they're fine, I think would be the 106 00:05:45.120 --> 00:05:47.120 best way to describe it. I mean, prices are around 107 00:05:47.160 --> 00:05:50.000 sixty dollars a barrel, which is not you know, you're 108 00:05:50.040 --> 00:05:52.199 not going gangbusters in terms of the money that you 109 00:05:52.199 --> 00:05:54.519 can make, but it's not a total collapse of the 110 00:05:54.560 --> 00:05:57.439 market either. And so that's been fairly in studies. Something 111 00:05:57.480 --> 00:05:59.680 that folks have been watching. You know, we've all seen 112 00:05:59.680 --> 00:06:01.800 I think gas prices go down over the past couple 113 00:06:01.800 --> 00:06:05.639 of years, but the expectation is that they're going to 114 00:06:05.720 --> 00:06:08.879 go up at a certain point. That there's energy demand 115 00:06:08.959 --> 00:06:11.959 globally is rising, and Western nations due to AI and 116 00:06:12.000 --> 00:06:15.319 developing nations, there is a really intense demand right now 117 00:06:15.399 --> 00:06:19.079 for dispatchable power units like natural gas as those countries 118 00:06:19.120 --> 00:06:21.920 continue to energize more and more. And so the expectation 119 00:06:22.079 --> 00:06:23.800 is that there is going to be a greater need 120 00:06:23.800 --> 00:06:25.959 for oil in the years to come, and those prices 121 00:06:26.000 --> 00:06:28.680 are going to start going up, and you know, the 122 00:06:28.720 --> 00:06:31.920 Texas market is poised to capitalize on that. It's basically 123 00:06:32.319 --> 00:06:37.560 the situation going into Venezuela. 124 00:06:35.920 --> 00:06:36.920 Again at end of this year. 125 00:06:36.920 --> 00:06:39.279 I mean, Jack, what is your sense of having watched 126 00:06:39.279 --> 00:06:42.120 the market for many decades, where are we sort of 127 00:06:42.160 --> 00:06:46.120 in the inevitable boom and bus cycle here in Texas. 128 00:06:46.560 --> 00:06:48.920 Yeah, I think we're in a kind of a stable place. 129 00:06:49.600 --> 00:06:52.480 I think Paul did a good job predicting or his 130 00:06:52.560 --> 00:06:56.040 predictions about what might happen, I think are fair. I 131 00:06:56.040 --> 00:07:01.879 think the economy is growing. You know, from the pandemic 132 00:07:02.000 --> 00:07:05.360 was kind of the low point of the oil business 133 00:07:06.079 --> 00:07:08.480 price of oil at some point when actually negative for 134 00:07:08.519 --> 00:07:12.800 a day, I think, and since then it has rebounded, 135 00:07:14.079 --> 00:07:18.120 it's backed down. It's in a place now where gasoline 136 00:07:18.120 --> 00:07:22.600 prices are low, where companies now have the ability to 137 00:07:22.680 --> 00:07:26.360 produce oil at a much lower cost. So even sixty 138 00:07:26.439 --> 00:07:29.959 dollars oil is attractive to them. So I think the 139 00:07:29.959 --> 00:07:34.839 outlet for the industry is excellent, especially in Texas, right. 140 00:07:34.879 --> 00:07:37.519 And I mean, as we've already seen over the last 141 00:07:37.560 --> 00:07:40.959 couple of years, global affairs can have a huge impact 142 00:07:41.040 --> 00:07:45.560 on the oil industry. We saw a huge impact from 143 00:07:45.720 --> 00:07:49.040 the war in Ukraine. Now obviously we've added this other 144 00:07:49.319 --> 00:07:53.720 variable with Venezuela. Jack talked just about just Venezuela and 145 00:07:53.759 --> 00:07:56.639 the sort of what Venezuela represents in the oil world. 146 00:07:57.480 --> 00:08:02.120 Well, as you said, I think it's the largest, maybe 147 00:08:02.120 --> 00:08:05.560 the largest reserves of oil in the world. A little 148 00:08:05.600 --> 00:08:08.600 bit of history, you know, American oil companies went into 149 00:08:08.639 --> 00:08:13.560 Venezuela in the nineteen twenties after oil was discovered, and 150 00:08:13.720 --> 00:08:17.560 they were very active in Venezuela. At one point Venezuela 151 00:08:17.720 --> 00:08:21.079 was the largest supplier of crude oil to the United States, 152 00:08:21.879 --> 00:08:27.560 and then in the nineteen seventies, the industry was nationalized. 153 00:08:28.920 --> 00:08:33.720 The government took over the assets of the American oil companies, 154 00:08:34.360 --> 00:08:38.200 and then in nineteen ninety two, the president of the 155 00:08:38.360 --> 00:08:43.720 country reprivatized the industry. All the oil companies went back 156 00:08:43.759 --> 00:08:46.440 in and then in two thousand and seven, President Chavez 157 00:08:47.200 --> 00:08:51.679 renationalized the oil companies by requiring that ninety three percent 158 00:08:51.799 --> 00:08:56.120 of the assets of the production go to the government. 159 00:08:56.639 --> 00:09:01.000 Exxon mobil and Conco Phillips refused to those terms, and 160 00:09:01.039 --> 00:09:04.159 they were their assets were taken over by the government. 161 00:09:04.600 --> 00:09:11.120 Chevron continued agreed to that to that arrangement and continues 162 00:09:11.159 --> 00:09:13.759 to produce there to this day. So that's sort of 163 00:09:13.919 --> 00:09:20.080 a quick history of the Venezuelan and American oil company experience. 164 00:09:20.759 --> 00:09:23.519 And I think economically it's it's worth sort of thinking 165 00:09:23.519 --> 00:09:26.320 of Venezuela as one of like the original Petro states. 166 00:09:26.480 --> 00:09:28.000 Like when you when you think of that, I mean 167 00:09:28.000 --> 00:09:33.039 their their economy is pretty singularly motivated by oil and 168 00:09:33.120 --> 00:09:35.200 by oil prices. I mean, they do not really have 169 00:09:35.240 --> 00:09:37.639 any other exports. They used to export coffee in big 170 00:09:37.759 --> 00:09:40.200 in big ways back in the day, but that economy 171 00:09:40.200 --> 00:09:44.600 has really become dependent on oil prices. And you know 172 00:09:44.679 --> 00:09:48.240 this this government, the socialist government spends a lot of 173 00:09:48.279 --> 00:09:51.759 money on social programs for its citizens, and so with 174 00:09:51.879 --> 00:09:53.879 these kind of boom and bus cycles that you see 175 00:09:53.919 --> 00:09:56.519 in oil and gas, and with that spending from the government, 176 00:09:56.759 --> 00:09:59.279 that has also created a lot of economic problems really 177 00:09:59.320 --> 00:10:01.120 throughout the deca I mean, we're going back to the 178 00:10:01.120 --> 00:10:03.799 seventies of you know, there are these periods where they 179 00:10:03.799 --> 00:10:05.440 are rich and they can spend their money on sort 180 00:10:05.480 --> 00:10:07.399 of anything they want. But the sort of lack of 181 00:10:07.399 --> 00:10:09.679 a rainy day fund being created there has created a 182 00:10:09.720 --> 00:10:12.039 lot of issues, especially going into the two thousands, and 183 00:10:12.080 --> 00:10:15.039 then with US sanctions beginning under the Trump administration in 184 00:10:15.039 --> 00:10:18.240 twenty sixteen, it's really destabilized their economy in a big way. 185 00:10:18.919 --> 00:10:19.720 It's really interesting. 186 00:10:19.720 --> 00:10:21.639 I mean my understand just from reading about this a 187 00:10:21.679 --> 00:10:24.320 little bit, right, It's like, if you know, just purely 188 00:10:24.360 --> 00:10:28.080 based on the amount of oil underground in Venezuela, if 189 00:10:28.159 --> 00:10:31.200 this was like in Texas or in you know, somewhere 190 00:10:31.240 --> 00:10:33.200 where there were sort of not these economic issues, these 191 00:10:33.240 --> 00:10:38.200 sort of political instability issues around, it would be you know, gushers, right, 192 00:10:38.240 --> 00:10:40.720 Like this would be like there's a huge amount of oil. 193 00:10:41.159 --> 00:10:44.799 The issue is more above ground in how we're accessing 194 00:10:44.840 --> 00:10:45.279 that oil. 195 00:10:45.320 --> 00:10:47.840 It seems like if only it was that easy, Yeah, 196 00:10:47.840 --> 00:10:48.799 and it was just a like. 197 00:10:50.000 --> 00:10:52.639 Fingers yeah right, Well, I mean that is certainly I 198 00:10:52.679 --> 00:10:55.840 think sort of how it's President Trump is talking about 199 00:10:55.840 --> 00:10:59.080 this as like we can come in. He has said 200 00:10:59.320 --> 00:11:02.080 to quote him and I won't do the voice. The 201 00:11:02.080 --> 00:11:04.559 oil business in Venezuela has been a bust, a total 202 00:11:04.559 --> 00:11:06.720 bust for a long time. He said, We're going to 203 00:11:06.759 --> 00:11:09.399 have our very large United States oil companies, the biggest 204 00:11:09.399 --> 00:11:11.960 anywhere in the world, go in, spend billions of dollars, 205 00:11:12.000 --> 00:11:15.320 fix the badly broken infrastructure, the oil infrastructure, and start 206 00:11:15.320 --> 00:11:19.279 making money for the country. Obviously, we cannot just snap 207 00:11:19.320 --> 00:11:23.159 our fingers and start doing that, you know, Jack, What 208 00:11:23.200 --> 00:11:25.600 do you see as the barriers to suddenly, you know, 209 00:11:25.879 --> 00:11:31.279 trying to create this oil or get the companies in 210 00:11:31.360 --> 00:11:35.840 the United States companies to sort of rehash the Venezuelan 211 00:11:35.919 --> 00:11:36.480 oil market. 212 00:11:37.320 --> 00:11:41.440 Yeah, I think Eleanor, I think there's some irrational exuberance 213 00:11:41.480 --> 00:11:46.519 in some of those statements coming out of Washington. A 214 00:11:46.559 --> 00:11:48.639 couple of things that oil companies look for. They look 215 00:11:48.679 --> 00:11:55.080 for stability, political stability, economic stability. These are companies that 216 00:11:55.120 --> 00:11:57.720 are prepared to invest billions and billions of dollars, and 217 00:11:57.759 --> 00:11:59.600 they want to make sure that they get a return 218 00:11:59.639 --> 00:12:03.120 on those dollars and that those investments are being protected. 219 00:12:04.600 --> 00:12:07.639 They need a stable US policy. You know, US policy 220 00:12:07.720 --> 00:12:11.159 keeps flipping back and forth, so that kind of weighs 221 00:12:11.159 --> 00:12:16.120 against going into a place, a place like Venezuela. Venezuela, 222 00:12:16.159 --> 00:12:21.559 and oil production today is seven is less than it's 223 00:12:21.600 --> 00:12:24.720 decreased more than seventy percent since its peak in the 224 00:12:24.799 --> 00:12:27.360 nineteen nineties, and it's going to take I've seen some 225 00:12:27.440 --> 00:12:29.879 reports that suggest it's going to take one hundred billion 226 00:12:30.000 --> 00:12:33.600 dollars just to get the infrastructure back to where they 227 00:12:33.600 --> 00:12:36.360 can go back to producing at the peaks they were 228 00:12:36.360 --> 00:12:39.799 in the nineteen nineties. And to ask people to come 229 00:12:39.840 --> 00:12:42.600 and to ask companies who have to answer to their 230 00:12:42.639 --> 00:12:47.159 shareholders to put in hundreds of billions of dollars in 231 00:12:47.200 --> 00:12:50.679 a place where the stability is questionable, I think that's 232 00:12:50.679 --> 00:12:52.279 a that's a that's a big ask. 233 00:12:54.360 --> 00:12:54.559 Yeah. 234 00:12:54.559 --> 00:12:58.039 And I think it's also that that number of one 235 00:12:58.080 --> 00:12:59.720 hundred billion, and I've heard as much of one hundred 236 00:12:59.720 --> 00:13:02.879 and fifty billion all the oil companies combined in the 237 00:13:02.919 --> 00:13:07.200 world last year invested about seventy five billion dollars, so 238 00:13:07.960 --> 00:13:11.960 just anything in all their activities, Yeah, in general investments. 239 00:13:12.000 --> 00:13:14.480 So what you're saying in one country, the amount of 240 00:13:14.519 --> 00:13:16.279 money that would be needed to get them back to 241 00:13:16.320 --> 00:13:19.159 where they were, you know, twenty years ago, would take 242 00:13:20.279 --> 00:13:23.200 more than every oil company in the world spent last year. 243 00:13:23.840 --> 00:13:28.240 That's and you know, Paulish, that's that's a really good point. 244 00:13:28.320 --> 00:13:31.639 And I don't mean to interrupt, please, that's a really 245 00:13:31.639 --> 00:13:33.279 good point. But the other thing I want to mention 246 00:13:33.440 --> 00:13:38.320 is that all publicly traded AILL companies today are much 247 00:13:38.360 --> 00:13:42.360 more disciplined than they were before the pandemic. And one 248 00:13:42.399 --> 00:13:46.039 thing that investors have demanded of those companies is fiscal 249 00:13:46.080 --> 00:13:49.360 discipline and cash flow, and those are two things that 250 00:13:49.399 --> 00:13:54.519 they're very very confident, very conscious of, and have to 251 00:13:54.519 --> 00:13:57.519 come into play when deciding whether to put an investment 252 00:13:57.559 --> 00:14:01.519 in the Permian and the Anadarko basin, or am I 253 00:14:01.559 --> 00:14:04.080 going to go to Venezuela where the risk is much 254 00:14:04.279 --> 00:14:04.840 much higher? 255 00:14:05.480 --> 00:14:08.120 And you know that risk is I think the important 256 00:14:08.240 --> 00:14:11.159 part the situation on the ground is really I think 257 00:14:11.200 --> 00:14:12.720 what a lot of folks are looking at. We don't 258 00:14:12.759 --> 00:14:14.200 have a lot of clarity on and you know, I'm 259 00:14:14.200 --> 00:14:16.960 certainly not going to ask Jack to speculate on the 260 00:14:17.000 --> 00:14:19.720 future of Venezuelan politics. But you know something I was 261 00:14:19.720 --> 00:14:23.080 struck by in the days after this operation to capture Maduro. 262 00:14:23.159 --> 00:14:26.039 I mean, there was a State Department memo warning Americans 263 00:14:26.080 --> 00:14:28.039 to get out of the country because there were armed 264 00:14:28.039 --> 00:14:31.240 gangs roaming the streets. I mean, that is not a 265 00:14:32.639 --> 00:14:35.799 country that sounds like a safe investment right now. And 266 00:14:35.879 --> 00:14:40.960 you know, obviously President Trump and the Venezuelan Vice president 267 00:14:41.000 --> 00:14:45.639 now president have been apparently been having good conversations. It 268 00:14:45.679 --> 00:14:49.519 seems like there's some efforts towards reconciliation there. But you know, 269 00:14:49.559 --> 00:14:54.840 this is still the Maduro regime, who many conservative members 270 00:14:54.879 --> 00:14:58.320 of Congress are happy would like to see completely rid of. 271 00:14:58.720 --> 00:15:01.440 You know, there's questions about what and elections might happen, 272 00:15:01.919 --> 00:15:05.039 who the next leader might be. I don't you know, 273 00:15:05.039 --> 00:15:06.480 I don't think any of us have the answer to 274 00:15:06.519 --> 00:15:09.120 any of these things. And it seems that the administration's focus, 275 00:15:09.159 --> 00:15:12.159 you know, recently has been on Greenland and now Minneapolis, 276 00:15:12.200 --> 00:15:14.840 and you know, it's kind of unclear what's going to 277 00:15:14.919 --> 00:15:16.559 come next. I think that's a lot of what everybody's 278 00:15:16.600 --> 00:15:17.759 waiting for is like what is going to be the 279 00:15:17.799 --> 00:15:21.919 next shoot to drop in Venezuela. And I don't know, right. 280 00:15:21.799 --> 00:15:24.360 Because it's not just money, right, Like I mean, I 281 00:15:24.399 --> 00:15:27.200 was reading some interviews with people who talked about, you know, 282 00:15:27.440 --> 00:15:30.240 sort of in the previous era when there were more 283 00:15:30.279 --> 00:15:32.720 American oil companies on the ground there. I mean people 284 00:15:32.720 --> 00:15:35.080 talking about they lived in Venezuela for periods of time, 285 00:15:35.080 --> 00:15:37.600 they brought their families to Venezuela, like there was a 286 00:15:37.639 --> 00:15:41.200 degree of sort of American compounds American oil cities there. 287 00:15:41.200 --> 00:15:43.799 I mean, you need people, you need engineers, you need 288 00:15:43.879 --> 00:15:47.799 so much there to rebuild that that's not just money. 289 00:15:47.879 --> 00:15:49.519 And like you said, I mean, if you're telling if 290 00:15:49.559 --> 00:15:52.120 the State Department is saying don't go to Venezuela, and 291 00:15:52.159 --> 00:15:54.519 we're also saying we need oil companies to put a 292 00:15:54.559 --> 00:15:56.919 lot of boots on the ground in Venezuela to get 293 00:15:56.960 --> 00:15:59.440 this back up and running, that's a conflicting message. 294 00:15:59.480 --> 00:16:02.559 Lint yea, Yeah, yeah, I mean Jack, what is your sense? 295 00:16:02.559 --> 00:16:05.600 I mean you talked about sort of this preps fiscal discipline, 296 00:16:05.600 --> 00:16:07.720 maybe a little bit like risk aversion from the oil 297 00:16:07.799 --> 00:16:11.759 companies right now, just in general, when we think about 298 00:16:11.799 --> 00:16:14.919 sort of investing, like you said, like you can invest 299 00:16:14.919 --> 00:16:17.120 in the Permian or you could invest in Venezuela. I mean, 300 00:16:17.159 --> 00:16:20.360 what do you think and then adding in on top 301 00:16:20.399 --> 00:16:22.360 of that, you've got President Trump, who is obviously a 302 00:16:22.399 --> 00:16:25.440 very influential figure, and sort of how do you think 303 00:16:25.519 --> 00:16:29.720 that these companies are balancing all of these competing pressures. 304 00:16:30.679 --> 00:16:32.559 Well, that's a that's a really good question. If you 305 00:16:32.559 --> 00:16:34.840 look at what they said at the press conference or 306 00:16:34.840 --> 00:16:37.440 at the meeting in the White House. I think the 307 00:16:37.480 --> 00:16:44.080 Excellon Mobile CEO Darren Woods called Venezuela uninvestable. There were 308 00:16:44.120 --> 00:16:46.879 some some of the some of the executives from some 309 00:16:46.960 --> 00:16:49.960 of the smaller companies seemed to be a whole lot 310 00:16:50.000 --> 00:16:57.840 more enthusiastic about it. But I'm very I'm very I'm 311 00:16:57.879 --> 00:17:01.840 pessimistic that we're going to see a lot of activity, 312 00:17:01.879 --> 00:17:06.759 American money, American employees heading into vend as a way 313 00:17:06.960 --> 00:17:09.559 to start on some brand new venture. I just think 314 00:17:09.960 --> 00:17:12.839 I think things are still too unstable for that to happen. 315 00:17:13.759 --> 00:17:15.880 You know, Chevron is there and they've been operating there 316 00:17:15.920 --> 00:17:17.640 for a long time, and they seem to be able 317 00:17:17.680 --> 00:17:22.319 to continue the operations that they're doing under their US license, 318 00:17:23.640 --> 00:17:26.680 but can they are they prepared to grow that investment. 319 00:17:26.920 --> 00:17:28.119 I just I can't say. 320 00:17:28.160 --> 00:17:32.920 I don't know right what would be the impact or 321 00:17:33.000 --> 00:17:36.599 what potentially is the impact for let's say Texas and 322 00:17:36.799 --> 00:17:38.960 the West Texas oil fields and things like that, if 323 00:17:39.480 --> 00:17:42.759 suddenly there was a lot more oil gushing out of Venezuela. 324 00:17:44.759 --> 00:17:48.599 Well, I think realistically, even if we assume that everybody's 325 00:17:48.640 --> 00:17:50.480 ready to go in there, you're not going to see 326 00:17:50.480 --> 00:17:54.440 any significant increases in production for some time. And you 327 00:17:54.480 --> 00:17:56.400 know the way the markets work. You know, oil is 328 00:17:56.400 --> 00:18:00.839 a worldwide market. It's influenced by obviously by supply and demand. 329 00:18:00.960 --> 00:18:07.839 It's it's influenced by economic activity, it's influenced by political events. 330 00:18:08.720 --> 00:18:11.559 So it's it's kind of hard to predict. I do 331 00:18:11.680 --> 00:18:14.680 know that there are some American refineries that were set 332 00:18:14.759 --> 00:18:19.160 up specifically to handle this kind of heavy crude. They 333 00:18:19.200 --> 00:18:22.799 would probably welcome that crew because it's cheaper and can 334 00:18:22.839 --> 00:18:28.119 be refined into products and improve improve the margins. So 335 00:18:29.519 --> 00:18:32.119 I think it's I think it's uncertain. I don't I 336 00:18:32.119 --> 00:18:34.880 don't really expect it to be to all of a 337 00:18:34.920 --> 00:18:38.680 sudden happen and and and glut the market with crude oil. 338 00:18:38.720 --> 00:18:40.799 That's just not that's just not in the near. 339 00:18:40.680 --> 00:18:45.519 Term, right I think, you know, we didn't even really 340 00:18:45.559 --> 00:18:48.680 see immediately oil prices shift that much. Like the market 341 00:18:48.720 --> 00:18:53.440 isn't really necessarily freaking out in response to this, certainly 342 00:18:53.640 --> 00:18:56.680 not that there doesn't seem to be this immediate threat 343 00:18:56.720 --> 00:18:58.559 of like everything's going to change overnight. 344 00:18:58.839 --> 00:19:01.640 Yeah, and that's that's what I've heard from from energy economists, 345 00:19:01.720 --> 00:19:04.640 from you know, oil companies, is they they are not 346 00:19:04.759 --> 00:19:07.759 really worried about this right now. I mean, obviously they 347 00:19:07.759 --> 00:19:10.640 are going to be worried about the comments for the 348 00:19:10.680 --> 00:19:12.519 president and sort of how they're going to handle all 349 00:19:12.519 --> 00:19:14.839 of that. But as far as like economic concerns of 350 00:19:14.920 --> 00:19:18.079 there being an oil glut, like Jack mentioned like that 351 00:19:18.160 --> 00:19:19.839 is that is not something we're worried about in the 352 00:19:19.839 --> 00:19:21.759 short term. What it's like what I said earlier, what 353 00:19:21.799 --> 00:19:23.720 I think folks are really thinking about is the rising 354 00:19:23.799 --> 00:19:27.079 energy demand across the world and meeting those needs. You know, 355 00:19:27.559 --> 00:19:30.079 if suddenly Venezuela came online in a big way, that 356 00:19:30.119 --> 00:19:32.519 would help a lot with those energy demands. But that 357 00:19:32.680 --> 00:19:35.519 is just for all the reasons that we stated in 358 00:19:35.559 --> 00:19:38.279 the last couple questions, that is not something that we 359 00:19:38.279 --> 00:19:41.359 think is going to happen anytime soon with the caveat 360 00:19:41.559 --> 00:19:44.440 also though that markets can change very quickly, especially in 361 00:19:44.480 --> 00:19:46.039 oil and gaess. I mean I was I was thinking 362 00:19:46.039 --> 00:19:47.880 when Jack was talking about the negative price of oil, 363 00:19:47.920 --> 00:19:49.559 and then it was two years later that the war 364 00:19:49.559 --> 00:19:53.160 in Ukraine started and gas prices skyrocketed, and you know 365 00:19:53.160 --> 00:19:56.279 they've stabilized since then. You know, who knows where we'll 366 00:19:56.279 --> 00:19:57.440 be in twenty twenty seven. 367 00:19:57.480 --> 00:20:00.039 Right, Like, if there's anything we know about oil, is. 368 00:20:00.200 --> 00:20:01.079 It boom and busts? 369 00:20:01.759 --> 00:20:02.039 Yes? 370 00:20:02.559 --> 00:20:04.880 But I will say you know, there obviously will always 371 00:20:04.960 --> 00:20:07.599 be some people willing to take the risk or to 372 00:20:07.640 --> 00:20:10.279 try to get in. Their reuters had some reporting about 373 00:20:10.319 --> 00:20:12.680 you know, some of these smaller I mean they were 374 00:20:12.720 --> 00:20:15.440 even calling you know, like these like wildcatters, sort of 375 00:20:15.640 --> 00:20:18.319 reminiscent of the era of you know, discovering the Texas 376 00:20:18.319 --> 00:20:20.839 oil fields, of like people who are going to try 377 00:20:20.880 --> 00:20:22.319 to like make a buck off of this, people who 378 00:20:22.319 --> 00:20:24.400 are going to see, like can we get something up? 379 00:20:24.480 --> 00:20:27.880 I mean, the CEO of Halliburton was saying on an 380 00:20:27.960 --> 00:20:31.000 earnings call that you know, his phone was quote ringing 381 00:20:31.039 --> 00:20:34.839 off the hook. They exited Venezuela in twenty twenty, but 382 00:20:34.880 --> 00:20:40.240 they're working on securing licenses to return. Another the former 383 00:20:40.279 --> 00:20:45.000 head of Chevron in Africaan Latin America who's now with 384 00:20:45.039 --> 00:20:47.640 a group in Houston, saying that they've been preparing for 385 00:20:47.759 --> 00:20:51.559 years to enter Venezuela, but you know, saying they're in 386 00:20:51.720 --> 00:20:54.119 early stage talks, you know, to raise as much as 387 00:20:54.119 --> 00:20:56.359 two billion dollars, which, as we said, is a lot 388 00:20:56.359 --> 00:20:58.640 of money, but it's not quite even close to what 389 00:20:58.720 --> 00:21:03.039 it would take to meaningfully stand up the energy economy 390 00:21:03.519 --> 00:21:06.880 in Venezuela. Do you expect Jack to see I mean, 391 00:21:07.920 --> 00:21:09.400 sort of is this the kind of thing where you 392 00:21:09.440 --> 00:21:13.079 can see like incremental steps and incremental projects or is 393 00:21:13.440 --> 00:21:16.359 your sense that it's like you're we're either going into 394 00:21:16.400 --> 00:21:18.640 Venezuela in a big way or it's not really gonna 395 00:21:18.640 --> 00:21:19.240 have an impact. 396 00:21:19.839 --> 00:21:22.960 No, I think I think. I think it's going to 397 00:21:22.960 --> 00:21:26.720 be incremental eleanor there may be some small companies that 398 00:21:26.799 --> 00:21:28.200 are willing to go in there and as you say, 399 00:21:28.279 --> 00:21:31.440 sort of be the wildcatters and take a chance, but 400 00:21:31.519 --> 00:21:33.799 I don't think that will make a significant difference in 401 00:21:33.839 --> 00:21:36.440