WEBVTT 1 00:00:04.080 --> 00:00:07.639 With Laurent's segal and from London and Gerard read from Berlin. 2 00:00:08.119 --> 00:00:09.880 This is redefining energy. 3 00:00:10.519 --> 00:00:13.279 Happy new year, guys, great to see you. I'm looking 4 00:00:13.279 --> 00:00:14.359 forward to hearing your voices. 5 00:00:14.759 --> 00:00:17.160 Happy new Year, Happy new Year to the both of you. 6 00:00:17.519 --> 00:00:20.199 Is going to be an awesome herr. There's going to 7 00:00:20.199 --> 00:00:22.879 be so much interesting stuff happening in twenty twenty six. 8 00:00:23.079 --> 00:00:23.640 Is positive. 9 00:00:24.000 --> 00:00:26.760 I agree totally with you, Michael, I agree totally. It's 10 00:00:26.800 --> 00:00:27.839 going to be a crazy year. 11 00:00:28.399 --> 00:00:32.280 But first, gentlemen, before talking about the new year, we 12 00:00:32.320 --> 00:00:35.039 need to revisit the prediction we've done a year ago, 13 00:00:35.560 --> 00:00:41.679 and let me remind our listener six predictions. So Michael said, 14 00:00:41.719 --> 00:00:44.520 all production down in the US in two twenty five, 15 00:00:45.520 --> 00:00:48.920 Chard said, old prices eat forty that up buried in 16 00:00:49.000 --> 00:00:49.960 two twenty five. 17 00:00:50.439 --> 00:00:52.439 Can I correct you there? I said fifty. No, no, 18 00:00:52.479 --> 00:00:55.880 you said forty. You just didn't. You couldn't understand my accent, Luren, 19 00:00:56.119 --> 00:00:59.280 I mean sorry, I fifty is what I said. I 20 00:00:59.280 --> 00:01:00.000 didn't say forty. 21 00:01:00.399 --> 00:01:03.600 Sadly, your record is against you on this one's Gerard. 22 00:01:05.400 --> 00:01:09.079 Yeah, yeah, fifty with starting with the four yeah third 23 00:01:09.200 --> 00:01:13.640 one geopolitics, stress, supply, chains and energy Bonanz up will 24 00:01:13.680 --> 00:01:17.120 bring more innovative and better world. That's me okay, So 25 00:01:17.239 --> 00:01:22.719 that's a Gerrard's style prediction. Number four Michael blood Bath 26 00:01:22.840 --> 00:01:28.239 or hydrogen transportation sector. Number five record installation of sellar 27 00:01:28.400 --> 00:01:32.079 seven hundred giga what ev twenty million and batteries two 28 00:01:32.200 --> 00:01:36.159 hundred giga what hour? From Jerrard and finally from me. 29 00:01:36.359 --> 00:01:40.840 Number six the end of all financial products labeled ESG, 30 00:01:41.000 --> 00:01:46.280 climate and carbon. Let's start with number one. Michael, I failed. 31 00:01:46.680 --> 00:01:49.000 I'm asked by about eight months. 32 00:01:49.359 --> 00:01:53.439 The oil price and oiled man was bullied because China 33 00:01:53.640 --> 00:01:57.280 has these massive reserves and has just kept buying oil. 34 00:01:57.959 --> 00:02:01.319 Are past the point of consumption. Even though actual diesel 35 00:02:01.359 --> 00:02:06.599 demand gasoline demand is down in China, their petrochemical industry 36 00:02:06.879 --> 00:02:09.560 has actually gone up a bit, so their actual oil 37 00:02:09.759 --> 00:02:14.800 assumption is relatively flat, but their reserves. They just don't 38 00:02:14.800 --> 00:02:18.719 think the geopolitics merit not having significant reserves, so that 39 00:02:18.800 --> 00:02:21.319 kept it up. That kept the price up to the 40 00:02:21.360 --> 00:02:24.960 second point, which Kent meant that they did finalize shale 41 00:02:25.000 --> 00:02:28.800 wells in the United States, but the drill rigs in 42 00:02:28.840 --> 00:02:31.919 the United States are way off. They are not completing 43 00:02:32.240 --> 00:02:36.439 nearly as many wells, China's reserves have got to be complete. 44 00:02:36.759 --> 00:02:38.960 So I'm not making this one of my predictions. But 45 00:02:39.400 --> 00:02:42.240 I'm off by months. It didn't happen this year. 46 00:02:42.800 --> 00:02:44.639 And by the way, just join on to that my 47 00:02:44.759 --> 00:02:47.719 thing about forty dollars oil, it relates to the same thing. 48 00:02:48.159 --> 00:02:48.960 At the end of the day. 49 00:02:49.000 --> 00:02:52.319 What happened was demand is strongly that we expected. But 50 00:02:52.400 --> 00:02:55.840 I would go along also with Michael and say that 51 00:02:56.080 --> 00:02:59.159 coming year we will see prices down towards the forty dollars. 52 00:03:00.120 --> 00:03:03.039 Yeah, okay, guy, that's what one. I'm fine. And it's 53 00:03:03.120 --> 00:03:05.759 true that the price of all is gone to, say, 54 00:03:05.759 --> 00:03:10.000 from eighty dollars to sixty. That's a lot. But let's 55 00:03:10.120 --> 00:03:13.840 rate Michael. So, Michael, I give you a two out 56 00:03:13.840 --> 00:03:15.039 of ten. Job. 57 00:03:15.319 --> 00:03:17.120 Oh, I give Michael five out of ten. It was 58 00:03:17.159 --> 00:03:18.479 just a timing was slightly out. 59 00:03:19.479 --> 00:03:22.240 That's very generous of your gerard. Thank you. 60 00:03:22.639 --> 00:03:24.639 It's twenty twenty six, it's going to be a great year. 61 00:03:25.039 --> 00:03:26.719 I would have given myself a three out of ten. 62 00:03:26.879 --> 00:03:29.039 So at two and a five, I'm in the range. 63 00:03:29.080 --> 00:03:29.840 I'm happy with that. 64 00:03:30.240 --> 00:03:31.840 But I do want to say the one thing, Michael, 65 00:03:31.919 --> 00:03:35.039 get a great explanation of It is just geopolitics of 66 00:03:35.240 --> 00:03:38.759 energy of what made really twenty twenty five complex. So 67 00:03:38.800 --> 00:03:39.680 I just want to say. 68 00:03:39.520 --> 00:03:43.120 That, Okay, Job, your prediction was very simple and you 69 00:03:43.199 --> 00:03:46.039 got it wrong. So I give you zero because it 70 00:03:46.120 --> 00:03:49.759 was very binary. So we get a zero out of ten. 71 00:03:50.439 --> 00:03:52.159 Mike out do you give Job? 72 00:03:52.599 --> 00:03:56.080 I'm just going to say that my prediction was binary 73 00:03:56.159 --> 00:03:59.280 as well, and you were more generous to me. I'm 74 00:03:59.280 --> 00:04:01.960 going to give D three on that. As I said, 75 00:04:01.960 --> 00:04:04.599 it got down of fifty. It was lower than any 76 00:04:04.639 --> 00:04:07.120 of the oil botens thought it was going to be. 77 00:04:07.680 --> 00:04:09.560 It was a bad year for oil. 78 00:04:09.879 --> 00:04:10.280 Agreed. 79 00:04:10.879 --> 00:04:14.199 Okay, So my prediction was vague, so it was a 80 00:04:14.280 --> 00:04:18.800 giard style. The winning strategy geopolitics stress, supply chain energy 81 00:04:18.839 --> 00:04:22.600 bonanza would bring a more innovative and better world. Well better, Well, 82 00:04:22.639 --> 00:04:25.720 I don't know, but what I do know is that 83 00:04:26.040 --> 00:04:30.399 the stress on the grids, we've seen advances and transformers. 84 00:04:31.120 --> 00:04:37.040 We've seen advances in digitization. We've seen incredible development of batteries. 85 00:04:37.079 --> 00:04:39.319 We even saw fuel cells. If you look at a 86 00:04:39.480 --> 00:04:42.360 company like Bloom Energy, all of a sudden, they're not 87 00:04:42.399 --> 00:04:45.959 doing their fuel cells for hydrogen, but for gas. We've 88 00:04:46.000 --> 00:04:51.160 seen advancement for brid studies. With AI company like Tapestry, 89 00:04:51.439 --> 00:04:55.639 we have advanture thermal, a lot of work done on flexibility. 90 00:04:55.800 --> 00:05:00.319 So for me, the geopolitics the demand for energy yet's 91 00:05:00.360 --> 00:05:02.120 pushed innovation forwards. 92 00:05:02.680 --> 00:05:05.959 Gentle Amendment, My take is slightly different, not disagreeing with you, 93 00:05:06.120 --> 00:05:08.399 except on blue Energy, which has always been a natural 94 00:05:08.480 --> 00:05:12.639 gas fuel cell with very dubious environmental claims. Tried to 95 00:05:12.639 --> 00:05:15.240 write the hydrogen hype and didn't do much there. Now 96 00:05:15.279 --> 00:05:17.759 it's writing the data center hype that it's still just 97 00:05:17.800 --> 00:05:22.000 a ballotoxide fuel cell for methane. But the geopolitics were 98 00:05:22.079 --> 00:05:25.480 very interesting. Pakistan is trying to find a new home 99 00:05:25.560 --> 00:05:31.199 for twenty four LNG ships worth of committed long term 100 00:05:31.199 --> 00:05:36.439 purchased LNG from Qatar that is seismic. The long term 101 00:05:36.480 --> 00:05:39.160 contracts were what was supposed to be buoying LNG and 102 00:05:39.279 --> 00:05:42.639 Pakistan says no because of seventeen gigawatts or rooftop solar 103 00:05:42.720 --> 00:05:45.720 they put in. Similarly, in the first six months of 104 00:05:45.759 --> 00:05:50.959 this year, India and China dropped LNG imports by double digits, 105 00:05:51.199 --> 00:05:55.560 and that was on India dropping gas generation by thirty 106 00:05:55.560 --> 00:05:59.680 four percent year. Every year, the world is changing tremendously 107 00:05:59.680 --> 00:06:03.079 for the because of cheap solar and batteries. I see 108 00:06:03.120 --> 00:06:06.279 the evidence of this globally as I look around the place, 109 00:06:06.560 --> 00:06:09.439 and the LNG industry is just not ready for this. 110 00:06:09.759 --> 00:06:11.680 It is going to be a bloodbath in the OLNG 111 00:06:11.759 --> 00:06:15.000 in thesuit, which isn't my prediction by the world, John. 112 00:06:15.079 --> 00:06:18.319 Well, let me sort of talk about the wording of 113 00:06:18.360 --> 00:06:22.319 what your prediction. You said geopolitics, stress supply change, and 114 00:06:22.560 --> 00:06:26.920 energy bonanza would bring a more innovative and better world. Yeah, 115 00:06:27.040 --> 00:06:29.720 so let's start with stress supply change. I don't see 116 00:06:29.720 --> 00:06:33.600 any stress supply change. I see oversupply of everything in 117 00:06:33.680 --> 00:06:39.800 anything out there in the energy space, whether it's oil, gas, coal, electricity. 118 00:06:39.800 --> 00:06:42.839 We're swimming electricity in Europe. You know, there's too much solar, 119 00:06:42.839 --> 00:06:45.560 there's too much battery, there's too much wind. And I 120 00:06:45.639 --> 00:06:48.399 take the point of innovative and better world, I don't 121 00:06:48.399 --> 00:06:50.839 know about that. What's more innovative than last year? And 122 00:06:50.839 --> 00:06:54.160 I don't really see any huge innovations over the last 123 00:06:54.199 --> 00:06:56.720 twelve months. There's no doubt the world is a better place. 124 00:06:56.879 --> 00:06:59.079 And the Pakistani example is a good example of that 125 00:07:00.120 --> 00:07:01.680 was so vague and this that, and I'm going to 126 00:07:01.680 --> 00:07:02.519 give you a five out of. 127 00:07:02.439 --> 00:07:04.439 Town, Michael. 128 00:07:05.120 --> 00:07:08.680 I think Gerard is being quite generous giving vagueness. You know, 129 00:07:08.759 --> 00:07:11.600 I took him to task and I just thumped him 130 00:07:11.600 --> 00:07:17.399 and said, predictions are testable and quantifiable, and so I 131 00:07:17.560 --> 00:07:22.399 have to preserve my stance for quantifiability. And so I'm 132 00:07:22.399 --> 00:07:25.720 going to give you a four, okay, which just gives 133 00:07:25.720 --> 00:07:28.199 you the highest score on the first round of predictions 134 00:07:28.439 --> 00:07:30.720 out of three. Is because you know, I failed completely 135 00:07:30.720 --> 00:07:33.480 on mine and Gerard failed completely on his. Generously, you 136 00:07:34.160 --> 00:07:36.639 guys gave me more than zero, which I thought was 137 00:07:36.720 --> 00:07:37.439 very nice in there. 138 00:07:37.759 --> 00:07:41.079 Okay, So the fourth one, Michael, you nailed it. A 139 00:07:41.120 --> 00:07:44.920 blood bub for hydrogen your transportation sector. So did you 140 00:07:44.920 --> 00:07:45.800 have a few examples? 141 00:07:46.720 --> 00:07:50.199 Oh my god, it is just being schadenfreud a city 142 00:07:50.240 --> 00:07:54.079 here in Vancouver, my schadenfreud. A cup has been flowing over. 143 00:07:54.480 --> 00:07:57.360 I've been talking about hydrogen and transportation and publishing and 144 00:07:57.399 --> 00:08:00.959 analyzing it for over a decade, and this year all 145 00:08:00.959 --> 00:08:03.879 the dreams come tumbling down. Let's just start with one 146 00:08:03.879 --> 00:08:07.560 of the big ones, heavy trucking. Obviously, batteries aren't going 147 00:08:07.600 --> 00:08:10.560 to cut it for heavy trucks in the freight industry, 148 00:08:10.600 --> 00:08:14.279 excepted in Aina, which is run the experiment with hydrogen 149 00:08:14.360 --> 00:08:18.439 versus battery electric. They saw ninety thousand battery electric heavy 150 00:08:18.480 --> 00:08:21.600 truckspoled in the first nine months of this year, and 151 00:08:21.680 --> 00:08:24.920 the number of hydrogen trucks blapsed went from the low 152 00:08:25.040 --> 00:08:28.399 thousands to lower thousands, you know, so it was off 153 00:08:28.439 --> 00:08:31.319 by forty percent or something like that. That's kind of 154 00:08:31.399 --> 00:08:35.360 data point one. Globally, we're seeing battery electric trucks being delivered, 155 00:08:35.440 --> 00:08:42.000 not hydrogen trucks. Similarly, the fuel cell cars disappeared. Alstom 156 00:08:42.399 --> 00:08:45.840 actually is now out of the hydrogen train business. They said, 157 00:08:46.080 --> 00:08:48.399 we're going to close down that division. Well, if you 158 00:08:48.440 --> 00:08:50.759 still want the hydrogen trains that you've got an order, 159 00:08:50.799 --> 00:08:54.039 will deliver them. But clearly they're signaling to their customers 160 00:08:54.159 --> 00:08:56.519 you shouldn't even eat them and keep you a battery 161 00:08:56.519 --> 00:09:01.279 electric instead. Similarly, in every data point I've tracked right now, 162 00:09:01.360 --> 00:09:03.720 a list of one hundred and seventy one firms and 163 00:09:03.840 --> 00:09:08.320 organizations that were active in hydrogen transportation in theory this year, 164 00:09:08.759 --> 00:09:12.559 they claim they're active and full thirty six percent have 165 00:09:12.960 --> 00:09:16.480 dropped hydrogen or pivoted out of it. Formally, now that 166 00:09:16.639 --> 00:09:21.440 thirty six percent is underrepresenting that number substantially because my 167 00:09:21.480 --> 00:09:24.080 standards for them dropping it are high. They have to 168 00:09:24.360 --> 00:09:27.480 explicitly said we're dropping it, as opposed to just quietly 169 00:09:27.519 --> 00:09:29.759 slinking away. So I think the number is well over 170 00:09:29.799 --> 00:09:35.879 fifty percent. Airbus dropped their hydrogen aviation program. Stillantis dropped 171 00:09:35.960 --> 00:09:40.720 hydrogen trucks. It's just terrible. Plug power fuel Cell Energy 172 00:09:40.840 --> 00:09:45.279 are struggling with reverse stock splits to try to stay 173 00:09:45.320 --> 00:09:49.320 on the stock market. They're cutting maintenance at their hydrogen plants, 174 00:09:49.320 --> 00:09:53.679 which is just dangerous. It is really ugly in hydrogen 175 00:09:53.720 --> 00:09:56.360 for transportation land and as I said, I'm enjoying every 176 00:09:56.360 --> 00:09:56.840 minute of it. 177 00:09:57.200 --> 00:10:00.559 Hey girl, we're done, so I give you eight out 178 00:10:00.559 --> 00:10:00.960 of ten. 179 00:10:01.600 --> 00:10:03.559 I'll give you a nine because you've been calling for 180 00:10:03.679 --> 00:10:05.759 quite a while. Well, though, great job. 181 00:10:06.039 --> 00:10:08.559 I'm wondering what more of a bloodbath do you want? 182 00:10:09.159 --> 00:10:11.720 What would cause it not to be to be a ten? 183 00:10:12.159 --> 00:10:13.519 Based on what I've shared. 184 00:10:13.759 --> 00:10:17.879 It's very simple. I have quantitative criteria, and I think 185 00:10:18.120 --> 00:10:24.240 your and so was it vague? Okay, job number five? 186 00:10:24.559 --> 00:10:27.440 Now job that he gave number, and the number were 187 00:10:27.559 --> 00:10:28.200 pretty good. 188 00:10:28.840 --> 00:10:31.080 I was put under pressure, so I said seven hundred 189 00:10:31.080 --> 00:10:34.440 gigaba's the solar and I think to us have listen, 190 00:10:34.440 --> 00:10:36.480 we don't really have the numbers fully, but I think 191 00:10:36.519 --> 00:10:39.679 they were near to that, maybe six hundred and eighty 192 00:10:39.720 --> 00:10:42.720 something like that. EV's twenty million, we're there, or maybe 193 00:10:42.759 --> 00:10:47.000 a little bit above that, and definitely batteries into we sat. 194 00:10:47.080 --> 00:10:49.399 I said sort of two hundred gigawatts hours, and I 195 00:10:49.399 --> 00:10:52.080 think it's probably even higher that, right, Yeah, so I 196 00:10:52.120 --> 00:10:53.799 think it is going to be pretty well my numbers. 197 00:10:53.879 --> 00:10:56.000 But it was a very good trick on your side 198 00:10:56.039 --> 00:10:59.240 because first you said two hundred gigawatts and then you 199 00:10:59.279 --> 00:11:03.080 said our so in fact, because of the batteries of 200 00:11:04.159 --> 00:11:07.840 four hours, well done, well done on this one, and 201 00:11:08.399 --> 00:11:08.840 that these. 202 00:11:09.039 --> 00:11:11.519 Record numbers, right, they really were. It's amazing and you 203 00:11:11.559 --> 00:11:13.360 know what went on all right, So on. 204 00:11:13.279 --> 00:11:15.320 This one you deserve a ten out of ten. 205 00:11:15.600 --> 00:11:17.399 I'm giving you a ten out of ten as well, 206 00:11:17.919 --> 00:11:20.519 will reward you for being predicting and bleedingly obvious. 207 00:11:20.519 --> 00:11:21.480 But you did pick. 208 00:11:21.440 --> 00:11:25.159 Numbers, and you were precise, and you actually had three 209 00:11:25.159 --> 00:11:29.679 different numbers. And yeah, twenty twenty five has been an 210 00:11:29.720 --> 00:11:34.039 amazing year the global transformation in the energy industry. 211 00:11:34.399 --> 00:11:38.480 Okay, so the last prediction of last year was myself 212 00:11:38.759 --> 00:11:42.279 the end of all financial products label ESG, climate and carbon. 213 00:11:43.039 --> 00:11:46.080 If I look at the amount of funds who claimed 214 00:11:46.159 --> 00:11:50.679 the were named climate or ESG, twenty five percent of 215 00:11:50.720 --> 00:11:56.480 them have been rebranded from sustainable to transition. In the US, 216 00:11:56.600 --> 00:12:00.799 there have been twelve consecutive quarters of outflows. It's about 217 00:12:00.840 --> 00:12:05.080 de carbonization versus the eddication. So everything that's de carbonization 218 00:12:05.559 --> 00:12:10.000 really large, and I'm talking carbon capture, hydrogen. These guys 219 00:12:10.039 --> 00:12:13.519 are just burning money only to be bailed out by 220 00:12:13.600 --> 00:12:18.159 taxpayers and probably less and less words, the rectification funds 221 00:12:18.159 --> 00:12:21.759 are doing great because, as I always said, switch to 222 00:12:21.840 --> 00:12:24.679 fuel makes more sense than fix the fuel. 223 00:12:25.120 --> 00:12:30.080 Gentlemen, great speech, London, But I'm about facts. And I 224 00:12:30.240 --> 00:12:33.320 just go into Google and I put ESG investing in, 225 00:12:34.039 --> 00:12:36.320 and what comes up is PIMCO, you know. So I 226 00:12:36.360 --> 00:12:39.600 go to Pimco and look, I go Pimco Climate, pand 227 00:12:39.679 --> 00:12:46.679 Fond Global Investment, Great Credit, Eschi Fond and so there's 228 00:12:46.720 --> 00:12:49.879 no end and mean it's finished. I mean it's still here. 229 00:12:49.919 --> 00:12:52.320 That's the reality. So there's no way of getting good 230 00:12:52.399 --> 00:12:52.840 marks for me. 231 00:12:54.200 --> 00:12:55.639 Michael, you got. 232 00:12:55.480 --> 00:12:58.399 The direction to travel, right, But like oil a for 233 00:12:58.559 --> 00:13:02.200 Gerard and I you missed the timing. You're far too 234 00:13:02.200 --> 00:13:05.679 aggressive on the timing. Yes, they're down, but I'd like 235 00:13:05.720 --> 00:13:07.960 to say that twenty five percent is less than thirty 236 00:13:08.000 --> 00:13:12.320 six percent. So from a qualification perspective, you certainly are 237 00:13:12.399 --> 00:13:14.679 getting perfect. I think it's a five out of ten 238 00:13:14.759 --> 00:13:17.519 personal You're right in that a bunch of them dropped 239 00:13:17.559 --> 00:13:20.039 and a bunch of changes occurred in that space, but 240 00:13:20.120 --> 00:13:23.039 it wasn't a blood bath in ESG and climate funds 241 00:13:23.120 --> 00:13:23.759 in the same way. 242 00:13:24.320 --> 00:13:25.600 Yeah, I'll give you four. 243 00:13:26.159 --> 00:13:32.159 So I recount as usual, I'm lost, and we are 244 00:13:32.320 --> 00:13:43.480 a winner again. It's Michael. 245 00:13:44.399 --> 00:13:46.240 I was expecting not to be the winner this year 246 00:13:46.279 --> 00:13:48.559 because I missed one really badly. 247 00:13:49.840 --> 00:13:53.200 Yeah, but you got Yeah, we're done pretty good. Oh yeah, yeah, 248 00:13:53.240 --> 00:13:56.600 and John the first was such a disaster that was sold, 249 00:13:56.679 --> 00:13:58.799 but that was not enough to catch up on Mike out. 250 00:13:58.840 --> 00:14:01.720 So as usual, the winner is Michael. 251 00:14:02.320 --> 00:14:05.200 Well, Michael, I'd just like to say that my uncle 252 00:14:05.240 --> 00:14:09.000 Nostro Damas is rolling over in his brave. I was 253 00:14:09.360 --> 00:14:12.879 far too precise and testable my predictions. 254 00:14:13.480 --> 00:14:18.000 There has been two additional predictions that we did along 255 00:14:18.080 --> 00:14:20.960 the way. The first is we thought that VP would 256 00:14:20.960 --> 00:14:25.039 not survive two twenty five. They did so good for them, Yeah, 257 00:14:25.039 --> 00:14:27.480 they did. And the other one is child the prediction 258 00:14:27.600 --> 00:14:30.600 you did fifteen months ago on the price of silver 259 00:14:30.919 --> 00:14:34.000 and you saw very botish silver. And when you said 260 00:14:34.039 --> 00:14:37.159 that silver was at thirty dollars and now it's at sixty. 261 00:14:37.279 --> 00:14:40.120 So this one, Jared, well done you. 262 00:14:40.320 --> 00:14:41.320 One right, that's good. 263 00:14:41.679 --> 00:14:46.639 Okay, gentlemen, it's time to move for our prediction for 264 00:14:46.799 --> 00:14:49.240 two or twenty six. Who want to go first? 265 00:14:49.799 --> 00:14:56.960 I'll go first this time. My first prediction is that 266 00:14:57.000 --> 00:15:00.639 we're going to see in China at battery storage auctions 267 00:15:01.080 --> 00:15:05.960 forty dollars for Killowa hour for battery energy storage systems 268 00:15:06.039 --> 00:15:10.840 on the grid with twenty year contracts maintained and deployed. Yeah, 269 00:15:10.840 --> 00:15:14.639 we're at sixty five last December, which was astounding. I 270 00:15:14.679 --> 00:15:16.080 think we're gonna head forty this year. 271 00:15:16.399 --> 00:15:19.240 Can I ask you a question, Michael Sure, what technology 272 00:15:19.360 --> 00:15:21.600 is it Lytia Mayon or is that sodium ion or 273 00:15:21.840 --> 00:15:22.440 what's your view? 274 00:15:22.879 --> 00:15:27.679 LFP sodium ion and extra batteries that coatl Is bring 275 00:15:27.679 --> 00:15:31.360 in are promising, but they're also economically heavily challenged by 276 00:15:31.519 --> 00:15:34.960 LFP being dirt cheap and having been most to the advantages. 277 00:15:35.399 --> 00:15:38.399 What's incredible is the new form factors which are arriving 278 00:15:38.639 --> 00:15:41.639 because everybody used to work on her three forty hours 279 00:15:41.679 --> 00:15:44.039 and now it's the five eighty seven. And we even 280 00:15:44.080 --> 00:15:47.200 see cells which are above one thousand and powers. So 281 00:15:47.360 --> 00:15:50.240 the bigger cells, the lower the cost of the system. 282 00:15:50.480 --> 00:15:53.279 It has huge gramifications, isn't it, Because actually, if you 283 00:15:53.399 --> 00:15:58.320 just think of solar and batteries together, right, crazy prices. 284 00:15:57.759 --> 00:16:00.840 And it's not just the sales loratl which was wrong 285 00:16:00.919 --> 00:16:04.080 and trite. And first principles was that it would be 286 00:16:04.159 --> 00:16:06.879 the same kind of thing we see with hydrogen electrolysis plants, 287 00:16:06.879 --> 00:16:09.000 where the balance of plant wouldn't get cheaper because it 288 00:16:09.039 --> 00:16:11.799 was commoditized. I expected that was true for the balance 289 00:16:11.919 --> 00:16:15.759 of the battery energy storage system. But in China with LFP, 290 00:16:16.480 --> 00:16:18.799 they assemble the cells. They just put them in a rack. 291 00:16:19.080 --> 00:16:22.200 They slap a bus on top of the lumin conductors, 292 00:16:22.240 --> 00:16:24.159 which is dirt cheap and he easy to assemble, and 293 00:16:24.200 --> 00:16:26.519 they shriek wrap them and put them in a box 294 00:16:27.080 --> 00:16:30.679 and put the box in a field. It's insanely light 295 00:16:30.840 --> 00:16:34.799 balance of plant. They're still innovating on everything in the system. 296 00:16:34.879 --> 00:16:37.000 There's still juice to be squeezed out of that level. 297 00:16:37.399 --> 00:16:40.879 Good job, Okay. So I'm going to go second, and 298 00:16:41.000 --> 00:16:47.960 of course I'm going to talk about data centers. Data 299 00:16:48.039 --> 00:16:53.559 centers and the new panic of eighteen seventy three. We're 300 00:16:53.600 --> 00:16:57.600 going to see a gigantique perch. And of course people 301 00:16:57.679 --> 00:17:01.240 hear about the bubble, which has been especially the case 302 00:17:01.279 --> 00:17:04.839 at Gen of last year. There have been some extremely 303 00:17:05.240 --> 00:17:09.680 unhealthy behavior. A startup that is borrowing money to build 304 00:17:09.759 --> 00:17:13.319 data center for another startup. They are both losing tremendous 305 00:17:13.319 --> 00:17:16.480 amount of cash and yes, somehow being able to raise 306 00:17:16.519 --> 00:17:19.119 the debt capital in order to fund this bill out 307 00:17:19.359 --> 00:17:23.359 again without having customer of the visibility into those investments 308 00:17:23.359 --> 00:17:27.640 paying off. I can predict that you like last decade 309 00:17:27.960 --> 00:17:30.720 Adam Neumann from we Work, I can tell you some 310 00:17:30.920 --> 00:17:34.559 old man from open Ai is the Adam Newman of 311 00:17:34.599 --> 00:17:39.279 the decade, but with a bigger order of magnitude. The Google, 312 00:17:39.400 --> 00:17:42.920 the Microsoft, They're going to be okay. But on the 313 00:17:42.960 --> 00:17:47.319 peripherry there are number of companies and I'm even wondering 314 00:17:47.359 --> 00:17:51.400 if we not put Oracle inside that group. Blue Owl 315 00:17:51.839 --> 00:17:55.000 Core with everything is built on credit and if you 316 00:17:55.039 --> 00:17:57.559 look at the CDs, and I mean I was at 317 00:17:57.599 --> 00:18:00.880 Liman twenty years ago, so everybody knew what created default 318 00:18:00.920 --> 00:18:03.799 swab was and everybody has forgotten since then. And for 319 00:18:03.839 --> 00:18:07.200 the past three months people talk about CDs again and 320 00:18:07.319 --> 00:18:10.799 the CDs of those peripheral company is the same as 321 00:18:10.839 --> 00:18:14.599 EGYP TOI, Twopao, Sri Lanka. So when I find j 322 00:18:14.759 --> 00:18:17.160 how you go to see Pimco A Pimko. They've given 323 00:18:17.240 --> 00:18:21.359 me a twenty billion of credit. So could you give 324 00:18:21.400 --> 00:18:25.680 us one line please so we can actually quantify it 325 00:18:26.000 --> 00:18:29.519 and actually see if you're right around. Okay, fifty of 326 00:18:29.559 --> 00:18:31.839 the data center announced will never be built. 327 00:18:32.400 --> 00:18:38.440 That's remarkably low, but I'll take fifty percent. That's an 328 00:18:38.440 --> 00:18:39.319 easy target to hit. 329 00:18:39.559 --> 00:18:40.240 I agree. 330 00:18:40.400 --> 00:18:43.960 I have specked data centers in my professional career. I've 331 00:18:44.000 --> 00:18:45.920 been put loads in data centers the first. 332 00:18:45.799 --> 00:18:46.759 Time in the eighties. 333 00:18:47.200 --> 00:18:50.400 I put loads in the clouds and cloud based data centers. 334 00:18:50.759 --> 00:18:53.400 And I've been doing AI professionally on and off for 335 00:18:53.559 --> 00:18:56.759 fifteen years, including in you know, one of my current firms. 336 00:18:57.160 --> 00:19:00.720 And I've been a performance engineer on major software. So 337 00:19:00.799 --> 00:19:05.440 I note three rules for software. First, never optimize early. 338 00:19:05.920 --> 00:19:07.799 Just assume you're able to throw hardware at it. 339 00:19:07.880 --> 00:19:10.720 Because that'll be the cheapest fix. Ducay, If you. 340 00:19:10.640 --> 00:19:13.680 Have a performance problem, throw hardware at it because that's 341 00:19:13.720 --> 00:19:17.319 the cheapest fix. Third, if you can't fix it with 342 00:19:17.440 --> 00:19:21.559 cheap hardware, then get intelligent people to optimize it. And 343 00:19:21.599 --> 00:19:25.480 that's what deep Seek did this year. Deep Seek at 344 00:19:25.519 --> 00:19:28.519 intelligent people. They optimize the software. They got amazing results 345 00:19:28.759 --> 00:19:32.039 with back level chips in a fraction of the training 346 00:19:32.039 --> 00:19:35.720 and processing time, and they're selling that model globally. A 347 00:19:35.759 --> 00:19:39.119 lot of the innovation in stuff is scripting that isn't 348 00:19:39.200 --> 00:19:42.759 using the large language models. So I know the demand 349 00:19:43.079 --> 00:19:46.759 bubble is gone. Now I'd like to talk about just 350 00:19:46.799 --> 00:19:48.160 a little bit of what the corollary is to the 351 00:19:48.160 --> 00:19:52.240 implications of that. When I analyzed the AI spike, what 352 00:19:52.319 --> 00:19:54.799 I found was that vast majority of the data center 353 00:19:54.839 --> 00:19:59.160 buildout is in the United States. All of the stock 354 00:19:59.279 --> 00:20:02.160 gains of the US stock market have been in the 355 00:20:02.200 --> 00:20:06.279 seven big tech companies. We're building massive data centers. Everything 356 00:20:06.319 --> 00:20:09.359 else is flat or declining. The United States is in 357 00:20:09.519 --> 00:20:13.480 structural recession except for the AI data center build So 358 00:20:13.519 --> 00:20:17.119 that's kind of economic indicator one. Economic indicator two is 359 00:20:17.599 --> 00:20:20.839 that the top ten percent of income earners are spending 360 00:20:20.880 --> 00:20:24.480 fifty percent of the consumer spending. They're spending that because 361 00:20:24.480 --> 00:20:26.599 their four to one k's are good. Because of this 362 00:20:27.119 --> 00:20:30.480 data center thing. They've got index funds that are over 363 00:20:30.839 --> 00:20:35.279 invested in these data centers. There is a bloodshed coming. 364 00:20:35.279 --> 00:20:37.519 This is not my prediction that there's bloodshed coming in 365 00:20:37.559 --> 00:20:41.160 the American economy next year as these economic indicators collide 366 00:20:41.480 --> 00:20:43.240 and the top ten percent stop spending. 367 00:20:43.960 --> 00:20:46.759 I think your boat row. Oh, I think it'll be 368 00:20:46.759 --> 00:20:49.960 twenty twenty seven, not twenty twenty six. Okay, you got 369 00:20:49.960 --> 00:20:52.559 your time in ronk job. You're going to explain me. 370 00:20:53.000 --> 00:20:57.640 Texas right now, receive two hundred and twenty six gigawa 371 00:20:57.920 --> 00:21:01.440 requests or new data center and the peak loode is 372 00:21:01.480 --> 00:21:02.279 eighty five. 373 00:21:02.920 --> 00:21:05.359 No, what you said in terms of data centers, I 374 00:21:05.400 --> 00:21:06.599 agree they're not going to be built. 375 00:21:06.680 --> 00:21:06.799 Right. 376 00:21:06.839 --> 00:21:09.839 It's the same as look at all the battery development 377 00:21:10.119 --> 00:21:11.920 projects that are in Germ not going to be built. 378 00:21:12.400 --> 00:21:15.480 But the point is you are going to say record 379 00:21:15.559 --> 00:21:18.720 CAPPAX expenditures in twenty twenty six. 380 00:21:18.839 --> 00:21:24.559 No, no, no, no, you're a romantic. Okay, you look 381 00:21:24.599 --> 00:21:25.400 at equit. 382 00:21:25.400 --> 00:21:27.680 Okay, but you're thinking about fifty percent of you know, 383 00:21:27.720 --> 00:21:30.960 when everybody's rushing for quick connections. What they do is 384 00:21:31.000 --> 00:21:33.599 they go and try and get quick connections everywhere that's 385 00:21:33.599 --> 00:21:35.240 not going to be built. So your prediction for me, 386 00:21:35.319 --> 00:21:36.240 it's not a proper prediction. 387 00:21:36.279 --> 00:21:39.000 Okay, Okay, you'll say that's what I'm just saying is 388 00:21:39.440 --> 00:21:41.920 because you force me, you corner me into giving you 389 00:21:41.960 --> 00:21:45.400 a number. But what I'm just saying is the debt 390 00:21:45.559 --> 00:21:50.359 market will simply not finance all those data cent always 391 00:21:50.359 --> 00:21:53.039 been announced, period, There's just too much that now the 392 00:21:53.079 --> 00:21:56.079 people who provide that stuff freaking out. The risk premium 393 00:21:56.119 --> 00:21:59.039 is going up. So that's it. We agree to disagree. 394 00:22:00.079 --> 00:22:04.359 We've got our chicken in this two day job. Your 395 00:22:04.400 --> 00:22:11.279 first prediction, I'm not going to be vague. What you're 396 00:22:11.279 --> 00:22:16.720 going to see is lower global wind and solar installations 397 00:22:16.720 --> 00:22:20.240 in twenty twenty six and twenty twenty five. And in fact, 398 00:22:20.240 --> 00:22:22.240 I even go so far as to say we've seen 399 00:22:22.720 --> 00:22:27.160 peak global wind and solar installations, and I'll explain why. 400 00:22:27.599 --> 00:22:29.200 By the way, this is not to say that the 401 00:22:29.319 --> 00:22:32.880