Shale Magazine Editor-in-Chief - Robert Rapier

Episode Transcript

Speaker 1 (00:01):
Welcome to the nationally syndicated Energy Mix Radio Show produced
by the Energy Network Media Group. The Energy Mix Radio
Show will give you an inside look at the energy
industry and how it affects you by talking with industry leaders, experts,
and government officials on the Energy Mix Radio Show.

Speaker 2 (00:16):
Welcome to the Energy Mix Radio Show, where we delve
into the fascinating world of energy, from energy trends to
the latest innovations shaping our future. I'm Kimbalato, your host today,
and I have my trustee co host back with me,
Robert Rapier, the editor in chief of SHEW magazine as
well as a senior contributor at Forbes. Now, Robert, you
are an esteemed expert in the energy sector. For the

(00:39):
listeners who don't know you, you carry a wealth of
knowledge on ranging topics from challenges that we're facing in
the oil and gas enders industry as well as exciting
developments on renewables and emerging technology. You also have spent
countless hours as a professional in the energy industry as
a chemical engineer as well, So welcome back to the

(01:02):
Energy Mixed Radio Show. Thank you, Kim. I want to
begin with there's a lot going on we try to
catch up with each other, what's going on at Shell magazine,
and of course the new administration and their position, and
also cover topics that you're covering in Forbes as well
pertaining to energy, and so there's a lot to talk about.

(01:24):
We have tariff trade going on right now with penalties
and assessments, and i'd like to talk about that. I'd
also like to get caught up on what you think
is happening in the oil and gas industry as well.
So I'm sure we're going to give our listeners a
very hourful of thought provoking information when we talk about energy.

(01:47):
Let's jump in and talk a little bit about the
tariff and trade policy. There's a lot going on. I
want to get to China, but I first want to
just kind of give you get your opinion on how
these tariffs and trade polities, policies and the uncertainties that
are going to impact the oil and gas industry. What

(02:08):
are your thoughts on how they're going to strategize companies
and adopt and figure out how they're going to adjust
to these challenges.

Speaker 3 (02:18):
So the tariffs have really rattled the whole market, and
they've rattled the oil and gas industry especially, and reading
some comments from a number of the CEOs, they're not
happy with the uncertainty. I think if you said, okay,
we're going to have tariffs, this is the way it's

(02:39):
going to be, everybody would go okay, so now we
know what to expect. I think it's the on again,
off again. We can't plan in this environment. That's really
rattling the market. So I was looking at my portfolio
the other day and it hit a high mark for
the year on February the eighteenth, and that's when the
tariff talk really started up, and then I sold off.

(03:02):
And then on April second, we put tariffs on everybody,
and then I took a sharp drop at that point,
and the overall markets did the same thing. And the
reason it's hit the oil and gas industry harder is
because with the rise of tariffs, so a lot of
industries got hit because they're expected, Okay, well this is
gonna hurt us. You know, we import you know, like

(03:24):
the auto industry, they import parks that are getting hit
with tariffs, so cars are going to cost more.

Speaker 2 (03:29):
So.

Speaker 3 (03:30):
But with the oil and gas industry, the reason it
really hurts the industry is because economists are increasing the
likelihood of recession, and recession is bad for oil and
for oil and gas prices. So right now we're seeing
oil prices have have had a pretty significant slide since
all this tariff talk, and you know that's directly attributed

(03:54):
to the fact that you know, the risk of recession
is rising. Now that's not a good thing. So we
just saw that the inflation numbers came in lower than expected,
and the reason they came in lower than expected was
because oil prices have dropped quite a bit. So when

(04:14):
you look at the grand scheme, you say, okay, inflation
was sort of low, but the reason was kind of
alarming the oil and gas The oil prices are so low,
and that's not a good thing for the oil and
gas industry. And the other thing I would point out,
the whole reason cited for putting these tariffs in place,

(04:35):
is our trade deficit. Well, twenty years ago we imported
twelve and a half million barrels a day of crude
and today we export two and a half million barrels
of crude and finished products. So what does that mean?
We are a net exporter. The higher the oil price,
the more money we get for those exports twenty years ago.

(04:56):
The higher oil prices, the more money we're sending overseas.
So it's a different paradigm today. Now that's not to
say that lower oil prices don't have any benefit. I mean,
consumers like paying less for gasoline. I get that that
gives them more discretionary income. The airline industry likes low
oil prices, the transportation industry likes low oil prices. But

(05:17):
it's not the same paradigm that was twenty years ago,
because now the oil and gas industry is such an
important part of the economy and such an important driver
the S and P five hundred returns over the last five years.
Out of all the sectors, the oil industry, the energy
sector has outperformed every other sector of the last five years.

(05:38):
So it is a major contributor of the stock market
gains over the last five years. So when we say, well,
low oil prices are good, anything that hurts the oil
industry now such an important part of the economy, such
an important contributor to our trade balance, I mean putting
positive dollars in our trade balance. You know that's not

(05:59):
a good thing. Some people will celebrate it, but it's
not necessarily a good thing. It's like when COVID hit.
When COVID hit, oil prices went negative. Briefly, gasoline prices plummeted.
That was not a good thing because it was signaling
there is a serious problem here. And so you know,
I know people like to point back and say, hey,
you know gas prices went under two dollars a gallon
when Trump was in office. Well, yeah, when everybody was

(06:20):
staying at home, that's when that happened. And that is
not a good thing. So, you know, low will prices
for the wrong reason are problematic.

Speaker 2 (06:31):
Let me ask you. So there's a selective set of
folks that are attached to the stock market, and then
there's a lot that are not. And those people, what
do you say to those people that are seeing, we
know that gas prices are not going to be good
for future projects funding and stock market usually funds a
lot of long term projects for the oil and gas,

(06:53):
So a lot of people may not necessarily realize they
really do work hand in hand as partners all of
these little pieces. But what do you say to the
person that's listening and says, no, it's about time that
we start really settling all this. You know, because it's
completely out of control in the way of how China
specifically and these other countries have been putting tariffs on us,

(07:16):
and they have not been fair and balanced in any manner,
and we have to unfortunately take some bad with the
good if we're ever going to get this settled. It's
kind of like when you have a bank account. You've
got a whole bunch of bills and you don't have
enough money to pay for it. Somewhere, you start paying
it off slowly to fix the problem. So you mentioned
stock market and we're our next exporter. Now everything is

(07:39):
kind of flipped around and the consumer is the winner
right now with low gas prices. But when we start
talking about tariffs and China specifically, how much is that
going to impact the oil and gas more importantly, they're
sitting at right now two hundred and forty five percent
tariffs on them. How is that going to impact the

(08:00):
oil and gas industry at this coast much longer? How
much are we how much is the oil and gas
industry depended on China? And then I want to move
into the latest executive order talking about the rare minerals
as well.

Speaker 3 (08:13):
Okay, so there's a lot to unpack there. You said
a lot of things, and let me address some of that.
First of all, regarding stock market, you said, what about
people who are not in the stock market? Two thirds
of Americans, nearly two thirds of Americans have some exposure
to the markets, either through retirement plans or through direct
investing and so forth. So stock market moves impact the
wealth of most Americans. Now for the others, for those

(08:36):
who say, I don't have a dime in the stock market,
I don't care. When the stock market declines, we and
it declines in response to potential recession. Companies stop hiring people,
stop spending money, and it affects people who might not
have a dime in the stock market. So the markets

(08:56):
affect nearly everybody, even if they don't have any money
in the markets. So that's one thing. And the other
thing is I deal with people all the time who
don't understand the difference between our budget deficit we have
a huge whopping debt, and our trade deficit. Those are
two entirely different things. They're almost completely unrelated. We have

(09:22):
had severe budget deficits and balanced trade. We have had
when Flinton was in office, the budget deficit fail every year,
and we had the highest trade deficits in the history
of the country, mainly because oil, because oil prices were
climbing and our imports were climbing. So those things are

(09:43):
not related. And here's an example I give you, and
I've given this example before. I have a trade deficit
with my grocery store. They don't buy anything from me.
I go and I give them money and they give
me good So I have a significant trade deficit with them.
That is entirely separate from whether I am elsewhere spending
more money than I bring in. That's my budget deficit.

(10:05):
I'm if I'm earning enough money to cover my bills,
including the trade deficit that I have with the grocery store.
That is not a problem. I mean, we are not
going to address our budget deficit with tariffs or by
closing the trade deficit. It is not a problem to
have a trade deficit. We've got trade deficits for most
of the most many many many years, and our economy

(10:28):
has grown and grown and grown. Our budget deficit has
grown for different reasons. We have consistently spent more money
than we bring in, and the only way to address
that is to bring more money in or to cut
the amount of money we spend, or some combination. But
you know those who are conflating the two, that's completely wrong.

(10:48):
Those things are not not the same. Now, how will
this affect China? The tariffs on China are not sustainable.
I mean they're once. I'm already hearing people going out
of business because they say that, A. I cannot afford
the tariffs. But I just got hit with and I
think when the reality hits and inflation does spiral higher,

(11:12):
I think Trump was gonna have to take a step
back and say wait a second, just like he's done already.
He's had to do it a couple of times. I think.
You know, Peter Navarro got in his ear years ago
and said, hey, tariffs can make us prosperous like we
were then in nineteen hundred. You know, we went from
tariffs to income tax for a for a specific reason.

(11:33):
We pay the tariffs just like you know we pay
income tax. But the lower tariffs mean more spending, more trade.
Almost every economist in the world will tell you this.
So China, I do not think we're gonna We're gonna
see these tariffs remain. But if they do remain, what
will it mean for the oil industry. We're probably going
to go into a recession and that won't be good.

(11:53):
It will not be good for the oil industry if
we if we go into a recession. That that's what
I think about the tariffs.

Speaker 2 (11:59):
Well, let's go to break. When we get back, I
want to get on the topic of the Executive Order
and how this new Executive Order is written to help
us with our rare minerals, which will lead us into
the problem with evs and the batteries that they require.
But I'd also like for you to also touch on

(12:20):
how long can the tariffs stay before it really starts
hurting the oil and gas industry. Let's take a quick break.
You're listening to the Energy Mix radio show, and we'll
be right back.

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Speaker 2 (13:02):
And we're back. You're listening to the Energy Mix radio show.
My co host today is Robert Raypier, the editor in
chief of Show magazine's consenior contributor of Forbes. Robert, we
just got back from break. We had some great discussions
on tariffs, what it's going to mean for the oil
and gas industry. You left us with kind of a

(13:22):
hangar of how long can these tariffs on China at
two hundred and forty five of a penalty on them?
How long can the oil and gas industry sustain themselves
without us really seeing you know, real rigs going down
and a lot of really bad things happening for the

(13:44):
oil and gas industry. And then we'll switch gears and
we'll talk about the executive order in the rare mineral well.

Speaker 3 (13:51):
Oil prices have already fallen a lot, so I would
say is already hurting the oil and gas industry. I
don't think. I think when consumer I mean think about
why did Trump blink on the tariffs? And a lot
of people say, well, he was just negotiating, and he
was trying to get a better deal, and blah blah blah.
He blinked because the market was crashing and the bond

(14:12):
market was surging. And the bond market surging is a
very big concern because China and Japan hold most of
our debt. If they dumped all that debt, it would
be devastating for us. Our bond yields would go for
sky high and it would cost us a lot more
to service our debt. And that's a very that's a

(14:34):
big risk hanging out there. And I think when the
bond yields spiked, the Trump administrator had to say, well,
hold on a second. You know, we were our thesis
was the bonyads were going to fall, and now they spiked,
so let's let's tap the brakes here. And I think
that's why they did. They tapped the brakes to say, uh,
let's have a little pause and let the markets absorb this.

Speaker 2 (14:54):
Robert, tell me a little bit about the tariffs. China
is at two forty five. How does this I'm not
even sure if I understand how this is really going
to impact the oil and gas industry in a big way.
I know it's not good when all prices go down.
I know the consumers meet, like the cheaper gases at
the pump. But these projects oil and gas take a

(15:14):
long time. Will they be slated, Will we start seeing layoffs?
What are we really going to see in the oil
and gas industry if anything? Or do you think that China?
I mean that Trump will blink with China since he's
already seen these ripple effects you and you said he blinked.

Speaker 3 (15:31):
Well, he already blinked on electronics too, he said they.
So I guess they figured out we get our smartphones
and computers from China, and so they said, okay, well
let's exempt those. Why because those were going to cost
consumers directly. It was going to be a high profile,
huge jump in the cost of an iPhone and the
cost of a computer, And so I think they said

(15:52):
let's try to exempt those. And that happened over the weekend.
So I've been talking with that before.

Speaker 2 (16:00):
Why didn't his team tell him the like?

Speaker 3 (16:02):
So if you watch them on the Sunday shows, there
is mass confusion among his economic advisors. Peter Navarro came
out and said, we didn't put a pause on anything,
and then another one came out and said, yes, we
put a pause on electronics, and somebody said, I mean
that they were There were many contradictory messages over the
weekend by by the guys that went out on the

(16:23):
Sunday talk shows. So I've been talking about indirect effects
on the oil and gas industry of you know, recession
and put potential and falling oil prices. But oil and
gas industry does import things from China, so you know
there will be things that cost them more money, not
like some industries. Some industries get a lot of things

(16:44):
from China and nearly everything from China. And you know,
I would say the oil and gas industry, they get
equipment from China, but they're not extremely dependent on China.
I would say, for you know, for their revenues, there
is a dependence there. It will cost them more money.
But that's not what's going to hurt the oil and
gas industry. It's the overall economic impact. And I'll just

(17:09):
say this broad based, and and this is based on
many many economists, many Nobel Prize winning economists will come
out and said, you know, broad we have the experience
of history. Broad based tariffs on everything are not good
for the economy. They helped worshen the Great Recession, the
Great Depression one hundred years ago. You know, we've done

(17:29):
this experiment a couple of times. But if you have
strategic tariffs on certain industries, Let's say, you know, you
don't want to outsource all your food production. You want
to be able to feed your country, and so in
that case, you might say, Okay, we're gonna put tariffs
on certain industries, so you know, Central America can't put

(17:50):
us out of business on you know, corn production or
or you know, soybeans or whatever. We want to be
able to produce those things. And that's why we have
farm subsidies. And that's but that's an example of how
a strategic tariff can keep an industry afloat that might
be put under by foreign competitors. We don't want our
food production being outsourced. We don't want our energy security

(18:15):
being outsourced. And that brings up the topic of these
critical minerals. You know, China has all these critical minerals
that we need for lots of different things, and if
they restrict these or if we put tariffs on those,
those can be effective tariffs for pushing our own domestic industry. Yes,

(18:36):
it raises the prices of those things, but that may
be what is needed. I'll give you an example. Let's
say the global price of oil was ten dollars a barrel,
and Saudi Arabia could produce it for ten dollars a barrel.
We might want to put a tariff on that to
raise the price so the US oil industry could be
competitive and wouldn't go under. We don't want to. We

(18:59):
don't want our domestic energy industry to go under. And
we can say the same thing about these critical minerals.
If we want to build a critical mineral industry, it
may require tariffs to do that.

Speaker 2 (19:12):
I want to drill down a little bit to the
recent executive order that Trump signed on the rare minerals.
My understanding of what I'm hearing from some people in
the industry is that it's going to affect the electric
vehicle sector more than anybody else. But it's also going
to free up other countries who will I think, potentially,

(19:35):
from what I'm hearing, try to fill in that gap.
So what do you think the supply chain will look
like in production with this new executive order? Will it
spur on other countries? To provide us or will we
see an increase here in the United States for these
rare minerals that are needed. There's a lot of them.
Most of us just think of lithium and cobalt, but

(19:58):
there's a lot of rare minerals that we get from
China and they're kind of really important for how we
live our modern society and lives today. Well, Robert, let's
take a quick break. When we return, I want you
to really get a little bit more in detail about
how these rare minerals and Trump's executive order the signing

(20:19):
of that, what is his thought behind, why he felt
he needed to do that, and how important are these
rare minerals. I don't think our listeners really understand what
they do. And then how much of an impact will
this have on the electric vehicle market since they need
a lot of these rare minerals. You're listening to the
Energy Mixed radio show. We'll be right back.

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Speaker 2 (21:22):
And we're back. You're listening to the Energy Mix radio show.
My co host today is Robert Raypier, the editor in
chief of Show magazine's consenior contributor of Forbes.

Speaker 3 (21:31):
So let's use lithium as an example. So lithium is
not really a rare mineral, but people know what lithium is.
They know it goes into lithium batteries. Everybody's got lithium
batteries and their phones. We're familiar with those. China produces
the most lithium. Now, if China wanted to restrict lithium
to us, you know that is a strategic national interest

(21:54):
that we not be beholden to China for lithium. So
let's say we it can work two ways, Okay, China
restricts lithium to us, We've got to find other sources.
But if we put tariffs on China's lithium and China's
rare minerals, but we exempt other countries that can do that,

(22:15):
we incentivize those other countries to be able to produce
and supply those minerals to US. And we also incentivize locally, domestically,
you know, potentially a lithium industry here in the US.
You know, it may cost us more to produce it,
but that's what the tariffs are designed to balance out.

(22:37):
You know, if it costs you know, China one hundred
dollars to produce something and it costs US, you know,
one hundred and fifty, well a fifty dollars tariff to
close the gap would make our domestic industry competitive with
those tariffs in place, and it might make other countries,
you know, Chili, Bolivia, if they if their costal production
was more than China's, but we exempted them from the tariffs,

(23:00):
then suddenly we're incentivizing more variety of supply from different places.

Speaker 2 (23:07):
I want to talk a little bit about some of
the recent articles that you have written in Forbes. Do
you mind if we switched to talking about that, sure.

Speaker 3 (23:15):
No problem. Yeah, So about that article. You know, one
of the things I was pointing out is that even
though we are at record production, record consumption, and the
price of natural gas has recovered a lot over the
last year. You know, sometimes it gets out of whack
and we get too much production for the demand. But

(23:37):
over the last year, demand has really skyrocketed. And there's
two major drivers for that. One is the LNG exports.
Those continue to grow, and the other is the continued
explosion of AI data centers. And those AI data centers
I read the other day they're consuming more power than

(23:59):
one hundred and something countries around the world. These things
are voracious power users, and that power is largely produced
using natural gas. So the natural gas going in these
data centers keeps going up. The natural gas going into
LNG keeps going up, and that's helping keep prices lifted
on our natural gas. I always tell people, you know,

(24:21):
if you want to know which direction natural gas prices
you're going, just look at the natural gas we have
in storage. If it's historically high, then natural gas prices
are going to be moderate when it starts coming down
from those historical high levels, which it did. Over the winter,
we had a big pull down. We had a cold winter,
natural gas in storage dropped down. You're going to see

(24:41):
natural gas prices rise, and natural gas prices then in
coming months will be higher than they would have been.
And I always use that, and it's a pretty good
gauge to forecast where natural gas precere are going to be.
If you go into a winter with low inventories and
there's a cold winner, you could see natural gas prices skyrocket.
I mean risk, and you're going to have a risk
premium on natural gas. If you go into the winter

(25:03):
and you don't have your inventories, they build up. They
build up inventories and storage over the spring and summer.
In the fall winter they deplete that.

Speaker 2 (25:12):
Okay, so then why is it? You know, it's very confusing.
I think for the listener, somebody who's outside the oil
and gas world, somebody that just interviews for a living,
that we see record supply and demand, and yet we
have terraffs, we have a new administration. They are on

(25:33):
the drill, baby drill. But at the same time we
are also seeing that oil prices are no longer a
clear win for the US economy, and that was an
article you wrote on April seventh. When we come back
from break, I want you to kind of help us explain,
if you'll put this in some kind of context for
the average person to understand. Why is everything so confusing?

(25:57):
It appears as though one side it seems to be
makes sense, on the other side, it makes no sense whatsoever.
And so for somebody like me that I'm trying to
wrap my head around all these different things that are
changing very quickly and trying to understand how they work,
I want you to try to put it. Let's take
a quick break, and at the end of the show,

(26:20):
I also want to mention I'm going to ask you
to get out your crystal ball and tell us how
these tariffs end in the way, who's going to be
the winners, who's going to be the losers? And do
you see anything emerging out of this? Because I always
believe that just because something bad is happening doesn't mean
something good is going to come out of it. I
believe it will. So let's take a quick break. You're
listening to the Energy Mix radio show, and we'll be

(26:41):
right back.

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Speaker 2 (27:22):
And we're back. You're listening to the Energy Mix radio show.
My co host is Robert Rabier, the editor in chief
of Shell Magazine as well as a senior contributor at Forbes. Robert,
this is a very complicated thing that's happening. If our
elected officials are struggling to understand, I think it's very
important to mention to the listener that don't worry you're

(27:44):
You're not the one that's confused. We all are. We're
trying to understand what's happening, and there's so many different
opinions and viewpoints. I like to listen to you in
the way you are a chemical engineer. You've worked a
long time in the energy and just stry. You have
exposure into how all these things work in all different

(28:05):
areas to be able to look at it and help
explain it. So in a recent article that you came
out with in Forbes, it's telling us about why falling
oil prices are no longer a clear win for the
US economy. That doesn't sound too positive. What are you
talking about in this article? What is it that we
need to know?

Speaker 3 (28:26):
So one of the reasons maybe this is confusing is
that things have changed in the last twenty years. So
twenty years ago, there's no question low oil prices were
a net benefits to the US economy. We imported a
lot of oil. When we could get that oil cheaper,
our import bill was down. It helped our balance of trade,
It helped consumers, It helped the transportation sector. It still

(28:50):
didn't help the oil industry, but it was offset by
so much so many other good things that overall it
was a net benefit. It was a good thing for
the refiners, you know, they could get low priced to
oil and turn into gasoline. You know. It was the
oil and gas producers. It wasn't good for them. But
what changed. What changes the shale boom. And we are

(29:15):
now exporting two and a half million barrels a day
of oil and finished products like diesel and jet fuel.
So now what happens when oil prices fall The revenues
for those products fall. So now instead of bringing as
much money into the country, where years ago it was

(29:35):
money that was going out of the country. So when
they're falling, now we're getting less money in the country
for those exports. So that is the difference LNNG exports
will probably be. There's two things that can happen here.
When the prices are lower, there will be more demand

(29:58):
frail in G. If there are reciprocal tariffs in place
in places, it could hurt our LG exports, and I
think that depends on a lot of those LG exports
are going to Europe. We're putting tariffs on Europe. We're
rattling sabers with Europe. That could hurt our LG exports.

(30:18):
So you know that this is why it's no At
one time it was a clear win, and now it's
not such a clear win just because of how it
affects the oil industry and how it affects our balance
of trade when oil prices fall. Twenty years ago it
helped our balance to trade when all prices fall, and
today it hurts it when all prices fall.

Speaker 2 (30:40):
Okay, earlier we looked about these rare minerals and President
Trump signed in an executive order and what that was
a going to mean for electric vehicles. Something that the
last administration talked a lot about was hydrogen. Went all
in on hydrogen, and President Trump seems to have a

(31:06):
little bit of a difference of opinion. Hasn't really said
anything negative on hydrogen, but I don't see it being
pushed out the way it was to the Biden administration.
A recent article that you wrote about talked about France's
natural hydrogen discoveries and how it could define clean energy.
Can we talk a little bit about hydrogen. Can you
get us up to speed on where we are? Are

(31:27):
we walking away from hydrogen or no?

Speaker 3 (31:31):
Unless there's a lot like I said about hydrogen. So
we've had hydrogen hot for the last twenty five years.
I mean, George W. Bush had his State of the
Union address where we talked about hydrogen economy and us
going to hydrogen and why is that? Because when you
burn hydrogen, the only thing that is produced is water,
so you don't have any carbon pollutants, you don't have

(31:52):
anything like that. You just have water. So hydrogen as
a fuel is really attractive because it doesn't pollute. However,
where does hydrogen come from? Well, how does it come from?
Natural gas? I mean, that's how we produce hydrogen today.
It's not the only place you can get hydrogen, but
today probably ninety nine percent of the hydrogen producer in
the world is made by refineries from steam reforming of

(32:16):
natural gas. So that's where our hydrogen comes from. So
what happened in France? France, I'll tell you a funny
story about twenty years ago. I was working at Conical
Phillips in the North Sea in Scotland, and I interviewed
somebody for a position and she claimed to be knowledgeable
about hydrogen and have some expertise in the area. And

(32:39):
I like to throw you curveballs during interviews, and I said,
where does hydrogen come from? And she said, well, we
just go and we drill hydrogen. Well, and I in
my mind I thought, well that's kind of silly. And
so I was interviewing with another person, and when she
walked out, I said, what do you think and she said,
I think you think there's no way because she just,

(33:01):
you know, tried to bluffer away through that answer, and
I said, correct, I said that, yeah. I mean, it's
okay to say I don't know, but it's not okay
to say we drill a hydrogen well. So now fast
forward to today, France has now made two discoveries of
natural hydrogen of where you could literally drill a well

(33:22):
and pump the hydrogen out. It was not known until
then that these existed. So her answer back in the
day was still wrong. We didn't get hydrogen from hydrogen wells.
But France has made these huge discoveries and you could
potentially drill a hydrogen well and get that hydrogen out.
The reason hydrogen doesn't exist naturally in most places it's
very reactive, you know it it doesn't last in the

(33:46):
environment very long because it reacts with other things. But
so the discovery in France said there may be in
specific cases around the world, and we've drilled a lot
of the world, and if there were really a lot
of hydrogen deposits out there, we would have found them.
But it's interesting that you know today there's the potential

(34:06):
for drilling and getting hydrogen. Now there's so much hydrogen
hot we're still going to be producing most of our
hydrogen from natural gas. But even then, if you produce
how does your natural gas in a refinery, you make
coeal two and you make hydrogen. You could use natural
gas then, and you could capture the coal two and

(34:28):
do whatever you want with it and then sell the hydrogen,
and the hydrogen could be used as an absolutely pollution
free transportation fuel. Now it does have some caveats, it
does have some downsides. The energy density of hydrogen's really low,
so that means the range of your car in a
hydrogen vehicle is probably not going to be great, and

(34:50):
you have to put a lot of high pressure hydrogen
in your vehicle. A lot of people don't want that.
The other alternative is fuel cells. Hydrogen fuel cells work,
they're tremendously expensive, and so a lot of people are
not going to be able to afford those cars. So
that's kind of putting the whole spin on hydrogen. It's
the hop's been around for twenty five years. We still
make most of it from natural gas, but The reason

(35:13):
it hangs around is just because the potential of using
hydrogen as a zero carbon fuel.

Speaker 2 (35:21):
That makes sense. As far as the president and we
really haven't heard anything. We're going to get ready for
break when we come back. If you want to touch
on that real quick, that'd be great. What can we
see from the administration is hydrogen is still going to
keep rolling forward here. There was a lot of requests
for permitting before in the Bide administration. But I really

(35:44):
want to get on what I promised the listeners, the
future outlook. I want you to talk about current political
environment along with the economic landscape, and what do we
see the future of oiling as in any emerging trends
technologies as a result of these tariffs and all the
changes that are occurring curring. Well, let's take a quick break.

(36:05):
You're listening to the Energy Mixed radio show. We'll be
right back, and we're back here listening to the Energy
Mix Radio Show. My co host today is Robert Rapier,
the editor in chief of Shell magazine as well as
senior contributor for Forbes. Robert, thank you for writing that
article about what's happening in France and their ability to

(36:25):
find natural I mean, I'm sorry hydrogen resources and explaining
what the problems have been, but get us up to
speak on the Biden administration had gone all in on hydrogen.
There was a lot of activity before hydrogen. Some of
the majors were putting a lot of effort into looking
at exporting hydrogen and permitting and things like that. The
Trump administration, I'm not saying as an expert, I just

(36:47):
really don't hear a whole lot of chatter about hydrogen anymore.
Can you give us an update on what's happening with
hydrogen within the United States and the Trump administration stance?
What do you think?

Speaker 3 (36:56):
Yeah, I think they just said we're not going to
fund a bunch of these off the wall projects that
we don't think have a legitimate chance of ever being
commercially successful, and we're not going to spend a lot
of tax payer dollars chasing a lot of these things
that the Bide administration was more likely to fund. I
think that's where things are. So I've heard from people
working on hydrogen projects have said, you know, they're funding

(37:16):
dried up and I think it's I think if somebody
can go out and make it, you know, producing hydrogen.
And again, the oil industry produces almost all the hydrogen
that's going to continue. Hydrogen is used exclusively, I mean
extensively in the oil industry in refining. I mean a
lot of hydrogen use in refining, and that will continue.

(37:38):
And so I think any projects that can just go
out there and make it on basic economics, I don't
think the Trump the ministry just say, you know, we
discourage that. I think they'd say, yep, that's fine, but
you just got to go out there and you got
to do it economically, and we're not going to use
tax dollars to help out with that.

Speaker 2 (37:52):
I think that's the position makes sense. Let's talk a
little bit about the future outlook. There's so much uncertainty
from the previous administration to this administration of different viewpoints
and definitely which in gears in many different ways pertaining
to the oil and gas industry to the point where
we have really some strange political situations that we're in

(38:17):
when we look at other countries and their oil and
gas position versus ours, trade talks, trade deficits, penalties on
their tariffs, excuse me, and then of course our economic landscape,
which there's one hundred different people that will tell you
one hundred different things. That's good, it's bad. Trump blinked.
Trump didn't blink. China's going to go down. They're going

(38:40):
to lose their economy. All their boards are shut down,
they're shutting Downess, there's everything on the web, worldwide Web.
You can imagine from an expert standpoint of looking at
this very logically big picture, what do you see the
future in oil and gas due to everything that's going on.

(39:01):
They also, on the other side have Interior Secretary Bergham
as well as a very seasoned Chris Right. Both of
these men are very seasoned, and they're pushing these agenda
to get oil and gas back in the driver's seat
with all this permitting that they had been delayed and
getting long term projects back and permitted. What are we
going to see? What are and are you seeing any

(39:22):
emerging trends, technology, something that might be reshaping the sector
as we speak because of all these changes, Well, what
do you feel is happening and where do we end up?

Speaker 3 (39:31):
So one thing I always note is that what happens
in oil and gas with respect to who's in the
lighthouse is often counterintuitive. You know, Biden was hostile to
the oil and gas industry. The oil and gas industry
made tremendous money when Biden was in office. Why is that, Well,
the hostility helped drive up ail and gas prices. The

(39:51):
sanctions on Russia when Ukraine invade helped drive up all
in gas prices, and that drove up oil profits. When
Obama was in office, Obama was hostile to oil and gas.
And what happened, Well, they've been working on fracking for
years and when he was in office, that started to
pay dividends. And we had a global kind of a

(40:14):
shortage of excess supply around the world, and as US
producer started to ramp up again tremendous profits under an
administration that was hostile towards oil and gas. And so
now Trump's in there and Trump is very friendly to
oil and gas. But the price is down. So what
does that mean? That means profits are going to be down.

(40:36):
I think Trump has mutually exclusive goals of lower prices.
He likes that and more drilling. And the CEOs outcomes
will tell you we're not interested in drilling. If the
outlook for oil is sixty dollars, we're you know, And
I think that's the problem. I think he's making promises
on higher production and lower prices that are going to

(40:59):
conflict with each other. So what's going to happen? I
think with the risk of recession hanging here, and if
if the tariffs that are in place stay in place,
I think all prices are likely to struggle this year.
I don't and that's just because the recession risk has
gone up. And if the world goes in recession, people

(41:20):
stop spending as much and then demand for oil goes down,
and so that's what I think. I think the best
case scenario here, in my view, would be for the
president to say, Okay, we've made our point. You know
we want fair trade, we've got some deals that are better. Now,
we're going to drop the tariffs, and I think the
market would rally then. I think all prices would recover then,

(41:43):
and I think that would be the best case scenario.
But the damage that's going to be done is we
have caused a lot of market uncertainty now with these
because they may say, well, okay, that's today, what's tomorrow,
what's next week? And market uncertainty leads to you know,
lower markets and more volets and then we've cause distrust
with really important trading partners like Canada and like Europe,

(42:06):
and they're gonna go out looking for other trading partners.
And that's my concern that in the long run, we
are trying to solve one problem, we're creating more problems.
And you know that's my concern. My concern is things
were pretty good. I mean, somebody told me this morning, well,
we had to do something about trade, and I said,
our economy was bigger than it has ever been before.

(42:27):
What do you think needed to be done about trade?
I mean, we we now have a huge surplus trade
on oil and gas. We're never gonna make bananas, I mean,
except now as there's some out in Hawaii, We're not
gonna make coffee. Where you know, there's certain things. You
trade what you're good at, and you trade what you
can build for countries that you know are better at it,
or have a better climate for it or whatever. We

(42:49):
don't have to produce our own socks in the United States.
If Vietnam can produce socks at a fraction of the cost,
we don't need more soft factories. If the unemployment is low,
and it is, we have a low and employment, right,
we don't need more SOP factories here. Let's continue to
ramp up our high tech and continue to develop these
critical mineral industries and put money strategically into things like that.

(43:11):
And stop thinking that we have to produce everything in
the US, because we don't. And that is not an
efficient global economy if you're behaving like that, if you're
thinking we have to produce everything here, we have to
be the best at everything, because we don't will never
be the best at everything. And that's just a function
of where people are in the world, the climate, the
local cost of labor, the raw materials they have, and

(43:32):
so forth. And so, you know, we do what we're
good at, and we should let others do what they're
good at and buy from them and sell them what
we're good at.

Speaker 2 (43:38):
One quick question and it can just be a yes
or now. Is this normal that a president of the
United States, Donald Trump and the president of China would
respond in the way that they did to these tear fors.
It kind of seemed like to me, the other countries
came and wanted to talk, and Trump was and the
administration was Trump was able to talk to them and
start working on it. Why do you think it all

(43:59):
fell upon Are these just two very I don't see
either one of them responding professionally or.

Speaker 3 (44:05):
Think I think China sense is an opportunity here. I
think China sense is an opportunity and they look around
the world and they go, if the US puts tariffs
on everybody, who are they going to turn to. China
is going to step up here and they're going to
assert their economic power around the world. I think that's
why I went down the way it did. Trump said
let's make a deal, and China said, you know, pounce end.

(44:29):
And some of that may be bluffing and some of
them may be posturing, but I think it also is
China thinking this is an opportunity here for us to
increase our global reach. And that's that's another concern of mine.

Speaker 2 (44:40):
That's a good point, Robert, I don't think anybody's really
been talking about Well that is all the time we
have for this show till next month when they have
you back on. Thank you for joining me, and we
look forward to reading more of your articles and keeping
up with what you're doing at Show magazine. Thank you
for joining me today.

Speaker 3 (44:54):
Thanks Kim.

Speaker 1 (44:55):
The Energy Mix Radio show is where we explore topics
that affect us all in the oil and gas industry.
Every week, our host will interview the movers and shakers
in this fast paced industry. You'll hear from industry experts,
elected officials, and many more on the Energy Mix radio
show