Shale Magazine Editor-in-Chief - Robert Rapier

Episode Transcript

Speaker 1 (00:00):
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.

Speaker 2 (00:15):
Show and welcome back to the Energy Mix Radio Show,
where we break down the headlines, decode the data, and
spotlight the voices shaping the future of energy. Today's guest
is someone who doesn't just report on the energy sector,
he helps shape it in conversation. Joining me is Robert Rapier,
the editor in chief of Shell Magazine, a seasoned chemical
engineer and one of the most respected voices in energy journalism.

(00:39):
With over twenty five years of global experience. Robert brings
a technical depth and editorial insight to the table. Robert,
Welcome to the Energy Mixed Radio Show or welcome back
this cam Well listen. I wanted to give you a
nice intro because you kind of have turned into a
national superstar, if you will, in being highlighted on CBA.

(01:00):
So tell us a little bit about what you were
talking about. Who did you interview with? And I have
to say it was a great great interview.

Speaker 3 (01:07):
Yeah, that came about as a result of an interview
that Wired magazine contacted me about, I don't know, maybe
about a month ago. They wanted to talk about the
drill baby drill policy and whether that's working, and I
explained what's happening there. You know, rig count is actually falling.

(01:27):
So if we got a drill baby drill policy, why
is the rig count falling? And so they wanted to
understand that a little bit more, and so for the
Wired article, I said, look, all companies are making decisions
on their outlook for oil prices. That's it. They're not
looking at the president for direction on whether the drill
or not. They're saying, you know, they take into consideration,

(01:48):
you know, policy changes and how that might affect their economics.
But their bottom line is economics and that's what they're
looking at. So, you know, we're seeing software oil prices
and they're seeing that and as a result, the rig
count is falling. Now we are seeing still oil production
still was rising. Up until about midsummer, we were still
seeing we're running about two percent ahead of last year's record.

(02:11):
But over the past I don't know six weeks or so,
we've seen a couple of declines. Now it's way too
early to say this is the beginning of decline and
oil production, but we can see that the growth this
year has been slower than it was for the past
two years. And again that's a function of lower oil prices.

(02:32):
I think if oil prices were one hundred dollars, we
would have seen strong growth again this year. But you know,
lower prices means you know, less drilling, and it means
ultimately falling oil production.

Speaker 2 (02:43):
Well, and I think in your interview, you know, you
were drawing that that we can't just drill, baby drill,
It's about economics. So I want pivot to a recent
article that highlights the common misconception that you wrote about
between the relationship between US production and consumer gas prices,

(03:03):
and it's kind of the same thing. It's like, just
because you hear drill, baby drill, will not necessarily equate
to President Trump getting a whole lot of oil, you know,
crude or natural gas on the market, because it really
is not up to him in a respectful way. It's
really supply and demand and economics. So can you explain

(03:24):
why high record US oil production doesn't always lead to
significant lower prices at the pump, because this again is
kind of hard to understand, right.

Speaker 3 (03:36):
Well, so the two things. One, it's a global market
and so just because we have record oil production, that
doesn't mean the rest of the world is keeping pace
with oil production. And so, you know, the second factor
is demand. If demand is growing strongly globally and we're
not keeping up with demand, then that's going to affect

(03:58):
oil prices. Going to keep oil prices is kind of
propped up, and that keeps gasoling price from going down. However,
this year, gasoling prices are starting to come down. Oil
prices are coming down, and that's the other the side
of the equation. You know, who else is producing out
there and what are the large who has a large
impact on production? Well, Opek does. Opek is out there

(04:20):
opening up the taps and saying, hey, we're gonna we're
gonna produce more. You know, they tried this strategy in
twenty fourteen, twenty fifteen, and they did put a lot
of shale producers out of business, and they ultimately collapsed
prices back down into the twenties. But shale producers persevered
and we went and we set new records after that,
after they briefly disrupted production, and I wrote a forest

(04:43):
article at the time and I called that OPEC's trillion
dollar miscalculation because I said, it's not gonna put all
producers out of business. I was actually on CNBC to
discuss set article. They said, that's kind of a you know,
really kind of explains OPEC strategy and how you think
it's the wrong strategy. And I did. I thought it Ultimately.
I did an article a couple of years later and

(05:04):
I said it did it cost them a trillion dollars?
It cost that strategy cost OPEQ a trillion dollars trying
to win back market.

Speaker 2 (05:09):
Shobert was that when was that when crude went negative
thirty No.

Speaker 3 (05:16):
That was that was during COVID. So during during the
early stages of COVID, when we implemented all the stay
at home orders, oil production oil demand both collapsed and
we did briefly see oil prices go negative. Now we
did see all prices bounce back pretty quickly because oil production.

(05:38):
You know, when when production collapsed, we lost three million
barrels a day in like April and May of twenty twenty.
Some of those producers shut in permanently because some of
those are little stripper wells, and once you know, prices
get too low, it just doesn't make sense to keep
running them. So you're shutting down small wells, You're shutting

(05:59):
down some wells going to take a while to start
back up. And so oil production gradually came back, but
oil demand came back very quickly, and so we saw
oil prices really rebound hard out of the COVID dip,
and that lasted. You know, oil prices were still climbing
up until the point that Russia invaded Ukraine. And when

(06:21):
that happened and Joe Biden said We're not going to
import Russian oil anymore, well, that caused another surgeon prices.
And so I always tell people there's not a lot
of president can do to affect the price of oil.
But Biden didn't make a decision there that affected the
price of oil. You know, when we said, you can
argue whether it was the right decision or wrong decision,
but it was a decision that affected the price of oil.

(06:43):
When he boycotted Russian oil, it really caused some disruptions
in our in our US refineries and caused them to
have to scramble to fill in you know, there was
a suddenly a diesel shortage because we were importing diesel
from Russia, so it really caused a lot of havoc.

Speaker 2 (06:58):
Yes, let's drill a little bit further, because I don't
know if we've actually really if we've gotten to the
point of that the relationship between US production and consumer
gas price is beyond domestic production here. What are some
of the other global and geopolitical factors that just seed
to play more of a role in influencing gas prices
for the American consumer? And I like to really bring

(07:22):
this up a lot throughout the year because we always
have different listeners, and I think it's really important to
understand why are those prices that you're paying at the
pump and what is behind it? And a lot of people,
I think also even wonder why is it so much
more expensive, which of course we know, but why is
it so much more expensive in other states that they
might be driving to versus here in Texas. So please

(07:43):
kind of drill down a little bit more to help
the listener understand what is influencing our prices here abroad,
the geopolitical and other global factors, and then why are
trickling in.

Speaker 3 (07:56):
So there are other factors that influence prices even here locally,
and that's the refining, because there's you know, have oil
and you have to be refined, and then you have
the gasoline production and sometimes a refinery can be offline,
and that creates a little bit of a disconnect between
the price of oil and the price of gasoline. Usually
they go in pretty much sink. Oil prices fall, gas

(08:16):
prices fall, oil prices rise, gas prices rise. Some states
have much higher taxes. Some states are very hostile towards
oil and gas producers. California is a state that has
driven oil refining out of that state, and they have
really strict gasoline requirements and that means when there is

(08:38):
a shortage of refinery out there goes offline, they can't
backfill from neighboring states because those gasoline does not meet
their requirements. So there are a number of factors that
can affect it here just in the US, but globally,
you know, China is a big, big factor. Opek is
a big factor. You know, China has this major push

(09:01):
for electric vehicles and their reports that their oil imports
are slowing down. They are filling a strategic reserve and
reports are that that is filling, and so that's also
slowing their imports down. So whatever China does is going
to influence the global price of oil. And so there's

(09:21):
a lot of factors. You know, the threat to the
Straight of Horror moves back, you know earlier this year.
That's a factor because you know, it affects futures prices.
You know, people out there trading, they want to make
sure they can get oil. And if there's suddenly a
geopolitical risk like closing the Straight of Horm moves, they'll
bid the price of oil up. But once that's settled down,
the price started to settle back down. But there can

(09:43):
definitely be disconnects, even seasonal seasonal disconnects. The demand for
diesel goes up in the spring and in the fall
when farmers are planting and harvesting, refiners are shifting production
toward diesel. In those seasons, they're taking refineries offline from
maintenance and seasons. So there are so many factors that

(10:04):
are at play, you know, between the price of oil
the price of gas link. But normally they go in sync.
You know, you see gas oil price of skyrocket gasline
prices with skyrocket, well.

Speaker 2 (10:14):
Switching gears a little bit. We seem to be gaining
traction as far as I think the show and its visibility.
And while you are doing national media pieces, I'm being
invited to go to Pennsylvania as part of the White
House Press Court to cover a recent announcement that Pennsylvania

(10:35):
has been selected to receive ninety billion dollars in investment
from for AI and Technology to push forward and make
sure that the United States stays on the forefront of AI.
In which President Trump actually attended the room and the
people that attended this one day summit, there must have

(10:57):
been a trillion dollars in there, but there was a
lot of solid offers that were made, and so much
to the point when the President got home Robert back
to d C, he actually signed three executive orders pertaining
to making sure that bureaucracy or trying to make sure

(11:18):
that bureaucracy doesn't weigh this down. So you recently, in
one of your articles, you identified several key factors behind
rising elect bills and including the growth of the AI
data centers and LG exports. And I want to drill
down to this. We're going to go to break I

(11:38):
want you to tell the listeners how do you see
these large scale energy demands trickling down and then the
impact on the average household bill. But I think what
we probably should do is break down and unpack a
little bit about what you think about the announcement in Pennsylvania.

Speaker 3 (11:53):
You know, big.

Speaker 2 (11:54):
Picture, how long? And you know the reason why they
were selected is.

Speaker 4 (11:58):
Because they have a great deal of natural gas and
they also were able to work across the aisle of
getting all of these partnerships in place, and they have
the skilled workforce.

Speaker 2 (12:09):
So now that we see this coming, what are your
thoughts on that? How will we address these large scale
energy demands and how will it trickle down to us.
Let's take a quick break. You're listening to the Energy
Mix radio show and we'll be write back.

Speaker 1 (12:23):
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Speaker 3 (13:02):
And we're back.

Speaker 2 (13:02):
You're listening to the Energy Mix radio show. My guest
today is Robert Raypier, the editor in chief of Shell Magazine. Robert,
before the break, I was telling you about an event
that I covered in Pennsylvania. It was a ninety billion
dollar investment in which President Trump announced it it's basically
going to ensure that Pennsylvania takes the lead on developing

(13:25):
AI data centers. And he led into that the climate
is right for Pennsylvania from a Democratic governor to a
Republican senator, and they have all the sweet spots. There
was skilled workforce, plenty of natural gas, and the ability

(13:45):
for political heads to work together. There was a ninety
billion dollar investment made to keep up with the AI
data centers. In a recent article that you did, you
identified several key drivers behind why rising energy bills, which
will include the growth of the AI data centers and

(14:05):
LG exports. For our listeners, how do we scale these
big energy demands and then how are they going to
trickle down to us and our household bills. So I
mean this is we're right on the edge getting ready
to jump off on this. I want our listeners to
understand we're not seeing it right now because we're in
the talk and we're in the build, but you're going
to start very soon. Go Robert, talk to me. Tell

(14:27):
me what's happening here.

Speaker 3 (14:29):
Well, I think a lot of people are seeing it.
I don't know about Texas, and I'll talk about Arizona
where I'm sitting right now in a moment. But people
started reaching out to me a month or so ago
and they said, hey, my electric bill has doubled and
tripled over the past year. What the heck is going on?
And the thing that's going on, I've been talking about
this for two or three years now, you know, all right,

(14:50):
for Investing Daily, and I've been telling people the AI
is going to be a big, big deal. It's going
to be a big deal. It's going to be as
big as the Internet. And I think a lot of
people are realizing that now. But what people how people
use it the most is these AI checkbots like chat GPT,
you know, instead of Google, they chat gpt it. They
go and ask it a question. Well, the energy demands, Yeah,

(15:13):
the energy demands on that are pretty substantial, and so
all these AI data centers are cropping up which process
these queries. You know, every time you make a query
on there, it takes a little bit of energy to
answer that, and we don't think about it, you know,
we don't think about when we google something that Okay,
there's some energy that's been consumed in this, but it's

(15:34):
growing exponentially, and the utilities they are not geared up
to to grow exponentially. They're not prepared for this and
they haven't been prepared for this, and so what we're
seeing is more demand than they can feel supply. And
at the same time, we're seeing competitive power producers. And

(15:57):
a good example I'll tell you is NRG. NRG has
tripled in about the past three years because they can
produce power and sell it competitively in the market. NRG
is one of our holdings in Utility Forecasters for Investing Daily.
I recommended a few years ago and it's been one
of the top performers in the portfolio and it has

(16:18):
benefitted from the AI data center boom. It's able to
go out there and sell power and that helps keep
power bills moderate, but at the same time it's boosting
them a little bit because they are selling power at
a premium. That's why they're doing so well. So, first
of all, that's one thing. AI data centers the racious demand.
The reason you'd want them in Pennsylvania is because forty

(16:40):
percent of our electricity is now produced from natural gas.
Pennsylvania has a lot of natural gas. So there's the
other factor behind why the electric bills are going up
in the past year. Natural gas prices are up at
about fifty percent. You know, a year ago they were
two dollars a more b to you. Now they're about
three dollars a million b to you. And I wrote
this article befes and identified those as two factors, and

(17:03):
somebody came back and said, how can you blame natural gas?
It was eight dollars a few years ago. That's true,
but at the same time we didn't have all these
AI data centers going in. So you do have rising
natural gas prices over the past year, and you've got
rising demand from these AI data centers. And you know,
one of the reasons natural gas price arising is we
are exporting more and more ling G and so those

(17:25):
factors altogether are driving up people's electric bills in a
lot of places. Ohio's seeing very high electric bills, you know.
I've talked to people in Ohio and they said, you know,
they know people in Kentucky have seen really spiraling electric bills.
But I checked my own bill. My own bill is
the same. July is always a high demand month, and
my house, our electric bill is just over three hundred

(17:48):
dollars generally in August, and this year it was over
three just over three hundred dollars. And I checked last
year and the year before and it's about the same.
There wasn't a lot of variants. You know, we're dealing
with one hundred and ten or one hundred and twenty
degree temperatures out here. Conditioners are running a lot. But
what we've got here, we've got a nuclear plant right
outside of Phoenix, and that is not subject to the

(18:08):
whims of you know, the natural gas prices. You know,
it's able to ramp up, you know, and ramp back down.
We've also had a huge outbuild of solar power capacity
here and of data storage, so a lot of batteries.
We're the third highest now battery storage. So all those

(18:28):
factors together have kept my bill in pretty much moderation.
And I've talked to people who said, well, we have
a nuclear plant and our power still our power bill
still went up. And yeah, the reason probably is it's
nuclear is not providing enough of your power. Nuclear provides
most of our power here, and that's just not subject
to the whims of a lot of the forces that

(18:49):
are affecting other people's electric bills.

Speaker 2 (18:51):
So is the recent AI data centers that you spoke about.
Are they how much of an impact when they start
really pulling on power can demand? How much are we
really going to see an increase in the average utility bill?

Speaker 3 (19:06):
Well, I think that's right now. That's the single biggest
factor in why people are seeing much higher electric wheels.
So that's what I talked about in the Forbes article.
I think the AI data centered demand is the single
largest factor because it's increasing electricity demand quite sharply, and
the utilities are not able to keep up. And so

(19:26):
if you've got a lot of demand and supply is
not keeping up, prices are going to rise. And that's
what we're seeing. And the problem is there's no easy
fix here. There's no quick fix. Utilities have to be planning,
they've got to be putting in more power capacity. You've
got to have more competitive producers out there like NRG

(19:48):
ramping up and putting more electricity out there for sale.
But there is no quick fix to this because I
think AI is going to continue to grow exponentially for
quite a while. So you know, I don't think a
year from now, two years from now, this issue is
going to be solved. I think we're in an era
of higher electric bills for a while.

Speaker 2 (20:09):
Absolutely. Let's take a quick break. When we return, I
want to get on the topic of nuclear power, as
you discussed earlier in the show you're listening to the
Energy Mixed Radio show. Will be right back.

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Speaker 3 (21:22):
And we're back.

Speaker 2 (21:22):
You're listening to the Energy Mix radio show. My guest
today is Robert Rapier, the editor in chief of Shell magazine. Robert,
as we were talking about all the demands that are
going to be we're going to face in the future
when we talk about just trying to keep up what
we were already having to keep up with more use
as well as we're growing in platforms, cell phones, people,

(21:45):
population growth, and now we have AI to deal with
as well in these massive data centers and Earlier in
the show, you talked about nuclear and I want to
switch to nuclear as you reported that nuclear power recently
set a new record for output. So do you see
these as the key drivers behind the growth and which

(22:06):
countries and regions are leading the charge.

Speaker 3 (22:08):
So I'll say right up front, we need more nuclear power.
I mean, this is clean, firm power. You know, nuclear
power has suffered some serious setbacks over the years. We
were growing exponentially in nuclear power in the early eighties,
and then the Chernobyl disaster happened in eighty six and
that really deflected the growth curve. And then when Fukushima

(22:31):
happened in Japan and twenty eleven, nuclear actually declined pretty sharply,
and it's been and slowly clawing its way back since then.
The US opened up a couple of new nuclear reactors
for the first time in a long time. But the
biggest driver, the biggest reason that we set a new
record for global nuclear power is China. You know, China

(22:55):
is the world's largest emitter of carbon dioxide. They are
driving higher carbonoxide emissions. You know, when we talk about
carbon emissions, the US cannot fix that problem. Is this
is China. This is China driving now.

Speaker 2 (23:10):
In other words, hold on for the listener who may
not quite understand. I just want to drill down a
little bit. What you just said is that we cannot
fix the climate change issue because we have not brought
China to the table. And China is the one that
is admitting the most of what the problem is in
releasing greenhouse gases.

Speaker 3 (23:29):
So almost the entire growth, we're setting carbon emission records
year after year after year, and that is almost entirely
from China. India is contributing a little bit. US emissions
have actually fallen over the past twenty five years. Meanwhile,
global emissions are marching high and hire every year, and
that's because China uses a lot of coal. Coal emits

(23:50):
a lot of carbon, and so yes, we could, you know,
there's nothing we can do short of just pulling carbon
out of the air, you know, and the most efficient
way to do that is to go plant a tree.
But there's nothing we can do easily that would fix
the problem unless we could figure out some way to
just suck carbon out of the air. So China is

(24:12):
driving that. They do recognize it, and so they're ramping
up nuclear power renewables. But they're also ramping up more
cold power, and they're ramping up natural gas, and you know,
they are out there trying to push electric vehicles to
lower their oil demand somewhat. But there's no place that
he needs nuclear power worse than China, and they are.

(24:34):
That is the fastest growth area. So that's what's driving growth.
It will continue to drive growth for a while, will
be China, but we need more in the US as well.
We need more nuclear power. It can be done safely.
I get that people are scared of it. People are
scared of radiation. You know, that's that's a fear that
I understand. But I also tell people, look the bananas

(24:56):
you ate for breakfast. I eat a banana for breakfast
this morning. It's radioactive. Our food is radioactive, our bodies
are radioactive. We are surrounded by radioactivity. It's really the
dose that matters. There are ways to manage the risks
in a nuclear power plant, and Chernobyl is a famous
case of how not to do it. Fukushima was a

(25:17):
bad design. We don't have to do.

Speaker 7 (25:19):
It that way.

Speaker 3 (25:20):
You know, we can do it in a way that
is safe. And you know, I recognize we don't want
to produce nuclear power in a way that a meltdown
causes people have to get up and permanently move from
their homes. That's unacceptable, but it can be done safely,
and we need more nuclear power in the world needs
more nuclear power, especially China. They need to be shutting
down coal plants and building nuclear power if we're serious

(25:42):
about getting carbon emissions under control.

Speaker 2 (25:45):
I'm glad you really drilled down into that because I
think that there's just so much unawareness for how important
we need to add nuclear back into our energy mixed strategy.
The title of your article, the renewable illusion, is a
pro pockative one. Your analysis shows that while renewable energy
is growing, it is not replacing fossil fuels, but rather

(26:07):
supplementing them. Robert, I want to talk about this when
we return from break. You're listening to the Energy Mix
radio show and we'll.

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Speaker 2 (27:22):
And we're back. You're listening to the Energy Mix radio show.
My guest is Robert Raypier, the editor in chief of
Shell Magazine. Well, Robert, in your part time, you like
to write articles for Forbes, and one that you recently
released was titled The Renewable Illusion, and it is a
provocative title in essence of some analysis that you had

(27:43):
shown that while renewable energy is growing, it's not actually
replacing fossil fuels, but it's rather supplementing them. So I
want to talk a little bit about could you break
down the data and what it's telling us in these trends?

Speaker 3 (27:58):
Right, So, there is in the reason he's not call
it an illusion, there's a widespread belief and I've provided
several references that people believe that we are ramping up
renewables and we are ramping down fossil fuels and that
is absolutely not happening.

Speaker 2 (28:13):
Who could be believing that.

Speaker 3 (28:16):
There's a lot of people, I mean, Bloomberg has been
out there pushing that narrative for a long time. They've
been pushing the narrative that fossil fuels are heading off
a cliff here as renewables ramp up. And the reality
is renewables are not growing fast enough to even keep
up with growing demand. And what that means is fossil
fuel consumption continues to increase you after year. And this

(28:38):
is also why global carbon emissions continue to go up,
because our fossil fuel usage continues to go higher and
high and higher. Now in the US it has gone
down because we've replaced coal with natural gas, which is
a much less carbon emitting fossil fuel. So you know,
if you want to reduce emissions around the world, swap

(28:58):
out coal for either natural aashro nuclear power and you
will substantially reduce emissions.

Speaker 2 (29:03):
So we have a renewable illusion. And you said that
even some of the major media outlets still believe that
renewables are replacing fossil fuels. I think you and I
both know it's not. And I think the one hundred
percent data delivery came when all of their funding was removed.

(29:24):
Do people still believe that they're going to be able
to be competitive and we're going to see solar and
when when they were receiving so many subsidies that they're
not going to receive anymore. So are not in this presidency,
So how is that going? Who is thinking that this
is going to continue at the massive pace it was
when a lot of it was because of the subsidies

(29:45):
that were being included. I can't believe people still believe this.
I do think this is a renewable illusion. If people
still think that they're going to see them, you know,
they were being supported by money from the government. That's
how I feel what are your thoughts.

Speaker 3 (29:59):
Well, lot of I mean a lot of places will
continue to fund that. Europe will continue to fund it.
China will continue to fund it. I mean, China is
now the leader in solar and win power. They will
continue to plow money into that. Europe will continue to
do it. You know, and there are places where, you know,
it may make sense in the US, especially if people

(30:20):
see their power build skyrocketing, They're going to start thinking, well,
maybe solar panels on my roof are not that's not
looking bad idea. So you know, there's a there is
a price point where things start to become competitive without subsidies,
and and you know, we may we may see some
of that, and that's the way it should be. You know,
I like to see things able to compete on price.

(30:43):
And so yeah, I think we solar I think will
continue to grow mainly because of China. I mean, China's
driving the growth in a lot of different energy categories.

Speaker 2 (30:53):
So what did you mean when you talk about dual
strategies as well for global energy transition and the collective
climate goals? So this you mentioned, these other countries are
still going to probably continue to grow their renewable footprint
un less than their fossil fuel consumption. So these countries

(31:13):
are still keeping up with their dual strategy despite the
fact that I mean, I think that there's a lot
of challenges with it. Not too long ago, what was it,
Spain and Portugal went offline for like three days due
to not having enough energy. I mean, I see, I'm
not an expert. I've never worked in energy, but I
see that there are problems that are emerging because they've

(31:36):
gone too far in relying on reliables that are not
reliable at this moment. That's not folks saying that I
think that they're bad and we need to remove them.
I don't know what the answer is, but I see
that countries are having problems, and so they're still going
to continue on this path of renewables.

Speaker 3 (31:55):
Robert Well, so a lot of countries, and again I
had to keep in China, China, China. But back to China,
they're doing all of the above strategy. So they are
ramping up every category of energy production they have, and
so that's the kind of strategy probably. You know, if
you're going to ramp up renewables, you need to recognize

(32:16):
the intermittency there and you know, batteries, you're getting to
the point where they're starting to become competitive. Big battery
banks that can smooth out some of the renewable dips.
Last year was a record year, you know, more than
double the global battery capacity, the installed utility scale battery storage.
Several countries have seen triple digit growth rates over the

(32:38):
past few years, so that will help. That will help
renewables become more competitive. But if you try to go
to renewables too fast, you will see some of the
issues that Spain and Portugals had. You'll see, you know,
sometimes the wind just doesn't blow for a few days,
and sometimes it gets cloudy for a few days, and

(32:58):
you have to be prepared for the demand in those cases.
And you know, if you've got big, large scale utility
battery banks, you can maybe smooth that out. The other
alternative is you've either got you know, nuclear supplementing that
can ramp up and down quickly, or you've got fast
cycling natural gas plants.

Speaker 2 (33:19):
You mentioned batteries, and we're going to go to break here.
When we return, I want to talk a little bit
about your CBS interview, but talk to me a little
bit about the switching gears entirely. You mentioned batteries and
I had a thought about the electric vehicles and their batteries.
Where are we at with those? Are they increasing there?
Are they becoming more efficient? What do you see in

(33:42):
the battery market for like Tesla and stuff like that
for evs, especially in little you know, the new administration
and all of these different changes that are occurring. If
we could talk about the EV batteries when we return,
Just a quick update and then we'll move into your
CBS interview. You're listening to the Energy Mixer, your show,
and we'll.

Speaker 8 (34:00):
Be right back.

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Speaker 3 (35:42):
And we're back.

Speaker 2 (35:42):
You're listening to the Energy Mix radio show. My guest
Today's Robert Raypierd, the editor in chief of Shell Magazine. Now, Robert,
I want our listeners to know about this interview because
to me, it was so great. You really explained everything
perfectly to your hosts. So you recently did a CBS
interview and you spoke about the surprising data from Baker

(36:03):
Hughes showing that riccount have actually decreased despite a pro
energy political climate. So what market and economic realities are
driving this trend and why are the Why are those
factors more influential than the political rhetoric.

Speaker 3 (36:22):
So, you know, I've always said the biggest, single, biggest
factor that drives what oil producers do is the price
of oil, or more importantly, their outlook for the price
of oil, because they're planning ahead. So it doesn't really
matter that much except at the margins what politicians do
or say. You know, look look back at the last

(36:45):
twenty five years. What's the largest expansion of oil and
gas production we've seen in the last twenty five years.
It was under Obama. Now, they might think Obama was
a pro oil and gas president. Yeah no, But what
happened was he was in office when the fracking boom
really started to accelerate, and the fracking, the marriage of

(37:08):
horizontal drilling and hydraulic fracturing, it really was taking place,
the development under George W. Bush, and we actually started
to see natural gas turn up in about two thousand
and five while he was still in office. But oil
production turned up sharply from Obama's first year, and that
was just coincidence. It was coincidence. That's when oil production

(37:30):
took off. And so now we've seen what's twenty twenty five.
Now we've seen seventeen years of almost uninterrupted oil growth
and that's because of technology, and that's because oil prices
supported it. And we saw you know, Trump came in
and he was more pro oil. Then Biden came in,

(37:51):
he was more anti oil. But if I showed you
a graphic of the past twenty five years and said, guests,
when a Democrat was in and guess when a Republican
was in, you couldn't guess if you didn't see the
you know, the lines. President Trump had a little bit
sharper increase, and you could say, okay, well there's what
you're seeing at the margins, but the overall trend, you

(38:12):
would say, well, there's a couple of events there. There
was an OPEC price war that caused oil production to dip,
and then there was COVID that caused oil production to dip.
But otherwise it's been pretty steady growth. And you know,
despite Biden being quite hostile to oil and gas industry,
we set natural gas production records all four years he
was in office, and we set oil production records the

(38:34):
last two years he was in office as we continue
to recover out of COVID. So you know, the biggest
factors there are just the price of oil and price
for natural gas, and that's what's driving producers to do
what they do.

Speaker 2 (38:45):
So Robert, this is the ending of the show. In
the way of my last question, you were mentioning about Obama,
and I want you to explain to the listeners. Obama
was seemed to be an anti oil and gas president,
but under his time as the president, this is when
the oil ban was lifted through his presidency, that changed everything.

(39:08):
So I want you to explain that because it also
is you often discuss the differences between political promises and
the reality of market fundamentals. So when you also when
President Trump also talks about drill, Baby, Drill, it doesn't
always translate into immediate and significant drilling activity in the US. Well,
there are completely different ways of looking at this. They're

(39:29):
similar in the way. Didn't matter that Obama was anti
oil and gas if you will, and pro renewable. We
actually took off the shell revolution under his administration due
to lifting that export ban. I think that's kind of
important because I don't think that necessarily they thought that
was going to happen. And I think that when President
Trump says drill, baby, drill, it doesn't always immediately mean

(39:50):
that they're going to open up the pickets or you know,
drilling rigs and start drilling, because there's a cost factor.
Please explain those two things.

Speaker 3 (39:57):
Okay, So very important to stink here because the ending
of the export ban had an immediate and significant impact
because oil production in the US was captive. I mean,
they couldn't export their oil, so we were starting to
fill up. The refiners were taken all they could and
it was really becoming a problem. And the reason Obama

(40:21):
agreed to end the export ban it was in a
negotiation with congressional Republicans who said, we will give you
some of the renewable things you want if you will
give us an end to the export ban, and so
each side got a little bit of what they wanted
and that's why the export ban ended. And had we
not seen that, You're right, the shale boom was going

(40:44):
to peter out just because it was no place left
for the oil to go. The refiners were taking it,
but the price was becoming more and more depressed. And
once that export ban was ended and then they could
access the international markets, then that opened up more room
for them to go.

Speaker 2 (41:00):
What about switching gears and talk to us about drill
baby drill? And how is that different as well?

Speaker 3 (41:06):
Well? So the reason that's different is there's no incentive
for them to drill if they don't see, you know,
more markets opening up. The ending of the export ban
opened up more markets for them. Drill baby drill doesn't
do anything. I mean, that just is a slogan that says,
weren't your drill from more oil? We're only going to
drill from more oil if they see, okay, my markets
are opening up or the price is going to be higher,

(41:29):
what is the incentive. There has to be an incentive.
These are you know, companies that are trying to make
a profit. They're not going to just go do what
the president wants them to do. You know, we didn't
start producing more oil after the export ban because Obama said,
you know, go produce more oil. There was a very
consequential impact of ending the export ban, and that was

(41:52):
the ability now of those producers to ship their oil
somewhere else and to get better prices for it.

Speaker 2 (41:58):
Robert, last question. The DOE recently rewrote and revised what
was typically looked at climate change information pertaining to how
they're regulated on climate change. It was a pretty lengthy report.
I don't I want you to try to tell us
and walkers through what was in it, and more importantly,

(42:20):
do you line up with what it's saying in the
climate change revisions coming out of the DOE.

Speaker 3 (42:25):
Okay, so this is a pretty significant rewrite. I will
say the acknowledging there that carbon dioxide is a greenhouse gas.
They say, you know, there are negative implications, but they
also try to play up, hey, you know it also
helped plants grow and maybe some areas will benefit and
so forth. So I don't agree with some of the

(42:46):
you know, the positives that spin they're putting on it,
but I agree with the bottom line, and the bottom
line is this is out of our hands to fix
because this is being driven by China. So I do
agree with that part of it, and we've got to
recognize that we do have to stop handcuffing ourselves trying
to solve the problem that we can't solve. You know,

(43:07):
We've got to figure out a better way to engage
China and India and developing country Asia Pacific is driving this,
you know, especially China, and until we get them to
really address this, we are hurting ourselves and handicapping ourselves
in trying to solve a problem we just simply can't solve.

Speaker 2 (43:26):
Well, Robert, I'm so happy that you said it that
way because for years we have talked on the radio
about how the problem is a global problem and it
needs a global solution. In the United States, well, everybody
wants to keep it in the ground and not in
my backyard, and all these different things that you know,
ham string us into poverty, if you will, and not

(43:49):
enough energy was not the right answer either. So I'm
glad you met you gave that answer that way, because
it is a big question to think about in the way,
how do we handle this on a global scale, and
how how do we start looking at it globally If
we're going to really make a difference. The United States
cannot do this alone. So Robert, thank you for joining
me today on the show. I learned a lot. Keep

(44:10):
up the good work, keep writing great articles. Anybody wants
to follow or read Robert's articles, you can always find
them on shellmag dot com. We are the first one
to release his articles, so please be sure to read
his articles at shellmag dot com.

Speaker 1 (44:24):
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.