Trump’s Energy Crisis Causes Food Shortages, Skyrocketing Prices, and Global Suffering. What’s Next?

Neocons and climate hysterics have at least one thing in common: they know nothing about energy. Without it, things fall apart. Morgan Downey on the economic effects of American intervention. (00:00) Where Are We Globally on Energy? (04:33) Are We Living in a Simulation? (11:49) Wars Threatening the World’s Natural Gas Supply (25:23) Who Really Blew up the Nord Stream Pipeline? (28:12) The US Energy Boom and Europe’s Growing Dependence (1:08:13) China’s Secret Plan to Turn Coal Into Oil Paid partnerships with: Ethos: Protect your family with life insurance from Ethos. Get up to $3 million in coverage in as little as 10 minutes at https://ethos.com/TUCKERCardiff: Get same-day business funding up to $500,000 with a quick 3-minute application and no personal credit impact ($12B+ funded) at https://Cardiff.co/TUCKERAmerican Financing: NMLS 182334, nmlsconsumeraccess.org. Average savings based on borrowers who save over $199.99. Call 800-685-5696 or visit http://www. AmericanFinancing.net/Tucker. Battalion Metals: Don't wait to move some of your wealth outside the system. https://battalionmetals.com/tucker Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:34Tucker Carlson?

  Morgan Day, thank you very much for doing this. We have searched far and wide for people who understand energy, energy markets, the energy business. And you came highly recommended, so I'm grateful that you're doing this. Where would you say we are globally with energy right now? Just give us the overview, if you would.

• 0:54Speaker 02

  Yep. Well, to put a kind of a big perspective on things, because people have been kind of in living in a delusional world, I believe, in energy over the past 20, 25 years. The world gets 90% of its of its energy from hydrocarbons, oil, natural gas and coal. It's 90%.

• 1:13Tucker Carlson?

  Still?

• 1:14Speaker 02

  Still. China, Europe, the US. The last 10% is nuclear and a little bit of solar and wind. And everyone talks about electrification of the world and putting solar panels up on your roof and all of that. That's going to be the energy transition as it's been marketed. That that is kind of a marketing pitch. There has been additional solar, wind, energy generation capacity put in place over the last 25 years. But that's been additional to that core undercoring 90% of hydrocarbons, oil, gas.

• 1:47Tucker Carlson?

  So 90% of energy in the world comes from oil, coal and gas?

• 1:54Speaker 02

  50 years ago and today in 2026.

• 1:57Tucker Carlson?

  Same percentage?

• 1:58Speaker 02

  Roughly, yeah.

• 1:59Tucker Carlson?

  And the other 10% is nuclear? And then what we refer to as renewables?

• 2:05Speaker 02

  Solar and wind. Yep.

• 2:06Tucker Carlson?

  Wow. So solar and wind are not even 10%? Like, what, what percent?

• 2:10Speaker 02

  5%, 5% globally. So 5, 6%. And it depends on the country, but on a global scale, 5 or 6%. And you go back 10 years ago, it was around 5 or 6%.

• 2:20Tucker Carlson?

  And so wait a second, we spent trillions of dollars on this and received endless lectures about it, and we're still only at 5%?

• 2:26Speaker 02

  Yeah. And in 20 years' time, it'll still be 5 or 6%.

• 2:30Tucker Carlson?

  Oh, so the whole thing was a lie then, is what you're saying?

• 2:32Speaker 02

  It's, it's, there's a reality to it. The additional capacity has been added, but global demand for energy is growing with global population. And the only energy source that's been able to keep up with the demand for energy globally has been hydrocarbons. And the three hydrocarbons are oil, a third of the world's energy, coal, a third of the world's energy, roughly, and natural gas, a third of the world's energy. And that that realization is kind of, I have this idea. People say, oh, are we living in a simulation, whatnot? People have no connection with base reality. And the base reality is that we are still living in a hydrocarbon world. We have been living in a hydrocarbon world. It's enabled amazing civilization developments over the last 100, 150 years. But people are disconnected from that reality.

• 3:17Speaker 02

  And they think, if you ask anyone, you know, how does China get its electricity? People will say, oh, it's, isn't it solar? They have the best solar industry and they have wind turbines and all that. No, 60% of China's energy comes from coal. 80% of India's energy comes from coal.

• 3:33Tucker Carlson?

  80% of India?

• 3:34Speaker 02

  Yeah, yeah. And they're growing rapidly and it's all coal. And so this whole, and I can understand no one want, even people that work in the oil and gas industry, everyone wants to be environmentally conscious. People live in the real world, you know, even people who work in the oil and gas and coal industry. So no one wants to pollute. But we also live in a world where you need energy to operate everything. It's, and not just energy, you need plastics that go into everything. You need petrochemicals that enable modern civilization. And, you know, this is, this is a very new thing. The oil industry started here in Pennsylvania or down in Pennsylvania in 1859. So this is, we're 150, we're 150 years into the mass scale hydrocarbon world.

• 4:17Speaker 02

  And this world that we live in is enabled by and is paid for. Modern civilization sits on top of hydrocarbons, 90%. And you get people, especially in Europe, which kind of annoys me. I'm from Ireland, I was born in Ireland. You get people complaining, why is energy so expensive? And, and even senior policy level and political leaders, and they have no base level of understanding of the reality of this is where we get it. They think it's, we just put more solar panels. That's their answer to everything, which is fine. You put up solar panels and that's great. You know, as a additive, nice thing to have. But 90% of the world's energy comes from oil, natural gas and coal. And it has 50 years ago, it has today, and it will 50 years from today.

• 5:03Tucker Carlson?

  Well, that is, so when you say that we are living in a kind of simulation, the simulation you're describing is one in which people don't know that.

• 5:10Speaker 02

  Correct. People have disconnected from where their energy comes from that enables everything, where their food comes from. Everyone talks about the fertilizer crisis because of the Hormuz shutdown this year. Fertilizer, 80% of the world's food that's grown everywhere, across the entire world, comes from natural gas. Natural gas, as remember, it's 30% of the oil, 30% nat gas, 30% roughly is coal. That 30% of nat gas, that makes urea and ammonia and all of the fertilizers. And if those fertilizers didn't exist, it's basically ammonia and urea are nat gas in a bag, uses fertilizer. If that didn't exist, we would have, we have, say, the world's population is 8 billion. We could only support maybe 2 billion if we didn't have nat gas. So not only is it the energy system.

• 5:55Tucker Carlson?

  Wait, what?

• 5:56Speaker 02

  Yeah, there would be, if you turn off nat gas production, natural gas production, it's very closely, very similar to the oil industry. It's one third of the world's energy. That produces nitrogen in the form of urea and ammonia. It is the essential fertilizer for growing crops globally, all crops. And with the Hormuz situation this year, because you had a nat gas production comes out of Qatar, you had a disruption in fertilizer production because natural gas is what produces fertilizer. That that's going to result in next year, 2027, usually there's a lag because crop cycles or seasons. That that lag is going to be one of the kind of the, the more laggy effects

• 6:41Speaker 02

  of the Middle Eastern situation with Iran this year. But so it's not only energy, it's also food. And there's just the simulation that most people in the world are living in, especially in Western civilization, is that they have forgotten or just are not aware of the fact that hydrocarbons are nine out of 10 portions of the energy that they consume. And for also for food, all of the food, pretty much most of the food that you eat today. And it doesn't matter what kind of food. You might say, oh, well, I eat, you know, vegetables. Well, that's also fertilizer goes into that as well. There's fertilizer used in every crop. And all of the world's food is dependent on natural gas. And so we can go back to, you know, this, why is natural gas used in, as a fertilizer? It was a discovery in Europe in the 1910s.

• 7:26Speaker 02

  So say the Haber-Bosch discovery, we take it, it used to be back in the 1800s. This is why how all knew this, this situation is back in the 1800s. If you wanted to put nitrogen into a crop, nitrogen is one of the essential nutrients for growing any kind of crop, pretty much. And you used to have to rotate crops. It's a very slow process. You put down tubers. And it was a very, you had to do it cycle by cycle. Every few crop cycles, you had to plant or nitrogen fixing to get nitrogen from the air and pull it into the soil.

• 7:56Tucker Carlson?

  Otherwise, you would exhaust the soil.

• 7:58Speaker 02

  You would exhaust the soil within a season or two and your yields would drop down. And this, this discovery around 1910, you could take natural gas, which is a hydrocarbon, and when I say hydrocarbon, it's these molecules contain hydrogen and carbon from amoeba millions of years ago, or animals millions of years ago buried underground. They basically with pressure and heat over millions of years, it turns into crude oil or natural gas or coal, one of these hydrocarbon fuels. And around 1910, it was discovered how to use natural gas. And you take the nitrogen from the air, use the hydrogen that comes from the hydrocarbon of natural gas, and you can make fertilizer, which basically you can put the nitrogen into the ground

• 8:42Speaker 02

  with the powders and things like that to, as a fertilizer. And it increased crop yields by 5 or 600% over time, 5 or 600%. So everyone goes, why did the population grow? Because cheap energy and cheap food because of natural gas. Those two reasons, that's why how we live in this world today. And it kind of, it doesn't annoy me, but it, it disturbs me when people are disconnected from that base reality. Base reality is 90% of the world's energy today and 50 years from now and 50 years in the past. And a similar proportion of food comes from that hydrocarbon ecosystem.

• 9:21Tucker Carlson?

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• 10:06Tucker Carlson?

  Ethos is E T H O S dot com slash Tucker. Application times obviously vary as do rates, but we think it's pretty good. So you're saying if we were to shut down natural gas production globally?

• 10:22Tucker Carlson?

  Six billion people would starve to death?

• 10:25Speaker 02

  Pretty much, yeah. And I was in New York yesterday. New York has banned drilling for nat gas. The New York State sits on top of a field, a nat gas field that runs right through West Virginia, Pennsylvania, the Marcellus and Utica, and the names of the hydrocarbon basins. New York City has, if you look at, go to Manhattan, New York, you see these big power stations, four big power stations on the east side of Manhattan, those run on natural gas. And so all of the electricity, and there's a big one in Queens and a few others, but those big power stations in Manhattan, they run natural gas. New York State has banned natural gas, drilling for natural gas. They sit on top of a huge amount of natural gas.

• 11:08Speaker 02

  They've banned it. They've also banned the pipelines to deliver natural gas, new pipelines. So they're cutting off their face to spite, or cutting off their nose to spite themselves in that. They're denying the fact that the reality is all of the electricity in Manhattan or New York City comes from that gas, but then they ban sourcing that fuel and they ban the piping of that fuel to the source of what turns on the lights. I mean, that is absurd, that whole, you know, it's a distortion of what environmentalism is. Environmentalism should be, you have a sustainable environment where you don't create negative consequences and pollution into it, but you also have to be aware of, you need energy just to live in modern civilization and you need energy for food, you need natural gas for food.

• 11:51Speaker 02

  And it's enabled the food supply for people living in the West. Luxury civilization is dependent on it, and not just luxury civilization. Also, the developing world, China and India are similarly dependent. There's no one sneaking away, getting a trick of secretly building the solar panels and wind turbines that they're getting away with some magic. There is no magic. It is oil, natural gas and coal.

• 12:19Tucker Carlson?

  It's interesting that the two worst in progress threaten the world's natural gas supply, a lot of it.

• 12:25Speaker 02

  Yep. 20% is out of Qatar, of the world's LNG, liquefied natural gas.

• 12:30Tucker Carlson?

  Right, which is the process by which the gas becomes liquid so it can be transported by ship.

• 12:34Speaker 02

  Correct, you just cool it down into a liquid.

• 12:36Tucker Carlson?

  It's the same fuel, it's just in a different form.

• 12:39Speaker 02

  Yeah, and what's interesting about, you know, in the US, natural gas, the US is producer in a quarter of the world's natural gas.

• 12:49Speaker 02

  The US, I just looked at this morning, nat gas is around $2.50. If you look at Asia.

• 12:54Tucker Carlson?

  By what unit?

• 12:55Speaker 02

  Per mm BTU, it's like the gallon equivalent of natural gas, but $2.50. And in Europe, it's $31, the same unit, and in Asia, it's around $31. And it's basically that energy blindness of Europe. Asia has got a separate issue in that they don't use nat gas as much as Europe does. But the reason they say that the discrepancy between the US being a major energy producer, and it has become so over the last 15 years, before that, the US was struggling up until 2005, 2009. But that disconnect between those who are truly energy blind, I mean, I was kind of mentioning Manhattan being energy ignorant, if you will, of what base reality energy is.

• 13:38Speaker 02

  Europe is even doubly so. They're paying 10 times more for their electricity than the US is. And it's primarily because.

• 13:46Tucker Carlson?

  10 times?

• 13:46Speaker 02

  Yeah. And you get these situations where I'm from Ireland, and I was reading, you know, the legacy press over the last few months, and people are confused about, why is our, they say in Ireland, and similarly in all of Western Europe, why is electricity so expensive? And I'm kind of shocked of the fact that people kind of go, well, you're paying 10 times the price of natural gas compared to the US. And the reason being is that Europe has, they shut down a huge portion of their energy system for ideological reasons, not for base reality reasons. They've turned it down, turned it off because they kind of, in an energy sense, they kind of hate themselves.

• 14:28Speaker 02

  And it's like self-flagellation of, let's shut down all the coal plants, let's shut down all the nuclear plants, let's try and move off nat gas and replace it with solar and wind, which, I'm not knocking solar and wind, they're good, but, and then they turn around and go, why has our electricity gone up by, you know, 200% this year, 100% this year? And there's a kind of a disconnect there. And it's amazing that that, that just a level of lack of knowledge of basic energy economics.

• 15:01Tucker Carlson?

  And this is because of political pressure from green parties in Europe? Like, where did this come from, this idea that you have to destroy your own civilization?

• 15:12Speaker 02

  There has been a lot of ideological capture, there has been a different movement. There's, the environmental movement kind of started in the US back in the 60s.

• 15:23Tucker Carlson?

  Can I just stop you there and just to be clear, our environment is disgusting. This country is much dirtier. Europe is much, much dirtier than it was 30 years ago. I visit a lot, I know. And so there's no actual concern for the environment, for like trees and cleanliness and keeping graffiti off your buildings and cleaning up your streets. Like, it is dirtier and the US is way dirtier. We've had unconstrained development, so like, none of this helps the environment. Just, I just want to be clear about terms, like, no matter what they tell you.

• 15:50Speaker 02

  Yep, yep. The original environmental, kind of, the modern environmental movement started in the 1960s in California. California had a real smog problem. And you had, and legitimately had an environmental issue.

• 16:04Tucker Carlson?

  I lived in Los Angeles at the time.

• 16:05Speaker 02

  And this is before the EPA existed as a concept or as an organization. And in the 1960s, California had an issue and they created the CARB, C-A-R-B, California Area Resource Board. And they clamped down on the amount of sulfur and other pollutants that were really in oil back then. And they also removed lead from gasoline. Lead is, had been added to gasoline from the 1920s. It's a neurotoxin, you know, lead is obviously, but it improves the octane of gasoline. But California was leading for legitimate environmental reasons. This is all a very good reason to kind of start an environmental movement. And it started in California, and it did really clean up the air in California.

• 16:48Speaker 02

  They removed, they got ultra low sulfur diesel, they brought, everyone had to put in catalytic converters. And those catalytic converters, you know, lead in gasoline did reduce IQ levels back in the, when it was in the 1920s to 1960s or 80s. And the lead wasn't removed because of that reason. That's kind of the dirty little secret of the business is that it was removed because if lead damages the catalysts in the catalytic converter. So anyway, California did clean up its air in the 1960s. And it was a cutting edge, they were the leading edge of that movement. And then EPA was established and they became a federal kind of environmental movement.

• 17:30Speaker 02

  And then, but what happened was that movement kind of was then captured by political agendas and social agendas and ideologies that were independent of environmental reasons. It became more of control, of controlling how people think and behave. And so environmentalism is a good thing and was a good thing. And it had a good origin story and had a good impact in the 1960s and 70s, starting with California. But then over the past 50 years, it's been captured by political movements that have wanted to have a kind of a controlling effect on society. And some of the things, you know, and you can see it morph into over time. Back in the 19, in the aughts, the 2000s, you had a big movement against fracking.

• 18:14Speaker 02

  Remember you had that Matt Damon movie, someone turned on the faucet and flames came out of the faucet because of nat gas, and that doesn't happen. I'm sorry, that was propaganda, that movie and the myth. And, but that was kind of when the fracking industry started, a portion of the US oil and gas industry started. And it was kind of a novel, new technology. It is, by the way, the core reason US has become energy independent of the last 20 years has become because of fracking and horizontal drilling. But anyway, if you fast forward, there was the anti-fracking lobby. And so all these kind of ideologies trying to stop different pieces of technology. Now it's the anti-data, the data center lobby.

• 18:55Speaker 02

  So basically, there's a stop oil group, like what? I look at that group and I think, you know, that's a death cult, a social death cult. Because you remove, you stop oil, we all die. We stop natural gas, we all die. And it's not just we in the West, everyone, India and China, that's where we get all our food from fertilizer. So all of these different movements have been about an element of control because there's a kind of a feel-good, like who is anti-environmental? No one. Even people who work in the oil and gas industry, they love the environment. They're just normal people like you and I. And, but it's been a capture of, that environmental movement has been captured by, you know,

• 19:36Speaker 02

  the carbon capture, you know, the net zero growths in Europe and in the UK. All these countries have destroyed their economy under the auspices of taking care of the environment, ignoring base reality of energy production and where all that energy really comes from. And ultimately, it's been about, it's been, the environmental movement has been captured by control. People who want to control how you live, how much energy you buy, what your carbon credits are today, what your, you know, your welfare check from the government, to make you dependent on the government because then they can control you. And even in New York, I was talking to a friend of mine there yesterday in Manhattan, and they get a $100 check from the government because their electricity bill was too high.

• 20:19Speaker 02

  And I thought, hang on a second, excuse me, you got a what? And so every taxpayer, I guess, in New York got a $100 check and. Meanwhile, they're banning pipelines that are bringing that fuel to New York. They're banning natural gas production, which is the fuel that's burned in those power stations. And natural gas is a very clean fuel. And it's they're by making you dependent on the government by controlling or trying to shut down energy production, it makes you even more dependent on the government. And so and Europe has been far more ideologically captured. And the reason for that is, of course, the centralization of power in Brussels in the EU. People don't know who they're voting for in Europe anymore. They're voting for the blob in Europe.

• 21:03Speaker 02

  And, you know, if you ask your average person in Ireland or England or Ireland or France or Spain, who their MEP is, their member of the European Parliament, they have no idea. They, you know, they might know their local member of their local national parliament. But the blob in Brussels, they can get away with a lot of these kind of control, especially of how people consume and use energy. And the net result is they pay 10 times more for energy in Europe than they do in the US.

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• 24:35Tucker Carlson?

  Cardiff, borrow better. What effect does that have when a society begins to pay 10 times more than it used to for energy?

• 24:42Speaker 02

  You can't, you don't have economic growth. I mean, everyone looks at Europe and says, why is there no economic growth in Europe? Because they've killed their, they are killing their energy industry.

• 24:52Tucker Carlson?

  And that means people don't have

• 24:56Speaker 02

  Everything's expensive.

• 24:57Tucker Carlson?

  Families, they don't have houses, they don't have children.

• 24:59Speaker 02

  Everything becomes expensive. Oil, gas, coal, and it may, you don't necessarily see the energy being produced. That's kind of the, the reason it's so dangerous for people to be energy blind is that people don't see where their food comes from or where their energy is produced. And so they just think, oh, things are more expensive. Everything, building a house is more expensive. Buying a car is more expensive. Everything, it becomes more expensive. It just becomes part of the, the background noise of living, of life, becomes that everything is a little bit more expensive. And the real reason is that energy in Europe has been, has been deliberately made more expensive than it needs to be. And there's, one part of it is control.

• 25:44Speaker 02

  Another part is you've got a, a kind of social agendas that have pushed energy blindness because people don't want you to know that 90% of your oil and gas, or that 90% of your energy comes from oil, gas, and coal. They want you to think it's solar and wind because you can kind of see those things, you know, spinning. And so it makes people feel like something's been done, but it's, there's nothing been done.

• 26:05Tucker Carlson?

  So what, explain what you can't see. So let's start here. 10 years ago, Europe, let's just say Western Europe, the country's Americans vacation in, got its energy from where? Where's the, yeah, where'd the energy come from? From Germany, Spain, Belgium, France, UK?

• 26:24Speaker 02

  A third came from oil, and that oil came from, oil is a global market. So it's always been a global market. It's, and that comes from Russia, the Middle East, Western Africa. So oil kind of comes from a little bit, I mean, it's, it comes a little bit from everywhere. Oil, that's a third of European energy 10 years ago, five years ago, even today, 30% is oil, global. Then they've got natural gas. Europe used to buy a lot of its natural gas from Russia. They famously built the Nord Stream pipeline across the Baltics, these two big pipelines. One never became active, Nord Stream 2.

• 27:04Speaker 02

  One was destroyed in unusual circumstances, I'll put it that way, five months into the Russia-Ukraine situation.

• 27:11Tucker Carlson?

  The US government took it out.

• 27:14Speaker 02

  It made Europe dependent on the US exporting natural gas. So it basically, you know, there's, there's a theory, you know, one theory behind a potential, you know, situation where, you know, that was a very difficult operation for someone to knock out an undersea pipeline. Did Ukraine really do that five months after the war started? You know, they, I don't know if they have the, the skills to do something like that. So I wouldn't say, say it was the US, just for argument's sake.

• 27:44Tucker Carlson?

  And not Ukrainian. Well, just for the record, we were told at Fox News and the whole world was told that Russia took out its own pipeline. Because Russia is so evil that having run out of people to hurt, they decided to hurt themselves. They told us that. That was on the front page of the New York Times. I was encouraged to repeat that lie. I didn't, but.

• 28:03Speaker 02

  Yeah. Wow. I mean, that just shows you.

• 28:06Tucker Carlson?

  How stupid they think people are.

• 28:12Speaker 02

  I don't know if it's, if it's stupidity. I think it's more of that, it's, it's more of narrative setting. If you kind of set a kind of a dystopian view of information that everything is absurd, everything, everything becomes, like you don't believe anything, like there's no, it's, it's almost like they know you're going to laugh at that Putin would destroy his own pipeline. But then it kind of makes people who read that think, well, why do I believe anything? You know, it's kind of like a, you, you sets people into this, the, the mush of believing, being more malleable to, to.

• 28:52Tucker Carlson?

  Right. They're turning the population into nihilists because they're nihilists, easy to control.

• 28:56Speaker 02

  Yeah. But say it was, but say it was the US government, just let's put it out there. And it did make Europe much more dependent on the US. And it goes back to also, you know, Trump, we were talking this morning at breakfast is a very, has a very, he operates in a very, people say he's transactional. He's not, you know, in terms of he's not strategically, I think he's strategic also, but he's very transactional, like a business.

• 29:22Tucker Carlson?

  Yeah, he's not ideological.

• 29:24Speaker 02

  Yeah, and then, but he's also very, he's a very personal, he takes things personally. And as he, you know, he's a normal human being. And so he got, he became president, you know, inspired by Seth Meyers mocking him back in the, in 2011 at the Correspondence Dinner. And when Trump won, the first time he was president, you had Angela Merkel and all the European leaders openly laughed at him, they mocked him. And when he told them, he chastised them, it was a famous NATO meeting where they were mocking, laughing at him. He was warning them, do not be dependent on Russia for nat gas. And then also at the same time, push Russia, you know, threatening Russia with, you know,

• 30:05Speaker 02

  weapons on Russia's border via NATO and other structures. And they mocked him, openly mocked him and laughed at him. So I think that Europe, you know, they, you know, was it the US that knocked out Nord Stream? I mean, the US benefited hugely from that situation. It also was a little bit of revenge of Trump on those European leaders, Merkel and that that mocked him and laughed at him when he warned them about Russia, them they've been overly dependent on Russia.

• 30:35Tucker Carlson?

  So how much more LNG does Europe buy from the US from, what about 10 years ago?

• 30:42Speaker 02

  It's a huge amount more, it's doubled at least.

• 30:45Tucker Carlson?

  Really?

• 30:46Speaker 02

  Yes, yeah, it's very much. And, and the US, and it's growing every day. And we, the, Europe is becoming a hugely energy dependent vassal of the US. I mean, the US did make a decision back in 2005. It didn't make a decision, it happened in 2005, starting that the US oil and gas industry was transformed by two things. You had fracking, which basically you pump water at high speed or high pressure underwater and fracks. It basically became a new production method back in 2005 roughly at scale. And then you had horizontal drilling where you can drill down, it used to be, that was, it sounds old school now, but now you can turn the drill bit and steer it sideways for three or four miles.

• 31:28Speaker 02

  And you can produce a huge amount more oil and gas that way than you could hit before that. And the US oil and gas production had been declining since the early 1970s to 2005, with fracking and horizontal drilling, it transformed the oil and gas industry. And the US now produces roughly a quarter of the world's oil and a quarter of the world's natural gas. That's up from under 10%. So it's doubled over the past 15 years. And it, it, it didn't happen because there was no government policy that really enabled this. This is the oil and gas industry realizing this new technology transformed the space. And fracking was banned, you go to France, I think, brands fracking. I mean, and fracking, it was a new technology 20 years ago in 2005. It transformed, as I said, the US oil and gas industry.

• 32:13Speaker 02

  Now, and it was like one well in a hundred back in 2005 was fracked. Now it's all, all wells. That is the default method of production of oil and gas in the US is you frac and you drill sideways. That's, you know, they, you have a fracking crew and, and it's hugely interesting technology, you know, that development. But it's, it's transformed the US into a global superpower. And that also then has kind of changed the US's view on foreign adventures and going up against foreign oil producers, you know, that because the US had been in decline since the early 1970s as an oil producer. And now we're net exporting oil and making Europe dependent on nat gas.

• 32:56Speaker 02

  We can, if, if the US shuts off, you know, the US released an SPR back in, earlier this year. And you know who, who benefited most from that SPR release? Not the US, Europe. They, they import 90% of their oil. And so all those SPR, all those SPR crude oil releases, they went into European refineries and Europe went, thank you, sir, to Trump, you know, to the US administration. So it, it, Europe is hugely dependent on the US for energy. And because of that, I mean, oil has, has steered every war over the past 150 years, has been at the core of and enabling, just like it's enabled civilization with food and, and that, you know, oil and natural gas. It's also enabled every, the, the political sphere and geopolitics.

• 33:42Speaker 02

  And, and Europe is now, is kind of, is dependent hugely now on the US. And they made that decision. They made that choice. They, they banned energy production pretty much in the North Sea. I mean, they'll, they'll say, oh, they technically didn't ban it, but they made it such that you can't drill in the North Sea. I mean, the difference between Europe and the US is very striking, energy. In the US, if you buy a piece of land, you buy the, the land under this table. In the US, as a private individual, you, you own that land the whole way down to the core of the earth, all the minerals, anything's in there, gold, oil, whatever, you, you own it. Everywhere in the world outside of the US, in Europe, the government owns it. You own the, the surface down to a few feet.

• 34:22Tucker Carlson?

  The dirt.

• 34:23Speaker 02

  The dirt, that, that surface there, everything below that is owned by the government. And are you going to risk your private capital to, to drill and, you know, in a very, the oil industry is, you know, it's, it's not risk free. There's a lot of dry holes that are drilled and, and there's a huge amount of capital risk and capital required to do that business. You're not going to drill it when the government's going to take it all. Why would I do that? I'm going to, you know, so that's why the US also has a hugely booming oil and gas industry. The government just stepped back. There are environmental controls and you can sue an oil and gas company if they pollute your water, where it doesn't happen, but you, as in they don't pollute the water tables like the environmentalist groups say, you know, can happen.

• 35:05Speaker 02

  But the US just, the government stepped back, let, and in a lot of parts of the US, it didn't happen in all of the US, it didn't. But the government stepped back and the oil industry and nat gas industry flourished. And let them do the thing. And look at the situation. Nat gas, oil is, I filled up my tank here yesterday in Maine, it was 345, sorry, 385 a gallon. In Denmark, in Europe, it's $12 a gallon. I mean, these guys are.

• 35:33Tucker Carlson?

  For gasoline?

• 35:34Speaker 02

  Yeah, yeah. And Denmark is obviously the, kind of the, is a high price point in Europe, but roughly in Europe, it's four times or three or four times gasoline and, and people.

• 35:44Tucker Carlson?

  It's so weird because I mean, there's in the region and Scandinavia famously off Norway, there's massive energy reserves.

• 35:51Speaker 02

  Yeah, Norway's a very, there is based and in terms of energy economics as more so, I'm glad they exist in that environment, but that they're not part of the EU. They never joined the EU because they knew what they would have to be, they would have to join into that, that blob of no, no energy production and self hatred in terms of energy production. And so Norway is in Europe, but it's not part of the EU. They deliberately stayed out there in the EE, the European Economic Area. So it's kind of like a junior version of the EU. And because they realized that the blob in Brussels, they have no idea about how energy works. They're so disconnected and they're blind to it. And so Norway is a very good example of, they, you know, produce a lot of oil and gas.

• 36:35Speaker 02

  So Europe has a lot of energy resources there, they just don't use it. And it's, it's hurt them and that's why they have no economic growth. And, you know, a lot of the reasons why buying everything, houses, electricity, they have no money because they're, they've made their energy, they've taxed the hell, I mean, that difference between 385 in, here in Maine and $12 in, in Denmark is tax. It's not because the oil is, it's the same thing. It's the exact same molecules in Denmark as Maine. It's just that they, they taxed the hell out of it there. And it's, it's, it has destroyed their, is destroying their economy. Energy is the fundamental bedrock of everything.

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• 39:26Tucker Carlson?

  Tucker so the idea was that you yeah because I mean it's priced on the international market so you know Denmark's buying oil at the same whatever the brand crude prices or whatever however you're marking it the same price everyone's buying it for correct

• 39:40Speaker 02

  Pretty much yeah the difference is just tax yep

• 39:43Tucker Carlson?

  So you tax things in order to discourage their use that's why cigarettes are $20 a pack

• 39:48Speaker 02

  Yeah and and you know so I know recently I was reading something that in Australia they tax cigarettes or something ridiculous like 20 30 dollars a pack the amount of illegal untaxed cigarettes now in Australia is like it's 80% or some ridiculously high

• 40:00Tucker Carlson?

  And they lecture you like you're a bad person

• 40:02Speaker 02

  And I mean tax has an impact we were talking about it earlier that you know I grew up in 1980s Ireland Ireland unemployment at the time was 22% yeah it was it was bad we joined the when it was it was a legitimate thing we joined the EU and it was the EU that did it for a good reason when we Ireland was in the 70s in the 70s we joined 1973 Ireland had a protectionist environment back then we made shoes and weird stuff there was no economic reason for Ireland to do that so we joined the EU and we had 3% unemployment in 1973 by 1985 or late 80s it was around 22 23% so it went up 20% because we had to drop all the tariffs all these companies went bankrupt but what had the what Ireland could have gone socialist Ireland would never really go that kind of like weird

• 40:47Speaker 02

  socialism but what Ireland did was and it was one of the most great government decisions I think in history for a Western European economy is that Ireland's the income tax rate was 65% or something ridiculous corporate tax rate was 40% or something very high Ireland just it was so desperate we're going to go bankrupt this is in the middle 80s and Ireland just said let's cut tax to zero or as close to zero as possible corporate tax zero and we're that we're that desperate anyway we're going to default next year let's see what happens and true to remember the Laffer curve with Reagan you know where you cut taxes growth takes off Ireland cut its corporate

• 41:28Speaker 02

  tax rate to zero and income tax cut hugely as well and we had 23% unemployment what happened the next year boom and it's boom for the last 50 years since or 40 years since it was basically proof that tax has a real impact and it was if there was no lag it didn't even take 10 years five years eight years it was the next year as soon as Ireland made that pivot to look become a low tax environment economic growth took off and hasn't looked back since I mean there were a few you know issues over time with the housing crisis you know everyone had that great 2008 but it was a proof point of tax you know creates incentives I mean it's

• 42:13Tucker Carlson?

  So the reasoning tax hydrocarbons is to get people to use them less use less of them but that hasn't worked

• 42:20Speaker 02

  No it hasn't not at all you know the interesting thing is that if you go back over time global population is now 8 billion roughly give or take eight three or eight three if you go back over time 50 years ago your generations back I mean say 50 years a generation roughly say just for argument sake today the world every person per capita in the world consumes four barrels of oil today 2006 50 years ago it was four barrels of oil 50 years before that it was four barrels of oil so doing the tax situation all it does

• 42:50Tucker Carlson?

  Is that true

• 42:51Speaker 02

  It's four barrels of oil per capita that's across the entire world China India it's four barrels of oil per person and you've got a

• 42:59Tucker Carlson?

  And that's never changed

• 43:00Speaker 02

  No not at all it hasn't changed in the last 100 years and the oil industry is not that old it's four barrels

• 43:05Tucker Carlson?

  That's amazing

• 43:06Speaker 02

  And what's interesting is that the US in the US the US consumes the US is a very unusual place in that there's a lot of space here compared to Europe here's a very dense place you've got the US consumes around 20 barrels of oil per person so remember the global average is four the US per person per year the US is 20 so the US is quite up there but the US you've got spread a spread out population a lot of commuting driving to and from school and offices and whatnot I mean everyone thinks of the US to be New York City no there's everyone lives in you know distant from their place of work or so the US consumes 20 a day barrels of sorry 20 barrels of oil per year

• 43:45Speaker 02

  per person and Europe consumes 10 half and then because it's a more dense place they don't drive as much and China is around four so to give you sense of just over four but the world is averages around four barrels per person per year and so because Europe is more dense remember they consume 10 barrels per person per year versus the US you can build a lot more trains in Europe the whole you know everyone thinks trains are in Europe are more and bicycles are more popular because they're just greener no it's because you got a lot of population living closer together Europe is a very very dense place and the US is not I mean you have dense spots of the US but in general the US is much more spread out and where is going to Denmark Denmark is one of the most

• 44:30Speaker 02

  densely populated place in the world or that portion of Europe and so there you can tax people put a lot of tax on gasoline because they're it's usually it's a more easily thing easy thing to tax and then also politicians lie about it they just say hey it's the oil companies making that money no they're the four of that eight sorry eight of that 12 dollars is going to the government four goes to the industry that gets it out of the ground that refines it that produces it that has to transport it eight of the 12 is going to the government and so most people in Europe they they're disconnected from the energy market I don't want to kind of harp on Europe as but it's there they are the most extreme signs of that energy blindness that just complete unawareness

• 45:15Tucker Carlson?

  of Well let's just take the UK for example so the UK had a pretty robust oil and gas industry based in the North Sea that's where the brand

• 45:24Speaker 02

  Yeah starting back in the 90s

• 45:26Tucker Carlson?

  Oil field was there which is now defunct I think but they're not extracting from the North Sea is that because there's no energy left there

• 45:33Speaker 02

  No there is there is all there I mean it's look at Norway Norway is still producing what happened in the UK

• 45:39Tucker Carlson?

  Also from the North Sea

• 45:40Speaker 02

  Also from the North Sea it's the same roughly the same oil fields and gas not gas fields and what happened in the UK was that you did have oil fields when you drill them they do decline they they're non renewable resource so they do decline so you've got to constantly go exploration and production you've got to go and drill and explore and you take some risk because you can drill a dry hole or so there's a lot of capital to be risked there but in order to encourage people to risk that capital you know say say oil today say roughly a hundred dollars a barrel to produce that oil is 60 70 dollars a barrel in the US it depends on where you're producing and if it's

• 46:19Speaker 02

  onshore offshore different environments but say it's 60 dollars a barrel and so you know just before the Hormuz situation oil was 50 so you know there are periods of time where you can lose money for years as an oil producer and so to risk capital to go and produce energy you have to have some sort of profit incentive to do that the UK in the 1980s 1990s and up to today removed all that incentive they basically they're a country where you drill a hole in the ground off even offshore as long as you're in the UK that money goes to the crown it goes to the British government and so there's no incentive I'm not going to drill in the North Sea when there's these you know they they're they call them windfall taxes and whatnot no one's going to risk money in that

• 47:02Speaker 02

  environment to drill up build a rig offshore and you know helicopter everyone out there every every few weeks and you might drill a dry hole it's you know the Norwegians understand how it can work and they've kind of created a more profit incentive for part of that oil and gas industry to take that risk but the US is kind of proven they're like the Ireland Ireland proved that the Laffer curve low taxes economic boom it just works the US proves the fact of stand out of the way give private individuals the rights to the profits if they risk capital and look what happens the US becomes one of the largest energy producers in the world it is

• 47:43Speaker 02

  sorry not one of it is the largest now energy producer in the world for oil and that gas and just by step stepping back and just let these guys do what they're going to do they they are regulated there's controls around in terms of environmental but the UK regulated remove the profit incentive no oil production or not gas it just dwindled to almost nothing the Brent Brent crude you know the Brent crude is kind of the price people quote in television 110 dollars a barrel and there's the WTI crude index is just West Texas intermediate and the Brent crude it does that field stopped producing a long time ago 20 years ago and so now the they changed

• 48:21Speaker 02

  the underlying way that pricing works such that US crude goes transatlantic and sets the price for Brent so Brent crude is actually now set by West Texas intermediate set by the US crude oil market and so even with that Brent crude as a price people say oh it's the international benchmark which historically it has been but it's also it's now set by the US the US barrels that move across the Atlantic just like the US natural gas moves across the Atlantic we set here in the US the price of oil in Europe and by extension the world and because the US the government stepped a little bit back gave people the authority to just take the profit risk on

• 49:03Speaker 02

  production and it worked it's very there was a very simple thing and it's the proof is here we here we are and and now was it was not all the US parts of the US that Washington New York State then here up here in New England Maine and so on banned nat gas you know production just like Europe it was a very and even California you know the the two coasts California and New England in the US have got the same energy blindness as Europe the EU writ large in that as I said all the electricity for the Northeast I just I was coming here driving my car this morning I passed four propane tankers you're driving past me on the road and the electricity here is either is

• 49:47Speaker 02

  oil or sorry it's nat gas or coal and so the people the regulations here and in California have crushed the energy industry in parts of the US and similar to what has happened in Europe and as I said it goes back to a combination of ideology and I don't want to say ignorance because ignorance would imply that that the information is not about available out there and how energy is produced it's more ideology than anything else

• 50:18Tucker Carlson?

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• 51:58Tucker Carlson?

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• 53:08Tucker Carlson?

  Fools.com/tucker. It's the impulse towards self-harm. To see leaders intentionally punish the people they lead is a dark thing to watch. And that's what you're watching, I think. I mean, to take the cloudiest part of the United States and clear cut forests in order to build solar panels in the cloudiest place in the United States tells you the point of this is like not to help people at all.

• 53:29Speaker 02

  I think that energy policy globally, especially in the West, is it is definitely not designed, it's not designed to help people at all. There's that, that is not no part of the consideration. It actually, it's more, it's designed, how can we get, because the political class know that energy is essential to modern life. And so it's a method of control. If we control how people consume and produce energy, we can control a lot more of their lives than otherwise. And it's, yeah, it's more, the energy policy is more ideological. It's not to help people.

• 54:11Speaker 02

  If they're helping people, an energy policy would be to step back to reduce government involvement in energy policy and allow to operate more freely. Another good example is sanctions. Oh my God, it's sanctions over the past, on energy sanctions on oil. So Europe, you couldn't even, this is so crazy. Europe, just before, just during the invasion, Russian invasion of Ukraine, Europe put these sanctions on Russian oil, crude oil exports. And they set the price at $60 per barrel versus Russian exports. And that's, they put those, that, it didn't change hardly one bit what Russia produced

• 54:56Speaker 02

  in terms of crude oil. It was basically self-harm on Russia, on Europe. They set these, the price is $60, the price went to 70 and Europe basically starved themselves of crude oil. I mean, you couldn't believe this, the, how badly Europe has used things like sanctions and energy policy. They have done almost everything you could possibly do wrong in terms of energy policy. And all those sanctions, and the US is not, has fallen into the sanctions trap also, imposing sanctions on Venezuela, Iran, on their oil production and Russia. And so what has happened? Those three countries, Russia, Iran, Venezuela, the US and Europe put oil sanctions, was

• 55:38Speaker 02

  trying to restrict by economics, how much oil those countries could export. Those countries, it didn't restrict one barrel of exports. You know who bought all that oil? China. They bought 2 million barrels a day from Venezuela, 2 million barrels a day of sanctioned crude from Iran, 2 million barrels a day of sanctioned crude from Russia, and they bought it all at a $10 to $20 per barrel discount because Europe and the US transferred that money.

• 56:02Tucker Carlson?

  So all you did was lower energy costs for China?

• 56:05Speaker 02

  Yeah. And it enabled China, China's been gorging on the sanctioned oil from those three countries for the last five or six years.

• 56:12Tucker Carlson?

  So, I mean, again, back to your point that you can't ascribe decisions like that to ignorance because the information is available. It's demonstrable. It's obvious. We just look at Russian, Venezuelan, Iranian oil output and you're like, well, where's the oil going? It's being bought at a discount by our main geopolitical rival, China.

• 56:33Speaker 02

  Yep.

• 56:33Tucker Carlson?

  So you can't say that they don't know that that's happening. So you have to, at a certain point, if it continues to happen, assume it happening is the point of the exercise. Like this is an effort to help China over the West. Like, how is it not that?

• 56:48Speaker 02

  I think, I think that there's, there's, and it showed the limits of control of the blob, if you will, the deep state, the blob, the bureaucracy. There's, they, they think they can control energy markets writ large globally. They cannot. And so they, that was kind of, it showed where that, that control ability.

• 57:10Tucker Carlson?

  But they kept doing it.

• 57:12Speaker 02

  Because these are, these are not a quick moving entities. The EU, I mean, they make a decision and it's, it goes in place and it stays there for five, 10 years. And they're very slow moving bureaucracies. And the oil and gas industry showed the limits of the stupidity, if you will, of that, those decisions. And it, I think they thought that they could somehow control the oil industry and, and we saw industry, just oil production globally, they can't. And they shouldn't. I mean, my God, if they did, we would all be in trouble. If, if, if those sanctions and things like that worked, we'd be paying, if they stopped

• 57:53Speaker 02

  Iranian production, Russian production, Venezuelan production, it would hurt us all. You know, it's like, and, but China has been sitting there quietly, buying up this $20 per barrel discounted crude from those three sanctioned countries, saying, saying nothing, secretly saying, thank you very much, EU and US for these sanctions. They've been so great. China has been building a strategic stockpile of oil and China's, say, the world is 100 million barrels per day of crude oil. China is, consumes 16 million barrels. They import 12 of that. So they're a huge oil importer. They don't produce that much oil. They've been building up their stockpiles ahead of Taiwan 2027.

• 58:34Speaker 02

  I mean, it's a publicly acknowledged invasion plan of Taiwan or control plan of Taiwan for next year. At least it, that was the plan two years ago and three years ago. And as part of that, they needed to bolster their inventory of crude oil ahead of that 2027 invasion of Taiwan. And they've, they've been using sanctioned barrels from those three countries to fill their stockpiles. And China went from almost very little strategic storage four or five years ago to now they have 1.5 billion barrels of oil in storage, underground salt caverns. And to put that in perspective, the US SPR has 300 million roughly. China has 1.5 billion. So it's, it's got it five times.

• 59:17Speaker 02

  And that storage that China's built up has happened, all of it, pretty much with sanctioned oil, cheaply created by the US sanctions and European sanctions on Russia, Iran and Venezuela. China's gorging that oil to build up their SPR ahead of a Taiwan 2027 invasion. And so it's sanctions don't just, aren't necessarily economically irrational. They also have side effects that you basically are doing an economic transfer and enabling China to build up strategic reserves. And strategically, it creates all these side effects that China now is sitting on. They still need to store more, I think, than they have, but they've been able to build

• 59:59Speaker 02

  a huge reserve ahead of a potential planned, you know, alleged plan for 2027. So those sanctions.

• 1:00:08Tucker Carlson?

  Why, I mean, if you wouldn't mind stating the obvious, why would China want to stockpile energy before moving on Taiwan?

• 1:00:16Speaker 02

  Because all of their ships, you know, everyone has this myth about China being solar and electricity and whatnot, and they do produce a lot. China gets electricity, 60% of their energy comes from coal. Twenty percent is oil and the balance is natural gas, twenty percent natural gas. And then they have solar and wind, even China are under ten percent and nuclear, under ten percent. So they're in the same ninety percent hydrocarbon world. But that twenty percent oil is for all of their ships are diesel. I mean, they do have nuclear powered vessels, but they're all of their ships are diesel, all of their military equipment are diesel and or some are gasoline, but they and they're importing twelve million barrels a day. If if they didn't have a strategic reserve, they would be done within twenty days, thirty

• 1:01:01Speaker 02

  days of if they were blockaded. If you blockaded Malika and Singapore or Hormuz, it's already blockaded. But if you blockaded those, you could, if China was trying to invade Taiwan, they wouldn't have the oil for their ships within three or four weeks. And so that that was why they've built up a stockpile that they they need that oil to power their navy and their military equipment. And they do have electrical equipment and vehicles, but not the hardcore navy military equipment that they need for an invasion.

• 1:01:30Tucker Carlson?

  What percentage of China's electricity is produced by coal?

• 1:01:34Speaker 02

  It's it's around, I think it's up in the seventies, seventy percent.

• 1:01:39Tucker Carlson?

  Overwhelming.

• 1:01:40Speaker 02

  Yeah.

• 1:01:41Tucker Carlson?

  Why coal?

• 1:01:42Speaker 02

  It's cheap. It's cheap. That's that's the actually a very good question to ask about why and any of this, like why oil, why coal, why? The first thing is cheap. Why does India make eighty percent of its or use eighty percent of its electricity from coal? It's cheap. Coal is the cheapest way to produce electricity and not just anywhere, it's in the US. The US produces a one third of the US energy consumption is coal. And coal has got a bad rap and I'm, you know, I'm going to be not careful here, but you know, coal, back in the sixties and seventies, back when the smog issue was around and the coal industry did really transform. And yes, there's this whole thing of marketing word of clean coal.

• 1:02:24Speaker 02

  But basically, when you burn coal, the most dangerous thing, the most immediately dangerous thing is sulfur sulfur going into the atmosphere and it falls, it turns into sulfuric acid, acid rain, it's not, it's and there's lead comes out of the coal also. But what the coal industry did, not just in the US, but globally, has put scrubbers on all of their the tires that where they burn coal. And those scrubbers can remove pretty much most or all of the pollutants that come out of coal. The only downside is it's it's it's it's very expensive to put those scrubbers on and whatnot. But coal gets a bad rap, but it's cheap. It is so cheap and it's still.

• 1:03:06Tucker Carlson?

  Why is it so cheap? Because it's so abundant?

• 1:03:09Speaker 02

  It's it's it's abundant. It is the most, it's it's similar to to, yeah, it's abundant and it's easy, it's an easy material to handle. You know, it's it doesn't require natural gas is a challenging material to handle because you could, you have to, if you want to ship it overseas, you've got to compress it into a liquid or cool it down to a liquid. That that's a very expensive process, incredibly. That's why, one of the reasons why Europe has thirty dollar gas, natural gas, we have three dollar natural gas. The big difference is that, well, European, you're banned natural gas production and so they don't produce any, but they're, they've decided to be dependent on others. And but natural gas is a is a situation where you've got, it's very hard to transport.

• 1:03:53Speaker 02

  The most ideal fuel of all is oil because it's a liquid, it's dense, you can, it's it's enabled so many different techniques. That's it's the most, one of the most ideal energy sources is crude oil and it's the refined price of crude crude oil, diesel, gasoline, all the others, you know, plastics, it's it's a, it's it's in everything. But yeah, going back to your original question, coal is cheap. That's why it's the baseload. It's one third of the world's energy is coal, one third oil, one third natural gas and that other ten percent. This year, last year, fifty years ago, has been all the others. Nuclear, nuclear is very expensive just because of all the regulations around it.

• 1:04:36Speaker 02

  Solar and wind, they're they're not, the economics of solar and wind are dependent on location. You know, the oil and gas industry, these are sharp guys and women who are, they'll make a dollar if they can. And so if you look at the biggest build out of solar in the US is Texas in oil country. You know, it's and because people are realizing, okay, there's a good, there's a, it's sunny in Texas a lot, it's during this, most of the year. And solar panels are cheap from China. I mean, we're basically, we don't want to become too dependent on China for those solar panels. But you're basically kind of technically importing coal because that energy to produce

• 1:05:17Speaker 02

  those solar panels was built by China gets seventy percent of electricity from coal. And so those solar panels are really disguised coal. And China basically is willing to do that for now in terms of building solar panels. No one else really at scale in the world builds solar panels or any other of these quote unquote environmentally friendly energy sources.

• 1:05:42Tucker Carlson?

  What about wind turbines?

• 1:05:43Speaker 02

  Wind turbines, I mean, that's, it's the very, very, it's tiny in terms of the global energy, it's tiny. It's like a few percent and it's very difficult to scale. And you've got issues with, it's too, can be too windy, not enough wind or or it can be, it's a very unreliable energy source. It, I'm not knocking them because it, they are useful in some parts of the world at some times of the day, it's some, you know, they're they're an additional energy source. It's a good thing to have, but it's it's not a baseload. We can run our society off that energy source. And, you know, that for all good and bad, you know, intense, it's hydrocarbons.

• 1:06:25Speaker 02

  We have, we depend and need hydrocarbon production. And maybe with AI, we come up with, you know, fusion or some new technology over the next fifty years or forty years. But right now, there's no, no alternative. We're, and we should just appreciate that and just and be okay with that, make make peace with that.

• 1:06:49Tucker Carlson?

  How many, how many countries have deep coal reserves, so the big countries? I mean, how much coal is there in the world?

• 1:06:56Speaker 02

  There's a lot, a lot more like we're not, we're never gonna, we're not gonna run out in the next fifty, hundred years. A lot of Australia produced a lot of coal.

• 1:07:05Tucker Carlson?

  Yep. Or has a lot of coal.

• 1:07:07Speaker 02

  Has a lot of coal, yeah. China itself, China itself produces a lot of coal. The US produces a lot of coal in, you know, the Appalachia.

• 1:07:15Tucker Carlson?

  Wyoming.

• 1:07:16Speaker 02

  Wyoming, yeah. It's less than it has been because you know what destroyed the coal industry? Everyone thinks, you know, Mike Bloomberg walks around, he's, you know, he's, he is who he is, the ex mayor of New York.

• 1:07:26Tucker Carlson?

  Stalinist midget. Well, no, he's been called that. I I'm not, I'm not endorsing the title, but yeah, he has been called.

• 1:07:35Speaker 02

  He, you know, he banned straws in New York, let's put it that way, he's one of those guys. And he, but he, you know, railed against coal, the coal industry in the US. And he, you know, claims are one of his, you know, he says that he, you know, helped destroy the coal industry. The coal industry, coal production, mining in the US was destroyed by fracking and and natural gas, cheap natural gas, it was undercut. It wasn't coal wasn't destroyed by, burning coal wasn't destroyed by environmentalists. It was undercut by the nat gas industry in the in the US that discovered fracking and horizontal drilling, you know, drilling these wells sideways. That was amazing technology development back in the early two thousands.

• 1:08:16Speaker 02

  And and that fracking as well, you're pumping these wells with water and cracking the rock a couple of miles down. That's what killed the coal industry in the US. The environmental regulations were more on putting scrubbers.

• 1:08:29Tucker Carlson?

  Because gas became cheaper than coal.

• 1:08:31Speaker 02

  Nat gas became cheaper. And it's one of those interesting things, people in the USA, gas and as an oil guy, energy guy, always make sure gasoline is the stuff you put in the car.

• 1:08:40Tucker Carlson?

  Right.

• 1:08:41Speaker 02

  Nat gas is the, so when people, if you say gas to an energy person, they always think you're talking about nat gas. Because it's, but it's a, yeah, gas, natural, natural gas. And no one ever talks about it. It's like a hidden fuel because it's in pipes, no one ever pumps it. You kind of, it just gets, goes to the power station. It's one third of the US electricity or of energy, not even electricity, energy is from nat gas. And it's the, it just hums along behind the scenes. No one ever complains. Earlier on this year, it was ten dollars per MMBTU because it was a coal snap up here, sorry, down in Texas. And it's now three dollars per MMBTU, but no one complained when it was ten. It's the third of the US energy supply was ten dollars.

• 1:09:24Speaker 02

  Now it's three and it's because, you know, diesel gets a lot of the attention this year. But it's nat gas is is probably, you know, everyone talks about energy independence, it's probably the fuel that can most make the US truly energy dependent. Because oil production, you know, one of the problems Trump's had this year was he dumped all the oil, crude oil from the SPR that went to Europe pretty much, which for good or bad, because it goes into the international bucket or basin of oil. The oil market is very global because you can ship it around. Natural gas is now as well connected, it's very expensive to ship it, you have to cool it down and compress it. And so, but if you want the US to be truly energy independent, nat gas is that fuel. And basically, and it's that has not been unlocked in the US.

• 1:10:09Speaker 02

  Look at the whole northeast, there's a huge amount of nat gas under there. There's also, in terms of potential, there's pipelines that are blocked, that people are not allowing that, those two things are just on cracking the nat gas production, on cracking that gas production in the US will, that is truly will make the US such that it will not just disconnect the US from physical energy, it will also price disconnect. Because remember, Europe is thirty one dollar nat gas, the US is three. So if the US increase, the US can become energy independent as well as price independent of the rest of the world. And the only fuel to do that is really nat gas. Oil is always going to be linked to the world. Coal pretty much is going to be linked to the world.

• 1:10:52Speaker 02

  But nat gas, because it's so difficult ship, it's kind of for good or bad, it's trapped in the US. There are some exports, but it's very expensive. So that is the fuel for true energy independence is nat gas. As I said, no one talks about it because it's it's under, it's in pipes, it goes into the power station. People in Manhattan ban it and they don't realize, hang on, that's the reason the light works. They, what, they, you know, banning the fuel that makes the light work. And so it's, that is kind of, it's an interesting fuel in that regard. And. It's, it's, it's, production is growing at a rapid rate in the, in the US. Even at $3, it's so cheap nat gas. Nat gas, cheap nat gas killed the coal industry. That did, not Mike Bloomberg.

• 1:11:37Speaker 02

  Nat gas killed the coal industry. And nat gas can actually, can continue to transform. We've got energy demand growth over the next five or 10 years because the US now is learning that, just like Ireland learned when you cut taxes, if you increase energy production in a country and make it cheap energy, your economy grows. And it doesn't matter, it's just, it happens. It's like people, because that, the cost of doing everything becomes cheaper. So whether it be a data center or it becomes a, a factory making something, you know, from China's making something because they've got cheap energy. They use coal, but they're cheap energy. The US, if we increase nat gas production, that's how you get manufacturing back to the US, at least to a certain extent. There's some manufacturing that's been lost, you know, pretty much forever, unfortunately,

• 1:12:22Speaker 02

  or at least for the foreseeable future. But you can at least stop the, the drain of manufacturing out of the US with cheap energy. I mean, you'll get, uh, people will build things here with just cheap energy. So yeah, it's, it's nat gas.

• 1:12:37Tucker Carlson?

  China gasifies some of its coal?

• 1:12:40Speaker 07

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• 1:14:05Speaker 06

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• 1:14:10Speaker 02

  Yeah, there was a big thing of it this year, you know, when-

• 1:14:12Tucker Carlson?

  What is, can you explain that?

• 1:14:14Speaker 02

  Yeah, it's actually, it's an interesting, because again, these are, oil, gas, coal are hydrocarbons. So you can turn coal into crude oil. You can turn coal into nat gas. You basically have to heat it and put it under pressure. And those hydrocarbons, and even oil refineries do this as well. They transform the hydrogen carbon atoms into a different hydrogen carbon atom. And so coal is hydrocarbon in solid form. Nat gas is kind of the most pure form methane, another form of hydrocarbon. And so, and oil is the same. And so you can change by heat and pressure, like just simple, it's a relatively simple chemical reaction, coal into nat gas, coal into gasoline. Problem is, I was made famous in the 1930s in Germany. That's where Fisher Trop was the technology.

• 1:14:58Speaker 02

  Germany had no oil at the time, a tiny amount. And it, the oil basically defined World War II, Japan going down to Indonesia. They had coal. And so what they tried to do is, it is a very expensive process. It, it costs $200 a barrel to do that process, to turn coal from coal, coal into crude oil, into gasoline. So it's very expensive, $200 a barrel. And so you can technically do it. And it's, it's, uh, it's called the Fisher Trop process. And Germany did it out of desperation, South Africa did it. You know, everyone says, okay, China does this now. They're not economic idiots. They're not going to pay, do a process that costs $200 a barrel. So they do it, they have it available, but they don't do that scale because it's a very expensive process. And you don't necessarily do it with coal.

• 1:15:42Speaker 02

  You can convert other parts of the energy space into gasoline. So you can, it's coal gasification or coal, turning coal, uh, coal to liquids is the, people call it in the industry. The, you can do it, but it's a very expensive process. But China is basically a very basic terms of oil consumption. They can, they import crude oil. They're just like any other place. They boil it, which is basically what an oil refinery does. You boil it and it separates into naphtha gasoline, diesel, heating oil-

• 1:16:12Tucker Carlson?

  All the way to asphalt.

• 1:16:12Speaker 02

  Jet fuel, yeah, down to asphalt. And they do the old school. I mean, it's a very, the oil industry is very basic. You basically boil this crude and the different crudes, you know, Venezuela's got heavy oil. It's basically like tar, thricely. You've got some very light oil out of West Texas. All this is very light. It, it produces a lot of gasoline very easily in a refinery. You don't have to boil it that much, kind of thing. And Canada produces a lot of heavy oil. So crude oil is a, there's, people define it by weight. Is it light or heavy crude oil? But it's, um, China basically just buys oil and refines it. They don't get into the coal to liquids. It's a very expensive, you kind of only do it in desperation. I think that one of the reasons they, they do it at a small scale, very small scale,

• 1:16:55Speaker 02

  is that they do it just to, in case they are cut off from oil, uh, the oil from the Middle East in a war situation, that they would at least have some oil. Because remember, they import 12 million barrels per day of their 16.

• 1:17:08Tucker Carlson?

  So why did they curtail, almost shut down their oil imports when the war in Iran started?

• 1:17:16Speaker 02

  That's, you know, that's the biggest question in the energy space this year, or oil space. Because it didn't matter like which analyst you talked to, or which oil company you talked to, or which people, you know, people in government that should supposedly have deeper knowledge, you know, from various means.

• 1:17:34Speaker 02

  How did China and why did they do that?

• 1:17:36Tucker Carlson?

  I'm glad to hear you say that because I asked a lot of people, including in the US government, what is this? And some apparently hadn't even thought about it. I thought it was one of the weirdest things I'd ever seen. And there's no consensus on why?

• 1:17:47Speaker 02

  It is a very unusual thing. I mean, basically China, they're, they consume 12 million, import 12 million barrels per day. They dropped it at one station to six. And you could, then people said, okay, that's, that's a lot. They halved their oil imports. And you, you can't just do that. You're like-

• 1:18:08Tucker Carlson?

  But they did.

• 1:18:09Speaker 02

  But they did. And so people said, well, where did they get that extra 6 million barrels from? Because they cut their imports. And, and remember, they were getting 2 million from Venezuela of the six, 2 million from Iran, gone, 2 million from Russia, kind of restricted with the sanctions and that. So, but anyway, they, they, they cut their imports by two, 6 million barrels per day. And one is, they have that big strategic 2027 Taiwan. And people haven't, people in, outside of China have no idea how much oil is in there. People estimate, because you can count the barrels and tankers going to China from the Middle East, people estimate it's one and a half billion barrels. Remember, the US SPR is five times less, 300 million. So people, they definitely dipped into that strategic reserve.

• 1:18:52Speaker 02

  Because they had to save their own economy, you know, they, they, they need to transport, they're a manufacturing economy. They have to transport diesel trucks and cars. And, and so they dipped into that strategic reserve. And which kind of set back their Taiwan 2027 strategy, a year or two, maybe longer. Because they were building that up ahead of 2027. So they dipped into that strategic reserve. They, then everyone says, okay, they did coal to liquids. They did, I'm, I'm very skeptical of these other reasons. Coal to liquids, they did, they told everyone to drive electric cars. No, not even in China, you can't tell people, drive your, you know, the BYD today, you know, they're, use Teslas as much over there. But you can't tell people to drive an electric car. You, you can't force that kind of behavior.

• 1:19:38Speaker 02

  But people put this out there as a, as a reason. I think the main thing they did was they dipped into their own reserves. And no one knows how much they did. People say, oh, they maybe only reduced it by 1 million, you know, of the six, they ate in just a little bit and they were relying more on, uh, they cut their petrochemical productions. I mean, a huge portion of oil and gas globally goes into petrochemicals, making plastics and, uh, and making fertilizer also, but, uh, making plastics. And there are people saying, oh, they diverted crude oil from petrochemicals, plastics into gasoline. And again, technically you can kind of do that, very expensive, awkward process to do. You can't just do it on, turn on a dime like that. I think what they do, it's the most simple answer.

• 1:20:21Speaker 02

  They dipped into their reserves that they were using. They'd built up from all this sanctioned oil from those three countries that they'd gorged on for the prior five years ahead of Taiwan 2027. They dipped into that and they dipped into that big time. They were, they, they had no choice because they can't survive. Their, their, their economy's kind of fragile. They've got a housing crisis, pretty much slow moving housing crisis, but it's going through their economy. They've got a debt crisis, they've got a huge, uh, their debt GP is huge. If you add in all of their debt, like government debt, personal debt. So they had to kind of save their economy and they, they have a record of doing this. They did this in the financial crisis, 2008.

• 1:21:02Speaker 02

  They pumped a huge amount of money into their domestic manufacturing economy, uh, in an emergency way, immediately following 2008. So they basically dipped into that strategic reserve in a big way. And people say, oh, they didn't, or that, no one really knows. I don't know. No one really knows. If I were at, you know, an intelligence organization, I would try and determine how much oil. I'm sure there are people that know, know that.

• 1:21:27Tucker Carlson?

  Well, I've heard that. That's exactly what I have heard, but it doesn't explain why. Why did they do that?

• 1:21:33Speaker 02

  One, to save their economy. They need, because the oil is a critical part of their-

• 1:21:36Tucker Carlson?

  No, no, no. Why did they have their imports? Why did they cut their imports in half?

• 1:21:42Speaker 02

  Well, there were, one, there was a blockade and they couldn't get the oil. They physically couldn't get the oil out of the Persian Gulf. And so that was one thing. There were, there were, back in March of this year, exports from the Middle East were zero from the, through the-

• 1:21:59Tucker Carlson?

  Oh, I remember. But they couldn't increase it from Russia?

• 1:22:02Speaker 02

  No, they couldn't.

• 1:22:03Tucker Carlson?

  Or West Africa?

• 1:22:04Speaker 02

  No. I mean, you, you can technically do it, but you have to, the ships have to go the whole way around Africa. And it becomes, and you have to get the tankers and it becomes a logistical nightmare. And China is trying to build pipelines to Russia. Very, that's a very long distance. And the oil and gas industry and long distance in oil and gas means expensive. And it's also a very cold, harsh environment. Look, you've got to heat the pipes or put diluents in there to, to enable it to flow. So one was technically China couldn't get access to the crude oil at that time. And that is now just China, a lot of Southeast Asia and Asia in general, India. And one is that, two, they really did want to save their economy by just releasing crude oil

• 1:22:43Speaker 02

  from their own stockpiles into the, into the world, into the, the domestic refining space. The other one is that they didn't want high oil prices. I mean, oil looked at one stage like it was going to go straight to $200 a barrel.

• 1:22:58Tucker Carlson?

  Oh, yeah, I remember.

• 1:22:59Speaker 02

  And so they, it, the oil industry operates in a margin that they basically didn't want them to contribute to that $200, $300 price spike. And so they decide, they just decided their relatively centralized government not to import. And it just made a decision and they had a stockpile that they could use. And they had these other marginal things like the electric cars. I don't believe those are at scale a big reason. And they just dipped into that stockpile. And then there's also the economic thing of China has been buying that $20 sanctioned oil at a discount for the past five years. And when oil went over 100 and they've, historically, they stopped their imports. And so every time it goes over 100, even right now, we're at, you know, 105 or 110.

• 1:23:41Speaker 02

  China's imports over the past two weeks have dropped off a cliff to, again. And so they're economically rational. I mean, everyone thinks of them as being communist or whatever. They're, they are, they know the value of a dollar or yuan or whatever. And so, but they're, they're, they basically stopped buying, they buy below 70 and they stopped buying above 100. And, and it's true, it's, it's a simple thing that they, and they stopped buying. It was, uh, once we got above 100 back in Feb, March, they stopped buying. And so they don't want to buy expensive oil. These are naturally, that culture in China is a naturally trader instinct and they stopped. And, and so they, they, I think it was just a combination of they dipped into their reserves, how their, their imports dropped, they dipped into their stockpile. It set them back in terms of their Taiwan invasion plan.

• 1:24:26Speaker 02

  And so, you know, people think that, you know, Trump was playing 5D or 8D or whatever the D is chess. And it did, it did have the side effect of knocking them back. And also Venezuela knocked them back in terms of China was buying almost 2 million barrels a day of Venezuelan oil. Venezuela, everyone forgets about, that was only this year. It was back in January of this year.

• 1:24:44Tucker Carlson?

  January 4th.

• 1:24:45Speaker 02

  There you go. It's, it seems so long ago, but that knocked, that was a basically a, you know, Don Ro doctrine knocked China out of the Western Hemisphere, but also knocked 2 million barrels a day of sanctioned discounted oil to, that China was-

• 1:24:58Tucker Carlson?

  Where's Venezuela oil going now?

• 1:25:00Speaker 02

  The US.

• 1:25:02Tucker Carlson?

  All of it?

• 1:25:02Speaker 02

  Yeah. I mean, it's, I'm not saying it's good or bad. It's, it, it's, it's, it's just, that's what reality is and it's going there. And, uh, you know, China had invested a huge amount of, uh, billions of dollars in, in, uh, into Venezuela. China had also invested billions of dollars into Iran. They built this Hormuz bypassing pipeline called JASK, J A S K, that went around, uh, the Strait of Hormuz. It's never been used. It was about to be completed by this year. And, um, but China basically has been, the whole Belt and Road Initiative, they've been applying that to the oil and gas industry. And, you know, uh, Russia, I think is kind of still independent of that influence of China. I mean, China, Russia will sell their oil to anyone, but they haven't been kind of captured

• 1:25:48Speaker 02

  by that Belt and Road Initiative economics. Iran was captured by it, by Chinese, that Belt and Road Initiative. Venezuela was captured by it. Um, and China doesn't care about Venezuela's politics or people or, uh, they care about the economics. They don't care about Iranian politics, religion, Israel, that whole situation. They don't care. They basically, can you get me cheap oil below $70 a barrel? How do I get that oil? And, uh, if, if you could ask the EU to put more sanctions to discount it even further, please, that would be a, a bonus because all that money is not going to Europe. It's just going straight into the pockets of Beijing.

• 1:26:27Tucker Carlson?

  To restate your point, which seems provable, Western sanctions against outlaw countries help China's economy?

• 1:26:34Speaker 02

  Directly. And it is, it, there's, and China would love for more European sanctions than US sanctions.

• 1:26:41Tucker Carlson?

  I was going to say, Western sanctions, which Western politicians brag about continuously, Western populations feel good about, I think.

• 1:26:50Speaker 02

  It, it makes them, it's a, it feels good. It's a feel-good policy.

• 1:26:53Tucker Carlson?

  All help China's economy?

• 1:26:55Speaker 02

  Directly, yes. And it's quantifiable. $10, $20 a barrel. And the Chinese would love nothing more than the EU to flagellate themselves even further. More sanctions, put a $20 cap on Russian oil.

• 1:27:09Speaker 05

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• 1:27:34Speaker 06

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• 1:27:40Speaker 00

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• 1:28:10Speaker 07

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• 1:28:38Tucker Carlson?

  Taxes and fees extra. See mintmobile.com. Oh. The main reason I want to have this conversation, of course, was the war, which has heightened the world's awareness of how important energy is and how hard it is to have a civilization without it. And this war, and both wars, the war against Russia and the war against Iran have both reminded us of that. So what effect have those wars had on global energy?

• 1:29:04Speaker 02

  I mean, it's, obviously it's because of, um, it being the regions that they are in.

• 1:29:12Speaker 02

  It's had effect on crude oil and, and natural gas. So coal, you can just put that aside. So that's again, a third of the world's energy. That's not involved in this whole situation, put that aside. So it's oil and natural gas. And, and the world, the world or the energy market had kind of war gamed out the shutting of the Strait of Hormuz for a long time. And it kind of did happen a little bit in the 1980s. You had the tanker wars.

• 1:29:34Tucker Carlson?

  Yes.

• 1:29:34Speaker 02

  When Iraq and Iran were fighting. And there were, I think it was four, it was a huge number of tankers that were, uh, knocked out by, in that war. The US, uh, you know, escorting tankers in and out of the straits at that time. And so there, there was kind of an awareness that the vulnerability was there of the whole choking of Hormuz. Um, the oil market immediately in Feb 28th,

• 1:30:01Speaker 02

  I assumed it was going to be a week or two. And you can tell how

• 1:30:05Tucker Carlson?

  Twenty six this year.

• 1:30:07Speaker 02

  Of this year of twenty twenty six. And it was because you can tell that there's the forward curve, which is the price of oil as you go out into the future. So you could tell that the market in the front of the curve was very high and then, but you, it was backwardated, they call it, but very low, only a few months forward. And so even the oil market itself, and the oil market is hyper geopolitically aware and very reactionary. It's kind of like almost prediction markets.

• 1:30:31Tucker Carlson?

  Yes.

• 1:30:31Speaker 02

  Existed, but it's, it's, the oil markets do use futures and options to do the same thing as prediction markets do. And so the oil market was saying

• 1:30:38Tucker Carlson?

  They're pretty accurate, sorry, you think those markets are pretty accurate in their predictions?

• 1:30:42Speaker 02

  They're accurate in the very short term. They're very short term aware. So the first thing I do when I wake up in the morning is I look at the price of WTI. I can tell if Iran has been hit. That's, I just looked this morning and it was like down at

• 1:30:53Tucker Carlson?

  You don't look at Brent, you look at

• 1:30:54Speaker 02

  WTI, yeah, yeah, yeah. Brent is, there's an issue of manipulation there and

• 1:30:58Tucker Carlson?

  Well, I've noticed.

• 1:31:00Speaker 02

  But it's, it's WTI, I look at WTI.

• 1:31:03Tucker Carlson?

  So just for people watching this, if you've made it this far in the interview and you're interested in understanding energy markets, WTI is

• 1:31:10Speaker 02

  West Texas.

• 1:31:11Tucker Carlson?

  West Texas.

• 1:31:11Speaker 02

  Yeah, yeah, West Texas Intermediate. And West Texas Midland crude is also what's, what now sets the price for Brent crude.

• 1:31:18Tucker Carlson?

  Yeah.

• 1:31:18Speaker 02

  So it actually, it's, Brent is a derivative of West Texas crude. So it's kind of a, there was a window of fifteen years where Brent took over. Because this is before fracking, you know, before that twenty two thousand and five revolution and US crude production was declining and Brent took over for about fifteen years between two thousand and five, twenty twenty. But now that, that has flipped back to WTI crude in the US. That's the global benchmark. And, uh, yeah.

• 1:31:45Tucker Carlson?

  Sorry to interrupt.

• 1:31:46Speaker 02

  I look at WTI every morning, first thing I look at, and you can tell how geopolitically changed the world is overnight by just looking at that one thing. I can tell if there's a war or whatever, and just by looking at that one thing, I look at other things as well. Best, the first thing I look at, the price of crude. And back in, in February, we went from sixty dollar WTI up to, you know, we got up into the hundreds and very quickly. But the curve, the forward curve, you can trade crude oil out into the months ahead for delivery futures curves, months ahead. That price was going down to like eighty dollars, seventy dollars. So the front was one hundred and twenty, you go out three or four months, it was back down to eighty. You can, so the, the market was predicting this thing is going to be quick. The oil market was predicting.

• 1:32:30Speaker 02

  And which, I think, you know, Trump went into this also thinking it was going to be quick. And the US intelligence agencies and they, they, the blob, the deep state, everyone thought that this was going to be really quick because we were just coming off Maduro in, you know, early January in Venezuela, uh, there was kind of a, it, uh, everyone thought this would be a hit and you're one and done, we'll be out within two weeks. Just eliminate a few politicians of the top layer, which I think was strategically a terrible thing to do.

• 1:32:59Tucker Carlson?

  Yeah.

• 1:33:01Speaker 02

  But it basically, and the oil market very quickly rallied. And then, once it wasn't over in two weeks, because Iran went to that mosaic structure where they basically distribute control of their military throughout the entire country, the IRGC and Besigdo. And so it went to that, in other words, you can't slice off the onion layer by layer at the top, it just doesn't work. And Iran has developed this method of working for the last thirty, forty years, since the late nineteen seventies. And they, uh, that's when, uh, and Iran started retaliating with drones. That's when, uh, the oil market went, oh, okay, this is going to be a more protracted thing.

• 1:33:38Tucker Carlson?

  They started hitting

• 1:33:39Speaker 02

  Hitting Gulf. Gulf production facilities. They hit Qatar's natural gas LNG plant, which is still out and will be out for the next three to five years. That's Qatar's main source of, of revenue is that LNG plant. And they knocked half of its production out. And that's, Qatar produces twenty percent of the world's LNG. So, you know, that's goes, that's what, that gas will go to Europe, natural gas, and will go to Asia. That's gone now for three to five years. Again, who benefits from this? The US natural gas industry, you know, like Nord Stream, Qatar. You know, if you were to be conspiratorial about it, you could just knock out all of Qatar. And then the US would benefit even more.

• 1:34:20Speaker 02

  So it's kind of a, an interesting kind of secondary effect that this, in this situation, Hormuz has kind of been a very positive to all the US economy. Because the US is a huge natural gas and oil producer. But anyway, so you had, the oil market initially priced in a quick win. And then Iran started attacking all the production facilities and particularly refineries in the Persian Gulf. And these refineries produce a lot of diesel. And that was the kind of the second effect was the diesel, uh, price spiking crude oil. The spread between diesel and crude or gasoline and crude is called the crack spread. That blew out to diesel to crude used to be, diesel used to be ten dollars refining margin above crude. It went to a hundred and it stayed there since.

• 1:35:03Tucker Carlson?

  That's crazy. And that's because it reduced refining capacity?

• 1:35:06Speaker 02

  There's, they knocked out two million barrels per day of Persian Gulf refining capacity.

• 1:35:10Tucker Carlson?

  But why would it have not the same effect on jet fuel, gasoline, heating oil, the rest?

• 1:35:17Speaker 02

  It just, the, that, the world, the US produces is a lot more gasoline dependent than diesel. And so it just, it was the way of, um, the world's supply and demand system for gasoline and diesel. It, it had that impact much more than, uh, significantly, just because Asia consumes more diesel. Europe consumes more diesel. It was basically, uh, a, it, it seems kind of like a, a, a kind of convoluted thing. But basically, the, the world had more gasoline capacity in refineries than it did have for diesel. So diesel was more tight as a global situation than gasoline.

• 1:35:58Tucker Carlson?

  How hard is it to switch a refinery's proportion of gasoline to diesel to all the other refined products?

• 1:36:04Speaker 02

  Extremely difficult.

• 1:36:05Tucker Carlson?

  Oh, really?

• 1:36:06Speaker 02

  Yeah, you can switch two or three percent from diesel molecules that come out of a crude oil in. You can move a slight two or three percent of the barrel into, from diesel into gasoline or vice versa. So it's a very, very difficult thing to switch.

• 1:36:22Tucker Carlson?

  Oh, wow.

• 1:36:22Speaker 02

  And so, yeah, so, but everyone talks about diesel, but gasoline margins went from ten, fifteen dollars to sixty. So gasoline did also rally a lot, that refining margin. And so diesel went to a hundred dollar spread over crude. So you've got a crude at a hundred, diesel is two hundred dollars a barrel. Gasoline, you're crude at a hundred, you had gasoline at a hundred and sixty dollars a barrel. So it did cause a rally in gasoline also. It was just that diesel was much more tighter, it's, as a reaction. And then that was combined with, and I know people knocked Trump for blaming Ukraine and Russia. Ukraine did start hitting all these Russian refineries and that did start coincidentally with the first half of this year when the Hormuz situation.

• 1:37:05Speaker 02

  So that knocked another two million barrels per day of refining capacity out of Europe. And, um, the world, as I said, is a hundred million barrels per day of production. You knock four million barrels per day of refining capacity out. And it does have an impact. And it's, it, uh, it, uh, it basically caused diesel prices to spike.

• 1:37:24Tucker Carlson?

  Why would Ukraine do that?

• 1:37:27Speaker 02

  Because the CIA helped them target.

• 1:37:28Tucker Carlson?

  Obviously, I mean, this, that, thank you for pointing that out, right? It's not, I mean, Ukraine's not an independent actor.

• 1:37:33Speaker 02

  Ukraine, everything Ukraine hits pretty much in Russia is approved and signed off.

• 1:37:38Tucker Carlson?

  That's factually true, what you said, and thank you for saying it. Why would the US intel community want to reduce Russia's refining capacity when it affects the price of diesel fuel and gasoline in the United States?

• 1:37:53Speaker 02

  I think that even though they're very sophisticated entities, the CIA and other entities in the US government. Sometimes I don't think they think about the effect, they're, they're energy blind to a certain extent as well. I didn't think that they would, thought it would have, they thought it would just like sanctions on Russia. They thought that if we just target Russian refineries, we can kind of damage Russia and it wouldn't affect global markets. I think they themselves.

• 1:38:19Tucker Carlson?

  Are you serious?

• 1:38:20Speaker 02

  They, they thought that they could just target, pinpoint target these Russian refineries. And oil refineries are easy to target, they're big pieces of equipment and, and they thought

• 1:38:29Tucker Carlson?

  They're exposed too.

• 1:38:30Speaker 02

  And they did want to create a little bit of, uh, pressure on Russia, Putin to come to the table this year. Trump wants out of Ukraine and Russia, that whole situation, he wants out of it, as everyone should want out of it. It's, it's, it's not a, that war should never have started, but everyone wants out, except for a certain few vested interests. You know, you don't, Europe again, here we go, talking negatively about Europe, but it's, uh,

• 1:38:56Speaker 02

  the CIA or whoever was providing the targeting information, they didn't think about the impact on diesel. Now they realize that, of course. And because they thought, oh, it was just two million barrels per day of refining capacity out of a hundred, it can't have that much of an impact. It did, it immediately did. And so, um, you know, the color of a blowback, this blowback was in the energy market. And so it was a mistake, the CIA should never have targeted those refineries. They did, and, uh, but they provided all the targeting, because they do want to pressure Putin to come to the table. They want to pressure Zelensky by Elon Musk flipping on and off the Starlink button every other day that seems to be doing now. And they're, these are kind of the two pressure points that they're applying. They're applying, you know, they're trying to destroy Russian revenue with refineries.

• 1:39:40Speaker 02

  And Zelensky's defense with the Starlink turning it on and off every few days to try and force these guys to come together and at least have some sort of a ceasefire. And, uh, that was kind of the original thought process behind it. I think they were surprised by how much diesel prices rallied.

• 1:39:55Tucker Carlson?

  It's a really interesting explanation.

• 1:39:56Speaker 02

  And it happened at the same time of Hormuz. If they did this when Hormuz was not happening, diesel would not have spiked as much.

• 1:40:02Tucker Carlson?

  How much? Oil and natural gas is making its way out of the Gulf now.

• 1:40:08Speaker 02

  So now it depends on day to day. You've got, you have a pipeline. It was a pipeline that the Saudis built. It's called the East-West Pipeline back in the 1980s because of the original tanker war. Iran-Iraq tanker war back in the 1980s. And

• 1:40:23Tucker Carlson?

  Can you explain where it goes?

• 1:40:24Speaker 02

  It goes from all of the oil and gas and pretty much oil, let's call it crude oil in Saudi is produced on the edge of the Persian Gulf. So on the east side of Saudi Arabia, but Saudi Arabia is a big piece of land that goes the whole way, all desert. There's no greenery there whatsoever, all the way over to the Red Sea. And the Red Sea is, you know, they've got issues there with the Houthis and whatnot over the past few months. But basically, all of the oil production is trapped in the Persian Gulf. And but the Red Sea is kind of one place they can get it out outside of the Hormuz. And so generally, the 1980s, they built this pipeline as kind of a backup plan. And it was a seven million barrel per day capacity pipeline again in scale. The world produces 100 million barrels per day.

• 1:41:08Speaker 02

  The Saudis produce 10 of that 100. So now they're not as big as these two. The US produces 25. So but of the 10 the Saudis produce, they could get seven of this out through this pipeline. But they didn't used to do this because this pipeline was usually run at two to three million barrels per day of the Saudi 10. And so they kind of use it as a backup plan and

• 1:41:30Tucker Carlson?

  Why? Is it cheaper to ship it through the Gulf?

• 1:41:32Speaker 02

  Yeah. And you've got to pump it across all these pumping stations. And also, if you're a buyer from China, they're main or Asia from Saudi, for them to send a tanker the whole way into the Red Sea. It's and past Yemen and it's a very much more dangerous area. It's more confined. And so it was cheaper for the tankers. Pipeline shipping is cheap also, but if you were to buy the oil from the Red Sea, where at the end of this East-West Pipeline is a dollar per barrel. Nowadays, it doesn't seem like that much, but it was a dollar a barrel more expensive. It was cheaper to buy it from the Persian Gulf for China. And so Saudi used to produce oil, all the those Gulf producers are trapped inside the Persian Gulf.

• 1:42:15Speaker 02

  It's it's kind of the same oil basin, that whole region.

• 1:42:18Tucker Carlson?

  Clearly.

• 1:42:20Speaker 02

  And even, you know, people talk about Tehran, even Tehran, Tehran is the almost the other edge of Iran to where their oil is produced. Their oil is also produced at the edge of the Yukarag Island and

• 1:42:31Tucker Carlson?

  I've noticed.

• 1:42:32Speaker 02

  It's also down by the coast.

• 1:42:33Tucker Carlson?

  It's the same reservoir, obviously.

• 1:42:35Speaker 02

  Pretty much, yeah, it's the same basin. It's a different reservoirs. Some of them are connected, like Kuwait and Iraq, their reservoirs are connected. But it's the same basin. It's the same, you know, they, as I said, you know, the same millions of years ago, it was created at the same time.

• 1:42:50Tucker Carlson?

  Low spot.

• 1:42:52Speaker 02

  And so basically, it was, some of them are connected. But anyway, the, the, when it, the whole situation kicked off. And the first surprise was the issue of refineries. Then it came into tankers because the, no one was in their right mind, send a tanker through the Straits of Hormuz when the active, there's an active war. And Iran is targeting tankers. And these are civilian tankers. These are not military tankers.

• 1:43:19Tucker Carlson?

  Right.

• 1:43:19Speaker 02

  And Iran was hitting them and would hit the occasional one. And they're hitting them cheaply. They don't send these 20, $50,000 drones to hit them. And so you had the, you had the spike in crude first, that was the first wave. They had the spike in refined products. Diesel was the most extreme one, but because you hit these refineries, combined with the Russia hits on refineries. Then you had a spike in tanker rates and these tankers went from, you could hire a super tanker, super tanker is like 2 million barrels a day, sorry, 2 million barrels capacity. A super tanker, they call them in the oil industry VLCCs, very large crude carriers. But there are these buildings effectively carrying 2 million barrels of crude. And the, these things, you could hire them for 50,000 to 100,000 dollars per day.

• 1:44:03Speaker 02

  That's the day rate, they call it, before in January, February this year. Now it's 1.5 million barrels, 1.5 million dollars per day.

• 1:44:12Tucker Carlson?

  Per day?

• 1:44:13Speaker 02

  Per day, from 100,000 dollars per day to 1.5 million dollars per day. And the reason the tankers have gone up is that, first of all, you don't want your, you can't get insurance. You can get technically get insurance, but the insurance rates have gone up.

• 1:44:27Tucker Carlson?

  They just self-insure by raising their fees.

• 1:44:29Speaker 02

  Saudis, well, they self-insure that a lot of the tankers that are doing this route, they, it's like a speed run of the Straits of Hormuz. You hug the coast of Oman and you speed run. And the only people doing that are the Saudis because they have their own tankers. So they're not paying other people to do this.

• 1:44:46Tucker Carlson?

  And the Emiratis have their own tankers.

• 1:44:47Speaker 02

  And they, yeah, the UAE have got their own tankers, Abu Dhabi. And so those guys are half of the tanker run. And basically they're at speed. When I say at speed, these are super tankers that are full of 2 million barrels of crude. They can't move at speed, but they're trying to. They move as fast as they technically possibly can into the Persian Gulf, grab the oil, load it and come back out. And usually before February, they would then continue on to China or continue on to Asia somewhere. And now they don't. They stop outside of the Gulf of Oman. They lighter, they load the crude onto another tanker and they go back in again and do that loading. So those super tankers are now just doing this speed run into the Persian Gulf. And Persian Gulf is 20 million barrels per day of, Persian Gulf produces 20 million barrels per day.

• 1:45:33Speaker 02

  The East-West Pipeline, that was built in 1980s, they ran that up from three to seven. So they get some oil coming out of that pipeline, extra oil. And they got some oil out of this. There's another pipeline to Fujairah. So they get another million barrels per day out of that. So they, they cranked up all the alternative bypass pipelines. So that was, that compensated a little bit for the Straits of Hormuz being shot. And then the big one is they started doing these tanker runs, speed running in and out of the Gulf. And doing what's called ship-to-ship transfer, STS, outside the Gulf of Oman.

• 1:46:04Tucker Carlson?

  I mean, what's that journey like?

• 1:46:07Speaker 02

  It's a few, it's a few days. It's a highly risk.

• 1:46:10Tucker Carlson?

  What are they paying these crews to do that?

• 1:46:12Speaker 02

  They're paying them, I think it was in the FT a few weeks ago, they're paying them for each run, which takes a few days. They're paying the captain, I think, 100, 200 grand per run. I mean, they're taking their lives under risk there. Right now, today, Iran is hitting one to two tankers a day, hitting. So they're hitting the engine room. It's a surprising thing. And there are some spills as a result of this, these are carrying crude oil. These tanks, one to two tankers a day. And that is the real thing that can't be sustained. I know Besen and Trump have got these, these economic sanctions and pain points. That's going to take too long, that, that, you know, that operation, that financial operation, that goes back to the sanctions things. It doesn't really work. It causes immediate pain, those sanctions.

• 1:46:56Speaker 02

  They close down money transfers and try to sanction companies that deal with Iran. But that's not going to be, that's not a long-term sustainable, I want to say long-term, I'm talking about, we need to resolve this within three to six months max. Before it gets, it, things just, things are already bad. They're, they need to start recovering because it's flowing through through food and fertilizers. But Iran's hitting one to two tankers a day right now, today, in November 2026. There are only 1,000 super tankers in the world.

• 1:47:25Tucker Carlson?

  People getting killed in these attacks?

• 1:47:27Speaker 02

  Yes. And they're fortunately, they're crews from India, Philippines. These are just civilians. These are not military people. They're, these are civilian tankers. They're, you know, they're marine, I know you're, you mentioned your father was in the Marines. Are they, they're civilian Marines. These are just people just earning, you know, working. And Iran is treating them like military hardware. They're hitting them. And so that can't be sustained. And so one of the things to stop that, because Iran, you know, the US reaction so far has been to do these mass kind of fireworks style campaigns, dropping the mother of all bombs, Trump was talking about things like that. Iran is very, there's a very well-educated population, surprisingly. And they historically have been

• 1:48:08Tucker Carlson?

  A higher median IQ than we do.

• 1:48:11Speaker 02

  The most, one of the most successful ethnic groups in the US is Iranian Persian.

• 1:48:15Tucker Carlson?

  The Persians, yeah.

• 1:48:16Speaker 02

  Yeah, they actually think they may be the number one. You know, everyone thinks it's like the Asian population, it's the Iranian Americans, Persian Americans. And so these guys are very, they're rational, like they actually, there's a kind of a logic to what they're doing. They're also highly, you know, they've got a religious aspect to it. But I think that this hitting one to two tankers a day, you annualize that, that's going to knock out the entire global fleet of tanks. Because they can be repaired. They're not completely knocked out of commission, but the repair takes three or four months. The US basically has to make every tanker hit matter. And so one way to do that is Iran has 150 power generation stations. I mean, this is an energy war. You say to Iran, just, and you don't secretly do this, you tell the Iran, there's a, there's a direct price to pay.

• 1:49:03Speaker 02

  For every tanker you hit, we knock out two power stations. Start with Tehran, they've got five major ones. And just make it each incrementally painful to stop that tanker hitting situation. Because Iran is hitting civilian infrastructure, going through a, you know, on a civilian purpose, there's no military purpose for this. And the US should just make every hit painful, stop it to stop that. Ahead of negotiations and everything, but to kind of right the world's economic situation in terms of energy, there has, that has to stop. And that's one way to do it. Iran has 150 power stations. You continue to Iran to do that for another month or weeks or months. If you do it for another week, you hit seven tankers, we're going to hit 14 power stations.

• 1:49:46Speaker 02

  There should be some sort of, it's a tit-for-tat retaliatory strike. You don't tell them which power stations, but you make it economically energy painful. That's one thing the US could do and to try and stop those tanker hits. Because that's, it's like a triage. You have, that is the most important thing, is to stop those tankers being hit on a daily, daily basis now. Because it just can't be, as I said, you can't do this for months. It's, you can do the economic war behind the scenes, whatever, but the tanker market, the physical base tanker market can't wait six months. It has to stop. That has to stop today.

• 1:50:19Tucker Carlson?

  How many oil tankers, supertankers are there in the world?

• 1:50:22Speaker 02

  There are around 9,000 oil tankers in the world. 1,000 of these supertankers, the 2 million barrels.

• 1:50:28Tucker Carlson?

  Total on the planet.

• 1:50:29Speaker 02

  Yeah. I mean, it's a, I mean, 2 million barrels is a big amount of crude. If the world is 100 million barrels per day of oil production and not all of it is tankered. You know, some pipelines and so but the, but 9,000 tankers in the world, 1,000 are supertankers. And, but if you hit one a day, that's, you know, annualize that, that's 400, 500 a year. You know, this big chunk of the supertanker, you just can't, that has to be stopped. And the other way is that you can stop the Iranian army, the IRGC. Iran has five refineries, just knock them out. Just like take the CIA, they know where the, these are not hidden things or secret things. And just within 20 days, the Iranian economy, energy wise, the financial side is the best in strategy of this.

• 1:51:11Speaker 02

  Like the sanctions thing, it's a very messy, long term. It creates all these weird side effects like China gorging in that free oil or discounted oil. You could just knock out their five refineries within, uh, within 20 days. That country seizes, it stops operating as in they can't diesel trucks, gasoline cars, motorbikes. The entire economy, it physically can't operate. So the US has got options. All this talk about nuclear weapons and that don't do that, it's not necessary. It's Iran is an extremely vulnerable on an energy side economy. And these things also are repairable, like you don't want to destroy civilian infrastructure or dual use infrastructure in Iran that just to be negative and punish these people.

• 1:51:53Speaker 02

  You basically want to say, stop, we, let's stop, let's parlay, let's take a, take a breath here. You can't hit these tankers every day. We're not going to negotiate with you even as you do that. And then the third thing, I think, I think going back to kind of the original scene of this war. I mean, Trump, the US government killed the Ayatollah and his family back in late February, early March. And then went onion layer, tried to wipe out another layer. That kind of behavior, I don't think is not, that's, that, that is not conducive to getting a balanced negotiation. First of all, it's, it's, it's.

• 1:52:28Tucker Carlson?

  I love.

• 1:52:29Speaker 02

  There should be, there should be, there should be.

• 1:52:30Tucker Carlson?

  Kind of behavior is not conducive to getting a negotiated settlement. No, it's not murdering their religious leader. No, it is murder. I mean, it's.

• 1:52:38Speaker 02

  But, but here's the thing, Trump did it.

• 1:52:39Tucker Carlson?

  Killing old people?

• 1:52:40Speaker 02

  Trump, Trump, back in March said, what, you know, people were asking the logic behind going to war. And when I know you, you talked to him beforehand. But he said, I got him before he got me. That's what he said about the Ayatollah.

• 1:52:52Tucker Carlson?

  It's just, that's just a child talking. It's absurd.

• 1:52:54Speaker 02

  I'm sure, but it doesn't, even if it were that, I'm sure there were people whispering in his ear that that was the truth.

• 1:52:59Tucker Carlson?

  For a fact that there were.

• 1:53:00Speaker 02

  Yeah.

• 1:53:01Tucker Carlson?

  And so. There are all kinds of flatterers and whispers and liars around him, mostly in the Israeli lobby, all telling him this lie that they're trying to kill you and you have to kill them first.

• 1:53:08Speaker 02

  As a sign of good faith, the US should have a policy revert back to, it used to be a policy in the US not to intentionally kill or assassinate foreign leaders. That needs to be.

• 1:53:18Tucker Carlson?

  That was our policy up until we did this. I mean, we have assassinated, as you know, foreign heads of state, but we always lied about it and pretended we didn't. And I think, you know, there's some value in upholding the standard, even if you don't meet it.

• 1:53:31Speaker 02

  There you go. And it does matter because I think that every leader in Iran, and there are, you know, as I said, they've got that mosaic structure. But they, you can't negotiate with someone under that kind of threat. And it's not just, it wasn't just.

• 1:53:44Tucker Carlson?

  By the way, it was during a peace negotiation that we did this. Yeah. As you know, it was a surprise attack.

• 1:53:48Speaker 02

  That was, I mean, that was just, it was a wrong, I mean, is it right or wrong to kill anyone? But, but just as a, as a strategic negotiating kind of tactic, that was, that, that just doesn't work.

• 1:54:00Tucker Carlson?

  You send in fake negotiators into a fake negotiation and then you kill the elderly head of their religion and his family in the opening salvo. And then, by the way, in case they didn't get the point, you double tap a girl's school. Like that's not the kind, and then you demand unconditional surrender, which our president did. Unconditional surrender, whatever that means. Yeah, I mean, that's, you went all in and you failed. So where, what do you do now?

• 1:54:26Speaker 02

  I, I think there needs to be a restatement of US policy. And Trump could do one of his executive orders and whatnot, just sign it, whatever. It says that US and no one endorsed even secondarily via the US, like CIA, whatever, should get it back into that business of killing politicians, elect politicians, even if we don't like the election or whatever, you know, for whatever reason, stop that. That is not good. It's not good for ethically and morally, but it's also a very basic military strategy. You don't, you know, that was why you would never kill the generals. You would negotiate, you need someone to parlay with. And it destroys for a whole variety of reasons. There, that should be a key component of this stage. One, stop the daily tanker wars. Two, by saying you hit one, we're going to knock out two power stations.

• 1:55:11Speaker 02

  Let's see how long, you know, that's going to quickly stop. I mean, if it doesn't, Iran is making a rational decision to wipe out their own power grid. Okay. I mean, they're not, I think that you need to have some tit for tat escalation there because that needs to be stopped right now. That's triage. Two, you tell the Iranians, we are no longer going to endorse, we'll publicly do, we're not going to endorse. And even on a secondary basis, secondary basis with other entities, you know, doing that. We're not going to support it, endorse it or promote it. Stop, we're not doing that anymore. The US doesn't do that. I should go back to that doctrine because you can't negotiate on that basis. And then once, once the tree, the situation is triaged, okay.

• 1:55:54Speaker 02

  Then, then we can go back and talk about all these other issues. We have, the Iran wants in this silly toll, we're not doing the toll. They want their money. You know, who owes Iran more money? China has, they've been buying all this discounted sanctioned crude over the last five years. They have $60 billion of in yuan. I mean, the, the fact that the Iranians were stupid enough to sell their oil for yuan. But anyway, they've got it locked up in China, $60 billion worth, way more than the US has got locked up in assets for. So if, so if Iran wants to pay someone, someone wants to pay Iran that toll, China can pay the toll, the dollar a barrel, whatever it is. Take it out of China's money. They're the guys who've been taking advantage of Iran over the last five, 10 years. And so, but let's put it back on the table.

• 1:56:35Speaker 02

  You want the toll, have it be a toll that's addressed by the GCC. Put the toll as GCC plus Iran manage that toll. But that's.

• 1:56:44Tucker Carlson?

  The other countries on the Persian Gulf, in other words.

• 1:56:46Speaker 02

  Yeah, yeah. Put them all on the, on the, on the toll and have an equal share of, of.

• 1:56:50Tucker Carlson?

  Plus Iraq.

• 1:56:50Speaker 02

  Yeah, yeah. A dollar a barrel and get them all sharing that toll. Yeah, okay. But no other party outside of the Persian Gulf is going to contribute that toll. So you've got the assets, get your money from China first. They're, they're your biggest debtor, if you will, Iran. The toll, make it a GCC toll, put that in place. And we're not going to target your, your political infrastructure and even nefariously do it. Really have it as a, a real thing, you know, where there's even secondary parties are not going to target that. And let's come to some sort of a situation, a, an agreement on the nuclear situation. We're not, Trump talks about bombing, you know, the pickaxe mountain and all this nonsense.

• 1:57:35Speaker 02

  I mean, let's put, go back to, and it's probably discussed Trump. Go back to the, the, the prior UN's inspection situation with Iran. Have Iran, treat Iran, by the way, as if it's a nuclear power. Because even if you take all that dust out, you think they aren't going to now try with every means possible to get one of those nukes from North Korea or five of those nukes or Pakistan. And you always treat them as if they're, as if they are a nuclear power. Iran is a major power in the Middle East. Accept that as a reality, you can't crush it. You're not going to defeat it militarily. It's just too expensive to boost it up.

• 1:58:16Speaker 02

  Let's come to an, an agreement where that we treat them as if they're a nuclear power. Constrain it, if you will. Ideally, I mean, this is me personally, I hope they don't go back to the Ayatollah regime and all of that. I would prefer Iran, it's, they tried the civilian rebellion back in January. It's probably going to end up being a military hunter like Pakistan, controlled by the IRGC. They'll have the Ayatollah, you know, they've, they've keeping that guy out of, out of sight. You know, people speculate why the son of the Ayatollah, why they haven't, you know, he's been maimed or he can't speak or, or legitimately they're afraid for him, you know, being killed by the US or Israel. The US should remove itself from that game and say, we don't play that game.

• 1:58:57Speaker 02

  But basically the, normalize the entire situation and triage the tanker situation. Normalize the Iran as a proxy nuclear power. I mean, it's sad to say, but it is what it is. And there, you can knock out the dust, but put some guard, guardrails around it. And like Pakistan, the US controls Pakistan's nuclear, supposedly nuclear weapons. And. Yeah, that would be it, just those things. And you don't need to go out and do a large, you know, all this escalatory talk of we're going to bomb huge things and make it a big spectacle.

• 1:59:41Speaker 02

  No, these are small incremental things that we've done. And Iran is looking for an out also. They don't want this situation to escalate. You know, I remember 10 years ago, when Instagram kind of kicked off, they had the rich kids of Tehran. These were all like these, these rich kids driving Ferraris around Tehran. They're just normal people like you and I, I mean, I don't drive Ferrari, but they're normal people that have, you know, we should treat them with dignity and respect and, and realize that they want to escalate, de-escalate the situation as much as we do. And they, they're great at, their media game throughout this whole war has been amazingly good. I mean, they're, they're trying to, you know, they're, they put out that 1,000 page or whatever it was, number page,

• 2:00:26Speaker 02

  document saying, here's the legitimate reasons why, they're grievance document, if you will. And they said, you know, we don't have, we don't have, they're trying to spin the US word of, we don't have a problem with the people of America, we have a problem with the government. And I'm thinking, hang on a second, for 50 years or 47 years since they have deaths in America. So you only meant the government, you didn't mean the people of America. In other words, Iran, they're not, you know, the innocent party in this whole escapade either. They, they've done some terrible, horrible, terrible things. And, you know, then they say, oh, but the Shah is the one about the Shah before the current regime was even worse. No, not really. The Shah supposedly, he killed, he had, you know, people tortured and killed during his time. But he was maybe 2,000 people, 3,000 people.

• 2:01:09Speaker 02

  There's a great book that I read recently, The Cauldron, it's called, and just talks about the Shah. Yeah, he was a dictator, pretty much a king figure, but he, and he was US supported because the US just needs someone stable in that environment. But the, the IRGC killed 20, 30,000 people in January of this year. The Shah, over a 40 year period, tortured, killed 2,000 people. I mean, so no one is innocent in this whole situation. Let's stabilize it for the energy markets perspective. There's a way out of this. It doesn't involve using nuclear weapons or doing these weird showy things. It revolves, it revolves around accepting that they're a rational player.

• 2:01:50Speaker 02

  They have legitimate concerns that, you know, we've kind of adopted the Israeli style, Mossad style, kill all the politicians first. No, the US should just back away from that. Go back to 1980s style. And yes, there were some behind the scenes things happening, but don't, as a policy, make it a crime. It was never really a crime in the past, but make it as close to a crime as possible to kill or assassinate a foreign leader or especially their family. I mean, that is just not a good.

• 2:02:18Tucker Carlson?

  It's not a Western understanding of justice at all. The family didn't do anything. It's not a crime to be someone's child.

• 2:02:25Speaker 02

  And Trump said, again, said, I got him before he got me. I mean, okay, you know, George W. Bush used the same logic back in Iraq, when it were Iraq too. He said, why did he go after, into Iraq and Iraq too? You know, they used the disguise of weapons of mass destruction a lot. But the one thing that sticks to me at that time is that George W. said, he tried to kill my daddy. And, you know, that.

• 2:02:50Tucker Carlson?

  Well, in fact, it was the Israeli government that plotted to kill George H. W. Bush. And that came out in Viktor Ostrovsky's memoir, Mossad Officers Memoir. I think that's a fact. So, you know, whatever, it's a complicated world, a lot of bad players in it, but stability has got to be the goal. Let me ask you though, do you think the United States and Israel can accept an ending to this war in which the current Iranian government or some version of it remains in control? There are no, or certainly fewer, American bases on the Gulf. Like, America is not keeping the peace in the Gulf going forward. We can't even keep the strait open.

• 2:03:27Speaker 02

  Yeah, I don't think the loss of those bases is a bad thing. I think they, they basically did what the US should have done. Those military bases, they were exposed targets for years. They don't, they shouldn't exist in the modern drone warfare. So they kind of did the US a favor by shutting those bases down. The US should still, when I say, everyone talks about the US walking away from the Middle East. The US is not going to walk away from the Middle East. The US still needs to be there and protect those countries because we need a, a, the energy prices to remain low at its core level. But also just for general stability as the hegemon globally and to stop China becoming the hegemon, especially in the Middle East. So the US is going to, is not going to walk away from the Middle East, no matter what Iran wants or needs or thinks they're going to do.

• 2:04:11Speaker 02

  Those bases, okay, whatever, they're sunk cost, they're written off. The US is going to have to come up with a more, kind of even like Iranian inspired mosaic, mobile base structure to defend the Middle East, the non-Iranian side. But the US and Israel have to accept that Iran is there. It's, it can't be defeated. And Iran, good on them, they shouldn't be defeated. I mean, they're, they can do whatever they want, as long as they don't assault, especially with nuclear weapons, the rest of the world, they can do whatever they want. They're an independent country. So the US and Israel.

• 2:04:45Tucker Carlson?

  But accepting what you just said, which seems demonstrable. I mean, the geography of Iran is ultimately its power and the fact it's a cohesive country, basically, and an ancient civilization. But just say, even saying that out loud is so contrary to what we have been told for 40 years and what even policymakers are saying now, like, we, you know, we can't accept this government, we can't accept Iran as a nation. I mean, they're going to have to, right? But do you think they can?

• 2:05:17Speaker 02

  I don't know, I don't think it's a matter of if they can, they have to. They have no choice. We have no choice but to accept Iran as it is. Sometimes, you know, it's like North Korea. Would the US love to, you know, they have nuclear weapons in North Korea, you can rocket boy. And so would they, would the US love to destroy North Korea and with everyone around them, the Japanese and South Koreans? Yes, of course, but it just is what it is. And sometimes you take the draw and you walk away and just allow it to exist. It's sad, but that's just.

• 2:05:52Tucker Carlson?

  There's a limit to your power because you're not God.

• 2:05:54Speaker 02

  Yeah, and that's not a bad thing.

• 2:05:55Tucker Carlson?

  No, I agree.

• 2:05:56Speaker 02

  Everyone thinks that the US has to, has to intervene everywhere. No, no, you basically, there's a payoff structure here where you don't, sometimes it's not worth intervening. It's just not in US interests. And that, in Iran is a classic case of that, North Korea is another case where you do as much as you need to, but you stop when the payoff stops working. And Iran is one of those situations where we need to get, to walk away from the situation. When I say walk away, we're going to walk away with those bases. Okay, tell Iran they're gone. I mean, but we're going to have to still defend, highly defend the eastern side or the western side of the Persian Gulf. But we still need to be there. The US still needs to be there and defend oil production and natural gas production.

• 2:06:42Speaker 02

  One is a bulwark against China and what they're doing. But two, because it does affect global energy prices and all of our allies, as well as our selfish own needs. We need to defend that side. And even if you ignore, take Israel out of the equation, we still need to be in the Persian Gulf. We need to be in there, even if Israel, Israel, I think, messes with the mind of the US military in terms of tactics, like the thing about assassinating leadership. The US shouldn't do that and shouldn't get into that. But the actual physical logistics of defending those countries, the US still needs to be there irrespective of Israel. If Israel didn't exist, the US unfortunately still needs to be there.

• 2:07:17Tucker Carlson?

  I don't think that's crazy at all. So my, my last question is about global food supply and prices. And you said at the outset that there's just a huge lag because the growing cycle between the constriction of certain inputs, fertilizers and outputs, like you don't see the consequences right away. What are we going to see in the next couple of years?

• 2:07:42Speaker 02

  So one of the two, the big things that were knocked out this year, most fertilizer is nat gas in the back. Natural gas is that one third of the world's oil production. Qatar was knocked out this year, half of its production was a big nat gas producer. And there's, because of that, the feeds, the thing that makes the fertilizer, nat gas, has gone up in price. As I said, it's only $2 in the, $3 in the US, it's $30 in Asia, the price of natural gas.

• 2:08:07Tucker Carlson?

  What, I just, sorry, again, sorry to interrupt you. What percentage of global food supply is directly traceable just to the nation of Qatar?

• 2:08:14Speaker 02

  Oh, sorry, no, it's Qatar.

• 2:08:16Tucker Carlson?

  Just Qatar, which is one of the biggest gas producers.

• 2:08:18Speaker 02

  It's one fifth of the world's LNG. So it's a decent chunk. It's like of the world's food, it's a fifth of terms of LNG and ammonia production.

• 2:08:29Tucker Carlson?

  It's just funny, so you've got a country of 400,000 people. It's just a tiny little country, one of the smallest countries. And is responsible indirectly, but kind of directly really for like a huge percentage of global food supply.

• 2:08:40Speaker 02

  Yes, and also not just not gas, you have sulfur.

• 2:08:44Tucker Carlson?

  Yeah.

• 2:08:45Speaker 02

  You know, a lot of heavy crude oil produces a lot of sulfur. It's and you have to remove that sulfur and sulfur is pretty much free. You can buy the sulfur, like someone will give you away the sulfur. If you go up to Canada, they desulfurize those oil sands that they stick up. They have to do so they have mountains of this yellow brick sulfur. The problem with sulfur is that it's not the actual material itself is kind of free. They would love to give it to you. Go up to Canada and get it. But the challenge is the Persian Gulf sulfur is used to make a is natural. Most fertilizer is natural gas goes into urea and ammonia and sulfur. And so sulfur is kind of free, pretty much because it's a side byproduct of the oil and gas industry. But the problem is it's not produced in all places around the world.

• 2:09:29Speaker 02

  And a big source of sulfur is also the Middle East and getting sulfur out. So the fertilizer industry has been hit by natural gas out of Qatar being shut down and sulfur. And the problem with sulfur is that Canada has a huge amount of sulfur, but it takes a while for the supply chains to turn a huge industry to point to Canada because Canada has to rail it out and get it to fertilizer production facilities. And so the net effect is that fertilizer fertilizer prices have gone up by three or four hundred percent this year. And it doesn't really have a big impact in developed economies like even places like not developed economies as much like Russia and Ukraine, they produce a lot of wheat.

• 2:10:10Speaker 02

  And the US produces a huge amount of grain, these huge food exporter, the US. And especially to places like China, China imports a huge amount of Western food. And so it doesn't really have as direct a big impact in the West, Western farming, but it's a huge impact in places like India, poor, poor countries. And for those people, the main variable on their crop yield is fertilizer and that has just gone up by 300%. So that will impact a lot of countries next year when crop cycles come through next year. And I don't think it's, I mean, people always talk about famine and the most extreme case, there will be less food produced next year. It's not going to affect the West, like America, or it's just be, it'll just become slightly more expensive food.

• 2:10:53Speaker 02

  But you will get, you know, it's high, a lot of the world is still living at the breadline, if you will, and that is going to have a real impact. So that's why stopping this now as quickly as possible and reverting to a more quote unquote, normal situation is is not just urgent for energy prices. It is going to have an impact and that impact is going to be on the, it's, you know what's going to happen? No one will talk about it. It'll just happen under the radar. People will be hungrier and especially in poorer countries, places like India and places like Africa, and no one will really talk about it and it'll just be into the background of the next year or two. But that's actually already unfortunately baked in.

• 2:11:34Tucker Carlson?

  Well, you'll see people move. I mean, you saw, you know, in the 19th century, Finns moved to Sweden in, then also you saw the Irish move to the United States.

• 2:11:44Speaker 02

  Food reasons.

• 2:11:45Tucker Carlson?

  Food.

• 2:11:46Speaker 02

  Yeah.

• 2:11:47Tucker Carlson?

  And so you're going to see mass migration every time food prices reach a certain threshold, people move.

• 2:11:53Speaker 02

  Yep, yep. You've got, you've got a, it's, it goes back to this kind of the thing I began with, is that, you know, everyone is so disconnected on where their energy, all of like 90% of their energy, people have this misconception where it comes from, but also in terms of food, people also don't realize how, it's not fragile. The oil industry and natural, everyone thinks they're fragile. They're very, they're not, they're very robust, just as proven by this year, the Persian Gulf, they're, they're not a fragile space, but they do have a price, the market price sensitivity. They're the market, global market for food and the global market for energy. They, they have impacts and some of those impacts are very, very bad for especially poorer countries.

• 2:12:38Speaker 02

  You know, it's, it's, it's, and I hope that just people can have a realization of that people in Europe, people in the US that have a, that rail against reality, they're railing against how food is produced, how energy is produced, should kind of have a, not a, you know, remember those that, when JD Vance was complaining to Zelensky, I was like, you're not grateful. I think that the world as a whole is kind of not grateful for where its energy comes from and is not, and not appreciated of it because it, it's, it should be something that people should learn more about and understand and appreciate.

• 2:13:21Speaker 02

  And it will, because of that, it will affect how people deal with their own lives and reality. You know, they, it's, it's a very fundamental part of the world we live in is oil and gas and coal and food. And we didn't leave that world. It still exists underpinning modern civilization. It's just that people have disconnected themselves and are living in this simulated world where it's all solar panels and wind turbines. That's not reality. That's like still four or 5% of the world's energy and that, people need to kind of anchor themselves, however they do it, into understanding where their food and oil comes from. And sometimes they're forced to because the situation in Persian Gulf this year.

• 2:14:05Speaker 02

  But it's, it's, yeah, it's a kind of an interesting kind of blind spot, energy blindness.

• 2:14:15Tucker Carlson?

  Morgan Downey, one of the great experts on the topic, author of Oil 101. Thank you very much. That was great.

• 2:14:22Speaker 02

  Thank you, Tucker. When it comes to my policy, farmers gives it to me straight, so there's no surprises. It's your coverage. You should never be confused. You hear that? An insurance provider with a conscience. We're a choir, but yes, we have that too. Straightforward coverage you can literally understand. That's what you get when. You have farmers. Learn more at farmers.com. Underwritten by Farmers Truck or Fire Insurance Exchanges or affiliate. Products not available in every state.