10/19/26 Garro Said It Best… Now Let's Talk Oil!

The Moneywise Radio Show and Podcast Monday, October 19th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Radio Show & Podcast" call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com https://www.moneywiseguys.com/ facebook: Moneywise_Wealth_Management https://www.facebook.com/moneywiseguys/ LinkedIn: Moneywise_Wealth_Management https://www.linkedin.com/company/moneywise-wealth-management-bakersfield/ Guest: Chad Hathaway, Founder/CEO of Hathaway LLC. website: https://hathawayllc.com/ The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. Chad Hathaway and Hathaway LLC. are not affiliated with nor endorsed by LPL Financial or Moneywise Wealth Management

• 0:00Speaker 00

  Live from the basement inside the historic Woolworth Building in downtown Bakersfield. Call or text in at 661-396-1000.

• 0:37Speaker 00

  Now, let's start the Money Wise Show.

• 0:40Speaker 01

  That's right. Welcome to the Money Wise Show. We are live from the basement of the historic Woolworth Building in downtown Bakersfield. And for the next hour, you are on News Talk 96.1 and 1230 AM. K E R N is always streaming live at MoneyWiseGuys.com. I'm your host today, Chris Pelster with?

• 0:58Speaker 02

  Sammy Abiawi.

• 0:59Speaker 01

  There you go, Sammy Abiawi.

• 1:02Speaker 02

  Chris, I have a quiz. I have a quiz question for you before we start the show.

• 1:06Speaker 01

  Right off the bat. Look at this, Stephen. Look, you don't even waste a moment.

• 1:09Speaker 02

  What did Gero used to say?

• 1:10Speaker 01

  It's Monday, man.

• 1:11Speaker 02

  What did Gero used to say at the beginning of the show when the music just finished? For a free Woolworth's cookie.

• 1:19Speaker 01

  Cookie.

• 1:20Speaker 02

  Cookie.

• 1:21Speaker 01

  What did?

• 1:22Speaker 02

  Yeah, Gero used to start the show always with something, and that's three words, like in the same word, but we piece it three times.

• 1:28Speaker 00

  I mean, I've got.

• 1:29Speaker 01

  All right, all right, all right.

• 1:31Speaker 02

  He used to say, that's one, that's one, but he.

• 1:34Speaker 01

  He used to throw some McConaughey out there.

• 1:37Speaker 00

  I was gonna say, I could think of 40 things.

• 1:39Speaker 02

  Money, money, money.

• 1:40Speaker 01

  Oh, there you go.

• 1:41Speaker 02

  That's Gero.

• 1:42Speaker 01

  Yeah, and then there was always, not manic Monday, not merger Monday.

• 1:47Speaker 00

  It's Money Wise Monday.

• 1:48Speaker 01

  Money Wise Monday. Yeah, there was definitely a handful of things Mr. Gero Ellis would bring to the, to the table.

• 1:54Speaker 02

  Hide and mist.

• 1:55Speaker 01

  Hide and mist. There you go. All right, all right, all right. Yep. Yeah, he had a few. And, and, and sometimes it was a battle cry if the right rock and roll music was on by Mr. Stephen over there behind the glass, so.

• 2:05Speaker 02

  I just wanted the cookie, so I'm gonna get the cookie because I said what Gero used to say.

• 2:09Speaker 01

  You answered your own question. Congratulations.

• 2:12Speaker 00

  Talk yourself into the cookie. I get it.

• 2:15Speaker 01

  Whatever you got. Yeah, I wasn't gonna eat a cookie, but since I got the answer right, way to go.

• 2:19Speaker 00

  Way to go.

• 2:21Speaker 01

  All right, you guys are what make the show great, though, so you can call or text the show 24 hours a day, 661-396-1000. If you want to join in the conversation live, you can do that. If it's after hours, you listen to the podcast, you can definitely throw out a question and we will get to it during the show. We do have a couple of messages that came in, so we'll go over those. First being, before we even go into the market news, no more brunch? Question mark, exclamation, question mark, exclamation.

• 2:45Speaker 02

  No, no, no more brunch. It's on a pause for the time being. We're trying to focus on, on the luncheonette. There's some really cool things we're working towards with reverb and stuff. Now, I don't want to get the cat out of the hat. But some really cool stuff, so we're trying to focus on that. Some, some, some real estate changes and some menu changes at the luncheonette level, so stay tuned.

• 3:07Speaker 01

  So what, what he's talking about is the luncheonette counter was doing a brunch on Sundays and we're, we're cutting that back. Okay. Good deal. Well, you learn something every day. I work in the building, so that's news to me. Thanks for, uh, thanks for getting us the information there.

• 3:21Speaker 02

  You did miss on the Moroccan shakshuka, though, but I'm here. I can always make it for you.

• 3:26Speaker 01

  Okay, yeah, looking forward to that. Hey, so we were gonna just go over the market news a little bit. We're obviously not through the trading day to day. The market is seeing some volatility as of late, but as of right now, it is green on the screen. So I don't know if maybe some of the scary details that I saw in some of the headline news today is, is means that maybe things will slow down a little bit as far as inflation, which means, you know, Fed step in, don't raise interest rates. The stock market likes that. Market likes cheap, cheap money. S and P 500 right now is up about a half a percent, 7,000, 702. The Dow, the dumb Dow we call it, is pretty much flatlined.

• 4:06Speaker 01

  52,037 and the NASDAQ is up a whopping 1.24. So there's been a little bit of a slide on the tech side. The NASDAQ is at 26,463. Big moves there.

• 4:19Speaker 01

  Uh, one of the things I was gonna say that I saw today was it's, it's a little bit of a headline that sometimes seems scarier, but contract cancellations on real estate purchases has ticked upwards pretty, pretty aggressively for that. The last time that we saw it this high or was higher than this was at the beginning of old COVID-19.

• 4:40Speaker 02

  Yeah, I don't know if you've been, well, I'm, I'm, I go to Zillow maybe once, twice a week and some other website just to see what type of activity we have, price cuts, things like that. So I, I have been seeing some price cuts, especially, I would say semi-custom and custom homes.

• 4:56Speaker 01

  Yep.

• 4:57Speaker 02

  So I think that's necessary, given the interest rates we have. I mean, if you're gonna get a mortgage of seven plus percent, I mean, a price cut probably makes sense to attract that buyer back into the transaction, so.

• 5:11Speaker 01

  Yeah, so back in, uh, March of 2020, we saw cancellations go all the way up to about 16.4%. So, so houses that were getting into contract and then dropping out was at 16. It dropped way down for the next couple of years, but it actually has been trending around 13 and a half to 14% for the last few years, but it has had a little bit of an upward tick. Obviously doesn't, you know, surprise anybody if you're thinking about interest rates kind of going up pretty aggressively here in the, in the last few quarters or the last few times the feds have met. So it's made people maybe be a little bit more leery, a little bit more cautious. Maybe they're finding out that they didn't lock in a rate and it's gonna be an extra three or 400 bucks a month for their loan. And that's real money.

• 5:53Speaker 02

  Yes.

• 5:54Speaker 01

  At the same time that, uh, that energy and, and gas has gotten a little bit more expensive, which by the way, leads us up to who our guest is today.

• 6:02Speaker 02

  Yeah, the great Chad.

• 6:03Speaker 01

  The great Chad Hathaway is gonna come on, talk about energy and oil and, and prices and educate the listeners. So get those questions ready and, and be ready for that. But obviously, all that adding together, why, why maybe some people are jumping out of contracts with some of these increased expenses, just, uh, just, you know, making the, making the dollar feel like it's not going very far.

• 6:24Speaker 02

  That's right.

• 6:25Speaker 01

  There it is what it is. But, um, so any other market news or anything that you think of?

• 6:29Speaker 02

  No, just, I mean, the, the biggest thing is what you talked about, uh, you know, the, the housing and impact of interest rates and what have you. I'm, I'm very, very interested in what Chad is gonna bring in today, especially about oil, oil prices, some other things that are moving, so.

• 6:45Speaker 01

  Awesome.

• 6:46Speaker 02

  We do have a listener question. I don't know if we, you wanna go over that?

• 6:49Speaker 01

  Yeah, I definitely want to go over that before we go to break and bring Chad on.

• 6:52Speaker 02

  Help answer this listener que- I mean, hey, guys, this is Carl, and I have been listening since 2010, and I figured this would be fun to share. So I have two kids in their twenties, and I'm trying to get them to start thinking about their future. They both work, but retirement is the last thing, last thing on their minds. If you could give them one or two pieces of financial advice, what would you tell them to start doing right now?

• 7:19Speaker 01

  Yeah, so, so Carl, first off, um, you are experiencing the reality of, of what is going on in the 20-year-olds' financial space. A lot of competing things, pulling 20-year-olds' money in different directions, and sometimes unfortunately, thinking about the future, or if you bring up retirement, that sounds like an old person's thing. And so, so you are experiencing what unfortunately the reality is. As a matter of fact, the median dedicated savings account balance for individuals 20 to 29 is a whopping $400, which is only a couple of tanks of gas at this point in our reality. You know, one emergency, you gotta put new tires on a car, your dedicated savings is gone.

• 8:04Speaker 01

  And so unfortunately, uh, it's just one of those things that, that, that the 20-year-olds have all these expenses and these things that used to be luxuries now are thought of as, as, uh, you know, needed items. And some of them, in some aspects are, I've talked about this before, like, I don't know how you navigate a lot of realities if you don't have a cell phone or a cell phone plan and all that stuff. And it is insane when we're all spending $500, $600 a month for a family cell phone plan. I mean, that, that, that's a vehicle, right? That's so many different things, and now we have these realities, and even young people, if you have their own plan or their own cell phone, and usually they're, they're having the cell phone that also has the monthly expense to it. So there's so many things pulling in them in those different directions.

• 8:47Speaker 01

  But, uh, you know, I guess one of the things to, to, to kind of think about when you're talking to younger people about this, even saying retirement planning, it, it, it maybe has such an out of sight, out of mind reality for somebody in their twenties. They're like, you're sitting, I'm like, starting my career and you're talking to me about retirement. So I can understand how that right there, just the wording, uh, can, can kind of turn people off.

• 9:11Speaker 02

  Yes.

• 9:11Speaker 01

  And so a lot of times you might want to start to, to preface, preface the conversation around financial freedom and about having more options in your future, right? Don't use the word retirement, because that's what we're all wanting to work for. Maybe people 40, 50 and up, uh, people in their twenties are wanting financial freedom. They're wanting to be able to do what they want to do and they don't have the resources. Or if they do have the, the, the money, maybe they don't have time because they're having to work 60 hours a week to put enough food on the table, right?

• 9:39Speaker 02

  Yes.

• 9:40Speaker 01

  So, so prefacing that conversation around having choices and financial freedom versus retirement. You know, a lot of times people don't necessarily want to think about retirement at 25. They want to think about having freedom and options and the money to do different things. And that ultimately is what you're doing when you're saving for retirement, is you're, you're, you're decreasing your lifestyle now. You're setting that money aside so that you have financial freedom and financial options in your future.

• 10:07Speaker 02

  Yes, changing the pitch, I think, is key, and that's what you're describing, and it makes, it makes sense. And, and while talking.

• 10:16Speaker 02

  I agree with you, Chris, avoiding that word retirement and switching it to freedom. And show them in numbers. A lot of the times, the young people don't even look at the numbers. Like, if you're leaving four or five percent match on the table, that's free money. There's no investment in the market that gives you that.

• 10:32Speaker 01

  Right.

• 10:33Speaker 02

  I had fifty percent return, basically.

• 10:34Speaker 01

  Yeah.

• 10:35Speaker 02

  So, so, so changing that pitch, educating, but also just, just sometimes what I do with my kid is just incentivize them.

• 10:43Speaker 01

  Mm-hmm.

• 10:43Speaker 02

  Like, hey, if you save this, and maybe I'll match it.

• 10:46Speaker 01

  Yeah. Start, start some, uh, your own personal matching.

• 10:50Speaker 02

  Correct.

• 10:50Speaker 01

  You put a thousand bucks in a Roth IRA, I'll put a thousand bucks in an IRA. If you can do something like that, you incentivize that good behavior.

• 10:58Speaker 02

  Yeah.

• 10:58Speaker 01

  Um, and, and I think one of the things we talked about too, Sammy, is, is there's different retirement calculators. And so you can talk about all this stuff all you want, but sometimes there's good visual calculators or tools, or, uh, Dave Ramsey has a lot of good stuff on his website and stuff like that to, to illustrate. If you do a little bit for a long time, it has a huge impact. And I think you ran some calculations before the show that showed even if you just wait seven or eight years, it cuts what you'll have in retirement in half.

• 11:28Speaker 02

  Half. So if you start like at twenty-two, twenty-three, and you invest just, just a, a certain dollar amount, a hundred to two hundred dollars a month, basically, at sixty-five, you'll end up with about six hundred fifty-five thousand dollars. That's seven percent return, like average return. But if you start at thirty-two or thirty-three, you cut that in half.

• 11:47Speaker 01

  Yep.

• 11:48Speaker 02

  Like, you're, that, that's six hundred fifty-five now becomes three hundred, three hundred ten thousand dollars.

• 11:53Speaker 01

  Yeah.

• 11:53Speaker 02

  That's the type of effect or, or impact.

• 11:56Speaker 01

  Yeah.

• 11:57Speaker 02

  That just a couple of years would have.

• 11:59Speaker 01

  Yep. And also debt management. Um, keep it realistic because unfortunately, uh, you know, they're handed credit cards and this and that. And they might have a little bit of credit cards. And so instead of like saying like, never have it, maybe just have better, uh, tools to teach them what's, you know, triage, meaning build a small emergency fund. Make sure you're grabbing any full employer match, like you were just talking about, free money. Uh, aggressively pay down high interest toxic debt. Try to help them understand the difference between, uh, I guess what would be considered a good debt and a bad debt. Dave Ramsey comes from the whole world that all debt is horrible. For a lot of people like that live in California, cost of living's a little bit more. Um, they're gonna have to have a healthier relationship with debt versus,

• 12:39Speaker 02

  Yeah.

• 12:40Speaker 01

  you know, save up thirty grand and, and, and buy a house and, and maybe somewhere where, uh, houses are more, uh, affordable or something like that. But, but debt management rules, keep it realistic. Don't, you know, just kind of completely poo-poo it because kids kind of have to learn that stuff on their own. Instead, focus on teaching them the difference between toxic debt and, and high interest debts, uh, you know, and the benefit of an emergency savings fund. You know, stress levels go down when you know that you can reach in and grab a little bit of money.

• 13:07Speaker 02

  Yeah.

• 13:07Speaker 01

  Uh, a thousand bucks may be plenty for you, depending on your budget and your income level and stuff like that. You maybe need to increase that. And obviously, ultimately, when you get to where you finally do have that three to six months worth of savings sitting in cash, even though it's not growing, it's not doing anything for you, it really does put you at a new level of peace of mind with your finances. You can get more aggressive with saving. You can get more aggressive with retirement money going in there because you know that if something happens in the short term, it's not catastrophic.

• 13:34Speaker 02

  To me, again, it's just in the pitch, right? So if you have those savings, if you are able to manage your debt, guess what? I mean, if you work in a, in, in a job where sometimes it could be toxic, or you're not liking it, or you want to change careers, this gives you an opportunity to have, you know, freedom money to make a jump. And maybe sometimes wait a month or two until you find that other place.

• 13:54Speaker 01

  Yeah.

• 13:54Speaker 02

  So you don't have to tolerate a certain work or a job if you really don't like it. That's what these savings, that's what these ideas will give you.

• 14:01Speaker 01

  Yep. So hopefully that helps, Carl. Good luck to you and your kids. We wish you guys nothing but the best. We've been saying this for twenty years, and I hear it all the time when people finally sit down. I wish I would have started five or ten years earlier. And so if you can help them make any good decisions as early as possible, it makes a big difference later in life. So, uh, yeah, hopefully that helps you be money wise. Stick around, we'll be right back.

• 14:30Speaker 01

  Welcome back.

• 14:32Speaker 01

  When you hear Mr. Sturgill, you know who's on the radio show. We are joined by Mr. Chad Hathaway. Chad, how are you doing?

• 14:39Speaker 03

  Good, how are you?

• 14:39Speaker 01

  Good, good. Thanks for, thanks for jumping on and always, uh, educating the listeners and bringing the, uh, the wisdom, uh, in this whole world that we're all navigating. So some good things maybe about higher prices? Is this good for you, bad for you? How do you?

• 14:54Speaker 03

  No, I think for the upstream side, which is the producer's side, yeah, the prices are good. Um, for obviously short term, this is a boom and bust business, but obviously the consumer's getting hit really hard in the pocket. Uh, I just came back from a cross-country trip with my son. He moved from Sacramento to, uh, Florida. And we drove, we drove his truck, and we stopped in every state, you know, to get gas or diesel, diesel in his case. And, I mean, the price in California compared to other states is substantially higher.

• 15:21Speaker 01

  Right.

• 15:22Speaker 03

  I mean, we averaged, I was averaging along the way, five seventy-five, five eighty-two around, kind of average was ballpark where we were at. California, you know, we're seven seventy, easy. So, I mean, we, we are definitely seeing a, a, a huge hit there. I think really what's happening right now is that the market doesn't feel safe. I think that, we talked about this multiple times, the amount of reserves that have been drawn down in the world, um, is phenomenal. We're at record lows. Like, if there ever was an emergency or something like that that happened right now where our supply was cut off, we would have, you know, less than twenty-five days, I believe, of crude oil in supply when we're used to having over forty. So we're at some of the lowest levels. And people around the world are starting to see that. People that are energy analysts, people that are purchasers.

• 16:05Speaker 03

  I'm seeing my forward-looking pricing into next year. We're seeing higher prices into the beginning, first quarter, second quarter maybe of next year, we might, might finally see a surplus, but we thought it was gonna happen sooner than later. We thought the price was gonna come down because, you know, we kind of thought this Iran, Iran war thing was gonna settle off and settle down and, and, and burn out, but it hasn't. And it just continues to get worse. They're unable to export the crude out, um, not only just through Hormoz, but pipelines have been hit. Now the Houthis are involved and, and getting involved in that waterway as well. So there's just a lot of things that are just compounding. And then on top of that, the Ukrainian crisis, or Ukraine, Russia war, where Ukraine now is actively bombing, um, refineries.

• 16:46Speaker 03

  And refineries predominantly produce diesel, lots of diesel. And so we're seeing a lot of that diesel off the market. I've seen in the news, but United States has been trying to strike a deal with Russia on some, some diesel recently, which, um, may or may not go through. I'm not sure where they're at with that. But we're really in a, in a really serious time right now. I think when it comes to the consumer, you talked about contracts. But, you know, this is, this is something that's hitting everybody in the pocket very, very hard.

• 17:13Speaker 01

  Right. Hey, so you, um, pardon my ignorance, because, I mean, I just saw headlines that there was a deal with, with Trump and Putin. Did that have anything to do with any of this stuff or address any of these things?

• 17:24Speaker 03

  Yeah, it was a diesel. I mean, they was trying to get some diesel released from Russia, trying to get some stuff lifted and, and to get some more Russian diesel in the market. Um, and that's, they were in the middle of it, I think, as of this weekend. Um, trying to work on something. I know a lot of the talk was on Friday, but, uh, I don't know if that'll make much of an impact at all. There's really been, there's been diesel, people talked about diesel bans, which, um, a ban on exporting diesel. Um, that's not the way our market works here. It won't help at all because it's regional. Regional pricing is one thing. Um, you know, just like California, for example, they're trying to, um, since we've lost so many refineries in the last several years, they're trying to actually reverse a pipeline that used to send refined products from, uh, Los Angeles to Arizona.

• 18:07Speaker 03

  Now they're trying to reverse that pipeline to bring in, um, and actually, again, I think it's called the, um, Western Passage Pipeline, but they're trying to get now Gulf Coast, uh, refined products to California, which is on par. It kind of looks like twenty twenty-nine or so that we, we could actually see that, which would help replace the loss of diesel. Because we're importing a lot of diesel now from, from Indonesia, and I believe from India and a few other places now. So we're importing these refined products, uh, because we don't have the refining capacity to create it. So trying to, to reverse that flow, but I don't believe, I think Arizona and Nevada, um, before that comes set and done,

• 18:47Speaker 03

  are sick and tired of relying on California and having to implement the California policies on, on the fuel, the, the low carbon fuel standards and all the things that, special fuel blends that we have. I think they're just kind of excited about having refined product pipeline coming from the Gulf Coast, which is much cheaper, uh, than what the crude, the refined products that we're getting from California. So there's a lot of down the road stuff, but short term, it's just not looking really good.

• 19:11Speaker 01

  Yeah.

• 19:12Speaker 03

  There's, there's not a lot on the plate. Activity in California is, is, is peaked, picking up. I, I should say peaked, but, you know, we had a judge lift a, uh, kind of lift a, uh, declare a fracking ban that we had. I've heard about this last week. I did a couple of different interviews on that. They, they basically stated that, um, you know, the judge says that the state of California did a de facto ban by just not approving any permits. And so that, that's not okay. You can't do that. You're taking away, you know, obviously our constitutional rights to develop our minerals on, on the basis of, of nothing, of politics, not health or anything like that. And if you, if you know anything about California crude or Kern County crude specifically,

• 19:53Speaker 03

  there's up to fifteen billion barrels of oil in the diatomite formation. That's out in the Bell Ridge on the, on the west side, Lost Hills, those bigger oil fields out there. You cannot produce those fields unless you fracture them. And the, and the, and the, and the sad thing is, is that, um, there's no fresh water there. There's no environmental issues with this at all. There, the, in far as water consumption is concerned, that's, I don't know if, you know, what's been shocking to me is all the arguments against data centers recently has been like the same ones they use against fracking. But when you dive into the data, the data isn't, isn't there for them.

• 20:23Speaker 01

  Right.

• 20:24Speaker 03

  You know, they're, they're basically saying the water usage, well, you know, we looked at fracking years ago and we said, wait, we use more water on a golf course in California before noon than fracking does all year long. So we're gonna walk away from billions of barrels of oil because of your argument. And so scare taxes and people have used. It's been very frustrating.

• 20:42Speaker 01

  Right. Yeah, it seems, uh, you pick and choose, pick and choose the science, I guess, based on your political leanings. Hey, again, we are being joined by Mr. Chad Hathaway, talking about oil and energy. Obviously, you can always throw in your questions too, six six one, three nine six, one thousand. When we come back, I want to talk a little bit about, a lot of times people just focus on gasoline prices, but obviously oil, uh, is a big, big deal all around the world. So when we come back, we're gonna talk a little bit about that. Stick around.

• 21:21Speaker 01

  Welcome back to the Money Wise Show. I'm your host, Chris Pelster with Sammy today, and joined by Chad Hathaway, and we are talking about oil and, and kinda like I said, sometimes people, when you hear about oil, maybe it's just focused on fuels or whatever, but, but kind of globally, some of the realities of energy and some of these different things, and maybe the impact that it's having on the young folks. Why don't we talk a little bit about that? So, you say a lot of times, people don't even realize kinda some of the realities around the world.

• 21:50Speaker 03

  Yeah, we talk about energy a lot. We've, you know, shared, it comes, we, we sometimes get into really engaging debates on climate change and things like that, but there's nothing, none of that is at debate here as far as what it is or what it isn't. But one fact I had, just, I just want to bring up one little fact that most people don't think of, what is there eight billion people in the world?

• 22:11Speaker 01

  Mm-hmm.

• 22:11Speaker 03

  2.1 billion of those people still use wood or dung to cook their food. Wood or dung, or waste, or charcoal, these are, this is 2.1 billion people in this world that are doing that. And they, the World Health Organization estimates that the household air pollution kills about 2.9 million people a year. So that's, you know, including 309,000 kids a year are getting killed because of this indoor air pollution. So, one of the biggest obstacles, or one of the biggest changes in that is propane. And propane is something that's a byproduct of petroleum, natural gas. It's something that's stripped off the natural gas stream, and, and we make it and ship it out, and we're, you know, we're a major exporter of propane.

• 22:54Speaker 03

  And propane is something that has changed the world. In fact, if you look at a satellite image of the Dominican Republic and Haiti, you will see the difference when Dominican Republic has had a propane subsidy for years, and brought in and invested in propane. And you look at the amount of dense forestry that's actually in the Dominican Republic, then you look at the, the nation of Haiti right next to it, it's been virtually strip-free of all its wood and anything that can be used to burn. And you look at that, it's, it's a very stark, very simple exercise you can do on Google Earth, just to look at the difference in those two countries. And, but propane, what propane can do for a nation, that's a pretty interesting deal. But anyways, I brought up a story today, it's called, "We're Teaching Kids Scarcity in an Age of Abundance."

• 23:35Speaker 03

  It's a great op-ed. It was a study of, it talks about basically the, the growing concern that we're raising a generation of young people who fear climate change, but often lack the basic understanding of energy that powers our everyday lives. So, the study was published in, in the Lancet Planter Health in December of 2021, illustrates just how significant this concern has become. This study took place over 10,000 people with the ages, between the ages of 16 and 25, with participants from countries all across the world, United States, United Kingdom, Australia, Brazil, France, so on and so forth. But the bottom line is the findings were really striking. 75% of the respondents said, "The future is frightening because of climate change."

• 24:16Speaker 03

  56% agreed with the statement that humanity is doomed. 59% were very or extremely worried about climate change, and more than 45% reported that their feelings about climate change negatively affected their daily lives. And 53.2, or 52.3% expressed hesitancy, hesitancy about having children because of climate change. Now, that's scary to me. It's really scary to me that, that they've gotten this data, but it, it reflects the perspectives of the young people that were surveyed, not necessarily scientific predictions. And equally concerning is the apparent disconnect between climate anxiety and just basic energy literacy. I run into this a lot where, you know, younger kids don't really

• 25:00Speaker 03

  know where, you know, they think food comes from the grocery store and, and gas just shows up at the gas station. But one of the troubling gaps that we're seeing here is fewer than one-third of high school students can identify America's three largest sources of electricity generation.

• 25:15Speaker 01

  Right.

• 25:16Speaker 03

  Imagine that? Three, the, I, can you name three?

• 25:20Speaker 01

  I mean, like the types?

• 25:23Speaker 03

  Natural gas, hydro, nuclear, wind, solar, I mean, yeah, one-third can't do that. Nearly three-quarters of teenagers incorrectly believe ocean plastic is a major contributor to climate change. Do you realize that ocean plastic is, it's really, yes, it's, it's a gross and disgusting thing to look at, but it's really not that big of a deal. In the scale and the size of our ocean, it is not that big of a deal.

• 25:53Speaker 02

  Yeah, it's, I mean, whenever I think you, I see it on videos or TVs, "Oh, it's the size of Texas." It is, and, and, and again, I think there's some truth to climate change.

• 26:07Speaker 03

  Yeah, we're arguing that.

• 26:08Speaker 02

  But I'm also a believer that climate changed in the past, too, and, and...

• 26:12Speaker 03

  Well, we're not, we're not even talking about whether we believe in it or not believe it. We're just talking about what effect it is having on our children. So, 75% of teachers who reported receiving no professional training or in teaching climate change. So, when these kids are picking up these things, I think that it's really important that we, we remind them that the world isn't gonna end tomorrow, and that we as a society have overcome so many challenging things in our lives over the last hundred years, or over the generations, you know, hundreds of years of Amer, and even in America, we've overcome so many substantial things to become great and survive. And I, I just think that that's, that's a tragedy that, that we have a younger generation that feels that way.

• 26:54Speaker 03

  And, and we've gotta be more realistic, you know, in 1960s, when the first Earth Day was actually being celebrated, the concern at that time was global cooling, which was the Ice Age was coming. And if you look it up, on the original Earth Day, the biggest concern that everybody had that time was the world was going to freeze.

• 27:12Speaker 01

  Right.

• 27:14Speaker 03

  And, and, you know, honestly, we don't even know. I mean, if you say that, that we say that, what are the effects and what are we doing? We don't ask ourselves these questions, I think, very often, like, "We're gonna, we're gonna spend this much money to become this much carbon neutral." What, how big of an impact does that really have on the world?

• 27:31Speaker 01

  Yeah.

• 27:32Speaker 03

  What happens if a forest fire comes through and burns everything down? And it's pretty, I saw, you know, Gavin Newsom and Governor Schwarzenegger were, were having a climate discussion last Friday. It was, it was on Forbes, put together a seminar, something, I can't remember what it was. But during, listening to Arnold Schwarzenegger talk, he said, you know, one of the things he said, he talked about Bakersfield. He said, "One of the most remarkable things about Bakers," how are we talking? You tell me, California. You know, he basically was talking, he said, "Remarkable things have happened in Bakersfield, and, and most of the oil workers there now work in, in renewable energy." And I'm like, "What are you talking about?" I mean, I sat there, and it's like, it was in the middle of that, that, that interview,

• 28:14Speaker 03

  and there, or that conversation was him and Gavin on the stage. I thought, "Man, this is so crazy." That people like this are saying things that are so far from the truth. Most of the jobs in solar go and come and they go. They don't stick around. They're not like our job, or industry. So, anyways.

• 28:28Speaker 02

  No, I'm, I'm glad you've brought that up, because there's a question here. Chad, if California allowed more fracking, would that actually bring more jobs and money back to Kern County? Or would it not make much of a difference?

• 28:41Speaker 03

  It would make a huge difference. Now, fracking, we have no fracking crews left in California, but the average frac crew was like 40 to 60 people. It's like an army of people that come in and do this job. And, and it's, and also the support staff and crews and all other people that are involved in, in, in the fracking, it would make a huge difference. And it's, it's shallow, it's, it's Bell Ridge, it's, it's Lost Hills, it's West Side Oil Production that, you know, it, it's, let me say something. If it's, if it's, if it's, say that oil in place is 15 billion barrels, and just say that 5 billion of that, it's usually the USGS, I think they said between 1 and 3 billion barrels of oil. That is a lot of oil to be recovered. It's shallow, it's easy to get to, it's very,

• 29:26Speaker 03

  very, very impactful on Kern County. Multiple jobs, multiple rigs would be drilling for it. I would believe that the Bell Ridge rig count is not nearly as high as what it used to be at all, because they can't frac. And that diatomite is a very, it's, it's like a honeycomb. If you look at it, it's what kitty litter is, basically.

• 29:44Speaker 01

  Yeah.

• 29:44Speaker 03

  But you, you, it's so saturated with oil, but it's, it has very low permeability, so you can't, it doesn't flow well, so you have to inject sand and water into it to break that rock open in order to free it. And I think that you would see a substantial increase in drilling if that was, was allowed. And, and the amount of work that goes into fracking in California now is unbelievable. The amount of paperwork and studies and work that has to be done around each well, which is kinda ridiculous, but, because you're doing them all in the same area, same place, is, is phenomenal.

• 30:17Speaker 01

  Yeah, so earlier, you mentioned some of the, maybe it being transported from Texas, or, you know, through the, the pipeline that you mentioned earlier. And so, somebody wrote in and said, "For your guest, I love the music today." There you go, love Sturgill. It says, "If we're building pipelines to bring fuel into California from Texas, what does that do for our local oil industry here?" So, would that stop, maybe, the fracking then, because we have that now, or what were you thinking?

• 30:42Speaker 03

  No, they're, they're talking about bringing in refined products. We don't have, we're down to seven refineries in California. We, we don't have, we're importing refined products. We're importing gasoline, diesel, those things now that we put in our car that we used to make here. That's what that pipeline is intended for, not oil, not oil itself. So, we import 60 to 70% of our crude right now from foreign countries. So, more, we can, we can drill for, till our, you know, we run out of drilling rigs in California, and we're still have a long ways to catch up. One thing that's really interesting, in 1990, even in the 2000s, we were producing 800,000 barrels a day of oil in California, and now we're down to 264,000 a day.

• 31:23Speaker 03

  Went from 800 to 264 solely on the backs of regulatory bottlenecks and constraints solely.

• 31:30Speaker 01

  Yeah. And it's not like, uh, consumption's gone down or need has gone down. It's like, not even at all, right? It's ramped up.

• 31:37Speaker 03

  Yeah, but that pipeline will have no effect at all. We, we, we will, we will never be able to meet unless there's just some sort of immediate, massive government-funded offshore opening, uh, miracle that happens in California to meet California's demand. We could, but we, it would take a miracle, which we, California would not allow that to happen.

• 32:00Speaker 01

  Yeah. And it all, like what's, what's crazy is talking about all this, going back to, uh, the people that are the biggest benefactors of what oil and what energy production has done for all these kids and not even understanding where the energy's coming from. The unhealthy view of the reality of, of, of like not wanting to have kids. And we were talking about how like so many things have gotten better because of energy, uh, um, uh, not, not dependency, but

• 32:25Speaker 03

  Abundance.

• 32:26Speaker 01

  Abundance, right? It, it's at our fingertips. I mean, these kids are using devices all day long that are using energy and they have no clue how it all comes to be, right? Every, every phone you have has a battery in it. Well, where does the energy from the battery come from?

• 32:39Speaker 03

  Well, that's just sad, but that's also to, we talk about diesel and gasoline a lot, but there's thousands and thousands. This is something we always talk about. I, I, we used to come in with a list of all the things, the odd things you didn't even know were made from oil. Whether it be heart valves or whether it be makeup or whether it may be paint or whether it be ink or whatever the thing is, there's thousands and thousands of products. If you didn't have oil, your, your house would be a shell of itself right now. I mean, there's just really your clothing you're wearing right now. If you have any kind of polyester or any kind of these dude, yoga pants. I mean, we all love yoga pants.

• 33:13Speaker 01

  That's actually why demand went up, I think.

• 33:15Speaker 03

  Yeah.

• 33:15Speaker 01

  Cause uh,

• 33:16Speaker 03

  Yoga pants.

• 33:19Speaker 02

  There's, there's a, just a quick statistic. I don't know if you're going to go on break or not. I can wait. It's just 1903, the Kern River field produced 17 million barrels, making it the top producing field in the United States. That's, that's, that's where Taft had this, the second branch of Bank of America open, opened in the city of Taft. That's how large the production was in Kern County.

• 33:43Speaker 03

  Well, Midway Sunset is Taft and Kern River is right out here, um, off the bluffs by, by Bigger's College. And that field, it's what's interesting about Kern River and Midway Sunset was is they, they were early 1900s, huge producers of oil, but then they kind of declined way, way down. And everybody said, oh, that we know we're done, you know, they're not going to do anything. Well, then somebody invented this thing called steam. Well, we didn't invent steam, but we invented putting it in the ground. And all of a sudden that Kern River oil field and the Midway Sunset oil field reached production limits that far exceeded what they ever did when they're initially drilled. And so if you look at the history of Kern River or Midway Sunset, which goes back to the Lakeview Gusher, which is one of the largest gushers in the, in the history of the world.

• 34:25Speaker 03

  These fields get reinvented. They get fracked. They get thermal EOR. They get, uh, water flooding technology going through it. They get more technical. They get horizontal drilling that's done to recover better. Technology has continuously improved these recovery factors in our oil fields. So when you, obviously if you're trying to kill oil and gas, one of the, one of the things you want to take away is that technology from the ability for us to use it. And that's really one thing that fracking, you take that away. There's a lot of oil that's been taken off the table in California, just because of the, the de facto ban on fracking. There's no real argument against it.

• 34:59Speaker 01

  Yeah.

• 35:00Speaker 03

  There isn't. You can't say it damages freshwater. You can't say that it uses a ton of water. It's, it's, there's all these things that, that, that it doesn't emit any more substantial amount of greenhouse gases.

• 35:11Speaker 01

  So all my, my ignorance would be, uh, is there a sinking of the ground or something? Does that cause any kind of concern with that? Cause that's what I've heard through the

• 35:19Speaker 03

  The sinking of the ground is called subsidence. It's the same thing that happens when you pull too much water out of an area. Like you're, you're familiar with all the pictures on the internet of a guy standing on a bridge with the, you know, up in the Northern Valley where they're staying on a bridge and it's 30 feet below where it was. That's from groundwater pumping. Anytime you pull something out of a reservoir and you don't put something back, the ground's going to subside.

• 35:42Speaker 01

  Gotcha.

• 35:42Speaker 03

  And so what we do in California, which we've been doing for decades, is that we have what they call material balance. So you take this much out, you've got to put this much back in. So yes, we watch subsidence extremely closely because with subsidence, literally casings will, uh, will collapse and good wells will get ruined. So we have to make sure we watch out for that. That's not because of fracking. That's just because we're pulling something out and we have to put, we have to put something back. It's volume. It's a void. It's simple.

• 36:11Speaker 01

  Right.

• 36:12Speaker 03

  You know, if you, if you pull this out and you don't put it back, your, your ground's going to sink. And yeah, subsidence is something that, we see in oil and gas and we, we mitigate and we work really hard to, and we track it better than anybody, way better. When, when, when Ag started tracking, uh, and I know cause I'm involved in water and water is a big part of my business. And also, you know, I farm and I own a lot of land. I look at, you know, the subsidence data that we're getting in Ag now and looking at that compared to what we do in oil. And it's, it's like dark ages compared to what we've been doing in oil for the last, I mean, we use seismic tilt meters out in the field that are watching every, you know, square foot across it. And

• 36:47Speaker 01

  Yeah.

• 36:47Speaker 03

  It's unbelievable. But yeah.

• 36:50Speaker 01

  Somebody, uh, wrote in, I remember being taught about the fear of the nuclear winter when I was in school in the early seventies. We were all going to die because the cooling was going to make crops not grow and we were going to have to farm in greenhouses. Um, so, so yeah, there's, there's been an ongoing, um, you know, concerns about these different things. And like I said, like, I, I like what you were saying where we're not debating, um, climate change or, or environmental issues and these different things, but,

• 37:18Speaker 01

  sometimes I think there's an unhealthy, uh, uh, not, not acknowledging, um, the abundance of energy and, and opportunity that we've been given and, and weighing that all out. So it's not that I don't want the kids to have no concern about climate change and different things, but to have over half of them not wanting to have kids because of that specific issue. Um, I mean, that's, that's sad. I mean, I, my, my family, my kids, uh, you know, yes, some of these things are challenges and all that stuff, but how sad that some kids would literally think this was so bad or it is so bad that

• 37:50Speaker 03

  That they cannot save, tying it to what you started the show with.

• 37:53Speaker 01

  Yeah.

• 37:53Speaker 03

  They can't save.

• 37:54Speaker 01

  Yeah. Well, that's what I, so perfect case. Is there some challenges to our environmental issues and all that stuff we're talking about? Yes. But yet at the same time, they won't even save up a thousand dollars for an emergency. What is more likely to happen? Them to have a financial emergency? Or to, to, to climate change creates such an issue for them that, that, that they shouldn't have had kids.

• 38:14Speaker 03

  We talk about, I mean, that's the thing. It's like, exactly. So if the world gets 2.2, uh, degrees Celsius hotter, we're not going to die.

• 38:24Speaker 03

  We're not going to die.

• 38:26Speaker 01

  Yeah.

• 38:26Speaker 03

  We'll adapt. We, we, that's weird. We live in places right now that are very inhospitable. We adapt.

• 38:31Speaker 01

  Right.

• 38:31Speaker 03

  And you know, you're right with the money thing. It's funny because you look at, I look at some of my employees and it's funny. They don't save anything. And you have all this free money out there for them that they could easily tap into. And it's pretty, we were looking at year end stuff, you know, because we do profit sharing and, and so obviously it's good for me, the owner as well. But I'm looking at the, and the one kid I have working for me, I won't say his name, but the kid who doesn't, he, he's a bucks AI. He's like an old soul. Saves more than anybody I have. He's in his twenties.

• 39:02Speaker 01

  Yeah.

• 39:02Speaker 03

  And I'm like, he was raised by his grandfather. And I'm like, okay, you know, this is cool, but everybody else who's out there and, you know, living paycheck to paycheck, you know, I, I just, it's, it's, there's something culturally here.

• 39:15Speaker 01

  Yeah.

• 39:15Speaker 03

  I don't know what it is.

• 39:16Speaker 01

  But it's, I think it's because of this. They, they almost have the mentality, like it's all going to crash and burn. You know, like, so might as well enjoy it while I have it now. And, and that's, that's what I mean. What's unfortunate because even 20 years ago or 25 years ago, people were complaining, not complaining, but, but fearful of this or that. And some things have become real issues. Other things, most things just die away and go away. I mean, I still remember panicking about the debt ceiling. You remember how big of a deal that was like 15 years ago? And I'm not saying it's not an issue and we still don't have those things, but so many people then make bad decisions or justify, I'm going to spend it now. But it's like those same people that did that now don't have money or maybe not in a good financial situation. And

• 40:00Speaker 01

  it's very much more likely the reality is, is you're going to be at a point where you want financial freedom. You want to be able to step away from work and whether or not you have saved up. And time is the biggest benefit for these young folks. And so it's, like I said, talking about retirement makes them think like, I'm, I'm not a grandpa. I don't need to be thinking about, uh, retirement, but it's like financial freedom. If you want to have the freedom to do what you want to be able to do and not have to go to work every day, you have to sacrifice a little bit now. And the earlier you start, the lower the sacrifice you have to make.

• 40:30Speaker 03

  I like the, I like the change of financial freedom. It's just like what global warming went, turned into climate change.

• 40:35Speaker 01

  Yeah.

• 40:36Speaker 02

  Yeah. I think, yeah.

• 40:38Speaker 01

  Just how you package it.

• 40:39Speaker 03

  Just reword it, you know, maybe I'll make up feel better. You want to be free? Save your money, punk.

• 40:46Speaker 02

  I think it starts with the education.

• 40:51Speaker 02

  Like my kid the other day was telling me, oh, they're gonna start teaching something in high school about finance. I'm like, well, it's about time. Our kids graduate from high school with no understanding of how to balance a checkbook or an account, or what's the savings account versus...

• 41:06Speaker 01

  What's a checkbook?

• 41:07Speaker 02

  What's a checkbook? Yes. You know, so to me, it starts there, educating as much as possible and having a good education system that throws everything, or a lot of this stuff that we're talking about, towards the kids so they can understand, bring them into the fold.

• 41:21Speaker 01

  Yeah.

• 41:21Speaker 03

  I think it's elective now. I think, but I know it is involved in the high school, but it's not necessarily something that is part of the mainstream. I'm not really sure, but it's a great, great point. I remember people trying to do that, come up with some sort of, you know, packaged portfolio to pitch to students and kids. But, you know, I really, the, growing up, I know the best teacher of money management was your parents. And your parents said, you know, mine always said, if you want money, there's a big neighborhood out there, go out there and find a way to raise it. You know, find a job, do something like that. I just think that the basic fundamentals, like I'll hire somebody who has, or work with somebody who has a phenomenal degree in engineering or whatever, but they can't do arithmetic.

• 42:01Speaker 01

  Right.

• 42:01Speaker 02

  Yeah.

• 42:02Speaker 03

  They may have a degree in math.

• 42:03Speaker 01

  Yeah.

• 42:04Speaker 03

  And like, oh, cool, you know, but they can't do basic arithmetic. So it's like, these are very much important life skills.

• 42:10Speaker 02

  It is. I think education is good for financials and stuff, but just introduce concepts about, about, you know, return on investment. What's a stock? How does that work? How can I get activated into this thing called the stock market? It does not have to be thousands of dollars. I mean, you can introduce 50 bucks, 25 bucks at times. I mean, Robinhood will allow you to do a lot of small trades and teach kids how to get involved in this thing called the stock market, or banking system, or whatever.

• 42:40Speaker 03

  But if you don't want to take the time, that's why people like you exist.

• 42:43Speaker 01

  Yeah.

• 42:43Speaker 03

  And that's the thing. I sit there and I study YouTube. I'll sit there for hours at a time, watching what I think is gonna happen with my portfolio next. And at the end of the day, I don't really change much.

• 42:52Speaker 01

  Yeah.

• 42:53Speaker 03

  You know, you just learn. There's so many places you can learn, and whether it be with somebody that's a financial advisor, or your employer. Like, if somebody came to me, I love it when employers come to me, they go, what should I do?

• 43:03Speaker 01

  Yeah.

• 43:03Speaker 03

  Yeah, that's a great feeling.

• 43:04Speaker 01

  You know, that's one of the things that, like, you know, the whole Trump accounts, I've had kind of mixed feelings about it. It's, it's kind of gimmicky, and it's, he put his name on it, of course, and stuff like that. But what it does do is, for young people, it's like, you now have a small stake in our economy, right? In the 500 largest companies, because I think it's an index fund of the S and P 500. So it's like, at least at a young age, they're like, hey, if the 500 largest companies in our economy continue to kick butt, like, you're going to participate with that.

• 43:32Speaker 03

  Correct.

• 43:33Speaker 01

  And the funny thing is, I've been doing this for a long time, and I've heard people complain all day long about social security, and if I would have been able to put the money in retirement accounts. Well, what's sad about that is, by and large, Americans are not doing anything. So they all complain about social security and the social security system, and it's theft, and this and that. But it's like, you could have put a little bit of money away for all these years, and by and large, Americans are not. And it's just gotten easier and easier and easier to participate with the success of our economy. So have all your political opinions, have your political leanings and all that stuff. But at the same time, our economy and some of these top companies in our economy have kicked butt for 30 years.

• 44:14Speaker 02

  Yes.

• 44:14Speaker 01

  And I'm not saying it would have been easy 30 years ago, because a lot of these companies and technologies didn't exist.

• 44:19Speaker 02

  Correct.

• 44:19Speaker 01

  So all you're doing is saying, I'm gonna participate with the 500 biggest, and you would have done very, very well. So as much as possible, hopefully this can light some fires. And thanks for Carl, like, who's getting out there and talking to his kids about it, because this is what we need. The more Americans that have financial freedom and options, the better our economy is gonna be. Thank you, guys, for making The Money Wise Show what it is. Thanks, Chad, for coming on and sharing.

• 44:42Speaker 03

  Thanks for having me.

• 44:42Speaker 01

  Thanks, Stephen, for the wonderful musical selections today. Sammy is gonna be on tomorrow with Stephen. They're gonna just go down, some things with John Cox, business editor of the Bakersfield Californian. Be smart, be safe, be money wise. See you tomorrow.

• 45:02Speaker 04

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