Mark unpacks the doom and gloom headlines on OPEC’s no deal, oil price bulls look bearish, and 175,000 bbls of Bakken crude reach the Netherlands.
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#060: Oil Price Bulls vs. Bears
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Iran struggles to find enough ships for oil exports
Grand Oil Bargain Is Victim of Saudi Arabia’s Iran Fixation
OPEC’s Failure Means Oil Is Headed Back Below $30
Craddick bullish on oil, gas industry future
Natural Gas Shoots Up As Energy Sector Becomes Increasingly Bullish
How Has The Outlook For Midstream Infrastructure Changed Since 2014?
Could a pipeline solve Uinta Basin’s oil-revenue woes?
Energy M&A stalls as buyers see little they want
Global refining margins help lift crude oil prices
Climate Alarmism and the Muzzling of Independent Science
Oil tanker laden with North Dakota crude reaches Netherlands
Panoramic from the pedestrian bridge over Memorial Parkway between Waugh and Shepherd.
Mark’s new gator neighbor.
The Weekly Onion
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#060: Oil Price Bulls vs. Bears
Transcripts Courtesy Of
James: I’m James Hahn II.
Mark: And I’m Mark LaCour.
James: And you’re listening to the Oil and Gas This Week Podcast, Brought To You By Red Wing, Episode #60. This is the show for busy oil pros who want to quickly keep their finger on the pulse of the industry. As I said, Episode 60, last week was your turn to be sick, Mark. And this week is mine.
Mark: Yeah, it sucks. Does it? I mean there’s no other way around it. It just sucks.
James: Yeah, it does but the show must go on and we don’t have time to talk about all that because we got a lot of things. Well, first of all, outside of me being sick, it’s been a very rough, rough week in Houston. The tornado’s touching down, we’ve lost I don’t know at least four or five people the last time I saw. So we definitely have to send prayers out for everyone in Houston because it’s been bad.
Mark: Yeah. I’ve lived here for 12 years and this is probably the worst flooding I’ve seen including the hurricanes so the flooding’s bad.
James: Yeah. I’ll stick it in the show notes. I got a panoramic of Memorial Parkway. People were walking their dogs in the parkway. That was interesting.
Mark: I have a pic of a five-foot alligator, maybe 150 yards in my house, the flood waters. My house is fine with the flood waters that are pushing to our neighborhood and pushing some of these alligators out of their natural habitat and it’s bizarre to see a live alligator sleeping three feet away from a sidewalk where people walk.
James: Oh, man. Yeah, all right. So we’ll get all those in the show notes at triberocket.com/tw60 and moving on to better news, we have great news for the Android users among us. Why don’t you fill them in, Mark?
Mark: The Android users probably could use great news. So we are officially on Google Play. So if you’re looking for our podcast and you’re an Android user, you now have a native Google app that you can use to subscribe to our podcast where they are likely to get uploaded every time we release an episode and it makes it just ridiculously easy for you to listen to us.
James: Yeah. So there’s still little confusion around exactly how to find it. If you go in and search for the show name, I’m not sure if that’s working. We got Paige on figuring out exactly how to do that because she is our podcast coordinator and also resident Android user but I know that if you search — I believe if you search one of our names, it comes up.
There’s a few different ways but we’ll get some more details around exactly how to do that but the good news is we are in the Google Play Store. So just open up your Google Play app and you don’t have to use the Stitcher or whatever workaround anymore.
All right. Moving on from there, we stand corrected. This has become a regular part of the show. Last week, Mark as we said was running a fever. He had chills and all of that and he made the mistake of mentioning the Washington Times being left leaning and oh, there was quite a few of you that jumped out on the opportunity to let us know that was not the case, Mark.
Mark: Yeah. So I stand corrected. My mistake. And thank you. Actually, audience. When we get something wrong, let us know. We love this. We want to know the truth as much as you do.
James: Yeah, definitely. And then I’ve heard from a few different people and in particular, it was Moss. I think he’s out in Toronto but a few different people pointing out on episode 56, we mentioned that Oman is a member of OPEC but they are in fact not a member of OPEC.
Mark: Nope. They’re not.
James: And then following up you just heard from someone in Twitter about our earthquake correction so I’ll let you take care of that.
Mark: Yeah. So I thought this was really cool. This is on Twitter. Swayne Shepp reached out to me and he goes, “Hey, Mark. I had to tell you. I always enjoyed the podcast but when you acknowledge reconsideration of earthquake data two shows back it brought a tear to my eye. Shockingly few people allow themselves to consider new evidence and have their minds changed on topics like this. Very impressed with your guys.”
And the reality is we want to know the truth. We don’t have our egos attached to being right. We want to know the truth. It’s part of our core business research here at modalpoint. It’s also just part of James and I’s personality. So we’re not attached to being right. We would rather know what the truth is. If we get something wrong or if we believe something and later new data comes out that shows that we were incorrect about that, we are happily to say, you know what? We’re wrong about that. This is what the reality is.
James: Yeah. I think you said it best when we were having a bit of an argument back and forth a while — I don’t know. It was a year ago or something. You said, I don’t care about being right. I’d rather find out that I’m wrong as quickly as possible. It’s exactly the same way I look at things.
All right moving on. Big, big shout out for Mr. James Gordey, one of our own. Launching his own very podcast. The Oil and Gas Young Professionals Podcast is available on iTunes. I got to admit, Mark. He’s making me look a little silly. For a show it was damn, damn good.[0:05:13]
Mark: I think he did an excellent job. Big shout out, James for having the courage to stick it out there. You’ve done great work so far. You’re on great work with us. It’s nice to see you go out on your own. James, I and our entire podcast audience support you 110%. So go get him, brother.
James: Go get him. I’m going to put together a pretty link. So if you want to go and listen and subscribe to James Gordey’s podcast, the Young Professional — Oil & Gas Young Professionals Podcast, just go to triberocket.com/ypp and that will take you straight to the iTunes store where you can — because he’s been such a big help to us and honestly, I’ve been dreaming about this for years in terms of seeing more and more people come out and do big things so this is great and then we also have a shout out that we have to give to Marshall Needham, Mark.
Mark: Yeah so Marshall’s out there at LSU in Baton Rouge. Go Tigers. And Marshall reached out to James and I and started talking to us about coming out and speaking, doing a live event at LSU. At the Society of Petroleum Engineers chapter there at LSU. So we’re working on that with them. If we can make it work, it’s going to be awesome.
If you’re anywhere within 100miles of LSU Baton Rouge and we go out there live, you need to make a trip out there. We don’t quite know what the format’s going to be and even if we did, knowing LSU, it’s probably going to change but it’s going to be fun, right? It’s going to be informative and it’s going to be real. So we’re looking forward to that.
James: Yeah. We’re definitely looking forward to that and anybody else is student chapters or anything, we’ve been talking about doing some more travelling with the show so reach out to us. We’re open to conversations but we have been doing a lot of housekeeping here at the beginning of the show. It’s time to get into the articles because we got plenty to cover.
We’re going to kick it off in Iran. Iran struggles to find enough ships for oil exports.
Mark: Yeah. So as they bring this production online, they need to get in the global market. They themselves do not have enough tankers to do that and because of the corruption and the violence and the recent sanctions that were removed, other companies don’t want to risk their super tanks there. So they’re in a bit of a pickle. They have a product they want to bring to market, there’s a market out there that wants to buy it which would benefit them but they have no way to transport, have no way to get it there.
So it’s a bit of a mess that I don’t see straightening out anytime soon. The other thing they don’t talk about in this article quite frankly is they don’t have the infrastructure to be able to load multiple tankers at one time. Their infrastructure’s been so severely crippled as far as their terminals that it’s hard for them to actually fill up a super tanker in a decent amount of time.
So the tanker industry is trying to figure out how to make some money here and they’re worried about risk. It’s almost impossible for them to get insured. The global market doesn’t want to buy some of this crude but it’s not worth to take in the financial risk of losing a tanker. Iran’s doing everything it can but they have a long history that quite frankly, they’re not going to overcome in a week or two. So this is a bit of a mess that’s not going to fix itself anytime soon.
James: When it mentions 20 tankers need to be modernized, what exactly are they mentioning or are they talking about modernization?
Mark: So every couple of years, in order for environmental catastrophes and loss of life, the world agreed upon certain standards. Things like now it’s double hauls, right? You can’t have a single haul tanker and that’s meant to check the people and environment so if you have an older tanker it doesn’t meet the newer requirements, you have to retrofit, you have to upgrade. Unfortunately to do that to a super tanker is somewhat expensive and you have to have dry docks which means that you have to have cash and you either have to own a dry dock or go rent a dry dock somewhere else in the world to do that retrofitting.
And quite frankly, right now, Iran doesn’t have the money to retrofit their older tankers so their older tankers are just sitting there. Nobody wants to invest money so that was the same problem here in Europe and the U.S., somebody would look at that as an investment like okay, I’ll invest $100 million knowing that once this tanker’s modernized, I’ll get back $120 million. Nobody’s going to take that chance in Iran right now. So they have tankers that need to be upgraded that aren’t going to happen, aren’t going to happen in anytime soon at least.
James: That’s really bazaar to hear you mention dry dock because here’s Iran they don’t have that availability and yet we’re going to be going and looking at it a rig in dry dock.
Mark: Yeah, Iran had it, it’s all been destroyed by war. All that infrastructure’s been destroyed by war. We’ve talked about this multiple times here about all these production coming into line. They don’t have the infrastructure to move it. The oil’s in the ground, yes, but to get it from the ground to the European marker or Asian marker or whatever is a struggle right now and it will be for a while.
James: All right. Let’s move on. Grand oil bargain is victim of Saudi Arabia’s Iran fixation. This has been creating a lot of doom and gloom headlines all around the interwebs so just catch us up on this meeting that happened and no deal and so forth.[0:10:04]
Mark: Yeah. So this was OPEC getting together to implement production freezes not cut production. The public has this misconstrued. So they were going to try to agree to not produce more oil in the global market, right? Just put freezing in place. The course of reasoning when you do that is drive prices up because they’re hurting as much in some ways long term wise even more than other countries from this low crude price environment.
So part of them being able to make this decision, Iran is a member of OPEC and Saudi Arabia insisted that Iran participated in this and Iran said no. It’s like we have a war torn country. We’ve had sanctions just lifted. We need to make money. We’re not agreeing to any production fixes. So the deal fell through.
I didn’t expect this to come through. I would’ve actually been surprised if it would have. If it would have, you would’ve seen the price of crude jump $10 just on perception overnight but once again, I didn’t expect this to happen that whole Iran Saudi Arabia thing is a mess and will continue to be a mess. Saudi Arabia is wielding global crude prices as a weapon against his enemies which Iran is one of them. Iran’s in a position where they need to make some money to start rebuild their infrastructure for their people so that’s a political quagmire that’s not going away anytime soon.
James: All right. Let’s move over to Seeking Alpha talking about doom and gloom. OPEC’s failure means oil is headed back below 30. Give us the reality.
Mark: So the reality is it may — once again, on a perception point of view, you may actually get below 30, it may get down to $29 or something. It’s going to be a short term thing. Supply, demand, over supply, those are the key factors, right? What is the demand? What is that demand growth globally? What is the supply? What is the oversupply? What is the rate of shrinkage of that oversupply? Perception drives markets a bit so because this fell through. The perception could drive oil down but it’s a perception. It’s not real.
The real business drivers in the price of crude oil would quickly come back and correct this. I don’t see oil staying below $30 a barrel. It’s not going to happen. I’m still sticking to my $50-$60 maybe $65 a barrel by August depends on what happens and I think the next OPEC meeting is in June. That’s going to be very pivotal. I think at that point, they will agree upon a reduction freeze not reduction. I think at that point, you can see $15-barrel jump in price right then and there. That’s why we’re still confident in our August prediction. But staying below 30 long term wise, not going to happen.
James: Yeah so more about that perception. And just to acknowledge anybody that’s listening and hearing a little thunder in the background, it is still raining in Houston so this is the Oil and Gas This Week quiet storm audition.
Mark: Yeah it’s thundered on my end too so our audience may hear it twice.
James: We’re going to move over to Texas here. We got Craddick who is — she’s the former, right? She’s not current or is she former? I’m not sure.
Mark: Yeah, she is. She is current, right?
James: Railroad commissioner. Christi Craddick. Bullish on oil and gas industry future.
Mark: Yeah because she’s the railroad commissioner of Texas. If she was railroad commissioner of California she wouldn’t be so bullish about this. If people don’t know in Texas, the oil and gas industry is regulated by railroad commissioners. It’s a long history of that but it makes perfect sense. Trust me I know. From the outside, it doesn’t sound like it makes sense but it makes total sense.
So Christi basically was a key note speaker at the Texas Alliance of Energy Producers in Wichita Falls Kansas and she says Texas continues to leave U.S. oil and gas production that we’ll continue to make money, we’ll continue to drive efficiency to the field. We’ll continue to drive environmental improvements and then as long as the federal government basically leaves us alone, we got this.
James: Yeah. We definitely got this. When you talk about the federal government leaving us alone, that’s probably going to happen because we’re in the end of a lame duck presidency or is there chances that some things could get pushed through at the end?
Mark: Nothing material’s going to happen. The problem is that no matter what political side you look at, nobody really supports the oil and gas industry. One political side tries to hurt us. The other political side just talks about it. They don’t really do anything. So we got to be really careful if things like the regulation of frack water, right? And fluids and all that sources.
That needs to be regulated at the state level because the way — the issues you have in North Dakota are different than the issues you have in Ohio which are different than the issues that you have in Texas. So each state needs to regulate that. From a federal point of view, our constitution says that the states are supposed to regulate stuff like that. If the federal government steps in, they can’t run a government much less come up with different ways to best manage frack water in different states based on different geology and different infrastructure.[0:15:07]
So that’s my fears. We have some federal regulation stepped in and tried to regulate something. They just know nothing about the — the state’s handling their best at it. As long as a state’s handling it, we’re fine. So that’s the fears that the federal government — same thing happened when the BP Macondo disaster happened, right? The federal government stepped in said okay, we’re going to fix this and the oil and gas industry went, bull! You don’t know anything about deep water. You can’t run a freaking windmill effectively.
So the industry as a whole stepped in, came up with something called the API Recommended Practice 75 which we then gave to the government and they took it verbatim and turned it into SIMS law. So thankfully, the engineers and the geologists had understood how to keep a Macondo disaster happen and was able to get together, put together some rules and regulations and federal government adopted it but if you let the federal government start writing stuff, it’s going to be a mess. And right now, I see no signs of that happening so we should be good.
James: All right. So we’re going to flip over to the Seeking Alpha people once again and they are bullish in this article. I should say this guy, bullish. Natural gas shoots up as energy sector becomes increasingly bullish. What’s going on in the natural gas side of things?
Mark: And so natural gases had been a low price environment forever and quite honestly, it’s not ever going to get back to $6 per billion cubic foot like it was $6 or $7 but it is starting to go up, right? So that increase of almost 8% just a few days ago is real. It’s not a perceptioning. It’s a real market trend. What’s happening is the U.S. is switching from coal to natural gas in their electrical generation plants. That’s a long term relatively high volume need for natural gas, right because people need electricity 24/7.
As these natural gas generators go online, you start pulling these oversupply out of the U.S. market and which is good for the producers, right? It’s good for the operators out there who concentrate on the gas so the prices go back up. Things start making money again regardless what the price of crude does. So yeah, the Seeking Alpha story, I buy right into it. The math makes perfect sense. It’s factual.
So we’re going to see — they mentioned around here that natural gas may be in a bull market. It’s not a bull market. It’s not that strong. It’s just on the upswing which is good. It’s still our electrical generation costs from a consumer from you and I James is still going to be cheaper than it was before we’re using coal and then it’s automatically 60% cleaner for the environment. So this is just a win-win-win type of situation.
James: And they do mention that the rally started after the failed OPEC talks and did that perception kind of get it going and then the reality is going to sustain it?
Mark: Yes. So once again, that shows you how the perception can drive a commodity price but then the business drivers kick in and correct it and then in this case, the business drivers there, we’re increasing our demand for it slowly but surely, we’re eating up this oversupply that’s out there and it’s good for everybody. It’s good for the operators, it’s good for the U.S. people. It’s good for their planet so just good stuff.
James: All right. I hate to put in so many darn Seeking Alpha stories but this one just fit right in with the editorial calendar that we’re going with these days in terms of infrastructure that we’re talking about and so I thought it was an interesting article. How has the outlook for midstream infrastructure change since 2014?
Mark: This is a good article. So I’ve been very bearish on midstream because of what’s going on. This low crude price environment has diminished the need for some of those pipeline projects, right? So midstream is still doing well. It’s not doing great like it as before. And there’s some good math in here.
It’s actually some very easy to understand graphs here showing the difference between 2014 and 2016 as far as projects, plan maintenance, that sort of stuff. Interesting enough, we just talked about gas, one of the things that’s changed is in 2014, a lot of these midstreams were built around moving crude around. Now, a lot of us built around moving gas around and we just talked about that and the reason why.
So midstream is still a good place to be. We need to make sure we stay on top of that story about those operators in court trying to get out of their long term commitments to the midstream companies because that can fundamentally change the industry but the Seeking Alpha story’s talking about how the man for midstream projects has diminished somewhat the — it’s still there. It’s still huge and it’s not as robust as it used to be and I agree 100%.
James: Where do we stand in terms of infrastructure in the United States when it comes to — obviously, we’re not Iran and we’re not anywhere else. We have thousands and thousands of pipelines everywhere. I guess I’m thinking in terms of a legacy or older types or things that need to be updated, where do we stand in infrastructure and things like that?[0:20:00]
Mark: Okay. So that’s two separate things. I’ll answer the second one first which is legacy upgrades, that sort of stuff. That’s an ongoing process by all midstream operators. It’s something they do and actually sometimes, it’s actually kind of cool. So sometimes, they’ll take a pipeline that originally was running from say, the Gulf Coast to the east coast and because the man has changed, now we need to get those crudes from Ohio to the Gulf Coast the reverse flow that pipeline.
So literally, business metrics has changed so much and now the pipeline flows the opposite way and makes money. Think about that. That’s actually really cool. Plant maintenance repair, all that type of pipeline integrity is an ongoing process and it will always be an ongoing process and there will always be an ongoing process.
As far as pipeline projects in the U.S., if you would see a map in the U.S. and all the existing pipelines you would say there’s no need for anything more because they’re everywhere and that’s not true. We have about, James, about 50 years of large Capex approved pipeline projects. We’re opening new pipelines. So the growth in the actual infrastructures going for at least the next 50 years. In 50 years now, if you and I are still doing the show, we’ll then see what’s going on at that point.
James: So if you’re working midstream, you got a little job scare you there.
Mark: Yeah. Of course.
James: All right. So more around infrastructure. Could a pipeline solve Uinta Basin’s oil-revenue woes? Out in Salt Lake City. The Salt Lake Tribute.
Mark: Yeah. So this is a good example of how the infrastructure’s not in place to move a special crude around. So this is actually Utah’s crudes and Utah’s crudes have a lot of — damn it, what’s it called? Paraffin which is wax, right? So when that oil gets below a certain temperature around 110 or so degrees, that paraffin starts to turn into wax and it seals up pipes and pumps can’t work and you can’t open valves and that sort of stuff. So you need to keep the temperature and the oil above that degree. That paraffin is actually extremely valuable, right? There’s refineries out there that want it.
So right now, all of this crude has been moved by trucks which you and I and our audience knows is very inefficient. So this is an article that was keynoted by a rule planning group showing that if they would build a pipeline that would be able to heat that oil that they could move it to many more markets and making much more money and actually revitalize the profit building in this field and they’re absolutely dead on right.
The cool thing is in 2016, the ability to build that pipeline that can keep that oil heated is easy. We’ve been doing it for years and years and years. So if they can pull together the money, to actually get this thing done, it will revitalize that field which then if you think about it creates jobs, right? Throws taxes in a local municipality so it’s kind of a win-win for everybody. Let’s see if they can pull it off.
James: Where would that pipeline connect into? They would be trying to get it down here to the Gulf Coast then?
Mark: They’re going to get to the Gulf Coast and also to the west coast. There are refineries in the west coast even though we don’t talk about them a bunch. And so those refineries have an appetite for that paraffin heavy crude and we actually have some here in the Gulf Coast as well. And the interesting thing is they don’t actually have to build a heated pipeline to the Gulf Coast.
If they could build a heated pipeline to the very top of Oklahoma, there’s existing companies that have pipelines that can handle that hot oil that they would just tap into and they would move it for them. So it’s really not this huge project. I’m not going to say it’s an easy project. It’s a midsized project. It would be not that hard to pull of successfully.
James: It’s interesting. It mentions Utah accounts for just 1.27% of U.S. oil production yet it offers some of the lightest and lowest sulfur crudes.
Mark: Yeah. And there’s some refineries in the U.S. that covet that, right? That’s their holy grail. And so the market is there for them. They have the production ability. Now, can they put the infrastructure in place to get it to market effectively and efficiently?
James: All right. So moving from infrastructure projects over to M&A. Energy M&A stalls as buyers see little they want.
Mark: Yeah. And we’ve talked about this before. The perfect storm is a couple of years ago. It didn’t happen and now, I wouldn’t want to invest money in a company that’s dead heavy. I wouldn’t want to invest money whose financial model was built at $80 a barrel. Those companies are going to go bankrupt. We have a bunch of equity being pumped into debt equity that actually own this companies so the companies now instead of selling assets are actually selling equity which means ownership to this debt equity companies.
So the machine is starting to turn and the machine is new. There’s never been a debt equity market oil and gas in North America during a downturn except for this one. So it’s too early to see where it shakes out. Do these debt equity companies want to flip these companies in which case the next big future for M&A activity and oil and gas is probably around 2018 or they’re going to actually stand them up and make some money when the price of crude comes back?
It’s too early to tell but this article sees exactly right. There’s no excessive M&A activity in the oil and gas market. It’s about — the number of deals are about norm. The total value has to decreased I think 15%, 19% something like that but yeah, there is no huge M&A activity in the U.S. in the needed future.
James: And a lot of that again driven by companies that were set up at $80 a barrel.
Mark: Yeah. Of course.
James: Not exactly the kind of long term growth companies that you’re looking to invest in possibly.
Mark: What it was is Wall Street, right? People saw I know they like to make a good return of their money and so people that did not know oil and gas invest in these companies and that’s just not a good combination.[0:25:47]
James: Never a good combination. Got to know the industry. Let’s move over to Reuturs, John Kemp. Something that you’ve talked about and we’ve talked about on previous shows but global refining markets help lift crude oil prices.
Mark: This is an interesting article because they’re talking about strictly fuels. Gasoline, diesel, jet fuel, bla, bla, bla whereas the real money actually in petrochemicals, we’ve talked about on past shows but even in the fuel market, the margins have increased which is great. There’s something called a crack spread basically what’s the cost of the crude raw sockets you buy and then what’s the cost of the in product that you sell. That difference is called a crack spread and that crack spread is going up which is good.
Fuel finders typically are not very profitable. There tend to be long term little margin businesses and because of this low crude price environment, even the fuel fighters are actually making more money than normal. So once again, if you’re a company looking to figure out where to sell your product or service in the oil and gas industry, look at downstream.
James: Let’s dig into this a little bit because it is the first time that I’ve had any definition of this crack spread we’ve talked about. So they talk about 321 crack spread and then 532, 211 can you break that down for us?
Mark: Yeah. That’s the industry specific talk so 532 is five barrels of crude, get three barrels of gasoline, two barrels of diesel. 211 is two barrels of crude, one barrel of gasoline, one diesel. It’s just a ratio. Now, ratio if your refinery — every year, you’re trying to figure out — it’s almost like playing poker. Farmers do this too. So every year, you’re trying to figure what’s going to be the hot crop next year so in the U.S., farmers are always looking at soy beans and corn, which one of those could be bigger dollars and which — have to plant them now and then hopefully next year, I’m right about that and I’ll make a lot of money.
Same way with the refineries. They have to look at next year what is going to be the most profitable? Is it going to be jet fuel? It’s going to be diesel. It’s going to be gasoline. So right now, diesel’s there’s a surplus so there’s less profit in it. So last year, the refineries that determine they wanted to go in a diesel are hurting right now. Now, the refineries that determine they want to put most of their production of gasoline are doing great because there’s an increase in demand for gasoline.
So once again, it’s a bit of a gambling game. The refineries here in the U.S. and really the big refineries globally they know how to do this. They have hundreds of years in experience of doing this right. So most of the time, they get it right.
James: So very interesting. So if you want to read the article in full and get a little bit more educated on all of these different spreads and so forth, just go to the show notes, triberocket.com/tw60. We have an interesting article from American Thinker that leads into a discussion about a forthcoming documentary so I’ll let you take it from here, Mark.
Mark: So this article is obviously biased toward the Right Wing but I agree with almost everything in here. A lot of people don’t understand that it’s not that hard to get the entire planet of the majority of the voices on the planet to agree and believe in something that’s not real. I’ll give you a good example. Flat Earth. The whole world believed the Earth was flat, right? The universe revolves around the earth. Once again, the whole world believed in that.
James: How about bleeding that happened for thousands of years? I mean that’s what killed George Washington, right?
Mark: Y2K. The world was worried about Y2K. SARS. I mean I could go on and on and on. This idea that man has increased the rate of global warming is in that same boat. It’s not true. It has not been proven. Global warming is true, right? So our climate fluctuates, right? We’re either in the ice age or we’re in a global warming. If you look out to your house right now, and you don’t see glazers that means you’re not in an ice age which means you’re naturally in a period of global warming. CO2 causes about 4% of global warming. Water vapor causes 95% of it.
So if you’re really worried about global warming, you’ll be talking about how to decrease water vapor. You never hear any of that. So this is a good article about how especially U.S. and Europe politicians have suppressed alternate view points on the climate, have taken their own scientists who believe in this and place them in places of prestige and generally has influenced the entire population where the entire population believes that the Earth is getting ready to get going global warming caused by man, and it’s going to destroy everything. It’s not true at all.[0:30:17]
So once again, I’ll be first to recognize this article as a political slant but the basic facts in there are the basic facts. We are in a period of global warming because we’re not in the ice age so we have to be in a period of global warming. There’s not enough data yet to prove if man have made an impact, have we sped that process up. There’s no record. There’s not enough information.
We know the 50 years. We have that data. In a lot of ways, if you’re an environmentalist especially in North America and you’re worried about this, you should be a big proponent of fracking because like I said earlier, by switching coal and natural gas in the U.S., you automatically reduce greenhouse emissions by 60% yet I don’t know, James. Maybe you do. I don’t know any environmentalist that’s a proponent of fracking. So it’s just a mess.
James: No but even Feel the Burn just came out against it. So yeah, I didn’t mention that the title is Climate Alarmism and the Muzzling of Independent Science and then you sent me a link to a documentary that I’ve seen a couple of days previously and that’s called the great climate hustle — or I’m sorry climatehustlemovie.com. So talk to us about that.
Mark: So this is great. Everything I just rattled off, I can’t believe somebody did this without getting — I kidnapped my green peas or something but everything I just talked about, they went and actually put a movie together with facts showing how the politicians in U.S. and Europe have swayed public opinion and they’re using it for their own political gains.
I mentioned the water vapor is 95% of greenhouse gasses and CO2 is 4%. The reason everybody talks about CO2 is you can make money out of it. You can make money trying to remove CO2, have a carbon capture all that sort of stuff. You can’t make money trying to get rid of water vapor. So that’s what the bottom line is. But I just can’t believe this was made a movie. Now, I have no idea if it’s good or not. I’m going to watch it and report it back if they actually did a good job with it.
James: Yeah. We’ll see. Now let’s get to philosophical or theological but personally, I call this whole movement neo-pantheism and pantheism is an old, old, old, way of seeing the world in terms of the world is the god and god is the world and Americans in the world in general have — once you abandoned something you have to put something else in its place and there was a cartoon of —
It was Al Gore holding up a globe and saying you will believe in global warming or burn and there’s a lot of just really poor not only science but philosophy that goes into this but I will get off of that soap box before I get myself in too much trouble and move over to maybe a good story I think so from Tulsa where oil tanker laden with North Dakota crude reaches the Netherlands.
Mark: Think about that. Isn’t that cool?
James: I think it’s awesome actually.
Mark: We listed export ban. Here’s a bunch of North Dakota oil and the truth is if you read the article, it’s also some Gulf of Mexico oil by accident mixed together but let’s just pretend it’s all North Dakota oil. In the Netherlands, and you know what’s cool about this, James? Is that they’re getting a premium. They’re getting about I think it’s about $14 more a barrel by selling it to Netherlands than they would’ve sold it here in the U.S. So here’s prosperity for North Dakota.
The Netherlands get the crude they want even the midstream company, whoever that tanker is they got to make money and normally they wouldn’t be able to make money moving North Dakota crude to the Netherlands so I just think this is awesome positive win-win story.
James: Yeah, 175,000 barrels and you are right on with the $14 premium per barrel so good news for the oil field of America. One thing I did forget to mention while we were going through, we’re talking bullish and bearish and everything and we’re talking about oil field cost. We have to give a shoutout to our sponsor Intech. They put together a white paper just for you and I’ll let Mark talk about it.
Mark: Yes. That’s a great segue, right? Bullish, if you need to decrease your field operations out there, you need to look at this white paper. Intech’s a pro at this. They’re also been doing it for a very long time and if your field operations could use a cost reduction to help you in this low crude price market, check out this white paper.
They took put this together just for our audience. It’s a quick read but it shows how their process automation not only can decrease cost but also decrease downtime, making sure you stay up as long as possible and right now that would just be perfect for your business. So take a second, download the white paper, read it, you’ll be glad you did.
James: Intechww.com/podcast. We do have our onion of the week. We will see drumroll if we get a chuckle from Mark. Guy at Gym Has Precious Little Diary to Keep Track of All of His Exercises.
Mark: That’s a no chuckle.
James: That’s a no chuckle. Well, I know that you sometimes you’ve joked with me before I get on the mic, you’re that guy which needs to have however much pumped up for his reps and so anyway, moving on from there, no chuckle from Mark. We do have a winner though Mark LaCour. Who is our winner this week for the Red Wing offshore bag?[0:35:25]
Mark: I bid congratulations to — drumroll in your head. Cody Courso. Cody, congratulations. You won the bag. Cody works —
James: He’s an independent operator. He’s an owner operator. So he’s one of the guys out there making it happen. Type of guys that I used to talk to when I was on the phone back at Drillinginfo, probably him and a handful of guys drilling holes and making money.
Mark: Yeah. That’s awesome. So Cody, you’re going to love this bag. Thanks for registering and you’re now one of the elite with the Red Wing offshore bag on your shoulders.
James: Very elite because I got to say I’m sporting it everywhere I go. I can’t get enough of it and if you would like your own, you can go to redwingshoes.com/podcast. There is no purchase necessary and see official site for details and I’ve actually talked to one or two people these days who do listen to our show who are surprised that red wing has something besides boots, Mark.
Mark: I run into it all the time right? What helps them also is hurting them a little bit with their flame resistant clothing. They’re known for the boots in the oil and gas industry for over 100 years. I mean I have a pair. Everybody I know has a pair. And so that’s what people think of them but Red Wing is so much more in that. If you and your people need PPE, you need flame resistant clothing and that protective gear, Red Wing has it and it’s the same high quality as their boots so think about that.
You had those boots — I mean my boots are literally 15 years old and they’re going to outlive me. How cool to have flame resistant clothing that’s comfortable that fits that is just as high quality that lasts that long so think of Red Wing for more than boots. They provide almost everything you need in the oil field to stay safe.
James: Yeah and they provide one stop shop.
Let’s move on to events. We have the Drillinginfo road show coming up. I believe Thursday but anyway it’s April 28th out at the Omni Houston Westside throughout the W’s, 11 a.m. to 2 p.m. I’ll be there. Always a great opportunity to hear Allen Gilmer speak. I don’t know about you, Mark but —
Mark: Oh, no. I’ll be there too. You’re absolutely right. Always a great deal to hear Allen speak and see what’s going on in Drillinginfo’s world, right? So if you’re out there and if you’re a service company or operator and you touch that upstream part of the house, you probably want to go to this. You probably want to know what’s coming and Allen tells it like it is.
James: Yeah. He’s a straight shooter. As a straight shooter as they come and not only get a good idea of what’s happening in the oil field but I know that they’ve always got some new crazy products they’re coming out with so we’ve got that and we have OTC coming right up, Mark LaCour.
Mark: Yeah, folks you have to go to OTC. Even if you aren’t involved in ending offshore you have to see this to believe it. It’s the largest offshore technology conference in the world but it’s the third largest tradeshow of any kind in the world. May 2nd through 5th right here in Houston and you need tickets. And they’re not cheap but you know what? I’ll give it to you free. Sign up for my newsletter list. The mailing will have free OTC tickets on there.
So if you want to go, and if you don’t want to buy tickets sign up for my newsletter and you will be invited. And James and I both will be there. We’ll be there most of the time probably spending some time on top of the FMC booth right in the middle of OTC so if you’re going hit us up on Twitter or social media choice and let us know if we can connect with you we’ll be happy to do so.
James: I was just thinking it’s really good that both of us got our seasonal sickness out of the way before —
Mark: Oh, that’s a good point.
James: So we both have all of our sickness out of the way. We’ll be nice and healthy by OTC. And then we have pretty much last call coming on the rig tour.
Mark: Yeah so rig tour is April 30th. I don’t care what you do. I don’t even care if you work in the oil and gas industry. If you have any interest, this is a once in a lifetime event. I will never be able to pull this off again.
So it’s a real rig, it’s a spar rig. It’s in dry dock which means you don’t have to get in a helicopter or crew boat. You drive up to it. If you search for API young professionals, rig tour, you should be able to find it and James will stick a link in the show notes and it’s free. You have to join API but it’s only $24 a year but this is a once in a lifetime event and it’s April 30th so it’s right around the corner.
James: Yeah. You can go to triberocket.com/rigtour and it’ll take you straight there or triberocket.com/tw60 and get all of the links. Speaking of links, you can go to triberocket.com/qa and/or any of the other ways that people send us questions because they are money but we’ve got two weeks away until all of the questions need to be in Mark.
Mark: Yes. So this is our first part of Q&A. Anything you want to know about the industry, reach out to us and if we can answer it we will and if we use your question, we’ll give you a big shout out on the air.
James: Yes and please by all means go to triberocket.com. There’s an orange button on the left — or I’m sorry, on the right where on your desktop or laptop that says send voicemail and if you send us a voice mail, we’ll certainly be playing that on the air. Big news on the LinkedIn front, Mark. We are four members away from 1,000 in the LinkedIn group.[0:40:39]
Mark: Oh, come on people. Get your boyfriends or girlfriends to sign up. We just need four more people.
James: Four more people. It’s huge though. Thanks to everyone who had signed up. This is ridiculous.
Mark: Yeah. Reach out to your friends, your neighbors, your co-workers, whatever so much more of our future podcast information will be distributed. It’s part of the family, if you’re a member, you are a part of the family so join have your friends join, and your co-workers join. You should pull strangers aside and have them join. We just need four more.
James: Four more people. We’ve had two reviews I’ll go ahead from the iTunes store. Interesting to see if anybody will jump on the Google Play bandwagon. We’ll see what happens over there but from the iTunes store, four stars from BK guy, “I’m learning so much! Thanks for unpacking the industry news in layman’s terms. That’s because me, I’m a simple man, Mark LaCour. You’ve got to bring it down to my level.”
I’m happy that we’ve got five stars going there and then lefty88, five stars. “I was looking for a podcast that would help stay on the pulse of the oil and gas industry especially in today’s market and have definitely found what I was looking for. James and Mark have great rapport and do a great job of hitting the latest news topics around the oil field and providing insights into the industry trends. Great job and keep it up.” Man, we are on episode 60. We are going to 100, 2, 3, however long you will put up with us so how can they leave us a review, Mark?
Mark: Yeah, folks. Please, please, please, leave us a review. It helps us with our search engine rankings which means that we can stomp on our competition which we like to do once in a while. So basically go to iTunes. You can also — James and I have a link in the show notes where you can go straight to it. It takes a minute and a half. Please, please, please leave us a review. And if you don’t like the show, leave us a review too. We want to know that just as much.
James: Yeah. It doesn’t have to be a five star. You can hate on me, hate on — they never hate on you, Mark but if you want to hate on me do it all day long. It would be fun to see Mark get hated on but he’s kind of the brains in the operation. I’m just here for good looks.
All right, if you’ve made it this far in the show please share it with your friends. You can go to triberocket.com/li to share it on LinkedIn, /sharetw to share it on Twitter and /sharefb to share it on Facebook. With that said that Mark, I’m ready to go lay down in bed.
Mark: Yeah. So do great work. Pay it forward and we will see you next time.
James: Go find some grease, guys.