Latest / Silicon & Shale Podcast / Gas-to-GPU: 90 GW Announced, 2 GW Running

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Gas-to-GPU: 90 GW Announced, 2 GW Running · Silicon & Shale Podcast

• 0:00
  SPEAKER_00: So most of the gas-to-GPU
• 0:01
  SPEAKER_00: story you have been hearing is a slide deck with a hard hat on it.
• 0:29
  SPEAKER_00: Our read,
• 0:30
  SPEAKER_00: not theirs,
• 0:30
  SPEAKER_00: their numbers,
• 0:31
  SPEAKER_00: and Texas leads announced capacity,
• 0:33
  SPEAKER_00: they say,
• 0:34
  SPEAKER_00: on Permian gas in a permissive regulatory climate,
• 0:37
  SPEAKER_00: which makes what landed September 21st feel even sharper.
• 0:40
  SPEAKER_01: Governor Abbott directed the Texas Commission on Environmental Quality
• 0:43
  SPEAKER_01: to halt permits sought by data centers until ERCOT finishes its audit.
• 0:46
  SPEAKER_01: TCEQ owes his office a compliance update by Monday, October 19th.
• 0:50
  SPEAKER_00: Same week,
• 0:50
  SPEAKER_00: three companies announced three different ways to turn natural gas
• 0:53
  SPEAKER_00: into data center power.
• 0:54
  SPEAKER_00: Engines on a pad.
• 0:55
  SPEAKER_00: A 20-year power contract next to a gas plant.
• 0:58
  SPEAKER_00: A 22-mile dedicated pipe.
• 1:00
  SPEAKER_00: Announced megawatts everywhere.
• 1:01
  SPEAKER_00: Steel in the ground.
• 1:02
  SPEAKER_00: Rarer.
• 1:03
  SPEAKER_01: 90 on paper.
• 1:05
  SPEAKER_01: Two spinning.
• 1:06
  SPEAKER_01: That's the show.
• 1:07
  SPEAKER_00: Welcome to Silicon & Shale, episode 17, week of October 5th, 2026.
• 1:11
  SPEAKER_00: I'm Derek.
• 1:12
  SPEAKER_01: I'm Packer.
• 1:13
  SPEAKER_01: Oil patch meets the algorithm.
• 1:14
  SPEAKER_01: And this week, the algorithm has a lot more announcements than crankshafts.
• 1:17
  SPEAKER_00: Quick fence line.
• 1:18
  SPEAKER_00: Two episodes back.
• 1:19
  SPEAKER_00: GPU hours starting to trade like a commodity.
• 1:22
  SPEAKER_00: Last week was total and mistrawl on reservoir models.
• 1:25
  SPEAKER_00: This week is the plumbing.
• 1:26
  SPEAKER_00: Molecules to megawatts to servers.
• 1:28
  SPEAKER_00: And how much of that is real iron versus a headline.
• 1:31
  SPEAKER_01: Case studies we already dug.
• 1:32
  SPEAKER_01: Kodiak Gas Services.
• 1:34
  SPEAKER_01: 76 megawatts on rented engines for six years.
• 1:37
  SPEAKER_01: New Era Energy and Digital with Vistra.
• 1:39
  SPEAKER_01: A 20-year power purchase agreement with a letter of credit that makes a banker sit up.
• 1:43
  SPEAKER_01: Woodway Energy Infrastructure.
• 1:45
  SPEAKER_01: A 22-mile, 30-inch pipeline aimed at one behind-the-meter power project.
• 1:49
  SPEAKER_00: Plus, RCOT's energization pause on new data centers 75 megawatts and up,
• 1:53
  SPEAKER_00: reports due December 10th.
• 1:55
  SPEAKER_00: And that TCEQ letter that never says the words behind the meter.
• 1:59
  SPEAKER_00: Links in the show notes.
• 2:00
  SPEAKER_00: Where something isn't disclosed, we say so.
• 2:02
  SPEAKER_00: More than once.
• 2:03
  SPEAKER_00: Start with the scoreboard because the deals make more sense once you know how thin
• 2:06
  SPEAKER_00: the operating slice is.
• 2:08
  SPEAKER_00: Clean view again.
• 2:09
  SPEAKER_00: As of mid-2026,
• 2:10
  SPEAKER_00: about 2 gigawatts of behind-the-meter generation online across four projects,
• 2:14
  SPEAKER_00: the vast majority at XAI's Colossus sites outside Memphis.
• 2:18
  SPEAKER_00: They expect total operating capacity between 2.8 and 3.2 gigawatts by the end of 2026.
• 2:24
  SPEAKER_01: So even the optimistic near-term number is still a few gigawatts against 90 announced.
• 2:28
  SPEAKER_01: And they flag permitting delays nationwide,
• 2:30
  SPEAKER_01: New Mexico pipeline blocks on a signature Stargate project,
• 2:33
  SPEAKER_01: a New Jersey air permit fight for Microsoft's partner Nebius on
• 2:35
  SPEAKER_01: a 400-megawatt on-site plant.
• 2:38
  SPEAKER_01: 92% of the projects they tracked were announced since the beginning of 2025.
• 2:42
  SPEAKER_01: A year ago, this was a curiosity.
• 2:44
  SPEAKER_01: Now it's a development strategy.
• 2:46
  SPEAKER_00: Equipment side still their report.
• 2:48
  SPEAKER_00: Heavy-duty combined cycle turbines have long lead times.
• 2:51
  SPEAKER_00: Developers are reaching for mobile gas generators,
• 2:54
  SPEAKER_00: aeroderivative turbines, reciprocating engines, refurbished industrial turbines.
• 2:59
  SPEAKER_00: Among OEMs they track, Caterpillar has about 33% share.
• 3:02
  SPEAKER_00: Bloom Energy at 14 after a big Oracle deal.
• 3:05
  SPEAKER_00: Speed to Power is winning the brochure.
• 3:07
  SPEAKER_00: Permits are winning the calendar.
• 3:09
  SPEAKER_01: And they put a dollar figure on why people tolerate inefficiency.
• 3:12
  SPEAKER_01: Their research says AI data centers can generate 10 to 12 million dollars per megawatt per year.
• 3:17
  SPEAKER_01: Bring a site online even a few years early and the foregone revenue is enormous.
• 3:20
  SPEAKER_01: That's their framing for why nobody is waiting politely in the utility queue.
• 3:24
  SPEAKER_00: Their research dated as their research.
• 3:26
  SPEAKER_00: Our job is to separate the 90 from the two.
• 3:29
  SPEAKER_00: Now the three West Texas adjacent deals from the week of September 21st,
• 3:32
  SPEAKER_00: case studies of paper versus pad.
• 3:34
  SPEAKER_01: Kodiak Gas Services, the Woodlands.
• 3:36
  SPEAKER_01: Most of the patch knows them as compression.
• 3:38
  SPEAKER_01: Their boilerplate now says contract compression, distributed power, and energy infrastructure.
• 3:42
  SPEAKER_00: Watch the middle words.
• 3:44
  SPEAKER_01: 76 megawatts of behind-the-meter baseload power capacity,
• 3:47
  SPEAKER_01: including balance of plant, to a West Texas data center.
• 3:50
  SPEAKER_01: Six-year term.
• 3:51
  SPEAKER_01: Approximately 40 reciprocating natural gas-fueled generation units.
• 3:55
  SPEAKER_00: Forty recipes, a small herd, not one big turbine on a pad.
• 3:58
  SPEAKER_01: And a herd is something a compression company already knows how to feed.
• 4:01
  SPEAKER_01: Engines, fuel gas, uptime, parts, people who show up at two in the morning.
• 4:05
  SPEAKER_01: That's the part I actually like about this one.
• 4:07
  SPEAKER_00: I'll give you that.
• 4:07
  SPEAKER_00: Real skill, priced like one.
• 4:09
  SPEAKER_00: Now the customer.
• 4:10
  SPEAKER_01: Customer,
• 4:10
  SPEAKER_01: in their words,
• 4:11
  SPEAKER_01: a data center operator that is contracted with an investment-grade rated hyperscaler
• 4:15
  SPEAKER_01: and has a GPU designer as guarantor of the data center lease.
• 4:18
  SPEAKER_00: Three parties, zero names.
• 4:19
  SPEAKER_00: That sentence has more guarantors than nouns.
• 4:22
  SPEAKER_01: And I'm not guessing names on this show.
• 4:23
  SPEAKER_01: If you hear somebody on the internet say which GPU designer it is,
• 4:25
  SPEAKER_01: ask where they read it, because it wasn't in the release.
• 4:27
  SPEAKER_01: Iron starts moving in the fourth quarter.
• 4:28
  SPEAKER_00: Revenue shows up the quarter after.
• 4:52
  SPEAKER_01: The size fits our available power fleet,
• 4:54
  SPEAKER_01: the location is within our established operational footprint in West Texas,
• 4:57
  SPEAKER_01: and the customer has strong commercial and financial support.
• 5:00
  SPEAKER_01: Honestly, that's a refreshingly boring quote.
• 5:02
  SPEAKER_01: Right size, right place, good credit.
• 5:05
  SPEAKER_00: He also says this is Kodiak's second long-term contract to supply primary power to
• 5:08
  SPEAKER_00: a data center.
• 5:10
  SPEAKER_00: Approximately half of the current power portfolio is now under long-term power contracts.
• 5:14
  SPEAKER_00: Target, 2 gigawatts of power generation capacity by 2030.
• 5:18
  SPEAKER_01: 76 megawatts toward 2 gigawatts.
• 5:20
  SPEAKER_01: Real contract.
• 5:21
  SPEAKER_01: Real step.
• 5:22
  SPEAKER_01: Long way from the finish line.
• 5:24
  SPEAKER_01: Both true.
• 5:25
  SPEAKER_00: And notice,
• 5:26
  SPEAKER_00: this is one of the few deals in this story with actual iron named 40 engines,
• 5:30
  SPEAKER_00: not a gigawatt on a slide, 76 megawatts you can count in crankcases.
• 5:34
  SPEAKER_00: Against CleanView's national scoreboard,
• 5:36
  SPEAKER_00: Kodiak is a small number that at least sounds like a pad plan.
• 5:39
  SPEAKER_01: Deal two.
• 5:40
  SPEAKER_01: This is the one with paperwork I actually enjoyed reading.
• 5:43
  SPEAKER_00: New Era Energy and Digital, ticker NUAI, Midland.
• 5:46
  SPEAKER_00: Press release September 21st, 8K, same day.
• 5:49
  SPEAKER_00: Agreement signed Friday, September 18th.
• 5:52
  SPEAKER_01: Fun fact from the SEC company record.
• 5:54
  SPEAKER_01: Their industry code is still crude petroleum and natural gas.
• 5:57
  SPEAKER_01: Former name, New Era Helium.
• 6:00
  SPEAKER_00: Helium, then data centers still coded as oil and gas.
• 6:02
  SPEAKER_00: Very West Texas biography.
• 6:04
  SPEAKER_01: The deal.
• 6:05
  SPEAKER_00: A New Era subsidiary signed a power purchase agreement with Luminant, a Vistra affiliate.
• 6:10
  SPEAKER_00: Minimum 200 megawatts, maximum 207 for phase one of New Era's Texas critical data center.
• 6:15
  SPEAKER_01: Press release.
• 6:17
  SPEAKER_01: Luminant will supply power
• 6:19
  SPEAKER_01: from Vistra's 1,180-megawatt natural gas-fired generating facility in Odessa,
• 6:23
  SPEAKER_01: Texas, which is located immediately adjacent to the TCDC site.
• 6:27
  SPEAKER_00: Gas plant next door, wire over the fence clean.
• 6:30
  SPEAKER_01: 8K, energy from that 1180-megawatt Odessa plant,
• 6:34
  SPEAKER_01: or otherwise sourced from other available sources or the ERCOT grid.
• 6:37
  SPEAKER_00: Or the ERCOT grid.
• 6:38
  SPEAKER_00: That clause is not in the press release, not a scandal.
• 6:42
  SPEAKER_00: Power contracts have backup language all the time.
• 6:44
  SPEAKER_00: Reading lesson, brochure versus lease.
• 6:46
  SPEAKER_01: Term.
• 6:47
  SPEAKER_01: 20 years from first delivery.
• 6:49
  SPEAKER_01: Auto one-year renewals.
• 6:51
  SPEAKER_01: Power expected third quarter 2027.
• 6:54
  SPEAKER_01: Filing.
• 6:54
  SPEAKER_01: Luminance obligations subject to conditions precedent by December 31st, 2027,
• 6:59
  SPEAKER_01: including a phase one purchase and sale agreement for the related substation
• 7:02
  SPEAKER_01: and equipment.
• 7:03
  SPEAKER_00: Signed PPA.
• 7:04
  SPEAKER_00: Still a list of things that have to happen.
• 7:06
  SPEAKER_01: Credit.
• 7:07
  SPEAKER_01: New Era posts a letter of credit for $116 million within 15 business days of signing.
• 7:11
  SPEAKER_01: Plus additional security not to exceed $82.8 million due on or before the delivery date.
• 7:16
  SPEAKER_00: Arithmetic out loud and this is us, not the filing.
• 7:19
  SPEAKER_00: 116 plus 82.8, 198.8 million, if the second piece posts at its full cap.
• 7:25
  SPEAKER_01: Are some.
• 7:26
  SPEAKER_01: Filing gives two pieces, we added them.
• 7:28
  SPEAKER_00: Just under 200 million of potential credit support to buy power.
• 7:32
  SPEAKER_00: And if the Phase 1 purchase agreement doesn't get signed in time
• 7:34
  SPEAKER_00: and New Era doesn't pay invoiced construction costs,
• 7:37
  SPEAKER_00: Luminance Affiliate can draw on that credit support for those costs,
• 7:39
  SPEAKER_00: up to 116 million.
• 7:41
  SPEAKER_01: Alongside the PPA, a Development Framework Agreement.
• 7:44
  SPEAKER_01: Vistra gets a right of first refusal starting April 2028
• 7:47
  SPEAKER_01: on future on-site generation at New Era's Ector County site,
• 7:50
  SPEAKER_01: a five-year right of first offer on certain generation and battery projects.
• 7:54
  SPEAKER_01: And after Luminant starts delivering power,
• 7:56
  SPEAKER_01: New Era's project company issues Vistra non-voting equity equal to 5% of
• 8:00
  SPEAKER_01: the fully diluted equity in the portion Vistra is powering.
• 8:03
  SPEAKER_00: Power seller ends up owning a slice of the customer,
• 8:05
  SPEAKER_00: slice that only appears once electrons flow.
• 8:08
  SPEAKER_00: Landman just leaned forward.
• 8:09
  SPEAKER_01: CEO Charlie Nelson.
• 8:12
  SPEAKER_01: Contracted power materially reduces Phase 1 development risk.
• 8:15
  SPEAKER_01: Goal.
• 8:16
  SPEAKER_01: Turn the site from a site with a power plan into permitted powered land.
• 8:20
  SPEAKER_00: Permitted powered land.
• 8:21
  SPEAKER_01: I actually think that's a real category now.
• 8:23
  SPEAKER_01: Land with permits and a power contract is worth more than land with a nice aerial photo.
• 8:27
  SPEAKER_00: It's a real category after the letter of credit posts.
• 8:30
  SPEAKER_00: Before that, it's a phrase.
• 8:31
  SPEAKER_01: Release also says land secured, construction permits in hand, room to expand.
• 8:36
  SPEAKER_01: 493 acres in the Permian anticipated capacity scaling to 1.4 gigawatts over time.
• 8:42
  SPEAKER_01: Tenant.
• 8:42
  SPEAKER_01: Not named.
• 8:44
  SPEAKER_01: An attractive opportunity to any quality tenant currently in the market.
• 8:47
  SPEAKER_00: For lease sign with a very nice font.
• 8:50
  SPEAKER_00: 1.4 gigawatts anticipated on one site.
• 8:53
  SPEAKER_00: CleanView's whole operating U.S.
• 8:54
  SPEAKER_00: behind the meter fleet right now is about 2 gigawatts across four projects.
• 8:58
  SPEAKER_00: Perspective,
• 8:58
  SPEAKER_00: and Vistra's quote from Claudia Morrow,
• 9:01
  SPEAKER_00: demand for reliable power to support digital infrastructure continues to grow across
• 9:04
  SPEAKER_00: the United States.
• 9:06
  SPEAKER_00: Nobody's going to argue with that sentence.
• 9:08
  SPEAKER_01: The boilerplate talks about flexible power,
• 9:09
  SPEAKER_01: including behind the meter and self-generated power.
• 9:12
  SPEAKER_01: This particular deal is a PPA with a gas plant next door that can also lean on the grid.
• 9:16
  SPEAKER_00: Strategy paragraph and specific contract are allowed to be different.
• 9:19
  SPEAKER_00: You just have to read both.
• 9:20
  SPEAKER_00: And the full PPA and framework text aren't public yet.
• 9:24
  SPEAKER_00: 8K says both file with a quarterly report for the period ending September 30th.
• 9:28
  SPEAKER_00: Everything we just said is from summaries.
• 9:30
  SPEAKER_01: Same week, separate filing, separate topic.
• 9:31
  SPEAKER_01: Say it carefully.
• 9:32
  SPEAKER_00: Thursday, September 24th.
• 9:34
  SPEAKER_00: Another 8K and a Prospectus Supplement at the Market Stock Program.
• 9:38
  SPEAKER_00: Up to $100 million of common stock sold from time to time, commissions up to 3.5%.
• 9:44
  SPEAKER_00: Use of proceeds,
• 9:45
  SPEAKER_00: general corporate purposes,
• 9:46
  SPEAKER_00: capital expenditures, working capital, paying or refinancing debt.
• 9:49
  SPEAKER_01: Filings do not connect that stock program to the letter of credit.
• 9:52
  SPEAKER_01: We're not connecting them either.
• 9:54
  SPEAKER_01: Two filings in the same week.
• 9:55
  SPEAKER_01: That's all we know.
• 9:56
  SPEAKER_01: We don't do stock tips.
• 9:57
  SPEAKER_01: We barely do weather.
• 9:59
  SPEAKER_00: Deal 3.
• 9:59
  SPEAKER_00: Woodway.
• 10:01
  SPEAKER_01: Their newsroom, Tuesday, September 22nd.
• 10:03
  SPEAKER_01: Houston, developer, owner, operator of Interstate Natural Gas Pipelines.
• 10:07
  SPEAKER_01: Backed by Macquarie Capital Principal Finance.
• 10:09
  SPEAKER_00: Definitive agreements for a 22-mile, 30-inch natural gas pipeline.
• 10:13
  SPEAKER_00: Dedicated transportation capacity to a behind-the-meter power generation project
• 10:16
  SPEAKER_00: for hyperscale data center development.
• 10:19
  SPEAKER_00: Designed around the customer's requirements, future scalability.
• 10:22
  SPEAKER_00: Commercial service expected first half of 2028.
• 10:25
  SPEAKER_00: Subject to customary regulatory reviews.
• 10:27
  SPEAKER_00: Woodway owns and operates 24-7 control room.
• 10:30
  SPEAKER_01: Customer, not disclosed.
• 10:33
  SPEAKER_01: Location, not disclosed.
• 10:35
  SPEAKER_01: Capacity, not disclosed.
• 10:37
  SPEAKER_01: Megawatts.
• 10:38
  SPEAKER_01: It feeds, not disclosed.
• 10:40
  SPEAKER_01: Cost, not disclosed.
• 10:41
  SPEAKER_00: Length, diameter, and year.
• 10:43
  SPEAKER_00: A 30-inch dedicated line says somebody is planning for real volume
• 10:47
  SPEAKER_00: or somebody picked the pipe size before they picked a press release with
• 10:49
  SPEAKER_00: a place name.
• 10:50
  SPEAKER_00: Both can be true.
• 10:52
  SPEAKER_00: Woodway describes its business as interstate pipelines.
• 10:55
  SPEAKER_00: The release doesn't say which state.
• 10:56
  SPEAKER_00: We're not going to tell you it's in the Permian or in Texas.
• 10:58
  SPEAKER_00: We don't know.
• 10:59
  SPEAKER_01: CEO, Diako Aviki.
• 11:01
  SPEAKER_01: The fuel supply certainty required to support their growth.
• 11:04
  SPEAKER_01: Kodiak is engines.
• 11:06
  SPEAKER_01: New Era is a power plant that can also lean on the grid.
• 11:08
  SPEAKER_01: Woodway is whether the molecules get there at all.
• 11:11
  SPEAKER_00: Put them on a board.
• 11:12
  SPEAKER_00: Gas, dirt, credit, clock, and one more column this week.
• 11:15
  SPEAKER_00: Announced versus running.
• 11:17
  SPEAKER_01: Gas.
• 11:17
  SPEAKER_01: Kodiak.
• 11:18
  SPEAKER_01: Fuel supply not disclosed.
• 11:20
  SPEAKER_01: New Era, Vistra's plant or other sources.
• 11:22
  SPEAKER_01: Plant fuel supply not in the disclosure.
• 11:25
  SPEAKER_01: Woodway, dedicated pipe, gas supplier not named.
• 11:28
  SPEAKER_01: Three deals, zero named gas sellers.
• 11:30
  SPEAKER_00: Dirt.
• 11:32
  SPEAKER_00: Kodiak, pads for 40 engines plus balance of plant at a site nobody named.
• 11:36
  SPEAKER_00: New Era, 493 acres in Ector County, plus certain substation and transmission construction costs.
• 11:42
  SPEAKER_00: The framework says New Era reimburses Vistra 4.
• 11:45
  SPEAKER_00: Woodway, 22 miles of right-of-way somewhere.
• 11:48
  SPEAKER_00: Surfaces where all three touch the ground.
• 11:51
  SPEAKER_00: Landmen will be negotiating for megawatts, not just minerals.
• 11:54
  SPEAKER_00: And I'd bet a lot of surface-use agreements in West Texas were not written
• 11:57
  SPEAKER_00: with 40 generator sets in mind.
• 11:59
  SPEAKER_01: That's our opinion, not a fact from these releases.
• 12:02
  SPEAKER_01: But it's a question worth asking about your own paper.
• 12:04
  SPEAKER_00: Credit.
• 12:05
  SPEAKER_00: Kodiak leans on the customer's chain,
• 12:07
  SPEAKER_00: investment-grade hyperscaler, GPU designer guaranteeing the lease.
• 12:11
  SPEAKER_00: New Era posts its own paper, 116 letter of credit, up to 82.8 more.
• 12:16
  SPEAKER_00: Woodway has a Macquarie-backed sponsor, three answers to who's on the hook.
• 12:20
  SPEAKER_01: Clock.
• 12:21
  SPEAKER_01: Kodiak, six years, revenue starting early 2027.
• 12:24
  SPEAKER_01: New era, 20 years from first delivery, power expected third quarter 2027.
• 12:29
  SPEAKER_01: Conditions due by end of 2027.
• 12:31
  SPEAKER_01: Woodway, in service first half of 2028.
• 12:34
  SPEAKER_01: Six years, 20 years, and a pipe that isn't due until sometime in the first half of 2028.
• 12:39
  SPEAKER_00: Three different bets on how long an AI load lives and how fast it needs power.
• 12:43
  SPEAKER_00: Kodiak's customer gets power quickly on a short term.
• 12:45
  SPEAKER_00: New era's customer, whoever that ends up being, gets a long term but has to wait.
• 12:49
  SPEAKER_00: Woodway's customers building for the long run from the ground up.
• 12:52
  SPEAKER_00: None of them are wrong.
• 12:52
  SPEAKER_00: They're just different answers.
• 12:54
  SPEAKER_01: Announced versus running column.
• 12:55
  SPEAKER_01: Kodiak names 40 engines and a deployment quarter.
• 12:58
  SPEAKER_01: Closest thing here to a near-term steel story.
• 13:00
  SPEAKER_01: New Era names a PPA, a plant next door, and a tenant who isn't there yet.
• 13:04
  SPEAKER_01: Paper that wants to become powered land.
• 13:07
  SPEAKER_01: Woodway names pipe for a project that isn't due until 2028.
• 13:10
  SPEAKER_01: Against CleanView's 90 versus 2 national picture,
• 13:13
  SPEAKER_01: these are three different distances from a spinning shaft.
• 13:15
  SPEAKER_00: Before the pause, confession time about us.
• 13:18
  SPEAKER_01: For years,
• 13:18
  SPEAKER_01: when I heard behind the meter,
• 13:20
  SPEAKER_01: I filed it under off-grid, off the regulator's desk, done.
• 13:23
  SPEAKER_01: Somebody said the phrase in a meeting and I heard no permission needed.
• 13:26
  SPEAKER_01: I never once went and read who a given rule actually applies to.
• 13:29
  SPEAKER_00: You liked it because it sounded like a hall pass.
• 13:31
  SPEAKER_01: I did.
• 13:32
  SPEAKER_00: Named.
• 13:33
  SPEAKER_00: Now the work.
• 13:34
  SPEAKER_00: ERCOT's board presentation for September 14th and 15th.
• 13:37
  SPEAKER_00: Energization pause affects large load data centers and crypto facilities not
• 13:41
  SPEAKER_00: yet connected to the ERCOT system.
• 13:43
  SPEAKER_01: Does that reach a project that runs purely on its own gas engines and never plugs into the grid?
• 13:47
  SPEAKER_01: Documents we read don't say.
• 13:48
  SPEAKER_01: Open question.
• 13:49
  SPEAKER_01: We're not answering it for ARCOT.
• 13:51
  SPEAKER_00: New Era's filing specifically lets power come from the ARCOT grid.
• 13:54
  SPEAKER_00: Is that site in batch zero?
• 13:56
  SPEAKER_00: Does the pause touch its third quarter 2027 date?
• 13:59
  SPEAKER_00: Neither document says.
• 14:00
  SPEAKER_01: Pause in plain English.
• 14:01
  SPEAKER_01: August 3rd, ARCOT's Notice.
• 14:03
  SPEAKER_01: Letter from Governor Abbott directing verification before advancing data center,
• 14:07
  SPEAKER_01: large loads through interconnection.
• 14:09
  SPEAKER_01: From the board deck,
• 14:10
  SPEAKER_01: ERCOT paused the batch zero study process,
• 14:12
  SPEAKER_01: delayed final classification,
• 14:14
  SPEAKER_01: and paused approvals to energize data centers or crypto facilities 75 megawatts
• 14:17
  SPEAKER_01: or greater.
• 14:18
  SPEAKER_00: Batch zero for folks who don't live in stakeholder meetings.
• 14:21
  SPEAKER_01: ARCOT's Definition.
• 14:23
  SPEAKER_01: A one-time transitional study of reliability impacts of large loads that want
• 14:26
  SPEAKER_01: to connect to the ARCOT system and meet certain eligibility criteria.
• 14:30
  SPEAKER_01: As of that deck, 204 projects, 66.4 gigawatts, conditionally baseload.
• 14:36
  SPEAKER_01: 158 projects, 127.9 gigawatts, conditionally studied load.
• 14:41
  SPEAKER_01: 362 large loads total.
• 14:43
  SPEAKER_00: Kodiak's whole deal is 76 megawatts.
• 14:45
  SPEAKER_00: New era phase one up to 207.
• 14:47
  SPEAKER_00: That queue is measured in gigawatts.
• 14:49
  SPEAKER_01: Provisional classifications to transmission utilities.
• 14:52
  SPEAKER_01: September 3rd, final inclusion or exclusion expected in December.
• 14:56
  SPEAKER_01: RCOT files two reports with the Public Utility Commission by December 10th.
• 14:59
  SPEAKER_01: Eligibility verification and community impact review.
• 15:02
  SPEAKER_01: Community impact RFI covers medium loads 25 to 75 megawatts and large loads,
• 15:07
  SPEAKER_01: data centers, and crypto.
• 15:09
  SPEAKER_01: Original rule had the study done by April 9th, 2027.
• 15:12
  SPEAKER_01: Deck now, impact on that timeline to be determined.
• 15:15
  SPEAKER_00: To be determined is the most expensive phrase in any development schedule.
• 15:19
  SPEAKER_00: September 9th.
• 15:19
  SPEAKER_00: Verification requests out.
• 15:21
  SPEAKER_00: Notarized.
• 15:22
  SPEAKER_00: 10 business days.
• 15:23
  SPEAKER_00: Then September the 21st.
• 15:25
  SPEAKER_00: Market notice MC092126-01.
• 15:28
  SPEAKER_00: After a September 11th workshop,
• 15:30
  SPEAKER_00: ERCOT updated the online form so the transmission utility can't see what
• 15:33
  SPEAKER_00: the data center developer uploaded and the distribution utility can't either.
• 15:36
  SPEAKER_00: Developer can see the utility's homework.
• 15:38
  SPEAKER_00: Utilities get a blank page.
• 15:41
  SPEAKER_01: Somebody at that workshop raised a hand.
• 15:43
  SPEAKER_01: Software patch from a Friday workshop.
• 15:45
  SPEAKER_01: I respect the hustle even when the form looks like a one-way mirror.
• 15:47
  SPEAKER_00: Why this matters if you sell gas or lease land.
• 15:50
  SPEAKER_00: Our take.
• 15:51
  SPEAKER_00: Interpretation, not the documents.
• 15:53
  SPEAKER_00: A gas-fired megawatt is only worth what the load on the other end can switch on.
• 15:56
  SPEAKER_00: Part of that calendar is being set in Austin.
• 15:59
  SPEAKER_00: If a project sits outside the pause, big deal.
• 16:01
  SPEAKER_00: Inside, also big deal.
• 16:02
  SPEAKER_00: We don't know which.
• 16:03
  SPEAKER_01: We... Second layer, same Monday the 21st.
• 16:06
  SPEAKER_01: We first caught it listening to another show.
• 16:08
  SPEAKER_01: BDE on the Crude Reality's feed from Digital Wildcatters.
• 16:11
  SPEAKER_01: Episode dated September 22nd.
• 16:14
  SPEAKER_01: Did the room agree?
• 16:25
  SPEAKER_01: Not even close.
• 16:27
  SPEAKER_01: Another voice.
• 16:29
  SPEAKER_01: I read that differently.
• 16:30
  SPEAKER_01: Behind the meter doesn't touch the grid, doesn't need TCEQ emissions permits.
• 16:35
  SPEAKER_01: Someone comes back.
• 16:36
  SPEAKER_01: You absolutely need at least a standard permit for emissions,
• 16:39
  SPEAKER_01: whether you're behind the meter or not.
• 16:41
  SPEAKER_00: Live argument about behind the meter the day after.
• 16:43
  SPEAKER_00: Open question with a microphone.
• 16:45
  SPEAKER_00: Their argument, not our ruling.
• 16:47
  SPEAKER_00: We're not permit lawyers.
• 16:48
  SPEAKER_00: Governor's letter is on his website.
• 16:49
  SPEAKER_00: We read it.
• 16:50
  SPEAKER_01: Dated September 21st to TCEQ Executive Director Kelly Keel.
• 16:54
  SPEAKER_01: First line.
• 16:56
  SPEAKER_01: With this letter,
• 16:56
  SPEAKER_01: I am directing the Texas Commission on Environmental Quality
• 16:59
  SPEAKER_01: to halt all permits sought by data centers.
• 17:01
  SPEAKER_01: Further down,
• 17:02
  SPEAKER_01: no other state agency shall move forward with regulatory approvals related
• 17:05
  SPEAKER_01: to data centers until the audit information is acquired.
• 17:08
  SPEAKER_01: Pause issuance of all permits related to data center projects until ERCOT completes its review.
• 17:13
  SPEAKER_01: Compliance update, due Monday, October 19th.
• 17:15
  SPEAKER_00: Does it say behind the meter?
• 17:17
  SPEAKER_01: Never uses the phrase.
• 17:18
  SPEAKER_01: Doesn't carve anything out.
• 17:19
  SPEAKER_01: Doesn't list which permits.
• 17:21
  SPEAKER_01: Says all permits related to data center projects.
• 17:23
  SPEAKER_00: So the hall pass confession got more expensive.
• 17:26
  SPEAKER_00: RCOT's pause is written around loads not yet connected to the grid.
• 17:29
  SPEAKER_00: Governor's letter is written around data centers, period.
• 17:32
  SPEAKER_00: How TCEQ applies that to on-site gas generation is still open.
• 17:36
  SPEAKER_00: October 19th is when we might hear.
• 17:38
  SPEAKER_01: Fairness.
• 17:38
  SPEAKER_01: Kodiak's release that Monday morning doesn't mention permits either way.
• 17:41
  SPEAKER_01: New Era says construction permits in hand and doesn't say which ones.
• 17:46
  SPEAKER_01: We don't know how the letter touches either project.
• 17:48
  SPEAKER_01: Not guessing.
• 17:49
  SPEAKER_00: Back to the equity kicker.
• 17:51
  SPEAKER_00: Vistra's 5% non-voting stake only shows up once power flows,
• 17:54
  SPEAKER_00: doesn't vote,
• 17:55
  SPEAKER_00: rides along, piece of upside for committing a big chunk of a plant for 20 years.
• 17:59
  SPEAKER_00: Anybody who's worked a carried interest or an override knows that feeling.
• 18:03
  SPEAKER_01: Our analogy.
• 18:04
  SPEAKER_01: Not a legal description.
• 18:05
  SPEAKER_01: So Vistra isn't holding a working interest.
• 18:07
  SPEAKER_01: It's holding a Watking interest.
• 18:09
  SPEAKER_00: Oh no.
• 18:10
  SPEAKER_01: Yeah.
• 18:10
  SPEAKER_00: Take that back to the land department and leave it there.
• 18:13
  SPEAKER_01: Stays in the file, never again.
• 18:15
  SPEAKER_00: Let's make this practical.
• 18:17
  SPEAKER_00: Who in our audience should do what with this?
• 18:19
  SPEAKER_00: Producers first, West Texas especially.
• 18:21
  SPEAKER_00: Three deals, zero named gas suppliers.
• 18:24
  SPEAKER_00: If you have gas near where these projects are going,
• 18:26
  SPEAKER_00: who's buying fuel for these engines, plants, and pipes, and on what terms?
• 18:29
  SPEAKER_00: Firm, how long?
• 18:30
  SPEAKER_00: What quality spec for engine fuel?
• 18:32
  SPEAKER_01: And notice the word baseload in Kodiak's release.
• 18:35
  SPEAKER_01: Baseload means the customer expects it on all the time.
• 18:38
  SPEAKER_01: That's a different customer than most gas buyers are used to.
• 18:40
  SPEAKER_00: Midstream.
• 18:41
  SPEAKER_00: Woodway just showed what a dedicated lateral for one power project looks like on paper.
• 18:45
  SPEAKER_00: 22 miles, 30 inches, owned and operated by the pipeline company, 24-7 Control Room.
• 18:51
  SPEAKER_01: If you run gathering or interstate pipe,
• 18:52
  SPEAKER_01: the question is whether your system is sitting near a site that might want
• 18:55
  SPEAKER_01: the same thing.
• 18:56
  SPEAKER_01: And whether your contracts are ready for a customer whose load doesn't care
• 18:58
  SPEAKER_01: about gas prices the way a utility does.
• 19:01
  SPEAKER_01: Again, interpretation.
• 19:02
  SPEAKER_00: Land people.
• 19:03
  SPEAKER_00: Pads, substations, easements.
• 19:06
  SPEAKER_00: The surface is where all three deals touch the ground.
• 19:09
  SPEAKER_00: If you manage surface or negotiate right of way,
• 19:11
  SPEAKER_00: read your forms with a generator set and a substation in mind.
• 19:14
  SPEAKER_00: Noise, access, water decommissioning.
• 19:17
  SPEAKER_01: And if you're a mineral owner under one of these sites, the question is different.
• 19:20
  SPEAKER_01: The data center doesn't produce minerals,
• 19:22
  SPEAKER_01: but the gas that feeds it might come from somewhere near you.
• 19:24
  SPEAKER_01: Might.
• 19:25
  SPEAKER_01: Nobody has disclosed where any of this gas comes from.
• 19:28
  SPEAKER_00: Compression to power is the business story I keep circling.
• 19:30
  SPEAKER_01: Kodiak's core business is keeping compression running in the field,
• 19:33
  SPEAKER_01: and a lot of field compression is engine-driven.
• 19:35
  SPEAKER_01: Power generation on recipes is engines, too.
• 19:38
  SPEAKER_01: The skill set rhymes.
• 19:39
  SPEAKER_01: The risk is that a data center customer is a lot less forgiving than a producer with
• 19:42
  SPEAKER_01: a compressor.
• 19:44
  SPEAKER_01: Producers have seen downtime.
• 19:45
  SPEAKER_01: A hyperscaler contract probably has very different expectations.
• 19:49
  SPEAKER_00: Probably.
• 19:49
  SPEAKER_00: We haven't seen the contract.
• 19:51
  SPEAKER_00: But the release says baseload, primary power.
• 19:53
  SPEAKER_00: That's not backup.
• 19:54
  SPEAKER_00: That's the main feed.
• 19:55
  SPEAKER_01: Which is why I like it and worry about it at the same time.
• 19:58
  SPEAKER_00: That's the right amount of worry.
• 19:59
  SPEAKER_01: Now let me push back on you a little.
• 20:01
  SPEAKER_01: You've been hard on the unnamed customers all episode.
• 20:03
  SPEAKER_00: I have.
• 20:04
  SPEAKER_01: Case for the releases.
• 20:05
  SPEAKER_01: Our general read, not in these documents.
• 20:07
  SPEAKER_01: A lot of data center tenants don't want names out early.
• 20:10
  SPEAKER_01: Site selection is competitive.
• 20:11
  SPEAKER_01: Some deals might not happen if everybody announced day one.
• 20:14
  SPEAKER_00: Fair.
• 20:14
  SPEAKER_00: I'm not saying they're hiding something.
• 20:16
  SPEAKER_00: The release asks you to trust a credit chain you can't see.
• 20:19
  SPEAKER_00: If you're signing a gas deal or an easement off that release,
• 20:22
  SPEAKER_00: ask for more than the release gives you.
• 20:24
  SPEAKER_00: Counterparty.
• 20:25
  SPEAKER_00: Guarantee.
• 20:26
  SPEAKER_00: Term.
• 20:27
  SPEAKER_00: Read the 8K before the press release if there is one.
• 20:30
  SPEAKER_01: Plain English on the letter of credit since most of us have posted bonds, not nine-figure LCs.
• 20:35
  SPEAKER_01: A bank saying, if this company doesn't pay, we will up to this amount.
• 20:38
  SPEAKER_01: Banks usually want collateral or fees for that.
• 20:40
  SPEAKER_01: General finance, not from this filing.
• 20:42
  SPEAKER_01: When a seller asks for $116 million up front,
• 20:45
  SPEAKER_01: our read, show us you can pay before we plug you in.
• 20:48
  SPEAKER_00: Six-year term at Kodiak versus 20 at New Era.
• 20:51
  SPEAKER_00: Our guess, labeled guess.
• 20:52
  SPEAKER_00: One more voice from the other end of the stack.
• 20:54
  SPEAKER_00: The Neuron, September 23rd.
• 20:55
  SPEAKER_00: Inside CoreWeave's AI infrastructure with Chen Goldberg.
• 20:57
  SPEAKER_00: She's CoreWeave's EVP of product and engineering.
• 20:58
  SPEAKER_00: Host asks whether energy and physical infrastructure become the constraint on AI scaling.
• 21:22
  SPEAKER_01: Her answer, 100% we're going to be growing together on all of those tracks.
• 21:27
  SPEAKER_01: Power and energy management.
• 21:29
  SPEAKER_01: This new set of problems, hard problems that are creating an opportunity of innovation.
• 21:33
  SPEAKER_00: Fair from the rack side.
• 21:35
  SPEAKER_00: From the pad side that same week,
• 21:37
  SPEAKER_00: $116 million letter of credit,
• 21:39
  SPEAKER_00: a notarized form,
• 21:40
  SPEAKER_00: a letter from the governor and a national tracker that says,
• 21:43
  SPEAKER_00: 90 gigawatts announced against about two running.
• 21:45
  SPEAKER_00: Same problem, different vocabulary.
• 21:48
  SPEAKER_01: What to watch.
• 21:49
  SPEAKER_01: 1.
• 21:49
  SPEAKER_01: New eras quarterly for the period ending September 30th.
• 21:52
  SPEAKER_01: Full PPA and framework language, including the grid sourcing clause and conditions precedent.
• 21:57
  SPEAKER_00: 2.
• 21:57
  SPEAKER_00: October 19th,
• 21:58
  SPEAKER_00: TCEQ's compliance update to the governor might finally say how
• 22:01
  SPEAKER_00: the permit halt treats behind the meter generation.
• 22:04
  SPEAKER_00: December 10th,
• 22:05
  SPEAKER_00: ERCOT's two reports to the Public Utility Commission,
• 22:08
  SPEAKER_00: how many of those 362 large loads survive verification,
• 22:11
  SPEAKER_00: and whether the energization pause lifts.
• 22:14
  SPEAKER_00: December 10th is a filing target, not an automatic end date for the pause.
• 22:17
  SPEAKER_01: 3.
• 22:18
  SPEAKER_01: Kodiak's fourth quarter deployment and whether a third data center contract shows up
• 22:21
  SPEAKER_01: on the way to 2 gigawatts.
• 22:23
  SPEAKER_01: 4.
• 22:24
  SPEAKER_01: Woodway's regulatory reviews.
• 22:26
  SPEAKER_01: If and when those go public, that may be when we learn the place name.
• 22:29
  SPEAKER_01: 5.
• 22:30
  SPEAKER_01: If you sell gas, own surface, or run pipe, ask who's buying fuel.
• 22:34
  SPEAKER_01: Read your paper with engines and substations in mind.
• 22:36
  SPEAKER_00: Bonus, press release in 8K same day.
• 22:39
  SPEAKER_00: Read the 8K first.
• 22:40
  SPEAKER_00: Brochure can wait.
• 22:42
  SPEAKER_00: Fairness on the form, the joke is the asymmetry.
• 22:44
  SPEAKER_00: Not that anyone did anything wrong.
• 22:46
  SPEAKER_00: Developers probably have commercially sensitive stuff in there,
• 22:49
  SPEAKER_00: maybe even the tenant names, written on the one form the utility can't read.
• 22:53
  SPEAKER_01: Two quick scenarios.
• 22:54
  SPEAKER_01: You're a landman.
• 22:55
  SPEAKER_01: Developer wants an option on surface near a gas plant.
• 22:58
  SPEAKER_01: Says they have power lined up and a tenant in discussions.
• 23:01
  SPEAKER_00: What does the power agreement say about where power comes from, plant, grid, or both?
• 23:05
  SPEAKER_00: Who's posting the credit and has it posted?
• 23:08
  SPEAKER_00: Answer all five.
• 23:08
  SPEAKER_00: Real conversation.
• 23:09
  SPEAKER_00: Answer none.
• 23:09
  SPEAKER_00: Press release.
• 23:10
  SPEAKER_00: Second scenario.
• 23:10
  SPEAKER_00: Small gas-weighted operator.
• 23:11
  SPEAKER_00: Pitch to sell fuel to a behind-the-meter power project.
• 23:13
  SPEAKER_00: Ask how long.
• 23:14
  SPEAKER_00: How firm.
• 23:14
  SPEAKER_00: What happens if your gas goes down a day?
• 23:15
  SPEAKER_00: What fuel spec?
• 23:33
  SPEAKER_01: Whether their power project is waiting on anything in Austin.
• 23:36
  SPEAKER_01: Because a gas contract with a customer that can't switch on is a very quiet gas contract.
• 23:40
  SPEAKER_00: News block done, closer gets dumber, house rule.
• 23:42
  SPEAKER_01: Messiest industry artifacts of the week.
• 23:44
  SPEAKER_01: Thread protectors, one through five.
• 23:46
  SPEAKER_01: Five stays on the pipe rack.
• 23:48
  SPEAKER_01: One is lost in the bar ditch.
• 23:49
  SPEAKER_00: Item one.
• 23:51
  SPEAKER_00: CleanView's own split,
• 23:52
  SPEAKER_00: said in their words, roughly 90 gigawatts announced, about 2 gigawatts operating.
• 23:57
  SPEAKER_00: That's not a mess because CleanView published it.
• 23:59
  SPEAKER_00: It's a mess because the industry keeps saying the first number like
• 24:01
  SPEAKER_00: the second one already happened,
• 24:02
  SPEAKER_00: two thread protectors, docked for every slide that forgets the denominator.
• 24:06
  SPEAKER_01: Item two, permitted powered land.
• 24:09
  SPEAKER_01: Three words that turn a pasture into an asset class.
• 24:11
  SPEAKER_01: You defended it earlier.
• 24:13
  SPEAKER_00: I still do with a caveat, real thing.
• 24:15
  SPEAKER_00: Needs a letter of credit and a tenant before it's fully real.
• 24:18
  SPEAKER_00: Three thread protectors, docked one for the missing tenant.
• 24:21
  SPEAKER_01: Item 3.
• 24:22
  SPEAKER_01: A GPU designer as guarantor of the data center lease.
• 24:25
  SPEAKER_01: Unnamed operator, unnamed hyperscaler, guarantor, described only by job title.
• 24:30
  SPEAKER_01: Lease with a chaperone.
• 24:31
  SPEAKER_01: I'd give it 3. Credit's probably great.
• 24:33
  SPEAKER_01: Needs a name tag.
• 24:34
  SPEAKER_00: And a bonus that fell in the ditch on its own.
• 24:37
  SPEAKER_00: 22 miles, 30 inches to somewhere.
• 24:39
  SPEAKER_00: Length, diameter, year, control room, no place name.
• 24:42
  SPEAKER_00: One thread protector.
• 24:44
  SPEAKER_00: Lost.
• 24:44
  SPEAKER_01: News was the gap between announced and running, then gas, dirt, credit, and clock.
• 24:49
  SPEAKER_01: Closer is glitter.
• 24:50
  SPEAKER_01: If something we said turns out wrong once the full contracts get filed,
• 24:55
  SPEAKER_01: or once TCEQ speaks on October 19th, we'll say so on the show.
• 25:15
  SPEAKER_01: And to the 90 gigawatts still living in a PDF,
• 25:17
  SPEAKER_01: if you'd like to join the two that actually spin,
• 25:19
  SPEAKER_01: bring a crankshaft, not another slide.
• 25:20
  SPEAKER_01: The pad already has enough announcements.