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Why Gas Prices Stay High — Oil CEO Jay Young Explains What’s Really Going On · Unshaken & Unafraid with Joe Pags

0:00
Speaker 1: Do you understand it? The Strait of Her Moves is
0:02
Speaker 1: back open, at least temporarily to two weeks ceasefire. Right,
0:05
Speaker 1: the threat is gone for now, So why are you
0:08
Speaker 1: still paying so much at the gas pump and oil?
0:10
Speaker 1: CEO just told me exactly who's keeping it high, and
0:13
Speaker 1: it's not Iran. Don't go anywhere. The Strait of Her
0:16
Speaker 1: Moves allegedly has twenty percent of the world's oil go
0:19
Speaker 1: through it. Why did my gas price go up by
0:22
Speaker 1: twenty five, thirty five, forty percent when the conflict started
0:25
Speaker 1: if only twenty percent of the oil goes through that waterway,
0:29
Speaker 1: I'm confused by that.
0:30
Speaker 2: Yeah, crazy number.
0:32
Speaker 3: Americans are paying eight hundred and thirty million more dollars
0:36
Speaker 3: a day right now Gasolene than they were before. I
0:39
Speaker 3: know it's crazy numbers, but that's true. What does that
0:42
Speaker 3: have to do with me? I mean, it's like I'll
0:45
Speaker 3: never even go over there. I'll never see this straight
0:48
Speaker 3: praising gold and it's affecting me. But oil is a
0:52
Speaker 3: global commodity. So if we're missing oil somewhere and there's
0:56
Speaker 3: so much transportation and so much old it has to
0:59
Speaker 3: go in between countries that it's a global commodity. Where
1:03
Speaker 3: natural gas is more homegrown supplying demand. Oil is more
1:08
Speaker 3: of a global supplying demand. So if we're missing oil
1:12
Speaker 3: in China, or if you know fifteen to twenty percent
1:16
Speaker 3: of all oil that goes through the straits missing, then
1:19
Speaker 3: then we have a problem, just like we're going to
1:21
Speaker 3: have a problem in the future when you know twelve
1:25
Speaker 3: to fifteen million barrels of oil have not been able
1:28
Speaker 3: to go through this trait, right, So we're going to
1:31
Speaker 3: see some really huge disruption in the future. So if
1:34
Speaker 3: you think your price tag is up now, it's going
1:37
Speaker 3: to continue there. And if something happens where this this
1:41
Speaker 3: war does not you know, play nice, we're going to
1:44
Speaker 3: have some major problems.
1:46
Speaker 1: It is a Jay Young, founder and CEO king Operating Corporations.
1:49
Speaker 1: Go get his book. It's called The Upside of Oil
1:51
Speaker 1: and Gas Investing. You see it over his shoulder there.
1:54
Speaker 1: So all very interesting. So are we using the wrong terminology?
1:57
Speaker 4: Jay?
1:57
Speaker 1: What I mean by that is we were told in
1:59
Speaker 1: the first Ump administration we are energy independent. That's not true.
2:03
Speaker 1: If the strait of her moves closing down causes us
2:05
Speaker 1: to pay a lot more money for energy, then we
2:08
Speaker 1: hear that we're a net exporter of oil. Great, so
2:10
Speaker 1: we're we're exporting more than we're than we're importing. Yet
2:13
Speaker 1: the strait of her moves can can affect my gasoline price.
2:16
Speaker 4: So what is it?
2:17
Speaker 1: Can we truly be energy independent? Can we tell the world,
2:21
Speaker 1: you know, Cartels, Opec in the others, screw you. We've
2:24
Speaker 1: got enough oil ourselves here in the United States. We're
2:27
Speaker 1: not gonna play your game.
2:29
Speaker 2: Yeah.
2:30
Speaker 3: Well, if you look at the numbers, and that's all
2:31
Speaker 3: I do is look at numbers and find out what's
2:34
Speaker 3: going on with supplying the man. I mean every day,
2:37
Speaker 3: it's just like George Bush said, you know, back in
2:40
Speaker 3: this two thousand and six Save the Union addressed we
2:43
Speaker 3: have an addiction to oil, he.
2:45
Speaker 2: Said, we need oil.
2:46
Speaker 3: We love it, we love driving, we love to get
2:49
Speaker 3: our you know, vegetables delivered to I mean, it's like
2:54
Speaker 3: there's airfare. I mean, there are so many different things.
2:58
Speaker 3: Twenty million today, we need twenty million barrels a day.
3:01
Speaker 3: Matter of fact, it's probably twenty one twenty two million
3:04
Speaker 3: a day, and we're producing thirteen.
3:07
Speaker 2: And I'm no math major any stretch of the imagination.
3:11
Speaker 4: I can help you with that subtraction. If you need.
3:13
Speaker 4: I can help you without that.
3:14
Speaker 3: I mean, but you hear Trump and Trump's like, we
3:17
Speaker 3: don't need anybody, We're good, And I mean, I think
3:22
Speaker 3: he's really keeping the price of gasoline lower than it
3:25
Speaker 3: should be right now. Given the circumstances of what's going
3:29
Speaker 3: on in the Middle East and what's going to happen
3:31
Speaker 3: in the next couple of weeks, oil prices should be higher.
3:36
Speaker 2: So let's don't go there. For Segon.
3:37
Speaker 4: Let's well, yeah, no, yeah, I don't.
3:39
Speaker 1: I don't want to push that in our conversation, that
3:41
Speaker 1: oil precures should be higher. Let me go back to
3:43
Speaker 1: something you just said. If we're only producing thirteen million
3:45
Speaker 1: barrels a day and we need twenty and if we
3:48
Speaker 1: have the first or second largest reserve of oil on
3:50
Speaker 1: the planet, why don't we produce twenty?
3:54
Speaker 2: Yeah, good question.
3:55
Speaker 3: Our refineries can't handle what we're producing now, So we
3:58
Speaker 3: are exporting oil.
3:59
Speaker 2: We are exporting oil. We need Argentina.
4:03
Speaker 3: Real thick oil in our refineries and not the really
4:06
Speaker 3: sweet stuff and the high grade oil that we're producing
4:09
Speaker 3: right now. We have to send that overseas to be
4:13
Speaker 3: refined and then it comes back. So it's it's kind
4:17
Speaker 3: of like, we're not. We're still and we get a
4:20
Speaker 3: lot of oil, a lot of Canada. You know, four
4:22
Speaker 3: to five million barrels a day come from Canada. You know,
4:26
Speaker 3: So in Mexico does a couple of million barrels. Argentina
4:30
Speaker 3: is starting to do about a million barrels a day
4:32
Speaker 3: right now. So I mean, we're we're not gonna get
4:35
Speaker 3: there because we're not gonna produce that much. We cannot
4:39
Speaker 3: produce forty something million barrels a day. Biden and Obama
4:43
Speaker 3: thought that they had it, that they had it down.
4:46
Speaker 3: We're going to electric cars. We're gonna swipe and just
4:50
Speaker 3: decrease our demand one hundred percent, and we're gonna we're
4:54
Speaker 3: gonna need no oil from any foreign countries, which is
4:57
Speaker 3: a great thought, but we're not gonna do it anytime
4:59
Speaker 3: soon because our demand for oil continues.
5:02
Speaker 4: To go up.
5:03
Speaker 1: Plus, I'm a red blooded American man, and I love
5:05
Speaker 1: the sound of my V eight engine when I started out,
5:07
Speaker 1: I want to have some silent car. The love affair
5:10
Speaker 1: with Americans and automobiles goes back a long time, and
5:13
Speaker 1: it's what built us to being the superpower that we are.
5:15
Speaker 1: The fact that they thought they could just take that
5:17
Speaker 1: away from people like you and me. It's not having you.
5:19
Speaker 1: You and I are both in Texas. You're not taking
5:21
Speaker 1: pickup trucks away from Texans. So I think that we
5:23
Speaker 1: should probably get over that and figure out how to
5:25
Speaker 1: solve the problem. It's Jay Young. Get his book. It's
5:27
Speaker 1: called The Upside of Oil and Gas Investing. So if
5:30
Speaker 1: I'm following you, we produce sweet crude. We need the
5:33
Speaker 1: heavy crude that works in our refinery, so we export
5:37
Speaker 1: the sweet crude, taking the stuff that we need. Dumb
5:40
Speaker 1: question from a guy that doesn't know anything about anything,
5:42
Speaker 1: Why don't we build a refinery?
5:44
Speaker 4: Now?
5:44
Speaker 1: The regulations and the overloading of the government is so
5:47
Speaker 1: much lower under under Trump. Why don't we build a
5:50
Speaker 1: refinery that can handle sweet crude.
5:53
Speaker 3: It's a great thought, and there's there's people that are
5:56
Speaker 3: trying to do something like that now. But we have
6:00
Speaker 3: not been We've not produced thirteen million barrels. I mean
6:03
Speaker 3: we were, you know, six seven million barrels a decade ago,
6:07
Speaker 3: fifteen years ago. So we before fracking the Premium basin,
6:11
Speaker 3: the Premium basin was producing a million barrels of oil
6:14
Speaker 3: back in two thousand and fifteen. No I'm sorry about
6:19
Speaker 3: twenty twelve. Thirteen is producing a million barrels today today
6:23
Speaker 3: is producing six and a half million. Wow, you can
6:26
Speaker 3: see what's happened just in the premium basin Middlan Odessa
6:30
Speaker 3: area alone because of horizontal and fracking. So and it
6:34
Speaker 3: takes a lot of work, it takes a lot of money,
6:37
Speaker 3: and it takes a long time to build refineries. And
6:39
Speaker 3: I know there's a lot of people right now that
6:41
Speaker 3: are thinking about putting some smaller refineries together in West
6:46
Speaker 3: Texas close to these oil fields so they can get
6:49
Speaker 3: products in and out faster, so they don't have to.
6:52
Speaker 2: Go as far, you know.
6:54
Speaker 3: So we're seeing a lot of demand for natural gas,
6:57
Speaker 3: which is a lot in the premium basin. We're seeing,
7:01
Speaker 3: you know, demand for oil and it's coming out of
7:03
Speaker 3: the permium basin and groves. We have an Eagle Ford
7:07
Speaker 3: down near San Antonio in that area Austin that's producing
7:11
Speaker 3: a lot. So it's it's there, we're producing it. We
7:15
Speaker 3: just can't regulations politics.
7:18
Speaker 2: Gee, I cannot.
7:19
Speaker 3: I cannot imagine trying to put together the paperwork to
7:24
Speaker 3: put a refinery in, especially if there's any Democrats within
7:27
Speaker 3: one hundred thousand miles, you know, because they's not gonna
7:31
Speaker 3: be able to do it.
7:31
Speaker 2: The lawyers would make so much money.
7:34
Speaker 3: That's all I want to do is go to law school,
7:36
Speaker 3: get that contract, because talking about litigation, that's all you're
7:39
Speaker 3: going to do. You'll never build a refinery in the
7:41
Speaker 3: United States because nobody's gonna let you because of regulations,
7:45
Speaker 3: and nobody wants oil and gas and all the other
7:48
Speaker 3: people that just do not like oil and gas, and
7:51
Speaker 3: and the tree huggers or whatever you call the people
7:54
Speaker 3: they just don't like that, the don't like it.
7:57
Speaker 1: Well, I think where I think we're moving to a
7:59
Speaker 1: position to where, okay, it is something that we need.
8:02
Speaker 1: People like me, I'm all for it. Some people might
8:05
Speaker 1: might say it's a necessary evil. I don't think it's
8:07
Speaker 1: exactly the way it was when Biden took office and
8:09
Speaker 1: he did that Green new scam and the Inflation Reduction Act,
8:12
Speaker 1: that didn't it just push this climate change garbage. But
8:15
Speaker 1: let me go back to a couple of things that
8:16
Speaker 1: you said. What bothers me is that opek can affect
8:21
Speaker 1: the price of a barrel of oil, so can buying
8:23
Speaker 1: and selling on the stock market, which bothers me too.
8:26
Speaker 1: I know that Opek purposely try to put eagle Ford
8:29
Speaker 1: in the Permium Basin out of business by lowering the
8:31
Speaker 1: price of a barrel of oil to under what was
8:33
Speaker 1: necessary just to go and get it. And I think
8:35
Speaker 1: the number today and you can correct me if I'm wrong,
8:37
Speaker 1: is about sixty or sixty five dollars a barrel. So
8:39
Speaker 1: if they go to fifty or forty five dollars a barrel,
8:42
Speaker 1: you cannot pay people to go and get it out
8:44
Speaker 1: of the permium basin or out of eagle Ford because
8:47
Speaker 1: near where I am, because you can't cover your costs.
8:50
Speaker 1: So why is it that so many different things can
8:52
Speaker 1: affect the price of a barrel of oil? It's not
8:54
Speaker 1: just a commodity that's bought and sold. It's also Opeck
8:57
Speaker 1: and say, well, screw it, we will open this bigot
8:59
Speaker 1: and we'll put the shale business out of business. Or
9:01
Speaker 1: the fracking business had a business in the United States,
9:03
Speaker 1: and we'll keep on getting the profits. And then once
9:06
Speaker 1: you shut down these these fracking businesses, then they crank
9:09
Speaker 1: the price right back up and they're gonna enjoy all
9:11
Speaker 1: the profits. Why are so many people able to affect
9:14
Speaker 1: how much I pay at the pump. It's not one
9:17
Speaker 1: thing that we can change or we can look.
9:18
Speaker 3: At it right and right now because of all the
9:22
Speaker 3: oil that hasn't been able to go through this trait.
9:25
Speaker 2: There's been hundreds of millions of barrels that.
9:27
Speaker 3: Have not made it through the strait of a mouse
9:30
Speaker 3: in the past, you know, four or five weeks that's
9:33
Speaker 3: backed up. You're going to see a problem with us
9:36
Speaker 3: getting gasoline oil gasoline and if the price is going
9:40
Speaker 3: to stay up there, right, and it doesn't matter, I mean,
9:43
Speaker 3: OPEK cannot flood our markets right now.
9:45
Speaker 4: Yeah, you're right.
9:46
Speaker 3: Right before COVID, I mean they were flooding our markets.
9:50
Speaker 3: Opek was flooding our markets full of oil because the
9:53
Speaker 3: price was really high, right, and they're saying, hey, we
9:55
Speaker 3: need markets share.
9:56
Speaker 2: How do you get markets share?
9:58
Speaker 3: Flood the markets in the United States, get it below
10:00
Speaker 3: that tipping point or break even point of the of
10:04
Speaker 3: the shell wells, and then you get these break even
10:08
Speaker 3: points or below the break even points, then they quit drilling,
10:11
Speaker 3: right And that's what that's what a lot of companies
10:13
Speaker 3: did right now. At fifty five dollars a barrel in December,
10:16
Speaker 3: they quit drilling. So that's why we're going to have
10:18
Speaker 3: a problem during the summertime without the war.
10:21
Speaker 2: We're gonna have a podcast.
10:22
Speaker 1: Right about the break even, Jay, is it sixty five
10:25
Speaker 1: sixty or sixty five dollars a barrel?
10:27
Speaker 3: I don't know if it's that high, but i'd say
10:29
Speaker 3: the fifties. I'd say the fifties, maybe sixty, but I
10:33
Speaker 3: don't think it goes to sixty five seventy. I mean
10:36
Speaker 3: there are some there are some locations, and you are
10:38
Speaker 3: exactly right. I mean there's our Tier one acreage, which
10:41
Speaker 3: is the best frock and the best locations that we have.
10:45
Speaker 3: You drill one, well there, it costs you twelve million barrels.
10:47
Speaker 3: You're gonna get a million barrels oil out. Now that's
10:50
Speaker 3: that's about fifty dollars a barrel. If you use that
10:53
Speaker 3: same twelve million barrels and you drill further outside the
10:58
Speaker 3: shell where it's not as sick, you may only get
11:01
Speaker 3: five hundred thousand barrels. Well, in that instance, yes, you
11:05
Speaker 3: do need seventy dollars a barrel, right, because that's you
11:08
Speaker 3: don't get as much oil out, so you're not got
11:10
Speaker 3: to have the price to get it. So, but most
11:13
Speaker 3: Tier one you know Wolf Camp right in the middle
11:16
Speaker 3: of Midland Eagle for good rock.
11:20
Speaker 2: That's that's about fifty to fifty five dollars a barrel.
11:23
Speaker 3: Right, The things that we're drilling at King Operating are
11:26
Speaker 3: like thirty thirty five. So oh wow, big difference in
11:28
Speaker 3: drilling prospects. But it's it's very predictable in the shell.
11:33
Speaker 1: It's a Jayyung Kingoperating dot com, the CEO of the
11:36
Speaker 1: founder of King Operating Corporation. Get his book called The
11:38
Speaker 1: Upside of Oil and Gas Investing. Talk to me about anwar.
11:43
Speaker 1: Anwar has Allegedly there was one guy who was a
11:45
Speaker 1: geologist and this is a long time ago, might be
11:48
Speaker 1: twenty five thirty years ago. He was an older gentleman
11:50
Speaker 1: who said, you've got two hundred years of oil and
11:53
Speaker 1: resources just there.
11:54
Speaker 4: Is that true? And are we getting it?
11:57
Speaker 2: Yeah? I don't think so.
11:58
Speaker 3: I mean, I know that we've talked reserves, and you
12:02
Speaker 3: know Venezuela has all these reserves. Now I'll to you,
12:05
Speaker 3: I will tell you one thing. I mean, we are
12:07
Speaker 3: not producing as much old as we need to. But
12:09
Speaker 3: when you produce a well like an Eagleford, you droll
12:12
Speaker 3: a well in the Eagle Ford you're only getting ten
12:14
Speaker 3: to fifteen percent of the oil out.
12:16
Speaker 2: Oh wow, you can't get all of it out.
12:18
Speaker 3: It's not like a pool and you're sucking all the
12:21
Speaker 3: water out of a swimming pool or something like that.
12:24
Speaker 3: It's the rock and the oil is embedded in all
12:27
Speaker 3: this rock and it's coming out of that out of
12:30
Speaker 3: the ground. You're leaving a lot of it behind. So
12:33
Speaker 3: unless somebody does come back and find a way to
12:36
Speaker 3: refract that rock or to treat it differently, you're only
12:40
Speaker 3: getting so much old out of that rock.
12:41
Speaker 2: You're not getting it all. And so that's the reason.
12:43
Speaker 3: Why, like right now we are we are working on
12:46
Speaker 3: ways to get as much oil out of that rock
12:48
Speaker 3: as we can because you're leaving a lot of it behind.
12:51
Speaker 4: Well, what kind of oil is in an an war?
12:53
Speaker 1: What is it there? Is it like schucking it out
12:54
Speaker 1: of a pool or would that all have to be
12:55
Speaker 1: fracked as well?
12:57
Speaker 2: It does need to be fracked exactly.
12:59
Speaker 4: Yeah.
13:00
Speaker 3: But like Venezuela has what three hundred billion barrels of oil?
13:03
Speaker 3: We have in the United States fifty billion to sixty
13:07
Speaker 3: billion and proven resi Yeah, and we're producing eight billion
13:11
Speaker 3: a year. We got like five years left Now, I'm
13:15
Speaker 3: not gonna say we're gonna round a wol in five years, right,
13:17
Speaker 3: But I'm gonna say we need to reinvent ourselves somehow,
13:20
Speaker 3: like the Premium basin. You know, it reinvented itself every
13:24
Speaker 3: couple of years with a new frack, a new you know,
13:27
Speaker 3: they drill longer laterals. They if you know, they drill
13:31
Speaker 3: with you know, sixty stages instead of forty. They do this,
13:34
Speaker 3: They do that. We're gonna have to find new ways
13:36
Speaker 3: to produce oil. But I think that's one reason why
13:39
Speaker 3: Trump like so much to get into Venezuela, because it
13:42
Speaker 3: does have oil, and there's a lot of oil there
13:45
Speaker 3: supposedly never seen the reserve report myself, but they are
13:49
Speaker 3: saying that there is a lot of oil, three hundred
13:53
Speaker 3: billion barrels of oil there and they're only producing you know,
13:56
Speaker 3: about half of bee or a bee in a year.
13:59
Speaker 3: So if we need oil for ten years, twenty years
14:03
Speaker 3: from now, I think trub did the right thing.
14:05
Speaker 1: Well, Jay, they also screwed us because all these American
14:08
Speaker 1: companies went there and built the infrastructure, then they kicked
14:10
Speaker 1: us out or kidnapped the CEOs. So I mean Venezuela
14:13
Speaker 1: owes us anyway. But I think you're right. I think
14:15
Speaker 1: it had to do with that. I think it also
14:17
Speaker 1: had to do with voting because the voting machines were
14:19
Speaker 1: pretty screwing from Venezuela. Had to deal with getting Iran
14:21
Speaker 1: and getting China and getting and getting Russia out of
14:23
Speaker 1: the Western hemisphere. So I think there was a lot
14:25
Speaker 1: of reasons for that. I think you're right about the
14:27
Speaker 1: oil part. It's Jay Young, get his book The Upside
14:29
Speaker 1: of Oil and Gas Investing. Let's talk about the price
14:31
Speaker 1: of the pump. When the operation started in Iran, the
14:36
Speaker 1: price went up immediately. Iran shut down the strait of ourmoves,
14:39
Speaker 1: and we all paid for it immediately. Yesterday, when the
14:42
Speaker 1: peace plan was announced, I was watching it live on
14:44
Speaker 1: my show, and the price per barrel went from about
14:47
Speaker 1: one hundred and twenty dollars a barrel done to ninety
14:49
Speaker 1: or ninety five. As I was watching it, I noticed
14:52
Speaker 1: that yesterday the price of the pump where I go
14:54
Speaker 1: is three ninety nine. Today the price of the pump
14:56
Speaker 1: where I go is still three ninety nine. So why
14:58
Speaker 1: is it that immediately when we started the war operation
15:01
Speaker 1: in it Ran, we saw the price go up that day,
15:04
Speaker 1: and it's gonna take a while for the price to
15:05
Speaker 1: come back down.
15:06
Speaker 4: Is that just greed? Is that? What is that? Why
15:08
Speaker 4: wouldn't it go down just as fast as it went up?
15:11
Speaker 3: Well, I think it's part greed because they can charge
15:14
Speaker 3: what they can at that time.
15:15
Speaker 2: And if if all the people around around here.
15:18
Speaker 3: Are producing and say hey let's let's start four bucks,
15:20
Speaker 3: then hey, price goales the four bucks, you know, and
15:23
Speaker 3: and and everybody follows along.
15:25
Speaker 2: But but right now, and that's the same thing.
15:28
Speaker 3: I was on a radio interview this morning Cincinnati, and
15:30
Speaker 3: I drove by the gas station. I'm like, okay, yeah, right,
15:34
Speaker 3: four dollars and twelve cents here in Dallas, and and
15:37
Speaker 3: we're not seeing I wonder how long that's gonna take
15:40
Speaker 3: it to go down? Right, We'll take it, because they
15:42
Speaker 3: are they are buying at the.
15:44
Speaker 2: At the wellhead.
15:45
Speaker 3: They're buying oil from us or companies like ours at
15:49
Speaker 3: the wellhead. It's going all the way from the wellhead
15:53
Speaker 3: to the refineries to your to your cars and and
15:57
Speaker 3: and to you you know, to the gas station to
15:59
Speaker 3: the cars.
16:00
Speaker 2: It's take you that a week or so.
16:02
Speaker 3: So I believe it's going to be another couple of
16:05
Speaker 3: days before everybody just doesn't completely just start egging all
16:10
Speaker 3: these gas stations and.
16:11
Speaker 2: Saying, hey, come on, we need the prize.
16:14
Speaker 4: To go down.
16:14
Speaker 3: It doesn't need to go up, it needs to go down.
16:16
Speaker 3: But I think within a week we'll be we'll be
16:19
Speaker 3: back at and uh, you know, three sixty three seven
16:23
Speaker 3: whatever whatever the price should be for ninion dollars a
16:25
Speaker 3: bar And I don't even know what the price is.
16:27
Speaker 3: I haven't looked at I've been trying not to look
16:29
Speaker 3: at my phone two hundred times today, you know, because
16:34
Speaker 3: I won't see what the prize hole is all the time.
16:36
Speaker 3: I haven't looked in the last two hours, so I
16:38
Speaker 3: don't know what the price is. And if it's still
16:40
Speaker 3: around ninety five dollars a barrel, then then we should
16:43
Speaker 3: come down. You should be down to the what three
16:46
Speaker 3: fifty three forty three fifty range?
16:48
Speaker 1: Yeah, it was like three twenty where I lived in
16:49
Speaker 1: the San Antonio area, you know, before all this started happening,
16:52
Speaker 1: he was actually looking like it would get into the
16:54
Speaker 1: twos for a while too, and I think it probably
16:56
Speaker 1: could go there. Let me leave you with this because
16:57
Speaker 1: people watch you listening one and answer to this Hey, Jay,
17:00
Speaker 1: I appreciate the time. You've got to come on again
17:01
Speaker 1: very soon. Let me leave you this question. If the
17:04
Speaker 1: price is ninety ninety five dollars a barrel, is there
17:07
Speaker 1: some way to devise in your head or through it
17:09
Speaker 1: an actual calculation what the price should be in a
17:13
Speaker 1: state not like California that has all this overregulation over taxation,
17:17
Speaker 1: but in a state like Texas, should it be to
17:19
Speaker 1: ninety three ten? Can we make that number out of
17:21
Speaker 1: how much it costs per barrel?
17:24
Speaker 3: Yes, exactly, I mean not that, not that the a
17:27
Speaker 3: price of a barrel or a barrel of oil is
17:30
Speaker 3: one hundred percent. So it's like one barrel of oil,
17:32
Speaker 3: a third, maybe forty percent of that barrel of oil
17:36
Speaker 3: goes to gasoline for cars, and then another third goes
17:39
Speaker 3: to plastics, lipsticks, you know, things of that nature. Then
17:43
Speaker 3: the other third or fourth goes to jet fuel, transportation, roads,
17:48
Speaker 3: you know, things that nature. So you will, but you
17:51
Speaker 3: will just see, you know, it's like when when the
17:54
Speaker 3: price was I was in Oklahoma. You know, they're in December,
17:59
Speaker 3: and I had to get out it's cold in December,
18:02
Speaker 3: saying a dollar ninety two gallon. But the price of
18:06
Speaker 3: oil is fifty five dollars a barrel, right you know?
18:09
Speaker 3: So yes, you can see Joe as you do going
18:12
Speaker 3: to different areas, you will see prices, you know, go down.
18:15
Speaker 3: You'll see gasoline prices going right with it. It may
18:19
Speaker 3: not go as fast as is what the it says
18:22
Speaker 3: that the on TV when you look at that wt
18:24
Speaker 3: I may not go as fast, but it will come
18:27
Speaker 3: down as long as as you know the price coming down,
18:31
Speaker 3: gasoline prices will come.
18:32
Speaker 1: Down along with it. This piece deal is supposed to
18:34
Speaker 1: be for two weeks. So if at the end of
18:36
Speaker 1: two weeks the military action starts again, they close the
18:38
Speaker 1: straight again, where do you go through all this again?
18:40
Speaker 2: Aren't we absolutely one hundred percent?
18:43
Speaker 3: And I don't think I ran plays nice and I
18:46
Speaker 3: don't think you know, I think what we sat on
18:49
Speaker 3: our knees and pray for growing up in world peace? Yeah,
18:52
Speaker 3: I don't think we're going to see it for a
18:54
Speaker 3: long time. Too many egos, too much money. That's why
18:58
Speaker 3: world wars are fault because of how much money trades
19:02
Speaker 3: hands and goes through every day. Well just think about
19:04
Speaker 3: Saudi Arabia has got three million a day, three million
19:07
Speaker 3: barrels of oil a day. Times one hundred dollars a
19:10
Speaker 3: barrel every day, and they're not being able to receive that.
19:13
Speaker 3: I mean, there's just so much ego. They're not going
19:15
Speaker 3: to just okay, that's fine, let's just move on. No,
19:19
Speaker 3: they're gonna be mad, and they're mad right now. And
19:22
Speaker 3: I mean, there's just so many different egos and everything going.
19:25
Speaker 2: And I would hope, I would hope just like Billy
19:28
Speaker 2: Bob Thornton old land.
19:29
Speaker 3: Man, right, I mean, seventy five eighty dollars a barrel,
19:32
Speaker 3: let's go and let's have a good time, and let's drill,
19:35
Speaker 3: maybe drill our clients. Our clients can make a tremendous
19:39
Speaker 3: amount of money. They get tax benefits, they can make
19:42
Speaker 3: monthly income while we scale that investment. We're having a
19:45
Speaker 3: lot of fun drilling great wells, and that's a great price.
19:49
Speaker 3: I don't really care to see one hundred, one hundred
19:51
Speaker 3: and twenty, even though that check you know coming here
19:54
Speaker 3: pretty soon is nice for the last month. But hey,
19:58
Speaker 3: you know what, I'm a team player, and I know
20:01
Speaker 3: we created a lot of jobs around San Antonio and
20:04
Speaker 3: Texas when we do.
20:06
Speaker 2: Have our higher oil prices. So I'm all for that
20:08
Speaker 2: for sure.
20:09
Speaker 1: Jay Young, founder and CEO King Operating Corporation. Go to
20:12
Speaker 1: King Operating dot com to found out more. Get his
20:14
Speaker 1: book called The Upside of Oil and Gas Investing. There
20:17
Speaker 1: are a lot more questions that I can ask. You've
20:19
Speaker 1: got to do your favorite. Comeback very soon because I
20:20
Speaker 1: want to know the difference between the Body administration and
20:23
Speaker 1: the availability of getting leases and drilling and what's going
20:26
Speaker 1: on with the Trump administration. Isn't that much different. We'll
20:28
Speaker 1: get into that next time. Will you do me favor
20:30
Speaker 1: and come back again soon.
20:33
Speaker 2: I'd love to.
20:33
Speaker 3: Now, Thus you're gonna ask me the difference between the
20:35
Speaker 3: real old filled and land Man with Billy Bob Thornton's
20:38
Speaker 3: and then.
20:38
Speaker 2: We be talking about that next time too.
20:40
Speaker 1: Joe, Well do I've got to catch up on land Man.
20:42
Speaker 1: I'll make sure that we do that as well. It's
20:44
Speaker 1: really a pleasure to talk to you. I really enjoyed it, Jay.
20:45
Speaker 1: Thank you. Vital information from Jay. He's a CEO of
20:48
Speaker 1: an oil company. What an incredible perspective. Now we have
20:51
Speaker 1: a better idea of how much it costing it out
20:53
Speaker 1: of the ground and how much it should affect the
20:56
Speaker 1: gas prices. Why don't they go up? So fast, but
20:58
Speaker 1: it really takes a long time for them to go down.
21:00
Speaker 1: But it made me think. Let me go back to
21:02
Speaker 1: part of a conversation I had with Daniel Turner recently
21:04
Speaker 1: from Power of the Future. Daniel and I talked about
21:07
Speaker 1: why don't we have more refining capacity here? And why
21:09
Speaker 1: is it that the rules and regulations make us remain
21:12
Speaker 1: reliant on OPEK in these international cartels? Are we really
21:17
Speaker 1: energy independent or can we be? In this country? I
21:20
Speaker 1: think you like this so again, I'm trying to figure
21:22
Speaker 1: this out because we keep hearing about wanting to be
21:24
Speaker 1: energy independent. In fact, under Trump, the first time we
21:27
Speaker 1: were told that we were a net exporter of energy
21:31
Speaker 1: of oil. I mean, we were getting as much, if
21:33
Speaker 1: not more, than anybody else on the planet. And I
21:35
Speaker 1: know that our reserves are very, very deep and steep.
21:38
Speaker 1: Why don't we have to still allow ourselves to be
21:40
Speaker 1: jockeyed around by this cartel called OPEK? Why does the
21:43
Speaker 1: world market affect us? Is it because we don't have
21:46
Speaker 1: enough refining capacity? What's the issue? Why can't we say
21:49
Speaker 1: you know what, you guys, screw you, We're going to
21:51
Speaker 1: set our own price per barrel in this country.
21:54
Speaker 5: I wish we could. And if you do look at
21:56
Speaker 5: the different oil markets, WTI, which is West Texas Intermediate,
22:01
Speaker 5: which is what American oil is, is usually around ten
22:04
Speaker 5: twelve dollars cheaper than some of the other oil markets,
22:08
Speaker 5: the oil market of Brent, which is the North Sea,
22:11
Speaker 5: the oil market of Morbon, which is the Middle East. Right,
22:14
Speaker 5: so there is some independence, but again it is all
22:17
Speaker 5: a global market. Every country in the world needs oil
22:21
Speaker 5: and for everything that we use. Even the people who
22:24
Speaker 5: are saying, well we should go green, your green products
22:26
Speaker 5: are made from oil. Your wind and your solar and
22:29
Speaker 5: your evs and your your tesla's and your batteries are
22:32
Speaker 5: all made from oil. So oil is not going anywhere
22:34
Speaker 5: anytime soon. And oil markets hate uncertainty, and there has
22:39
Speaker 5: been uncertainty in the last couple of days.
22:42
Speaker 4: Now.
22:43
Speaker 5: A huge story is how we went from one hundred
22:45
Speaker 5: and twenty two dollars to eighty one dollars in a
22:48
Speaker 5: matter of hours.
22:50
Speaker 2: Right, So as things.
22:51
Speaker 5: Calm down and as the jitters escape, oil prices will
22:56
Speaker 5: come down and they'll continue in that direction. As more
22:59
Speaker 5: commas restored to the area.
23:01
Speaker 1: Well, the left media and the left politically all rejoiced
23:04
Speaker 1: the fact that it was over one hundred dollars a barrel,
23:06
Speaker 1: So how did it go to one hundred down to
23:08
Speaker 1: eighty one so fast? What happened? Does something have to
23:10
Speaker 1: happen or was that just a massive you know, a
23:13
Speaker 1: bunch of people selling what they had to make a
23:15
Speaker 1: quick profit and that lowered the price. Or did we
23:18
Speaker 1: release or get our hands on some other source of
23:20
Speaker 1: crud that I didn't know about.
23:22
Speaker 5: No, it's all just speculation, and it's all market jitters.
23:25
Speaker 5: We don't have a supply problem. We had a fear
23:28
Speaker 5: of a of a transportation problem. And those tankers that
23:32
Speaker 5: were in the straits of Courtmouse that were anchored right
23:36
Speaker 5: because they were reluctant to set sail, well they didn't
23:40
Speaker 5: have sale boats, but you know they didn't have sales
23:42
Speaker 5: but you know what I mean, as they were relucking
23:44
Speaker 5: at the path. Once they were given that security by
23:46
Speaker 5: the government of first military protection from the United States
23:49
Speaker 5: government and then insurance protection by the United States government.
23:53
Speaker 5: Once things were calmed and vessels started moving again, the speculators,
23:58
Speaker 5: the concern all all calm down and prices dropped. So
24:03
Speaker 5: this is just this is markets in action. It's the
24:05
Speaker 5: same reason why when you know you see a hurricane crumbing,
24:09
Speaker 5: orange juice prices spike. It's the same reason why you
24:13
Speaker 5: know what you see weather storms and airline prices spike. Right,
24:17
Speaker 5: So this is just all the way the markets work.
24:20
Speaker 4: You know.
24:20
Speaker 1: It bothers me that we are in a speculative market
24:22
Speaker 1: market like this. And here's what I mean. If I
24:24
Speaker 1: go to my local gas station and I pull in
24:27
Speaker 1: the gas that I'm about to pump was put in
24:29
Speaker 1: the ground before I got there, Okay, just follow me here. Yet,
24:32
Speaker 1: if I have to get gas in three days and
24:34
Speaker 1: the same tank below the ground is still feeding the
24:37
Speaker 1: same gasoline, it might be twenty or thirty cents higher
24:40
Speaker 1: or twenty of your thirty cents lower for the same
24:42
Speaker 1: exact product I just bought three days ago at a
24:44
Speaker 1: certain price. Why are we allowed to be so speculative
24:47
Speaker 1: like that? Why can't we say, okay, we bought this
24:49
Speaker 1: oil for this much. That's how much it cost to
24:51
Speaker 1: go and get it, whether out of the ground at
24:53
Speaker 1: a shale wherever it happened to be, whether it's came
24:56
Speaker 1: over on a ship, then they refined it, then we
24:58
Speaker 1: got it on the tanker, we brought it to the
24:59
Speaker 1: gas station and this amount of gasoline and putting in
25:02
Speaker 1: the ground should be this price until it's gone. Then
25:05
Speaker 1: the next load can be a different price. Why are
25:06
Speaker 1: they allowed to change the price of the same stuff
25:09
Speaker 1: And you just said, it's not a supply and demand thing,
25:11
Speaker 1: it's just a we'd speculating.
25:12
Speaker 4: Why is that Okay?
25:14
Speaker 5: Well, the gas that you are buying, the gasoline that
25:17
Speaker 5: you are buying right now and putting in your car
25:20
Speaker 5: is actually the price of what they think the future
25:23
Speaker 5: is going to be. The gasoline that you are currently
25:26
Speaker 5: putting in your car was paid last week when that
25:30
Speaker 5: tanker showed up, and last week there were different conditions.
25:33
Speaker 5: And so it is a futures market. I wish there
25:37
Speaker 5: was some security in it, without a doubt, But I
25:39
Speaker 5: wish the same thing on beef prices and on egg
25:42
Speaker 5: pro on all commodity prices.
25:44
Speaker 2: Right, But these types of.
25:46
Speaker 5: Commodities that have a lot of environmental and transportation inputs,
25:52
Speaker 5: they fluctuate, They have price ups and downs. What we
25:56
Speaker 5: need overall from our government is not price regulation. We
25:59
Speaker 5: need the the conditions so that prices can find their
26:04
Speaker 5: base right, conditions of go ahead well, conditions of stable transportation,
26:11
Speaker 5: of stable piece of volatility of society. Right, Government's job
26:16
Speaker 5: is to help create those conditions so everything is calm.
26:20
Speaker 1: You realize why it's turning my brain though, Right, Because
26:22
Speaker 1: I've got a car that I want to sell, and
26:25
Speaker 1: the car today is valued at whatever it's valued at.
26:29
Speaker 1: I can't possibly, you know, list it on Craigslist and say,
26:32
Speaker 1: because this car might cost this much in twenty thirty six,
26:36
Speaker 1: I'm going to ask that much today because I'm speculating
26:38
Speaker 1: that it's going to go up that high. Once you
26:40
Speaker 1: buy it, you can figure out if it goes up
26:42
Speaker 1: that high. So I guess it seems unfair to me.
26:44
Speaker 1: And I don't want more government regulations. I don't want
26:47
Speaker 1: more taxation. I'm a small government, constitutional guy. I just
26:50
Speaker 1: don't get that in some form and fashion commodities, you're
26:54
Speaker 1: able to do this in something that's reusable or something
26:58
Speaker 1: that we need to go back and buy more of.
27:00
Speaker 1: Happens with food, same thing happens with energy. I just
27:03
Speaker 1: hate that it works that way, but that's the way
27:05
Speaker 1: it is, and I should probably stop complaining. Is that
27:06
Speaker 1: what you're saying to a certain extent.
27:09
Speaker 5: And if you look at the life cycle of the
27:11
Speaker 5: drop of crude and how many times it has changed hands?
27:15
Speaker 4: Right?
27:15
Speaker 5: The guys who drill are not the guys who extract,
27:17
Speaker 5: who are not the guys who transport, who are not
27:20
Speaker 5: the guys who refine, who are not the guys who
27:22
Speaker 5: didn't transport that, who are not? The guys who sell,
27:25
Speaker 5: who are not the guys that put it into your
27:26
Speaker 5: gas station?
27:27
Speaker 2: Who's not the guy who sells it to you?
27:29
Speaker 4: Right?
27:29
Speaker 5: All those little tiny steps are where you have a
27:32
Speaker 5: lot of volatility. You know, it's not a hard asset.
27:35
Speaker 5: It's not a car, it's not a computer. Right where
27:38
Speaker 5: it's pretty much the same price and I filled right.
27:42
Speaker 5: These are commodities like I keep going back to beef.
27:45
Speaker 5: Agriculture is the best example. These commodities that have lots
27:49
Speaker 5: of environmental and climate impacts, and prices go up and
27:54
Speaker 5: down and they always will.
27:57
Speaker 1: It is Daniel Turner, the executive director and also the
28:00
Speaker 1: founder of Powerthfuture dot Com, Power the Future dot Com.
28:03
Speaker 1: How important is the strait of her moves? If they
28:05
Speaker 1: shut down the strait of her moves, which Iran has
28:07
Speaker 1: threatened to do, and then President Trump's response was, We'll
28:09
Speaker 1: hit you twenty times harder if you do that. How
28:12
Speaker 1: vital is that. Do you know about percentage wise how
28:15
Speaker 1: much of the world's oil passes through there?
28:18
Speaker 5: They say around twenty percent of the world's oil passes
28:20
Speaker 5: a lot there. But look at the nations. Who are
28:23
Speaker 5: the petro states whose oil passed through there?
28:25
Speaker 4: Right?
28:25
Speaker 5: If your wonderful listeners can ever get a chance to
28:29
Speaker 5: go on a map and look at that little part
28:31
Speaker 5: of the world, it does a hairpin turn right around
28:34
Speaker 5: the very narrow peninsula. And as soon as you leave
28:37
Speaker 5: the Gulf of Oman into the Persian Gulf, the Straits
28:41
Speaker 5: of Hormuz connects the two. You have United Arab Emirates famous.
28:44
Speaker 5: Everyone wants to go to Dubai. Right, you have Katar.
28:47
Speaker 5: Everyone wants to go to Doha. I don't want to go,
28:49
Speaker 5: but there's no You have Saudi Arabia, you have Kuwait,
28:54
Speaker 5: you have all of Iraq, you have all of Iran, right,
28:57
Speaker 5: some really big petro states all have to get through
29:00
Speaker 5: that narrow little stretch. And Iran has made it theirs
29:05
Speaker 5: for a very long time, and the Trump administration is
29:07
Speaker 5: tired of that. I don't like the fact that it's
29:10
Speaker 5: so volatile either. I'm supporting the idea of calling it
29:13
Speaker 5: the Straits of America, because if we police that and
29:16
Speaker 5: we control the waterways, then we control the price of oil.
29:20
Speaker 5: And when we control and set the tone of oil,
29:22
Speaker 5: we control the world order for good. And America is
29:25
Speaker 5: the ultimate force for good.
29:27
Speaker 1: You know, I think that the administration listens or watches
29:29
Speaker 1: most every day. I wouldn't be surprised if there's a
29:32
Speaker 1: memorandum tomorrow that's gonna be called the Strength of America.
29:35
Speaker 1: I think that'd be amazing.
29:36
Speaker 4: It is.
29:36
Speaker 1: Daniel Turner go to Powerthfuture dot com. Talk to me
29:39
Speaker 1: about what I said earlier, and again, I'm kind of
29:41
Speaker 1: a dumb guy when it comes to how we end
29:43
Speaker 1: up refining this stuff. But I know that under the
29:46
Speaker 1: I think it was the Clinton administration. He said in
29:49
Speaker 1: response to why don't we build more refineries? That'll take
29:51
Speaker 1: thirty damn years to do that. Can we change the
29:54
Speaker 1: rules and regulations, Daniel, to where we can? If Trump
29:56
Speaker 1: were to say, I want us to build some refineries
29:59
Speaker 1: in the next two years, and I want it done
30:01
Speaker 1: by twenty nine. Like it or not, that's what I want.
30:05
Speaker 1: Can that happen? Can we start building refineries here? We
30:07
Speaker 1: just take the red tape off of it. It doesn't
30:10
Speaker 1: literally take thirty years to build one, right.
30:12
Speaker 4: It does not.
30:13
Speaker 5: And the President in his first term expanded refining capacity
30:16
Speaker 5: by not building new ones, but letting existing ones increase
30:20
Speaker 5: their size and therefore increase their output. You know, President
30:24
Speaker 5: Trump is a believer in the rule of law. I
30:28
Speaker 5: wish you were heavier handed to say, I signed an
30:31
Speaker 5: executive order on an energy emergency, and gosh darn it,
30:34
Speaker 5: I'm going to use that an energy emergency. Right, because
30:36
Speaker 5: when Joe Biden thought that we were in an emergency,
30:39
Speaker 5: he wouldn't let me leave my house unless I put
30:41
Speaker 5: a mask on, right, right, And he told us he
30:43
Speaker 5: was tired of us, you know, having the freedom to
30:47
Speaker 5: walk around unvaccinated.
30:48
Speaker 4: Right.
30:49
Speaker 5: I don't like that approach, and clearly President Trump does either.
30:53
Speaker 5: But we are in an energy emergency, and I would
30:55
Speaker 5: like to see not the heavy hand of government say
30:58
Speaker 5: we're going to force this upon what ever locale. But
31:01
Speaker 5: you know, every time we try to do anything in
31:02
Speaker 5: the oil and gas space, George Soros pays a bunch
31:06
Speaker 5: of pink cared you know, old lesbians to protest and
31:09
Speaker 5: start a new organization, you know, pink Hared Lesbians against
31:13
Speaker 5: climate Change, and then we have lawsuits and litigation, and
31:16
Speaker 5: we spend years and years and years in the courts battling.
31:19
Speaker 5: We have to get rid of all this nonsense. We
31:21
Speaker 5: have to get rid of the endless litigation of the
31:24
Speaker 5: climate left funded by either communists China or funded by
31:28
Speaker 5: foreign groups that litigate us to death, so that we
31:31
Speaker 5: can improve our fossil fuel infrastructure.