Latest / Yaron Brook Show / Mineral Rights: Who Should Own What’s Under the Ground? Australia Case Study | Yaron Brook Show

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Mineral Rights: Who Should Own What’s Under the Ground? Australia Case Study | Yaron Brook Show · Yaron Brook Show

• 0:02
  Speaker 1: The radical, fundamental principles of freedom, rational self-interest, and individual rights.
• 0:14
  Speaker 1: This is the Yaron Brook Show. All right, everybody. Welcome
• 0:21
  Speaker 1: to Yaron Brook Show on this Friday, October 16th. I
• 0:25
  Speaker 1: hope everybody is having had a good week. It's evening
• 0:32
  Speaker 1: here already, so the day is already pretty much over.
• 0:37
  Speaker 1: I'm just looking. Yeah, I mean, today's show is going
• 0:41
  Speaker 1: to be funny only because, again, I'm streaming in places
• 0:53
  Speaker 1: where I don't think they're quite ready for this particular show, right? Uh,
• 1:01
  Speaker 1: so anyway, um, not the kind of topic you necessarily get.
• 1:08
  Speaker 1: What is this? Oh, look at that. And, uh, I've
• 1:12
  Speaker 1: already got 40 followers, 40 followers on Twitch. So, uh,
• 1:18
  Speaker 1: not bad. I just started. All right. So, uh, yeah, I, I,
• 1:22
  Speaker 1: I wouldn't be surprised if nobody watched it today. This is, uh,
• 1:26
  Speaker 1: very much not the kind of topic Twitch engages in,
• 1:29
  Speaker 1: but anyway, It's going to be interesting. I think this
• 1:33
  Speaker 1: is a really fascinating topic, really interesting stuff. Hopefully you
• 1:37
  Speaker 1: will find it interesting. Is Randall here? Say hello in
• 1:41
  Speaker 1: the chat, Randall, if you are there. Randall is the
• 1:46
  Speaker 1: sponsor of today's show. As you know, $ 1, 000 gets you...
• 1:54
  Speaker 1: you a show on a topic of your own choosing,
• 1:58
  Speaker 1: so you get to decide what I talk about. So
• 1:59
  Speaker 1: today is, I've been delaying this for a while, partially
• 2:04
  Speaker 1: because I was traveling so much, partially because I needed
• 2:06
  Speaker 1: to do some research. It's not a topic I could
• 2:08
  Speaker 1: just do like that. I didn't really know what Randall
• 2:11
  Speaker 1: was talking about when he first approached me, but I
• 2:14
  Speaker 1: think I have a handle on it, at least to
• 2:17
  Speaker 1: some extent. And this is, so we will talk about it. Basically,
• 2:22
  Speaker 1: Today's topic will cover mineral rights, the disposition of mineral rights,
• 2:29
  Speaker 1: you know, the way it functions in pretty much all
• 2:33
  Speaker 1: of the world with the exception of the United States.
• 2:36
  Speaker 1: And then we'll talk about Australia in particular. And then
• 2:42
  Speaker 1: we'll talk about a particular tax scheme that the Australian
• 2:47
  Speaker 1: government wants to impose, a tax scheme, although That seems
• 2:53
  Speaker 1: to be put aside, and now they've got export controls.
• 2:56
  Speaker 1: Call it that, export controls that they want to impose.
• 2:58
  Speaker 1: So we're going to talk about all of that today.
• 3:00
  Speaker 1: There's Randall. He is here. That's good. I also timed
• 3:04
  Speaker 1: the show so it wouldn't be some ridiculous hour in Australia,
• 3:08
  Speaker 1: like 2 a.m. or something. So, you know, here we are. Please...
• 3:23
  Speaker 1: yeah we we've got the super chat going let me
• 3:26
  Speaker 1: just close this one window here so i'm not distracted
• 3:29
  Speaker 1: that is closed we're streaming on all these platforms that
• 3:33
  Speaker 1: is good yeah let's jump into it so uh today's
• 3:38
  Speaker 1: randall show and of course i'm sure he will let
• 3:40
  Speaker 1: me know if i'm if the things that amy's saying
• 3:43
  Speaker 1: uh not correct about australia or the things that um
• 3:50
  Speaker 1: he would like me to cover that I haven't covered yet,
• 3:52
  Speaker 1: but we will take a shot at this. All right,
• 3:56
  Speaker 1: a few just numbers to give you a sense of
• 3:58
  Speaker 1: what is going on in Australia. Australia is a massive
• 4:02
  Speaker 1: exporter of liquefied natural gas. It sold 64.6 billion Australian dollars.
• 4:09
  Speaker 1: Everything today is going to be Australian dollars. I apologize,
• 4:11
  Speaker 1: but it is Australia. The data is about Australia, I think.
• 4:15
  Speaker 1: and therefore it's going to be Australian dollars unless otherwise specified.
• 4:19
  Speaker 1: They sold $ 64. 6 billion of liquefied natural gas last year.
• 4:25
  Speaker 1: Only the United States and Qatar export more natural gas
• 4:30
  Speaker 1: than Australia. 83% of the gas it produces leaves the country.
• 4:36
  Speaker 1: That is, it's exported out. And, you know, the challenge is,
• 4:45
  Speaker 1: that the most populated area in Australia, the southeast of Australia,
• 4:54
  Speaker 1: is going to face natural gas shortages based on the
• 5:01
  Speaker 1: numbers today in 2028. The offshore fields that supply two-thirds
• 5:08
  Speaker 1: of the eastern Australia's gas for 50 years are running down.
• 5:12
  Speaker 1: The plant that processed them is going to be shut
• 5:15
  Speaker 1: down in 2033. Nothing's been approved to replace it. So
• 5:19
  Speaker 1: there's generally this decline in available natural gas in Southeast Australia,
• 5:28
  Speaker 1: where a big chunk of the population lives. And yet,
• 5:34
  Speaker 1: Australia's committed, through long-term contracts, to exporting huge quantities of
• 5:39
  Speaker 1: natural gas out of the country. The consequence of that,
• 5:41
  Speaker 1: of course, is that prices of natural gas in the
• 5:46
  Speaker 1: southeast are expected to increase. There's also a problem of
• 5:50
  Speaker 1: can the southeast Australia import natural gas? They have LNG
• 5:55
  Speaker 1: terminals that are directed out. They don't have LNG terminals
• 5:59
  Speaker 1: that are directed in, which they should have. They should
• 6:02
  Speaker 1: have an ability to import. So there's this debate in Canberra,
• 6:07
  Speaker 1: which is the capital, the federal capital, And, uh, you know,
• 6:13
  Speaker 1: a debate about what to do about this. And, um, uh,
• 6:17
  Speaker 1: they were, you know, there are two proposals on the table.
• 6:22
  Speaker 1: One is from the unions and the green party. They
• 6:26
  Speaker 1: want a 25% tax on every dollar of exported gas.
• 6:30
  Speaker 1: So they want to export tax here in the United States,
• 6:33
  Speaker 1: very popular import tax. They want an export tax, which
• 6:39
  Speaker 1: they estimate, um, uh, would, uh, you know, bring in
• 6:43
  Speaker 1: about $ 17 billion in to the Treasury, but also disincentivize
• 6:49
  Speaker 1: export and therefore free up more gas to be sold locally.
• 6:55
  Speaker 1: If you can make more money locally, they'll sell it locally. Now,
• 7:01
  Speaker 1: the Labor government, center-left, you know, U.S. Democrats, further to
• 7:07
  Speaker 1: the left because everything outside of the United States is
• 7:09
  Speaker 1: further to the left. Well, further to the left today,
• 7:14
  Speaker 1: the Democrats are galloping left of everybody these days. The
• 7:22
  Speaker 1: Labor government has said, not now. We're not going to
• 7:27
  Speaker 1: do that, at least as of Wednesday of this week.
• 7:33
  Speaker 1: And it's instead legislating a quotas. basically telling exporters that
• 7:40
  Speaker 1: they have to offer up to 20% of their exports
• 7:43
  Speaker 1: to the whole market from 2028. So putting a cap
• 7:49
  Speaker 1: on the amount that can be exported, 80% can be exported,
• 7:54
  Speaker 1: 20% has to stay at home. So underneath all of
• 8:02
  Speaker 1: this is a certain assumption that we're going to, discuss today,
• 8:06
  Speaker 1: although we're going to get into a lot of the details,
• 8:08
  Speaker 1: but the assumption underneath it all is that, you know,
• 8:13
  Speaker 1: the gas that's being exported is Australia's gas, right? It's
• 8:20
  Speaker 1: Australia's gas, and therefore the government should be in a
• 8:22
  Speaker 1: position to decide how it's redistributed, how it's allocated, and
• 8:26
  Speaker 1: how much it should be paid for it. And so
• 8:33
  Speaker 1: we're going to be talking about that. Now, Randall is
• 8:37
  Speaker 1: from Western Australia. And we'll talk about Western Australia. Western
• 8:40
  Speaker 1: Australia is somewhat different. And he asked me to produce
• 8:46
  Speaker 1: something that he could send to somebody who supports either
• 8:51
  Speaker 1: the tax or this export restriction. So we're going to
• 8:56
  Speaker 1: try to take the argument apart. We're going to try
• 8:59
  Speaker 1: to steel man their arguments and then take them apart.
• 9:02
  Speaker 1: So that it is effective, hopefully, to convince somebody out there, right?
• 9:12
  Speaker 1: So that's kind of the goal, to explain what's going on,
• 9:16
  Speaker 1: to explain how we got here, a little bit about
• 9:18
  Speaker 1: the history of natural gas. I think it's interesting. And
• 9:22
  Speaker 1: we'll also, you know, open up a can of worms
• 9:25
  Speaker 1: of talking about Norway and talking about the Gulf, basically,
• 9:29
  Speaker 1: other countries here. I mean, basically every country in the world,
• 9:34
  Speaker 1: except America, natural resources are publicly owned. Are publicly owned. Right? So,
• 9:47
  Speaker 1: but everything we're going to talk about Australia has been
• 9:50
  Speaker 1: discussed in the United States. I'll just give you one example.
• 9:54
  Speaker 1: Trump has been threatening to restrict export of diesel. in
• 10:01
  Speaker 1: order to make it available for the domestic market so
• 10:04
  Speaker 1: that prices would come down. So here in America, we
• 10:12
  Speaker 1: are talking about, you know, importation or export restrictions. So
• 10:18
  Speaker 1: this is not, none of this is going to be
• 10:21
  Speaker 1: unique to the Australian case. And I think it brings
• 10:24
  Speaker 1: up a lot of questions or a lot of issues
• 10:27
  Speaker 1: related to just, you know, mineral rights, who owns them,
• 10:32
  Speaker 1: and how it all really plays out. All right. Just
• 10:37
  Speaker 1: a little bit of orientation, right? Not for Randall, but
• 10:40
  Speaker 1: for the rest of you. Australia is huge. It's about
• 10:45
  Speaker 1: the size of the lower 48. So exclude Australia. exclude
• 10:51
  Speaker 1: Alaska and exclude Hawaii, and Australia is almost the size
• 10:56
  Speaker 1: of the United States. That's huge. You don't really get
• 11:00
  Speaker 1: that when you just look at a globe, right? And
• 11:05
  Speaker 1: the thing about Australia is it's almost the size of
• 11:07
  Speaker 1: the U.S., but it has the population of Texas. Nearly
• 11:13
  Speaker 1: everyone in Australia lives on the east and the southeast, Sydney, Melbourne, Brisbane,
• 11:23
  Speaker 1: You know, with the exception of Randall, who lives on
• 11:25
  Speaker 1: the wet. No, I'm kidding. But, you know, and then
• 11:28
  Speaker 1: there's like 3,000 miles. And then on the west, across
• 11:34
  Speaker 1: basically 3,000 miles of desert, there's Perth, which is the
• 11:38
  Speaker 1: capital of Western Australia, which is a state within Australia
• 11:43
  Speaker 1: the size of Alaska and Texas combined. And it has
• 11:49
  Speaker 1: 3 million people. And basically, that's it. Everything in the
• 11:54
  Speaker 1: middle is for all intents and purposes empty. There's nobody there. Now,
• 12:02
  Speaker 1: the Western Australia, Perth is considered kind of Australia's Texas.
• 12:07
  Speaker 1: It's remote. It's got mining, oil and gas. And I think,
• 12:14
  Speaker 1: and Randall will correct me if I'm wrong, kind of
• 12:16
  Speaker 1: a different orientation politically as well. Now, here's one of
• 12:20
  Speaker 1: the amazing things about Australia. Just like there's no pipeline
• 12:24
  Speaker 1: that connects Texas to California, there's no pipeline that connects
• 12:28
  Speaker 1: the West to the East. There's 2,000 something thousand miles
• 12:37
  Speaker 1: of nothing in between. So Australia really doesn't have one
• 12:42
  Speaker 1: natural gas marketplace. It has two. It has a Western
• 12:49
  Speaker 1: marketplace and an Eastern marketplace that really have very unique characteristics. Now,
• 12:58
  Speaker 1: gas was first found in the ocean off of Perth.
• 13:04
  Speaker 1: And that, you know, that gas or that gas that's
• 13:08
  Speaker 1: found off of Perth cannot reach Melbourne except by ship.
• 13:13
  Speaker 1: And there's no LNG terminal in Melbourne to accept. Natural
• 13:20
  Speaker 1: gas on that side. By the way, is the chat working?
• 13:23
  Speaker 1: You guys are really quiet, and I'm worried whether we
• 13:26
  Speaker 1: even connected and were on because nobody's on the chat. Anyway,
• 13:35
  Speaker 1: somebody on the chat say something just so I know
• 13:36
  Speaker 1: that you're alive. Well, that I know that I'm alive,
• 13:41
  Speaker 1: that I know that I'm live. All right, so let's
• 13:46
  Speaker 1: talk about how we got here. if you will. And
• 13:51
  Speaker 1: in the 1970s, there was a huge gas find under
• 13:56
  Speaker 1: the ocean, a thousand miles north of Perth, basically in
• 14:00
  Speaker 1: the middle of nowhere. Three million people, you know, can't
• 14:05
  Speaker 1: use the amount of gas that was there. So immediately
• 14:08
  Speaker 1: the question is, where does it go, right? The only
• 14:12
  Speaker 1: way to make that gas worth anything, worth anything, is
• 14:18
  Speaker 1: to basically chill it. These numbers are amazing. You have
• 14:22
  Speaker 1: to chill it to minus 260 Fahrenheit, where it turns
• 14:28
  Speaker 1: into liquid, and then you can load it up onto ships,
• 14:33
  Speaker 1: and then you need a terminal on the other side
• 14:35
  Speaker 1: to basically melt it, melt it? Yeah, melt it back
• 14:40
  Speaker 1: into gas, and that's what liquefied natural gas is. I
• 14:44
  Speaker 1: never realized it was minus 260 Fahrenheit. That is cold,
• 14:49
  Speaker 1: even for the Michiganians around, or the Michiganians around, and
• 14:56
  Speaker 1: I know some of you are still offended by my
• 14:58
  Speaker 1: use of Michiganians, but that's okay. You know, even for you,
• 15:07
  Speaker 1: it would be cold. So, you know, this technology in
• 15:14
  Speaker 1: the 1970s, It was very young. It was very expensive.
• 15:20
  Speaker 1: But the obvious consumer, there was a consumer not that
• 15:23
  Speaker 1: far from Australia, at least not that far in the
• 15:27
  Speaker 1: scale of the Pacific, not that far from Australia, and
• 15:30
  Speaker 1: that was Japan. Japan is this industrial powerhouse. It's a
• 15:38
  Speaker 1: productivity powerhouse. And yet, Japan has no gas, no oil,
• 15:46
  Speaker 1: No natural resources. So Japan inputs almost all of its
• 15:54
  Speaker 1: power except for the nuclear energy that in the 1970s
• 15:58
  Speaker 1: it was building and then shut down and now is
• 16:02
  Speaker 1: starting up again because it's become obvious that nuclear is
• 16:08
  Speaker 1: the solution. Anyway, so there was a deal to build
• 16:12
  Speaker 1: out Australian gas. Japanese utilities signed 20-year contracts to buy
• 16:18
  Speaker 1: from a plant that didn't exist. And on the strength
• 16:24
  Speaker 1: of those contracts, six companies, Shell, Chevron, BP, Shell, Chevron, BP,
• 16:30
  Speaker 1: European and American companies, two Australian firms, and one Japanese,
• 16:35
  Speaker 1: spent the money to build, to build the facility to
• 16:40
  Speaker 1: liquefy the natural gas and to go and drill for
• 16:44
  Speaker 1: the gas and pipe it to the facility the first
• 16:49
  Speaker 1: cargo to japan uh went out in 1989 so not
• 16:53
  Speaker 1: that long ago at least on my scale of thinking
• 16:57
  Speaker 1: um i mean you can think of it this way
• 17:01
  Speaker 1: and this is something that people not the way people
• 17:03
  Speaker 1: think about this stuff right The Japanese didn't just buy
• 17:08
  Speaker 1: Australia's gas. They brought it or helped bring it into existence.
• 17:15
  Speaker 1: They financed its existence. There is no natural gas in
• 17:22
  Speaker 1: Australia without Japanese financing, without foreign company, massive foreign company investment.
• 17:32
  Speaker 1: Maybe it would have happened ultimately, would have taken a
• 17:35
  Speaker 1: lot longer. and a lot more expensive because the expertise
• 17:39
  Speaker 1: was not in Australia. Now, before the money was spent,
• 17:43
  Speaker 1: before any of this happened, the Western Australian state government said, well,
• 17:50
  Speaker 1: there's one condition. Remember, and here it's important to know,
• 17:54
  Speaker 1: offshore resources, oil, natural gas, minerals, whatever you find offshore,
• 18:00
  Speaker 1: the state claims, and this is true in America as well.
• 18:03
  Speaker 1: So in America, there is no private property claim. out
• 18:06
  Speaker 1: in the ocean, which is sad and pathetic, but it's true.
• 18:11
  Speaker 1: So if you drill for oil off the shore of
• 18:15
  Speaker 1: South Carolina, I don't know about the state government, but
• 18:18
  Speaker 1: certainly the federal government has a claim on anything you do,
• 18:21
  Speaker 1: and you need permits, you need approval, you need permission. Indeed,
• 18:24
  Speaker 1: a big deal is getting permission because it's all considered
• 18:28
  Speaker 1: government land. So the drilling in the ocean off of
• 18:34
  Speaker 1: the coast of Western Australia is needed the approval and
• 18:37
  Speaker 1: permission of the Western Australian government. And once natural gas
• 18:43
  Speaker 1: was found, the Western Australian government wrote one condition into
• 18:50
  Speaker 1: the deal. They actually placed one condition. And that is
• 18:53
  Speaker 1: that a piece of the gas eventually was set at
• 18:57
  Speaker 1: 15% of export. We'll get to see how much export
• 19:00
  Speaker 1: actually go to Western Australia. But it was set at
• 19:04
  Speaker 1: 15% of export. had to be made available to the
• 19:07
  Speaker 1: whole market. Now, it didn't mean that 15% would go
• 19:10
  Speaker 1: to the whole market. It meant that up to 15%
• 19:13
  Speaker 1: had to be made available for the whole market. No
• 19:17
  Speaker 1: price was set, important, just availability. And it's important to
• 19:24
  Speaker 1: note that in spite of the fact that I don't
• 19:27
  Speaker 1: even agree with this, I don't think this is right,
• 19:30
  Speaker 1: because I don't think the state has, quote, ownership rights.
• 19:35
  Speaker 1: over any property, including what's offshore, if you're afraid it's yours.
• 19:42
  Speaker 1: But in this case, they said it in advance of
• 19:46
  Speaker 1: any major investment. So whoever invested in the project, the pipelines,
• 19:52
  Speaker 1: the LNG facility, the expansion, the drilling and all of that,
• 19:58
  Speaker 1: they knew that they had to allocate 15% of export
• 20:02
  Speaker 1: to the domestic market. And by the way, 15% of
• 20:05
  Speaker 1: export at market prices. The state did not impose a
• 20:09
  Speaker 1: price cap, did not impose prices. Really, I think, important. So,
• 20:18
  Speaker 1: you know, before investment was made, so over the next
• 20:22
  Speaker 1: 30 years, Western Australia, they saw five more of these
• 20:30
  Speaker 1: LNG plants being built, each one bigger than the previous one.
• 20:35
  Speaker 1: The largest, Chevron's Gorgon plant, cost north of $ 50 billion.
• 20:41
  Speaker 1: It also ran years late. You can imagine the kind
• 20:43
  Speaker 1: of environmental regulations that would stop something like this from happening.
• 20:48
  Speaker 1: The whole wave of the building was $ 234 billion. Today,
• 20:55
  Speaker 1: gas in Perth sells at about $ 10. You know, double
• 21:02
  Speaker 1: what it sells to Texas. Texas is really cheap. because,
• 21:06
  Speaker 1: I mean, it's not even offshore in Texas, and it's
• 21:11
  Speaker 1: easier to get to in Texas. But it's cheap, really cheap,
• 21:14
  Speaker 1: as compared to the rest of Asia, where it has
• 21:16
  Speaker 1: to be shipped through LNG. Now let's look at the east,
• 21:22
  Speaker 1: where the vast majority of the Australian population is. Let
• 21:28
  Speaker 1: me just check. I didn't think of doing this. what
• 21:34
  Speaker 1: the population of Australia is. It's 28 million people, right?
• 21:39
  Speaker 1: 28 million people. Three in the West. I won't say
• 21:42
  Speaker 1: 25 in the Southeast, but probably 20 in the Southeast.
• 21:48
  Speaker 1: So in 1965, Exxon and an Australian partner found some
• 21:52
  Speaker 1: oil and gas in the Bass Strait. That's the water
• 21:56
  Speaker 1: between Melbourne and Tasmania. Remember the cartoons of the Tasmanian Devil?
• 22:02
  Speaker 1: That Tasmania. This is considered Australia's Gulf of Mexico or
• 22:07
  Speaker 1: Gulf of America. I don't know what it's called these days.
• 22:10
  Speaker 1: For 50 years, that one basin has fed Melbourne and Sydney.
• 22:16
  Speaker 1: It was cheap. It was captive. There were no export terminals,
• 22:21
  Speaker 1: so all of it stayed home. Whole industries were built
• 22:25
  Speaker 1: on the assumption that it would always be there and
• 22:28
  Speaker 1: it would always be cheap. Now, see, Since then, two
• 22:34
  Speaker 1: things have happened. The Bass Strait has started running down.
• 22:40
  Speaker 1: And in Queensland, the state north of Sydney, still in
• 22:45
  Speaker 1: the east, but north of Sydney, companies worked out how
• 22:48
  Speaker 1: to get gas out of coal seams, what Americans called
• 22:54
  Speaker 1: coal bed methane. It's the same kind of unconventional gas
• 22:58
  Speaker 1: that made the U.S. shale boom, right? It's innovation, exciting innovations.
• 23:07
  Speaker 1: And three consortia, led by Shell, by Santos, which is
• 23:11
  Speaker 1: an Australian homegrown gas company, and by origin with ConcoPhillips,
• 23:17
  Speaker 1: built three export plants side by side near the port
• 23:21
  Speaker 1: town of Galston. From 2015, the East Coast could now
• 23:27
  Speaker 1: ship gas to Asia for the first time. That's a
• 23:30
  Speaker 1: lucrative business. Now, the export plants actually, you know, demand
• 23:41
  Speaker 1: for this in Asia was so high that the export
• 23:44
  Speaker 1: plants needed more gas than their own fields produced. So
• 23:48
  Speaker 1: they bought from the fields that were supplying Melbourne and Sydney.
• 23:56
  Speaker 1: Think about this economically. You know, their fields are supplying
• 24:02
  Speaker 1: Melbourne and Sydney at a really, really low price. But now,
• 24:05
  Speaker 1: instead of going to Melbourne and Sydney, they can go
• 24:07
  Speaker 1: to these LNG places and then ship to Asia at
• 24:10
  Speaker 1: a much, much higher price. And it landed up that
• 24:15
  Speaker 1: the three exporters ended up controlling about 90% of the
• 24:17
  Speaker 1: East Coast reserves. And overnight, prices in Melbourne and Sydney
• 24:25
  Speaker 1: and everything in between were going up because now they
• 24:28
  Speaker 1: were competing with what the Japanese were willing to pay overseas.
• 24:34
  Speaker 1: for natural gas in Tokyo. Now, let me just say,
• 24:38
  Speaker 1: when I read stories like this, when I read about
• 24:41
  Speaker 1: this stuff, what I see is just the beauty of globalization.
• 24:47
  Speaker 1: Capital and resources flowing to the most productive use. And
• 24:52
  Speaker 1: that means a redistribution of investment. That means that some
• 24:57
  Speaker 1: companies fail while others thrive. But it is This, if
• 25:04
  Speaker 1: you will, arbitrage of prices across geographies as transportation costs
• 25:09
  Speaker 1: go to zero, and they've gone close to zero in
• 25:13
  Speaker 1: many shipping arenas, not so much with LNG, is really
• 25:18
  Speaker 1: amazing and beautiful. And it's part of the reason that
• 25:23
  Speaker 1: the world is as prosperous and is doing as well
• 25:28
  Speaker 1: financially and economically as it is, as it is. Anyway,
• 25:37
  Speaker 1: domestic prices went from $ 4 on the East to about $ 12.
• 25:41
  Speaker 1: They spiked over $ 30 when Russia invaded Ukraine, and they're
• 25:46
  Speaker 1: down now to somewhere between $ 12 to $ 15. So if
• 25:56
  Speaker 1: you think about what's the obvious answer when you think
• 26:03
  Speaker 1: this huge demand is There's demand for export. There's domestic demand.
• 26:07
  Speaker 1: Demand is going up. Prices are high, so I can
• 26:11
  Speaker 1: make a nice profit. What is the obvious response to this?
• 26:15
  Speaker 1: The same response you would have in housing. Prices are up.
• 26:22
  Speaker 1: Demand is high. What do you do? Well, you increase supply.
• 26:28
  Speaker 1: Drill baby drill. You increase supply. And it turns out
• 26:36
  Speaker 1: that the East, Eastern Australia, has gas onshore. Under the
• 26:44
  Speaker 1: very people who are complaining, right underneath their feet, there's
• 26:48
  Speaker 1: natural gas. But the states banned drilling for it. Victoria,
• 26:56
  Speaker 1: the state around Melbourne, banned fracking in 2012. They put
• 27:02
  Speaker 1: a moratorium on all onshore drilling in 2014. They kept
• 27:07
  Speaker 1: it for seven years. And in 2021, they wrote the
• 27:11
  Speaker 1: fracking ban into the state constitution. This is the Melbourne
• 27:18
  Speaker 1: that shut everybody down, locked them down in their homes
• 27:24
  Speaker 1: during COVID. This is one of the worst places in
• 27:26
  Speaker 1: the world to be during COVID. That Melbourne put the
• 27:30
  Speaker 1: fracking ban into their constitution. Talk about an abuse of
• 27:35
  Speaker 1: Of the constitution. Any constitution. New South Wales. Around Sydney.
• 27:43
  Speaker 1: Didn't ban drilling. No. There's no ban on drilling. They
• 27:47
  Speaker 1: just never approve any. Haven't approved any. There was one
• 27:54
  Speaker 1: big project. Proposed in 2013. Still haven't been given a
• 28:00
  Speaker 1: go ahead. What is it? 13 years later? No go ahead.
• 28:06
  Speaker 1: So the East Coast didn't so much run out of gas,
• 28:12
  Speaker 1: it ran out of permission slips. Its politicians have basically
• 28:17
  Speaker 1: created a shortage, scarcity, when none really exists. By the way,
• 28:29
  Speaker 1: this so reminds me of Europe. Did you know that
• 28:31
  Speaker 1: in 2001, Europe was a major producer of natural gas.
• 28:38
  Speaker 1: And as they shut down the nuclear pipelines, they also
• 28:40
  Speaker 1: shut down drilling for natural gas and natural gas production
• 28:44
  Speaker 1: in Europe has gone like that. And there's massive quantities
• 28:47
  Speaker 1: of natural gas under Germany and under Ukraine. I don't
• 28:52
  Speaker 1: know about Poland. There's massive quantities of natural gas under
• 28:57
  Speaker 1: the UK. And they won't allow drilling. They won't allow drilling.
• 29:07
  Speaker 1: And then they complain that prices are high and they're
• 29:10
  Speaker 1: cold in the winter and they can't heat and there's
• 29:12
  Speaker 1: not enough electricity for air conditioning and all this stuff. Well, yeah. Decisions, decisions, decisions. Consequences, consequences, consequences.
• 29:24
  Speaker 1: All right. So since 2017, the federal government has intervened
• 29:30
  Speaker 1: without adding any supply. So it has an export control
• 29:36
  Speaker 1: power that it's never used. It's tried to impose a
• 29:41
  Speaker 1: voluntary agreement with exporters. In 2022, it placed a $ 12
• 29:48
  Speaker 1: price cap, then a permanent reasonable price rule. All these
• 29:57
  Speaker 1: different things that they put into place, they overlap and
• 30:03
  Speaker 1: don't really work, but they passed lots of law, lots
• 30:08
  Speaker 1: of regulations laws, but nothing's, they haven't done anything really.
• 30:13
  Speaker 1: It's all spinning wheels and, and, and, and making noises
• 30:16
  Speaker 1: to appease. This year, they made two big moves. As
• 30:22
  Speaker 1: I said earlier, two big moves. Um, the unions proposed
• 30:30
  Speaker 1: the 25% expo tax, um, and the greens and some
• 30:35
  Speaker 1: independents picked it up. A Senate inquiry recommended nothing. The
• 30:41
  Speaker 1: prime minister said now is not the time, but didn't
• 30:44
  Speaker 1: rule it out. Instead, as I said, the government is
• 30:48
  Speaker 1: legislating a 20% reservation, which means 20% for domestic use
• 30:50
  Speaker 1: from 2028. Um, And the Japanese buyers, who right now
• 31:00
  Speaker 1: take about 40% of Australian LNG, on record saying, hmm,
• 31:06
  Speaker 1: we're worried. We have strong concerns about all of this.
• 31:17
  Speaker 1: So companies did get projects approved in these years, despite
• 31:22
  Speaker 1: all of this. But under huge uncertainty... Not one of
• 31:29
  Speaker 1: the projects that was approved was meant to produce more gas.
• 31:36
  Speaker 1: Everyone was meant to decide who gets the gas that
• 31:39
  Speaker 1: are already there. Should it be Australians? Should it be foreigners?
• 31:43
  Speaker 1: Producers or consumers? Companies or the treasury? So all the
• 31:49
  Speaker 1: projects were political projects. No new drilling. No new drilling
• 31:53
  Speaker 1: was approved. Nine years of fighting. of how to slice
• 32:00
  Speaker 1: the fixed cake, fixed only because of those permission slips,
• 32:07
  Speaker 1: only because the government will not allow the cake to grow,
• 32:11
  Speaker 1: the pie to grow. I hate pie analogies. I'm not
• 32:13
  Speaker 1: sure why I'm using it. It seems apropos because they're
• 32:17
  Speaker 1: not allowing it to grow, so they fixed it already.
• 32:19
  Speaker 1: All right. So let's talk about this 25% tax, 25% tax.
• 32:35
  Speaker 1: We've got a gas that formed over 100 million years ago, right?
• 32:46
  Speaker 1: Nobody actually made it. It's called a natural resource, right?
• 32:50
  Speaker 1: Under Australian law, as in most of the world outside
• 32:53
  Speaker 1: the United States, minerals belong to the state until a
• 32:59
  Speaker 1: company is established. licensed, i.e. given permission to take them.
• 33:06
  Speaker 1: A company that spends $ 10 billion developing a field deserves
• 33:10
  Speaker 1: a return, almost everybody would agree, on the money and
• 33:14
  Speaker 1: the risk that they took. But what about the extra
• 33:22
  Speaker 1: value that exists in Because the gas is scarce or
• 33:27
  Speaker 1: because something in the world happened, like a war that
• 33:30
  Speaker 1: drove the price up to 30. We often call this windfall,
• 33:36
  Speaker 1: windfall profits. Economists often call this economic rent. I hate
• 33:43
  Speaker 1: that term, but that's what they call it, economic rents.
• 33:47
  Speaker 1: A excess, excess? A profit. A profit. No direct action
• 33:55
  Speaker 1: of yours is produced. Some external event made it so.
• 34:04
  Speaker 1: So people say, okay, well, it's okay for you to
• 34:08
  Speaker 1: make a return on your investment. But maybe we should
• 34:12
  Speaker 1: tax what's on top of that. Maybe we should have
• 34:15
  Speaker 1: an extra tax on the so-called economic grant. Because Nobody
• 34:22
  Speaker 1: produced it. Nobody invested in it. It's the same gas.
• 34:26
  Speaker 1: It's just the price went up for whatever reason. And
• 34:31
  Speaker 1: Australia basically built a tax on exactly that theory in 1987.
• 34:35
  Speaker 1: It's called the Petroleum Resource Rent Tax. Very explicit. It's
• 34:43
  Speaker 1: a 40% tax on offshore oil and gas profits. Offshore,
• 34:48
  Speaker 1: so this affects primarily West Australia. that only starts after
• 34:53
  Speaker 1: a company has recovered all its costs plus a return.
• 35:01
  Speaker 1: And the industry, I guess, agreed to this. And then
• 35:04
  Speaker 1: they gamed it, right? So Australia exports 64.6 billion of
• 35:10
  Speaker 1: LNG last year. The resource rent tax collected about 1.5 billion. Uh,
• 35:22
  Speaker 1: And the reality is that according to the Treasury's own
• 35:27
  Speaker 1: 2023 budget, they said that at that point, not a
• 35:32
  Speaker 1: single LNG project had ever paid it. Why? Why aren't
• 35:37
  Speaker 1: they paying this rent tax? Because as we said, the
• 35:42
  Speaker 1: tax lets you, you know, first you have to get
• 35:46
  Speaker 1: a return. And the tax-elected companies carry forward every dollar
• 35:50
  Speaker 1: of exploration and construction costs, growing it every year at
• 35:56
  Speaker 1: whatever the rate on the bonds are, which could be
• 36:00
  Speaker 1: government bonds plus five or up to 15 basis points,
• 36:05
  Speaker 1: compounding until, in a sense, it's used up, until the
• 36:09
  Speaker 1: profits eat up that amount. And the reality is that
• 36:14
  Speaker 1: the pile of unused deductions is now hundreds of billions
• 36:18
  Speaker 1: of dollars. So the tax office publishes that big companies pay. Santos,
• 36:26
  Speaker 1: the biggest homegrown gas company, had paid. So it publishes
• 36:32
  Speaker 1: what big companies pay. Santos had paid zero corporate income
• 36:37
  Speaker 1: tax for 11 straight years. The Japanese company that runs
• 36:41
  Speaker 1: Darwin Plant Zero income tax, zero resource tax, seven years.
• 36:46
  Speaker 1: $ 53 billion in sales. The resource rent tax raises less
• 36:53
  Speaker 1: than beer tax. And then, you know, the former head
• 37:00
  Speaker 1: of the Treasury, one of the country's most respected economic
• 37:04
  Speaker 1: civil servants, the man who designed the 2010 mining tax.
• 37:09
  Speaker 1: told the Senate that Australia could have collected hundreds of
• 37:12
  Speaker 1: billions more from the boom, Australia, whoever that is, the
• 37:17
  Speaker 1: government in other words, that the resource company's self-interest is
• 37:21
  Speaker 1: driving their arguments, and that the country should, quote, stop
• 37:25
  Speaker 1: the crap and just do it in the national interest.
• 37:30
  Speaker 1: In other words, raise more money from gas. In other words,
• 37:34
  Speaker 1: start taxing them. And this isn't a fringe view. This
• 37:39
  Speaker 1: is a popular view out there. And, you know, a
• 37:43
  Speaker 1: lot of this is based on the model from Norway.
• 37:48
  Speaker 1: Norway taxes petroleum profits at 78%. Yeah. Its sovereign fund,
• 37:57
  Speaker 1: where the profits flow to, has more than $ 1. 8 trillion U.S.
• 38:03
  Speaker 1: in this case. And the companies keep drilling. Because they
• 38:09
  Speaker 1: still make money. And they went into these agreements knowing
• 38:14
  Speaker 1: the tax would be this high. But also, you know,
• 38:18
  Speaker 1: it's interesting how it works. We'll get to that in
• 38:20
  Speaker 1: a minute. Qatar exports about as much gas as Australia
• 38:26
  Speaker 1: and collects several times the revenue. Most of Australia's energy
• 38:30
  Speaker 1: profit goes to foreign-owned companies. So the pictures the supporters see,
• 38:35
  Speaker 1: the supporters of the taxi, a foreign company takes a, quote,
• 38:40
  Speaker 1: public resource, pays almost nothing for it, and the Australian
• 38:44
  Speaker 1: family pays triple for the gas on its own fee.
• 38:49
  Speaker 1: And look at the Norwegians. Look at the Qataris. Now,
• 38:56
  Speaker 1: so a 25% increase. 25% revenue tax is what they want.
• 39:02
  Speaker 1: Not a profit tax, revenue tax. Because you can't game
• 39:06
  Speaker 1: a revenue tax. Right? Profits get gamed. Revenue is revenue.
• 39:12
  Speaker 1: It's just the money coming in. Because most LNG goes
• 39:16
  Speaker 1: out under long-term contracts with the price formula already fixed.
• 39:21
  Speaker 1: So the exporter can't pass the tax to the buyer.
• 39:24
  Speaker 1: It comes out of profit. But The state gets... its
• 39:30
  Speaker 1: entire chunk. So, yeah, that would be $ 17 billion a year.
• 39:41
  Speaker 1: And supposedly, these companies haven't paid much in 20 years,
• 39:45
  Speaker 1: so big deal. Now, what's the problem with this argument?
• 39:52
  Speaker 1: What's the problem with this tax? Let's kind of look
• 39:58
  Speaker 1: at it both philosophically and economically and actually look at
• 40:04
  Speaker 1: other countries and what they've done and even look at Norway.
• 40:12
  Speaker 1: Norway's interesting, right? I think we're going to look at Norway. Anyway.
• 40:21
  Speaker 1: So the first question you have to ask yourself whenever
• 40:24
  Speaker 1: dealing with issues like this is who owns the gas?
• 40:30
  Speaker 1: Who owns it? Now, ownership means the ability to use, sell,
• 40:36
  Speaker 1: keep someone away from it, protect it. It's yours. If
• 40:44
  Speaker 1: Australians own the gas, can any Australian do any of that?
• 40:50
  Speaker 1: I mean, the reality is that the government controls it.
• 40:53
  Speaker 1: The minister in charge controls it. The minister can change
• 40:57
  Speaker 1: the terms. After you've built a plant, he can do
• 41:00
  Speaker 1: whatever the hell he wants. The government has an arbitrary
• 41:06
  Speaker 1: claim over this in the name of its residents. Now,
• 41:09
  Speaker 1: where does this come from? Well, it comes from British kings.
• 41:14
  Speaker 1: It comes from the idea that the sovereign, as a claim...
• 41:19
  Speaker 1: against everything under the soil, in the soil, on the soil,
• 41:23
  Speaker 1: and everybody who lives on it. Now, Australia inhabited this
• 41:29
  Speaker 1: to some extent, right? So did the United States to
• 41:33
  Speaker 1: some extent. But the United States, at least onshore, recognizes
• 41:42
  Speaker 1: that what's under the soil belongs to the person who
• 41:46
  Speaker 1: owns what's above the soil. Natural resources in America on
• 41:53
  Speaker 1: private land are private. Now, the sad reality of America is,
• 41:58
  Speaker 1: one of the sad realities, is that 75% of the
• 42:01
  Speaker 1: land west of the Mississippi, I'll say that again, 75%
• 42:06
  Speaker 1: of the land west of the Mississippi is owned by
• 42:09
  Speaker 1: some form of government, federal, state, local. So their government, quote,
• 42:17
  Speaker 1: owns the natural resources under the land. which creates a
• 42:21
  Speaker 1: lot of problems and why all the amazing natural resources
• 42:26
  Speaker 1: that exist in the United States are not exploited because
• 42:29
  Speaker 1: the government doesn't give it permission. Again, permission slips. Not
• 42:32
  Speaker 1: enough permission slips. And of course, offshore, the United States
• 42:38
  Speaker 1: is just like Australia. You need a permission. But the
• 42:44
  Speaker 1: reality is, the reality is that there's no such thing
• 42:47
  Speaker 1: as collective ownership. Ownership is a relationship between a person
• 42:52
  Speaker 1: and a thing he acts on. It's something that you
• 42:59
  Speaker 1: have produced, that you have created, or something that you
• 43:03
  Speaker 1: have used what you have produced and created to purchase.
• 43:08
  Speaker 1: But you as an Australian can't sell your shares in
• 43:14
  Speaker 1: the natural resources of Australia. You can't go out there
• 43:18
  Speaker 1: and drill for your piece of it. 27, 28 million,
• 43:23
  Speaker 1: cannot act on a gas field. So, a resource, and
• 43:34
  Speaker 1: this is an important point that Ayn Rand makes, but,
• 43:38
  Speaker 1: you know, there's some economists who get this. Julian Simon.
• 43:42
  Speaker 1: A resource is not a thing in the ground. It's
• 43:47
  Speaker 1: a thing in the ground plus a mind that knows
• 43:49
  Speaker 1: what to do with it. Like, Alex always uses the
• 43:55
  Speaker 1: example of oil. If you had oil on your land
• 44:00
  Speaker 1: before the 1850s, it lowered the value of the land.
• 44:08
  Speaker 1: The black gunk coming out of the ground destroyed the
• 44:13
  Speaker 1: ability to grow anything on it. It's a nuisance. It's dirty.
• 44:18
  Speaker 1: It's a fire. It's just not good. No value. So
• 44:30
  Speaker 1: a thing in the ground needs a mind to give
• 44:34
  Speaker 1: it value. For 100 million years, that gas was worth nothing. Negative.
• 44:43
  Speaker 1: It was pressure in a rock. As Alex Epstein says,
• 44:49
  Speaker 1: we don't take resources from nature. We create them from nature.
• 44:54
  Speaker 1: And we create them with knowledge. with capital, and by
• 44:58
  Speaker 1: taking on risk. Rand, when she talked about the airwaves,
• 45:03
  Speaker 1: what requires human knowledge and effort to become useful should
• 45:06
  Speaker 1: belong to those who apply the knowledge and the effort.
• 45:10
  Speaker 1: I'm paraphrasing the property rights status of airwaves from capitalism,
• 45:16
  Speaker 1: the unknown ideal. The people who turn pressure and rock
• 45:21
  Speaker 1: into cargo in Osaka are Shell, Chevron, Woodside, and the
• 45:26
  Speaker 1: Japanese utilities that finance them. They get to own it.
• 45:31
  Speaker 1: It's not Australia. It's not the government's. It's not yours.
• 45:39
  Speaker 1: And then a fair return? Fair to whom? Fair by
• 45:44
  Speaker 1: what standard? In a trade, fair means each body keeps
• 45:50
  Speaker 1: what it brought. I mean, sorry, in a trade, fair
• 45:59
  Speaker 1: means each party gives up something of lesser value and
• 46:04
  Speaker 1: gains something of greater value. That's fair. Here, the producer
• 46:13
  Speaker 1: brings the plant, the ships, $ 234 billion of investment. What
• 46:22
  Speaker 1: does the state bring? A title inherited from a king?
• 46:28
  Speaker 1: A fair return on that title is whatever it was
• 46:31
  Speaker 1: worth before anyone spent a dollar. Agreed once. But why
• 46:38
  Speaker 1: does the state even have a title? Why does it
• 46:42
  Speaker 1: have any say? Again, in America, onshore in the U.S.,
• 46:48
  Speaker 1: the landowner owns the minerals. About 12 million Americans, I
• 46:52
  Speaker 1: didn't know this, 12 million Americans collect oil and gas royalties.
• 46:56
  Speaker 1: And that's a large part of why the U.S. went
• 46:59
  Speaker 1: from a gas importer to the world's biggest exporter in
• 47:02
  Speaker 1: 15 years. When the farmer owns the gas, the farmer
• 47:08
  Speaker 1: wants the well drilled. When the people own the gas,
• 47:13
  Speaker 1: nobody wants anything. Why would I want you to drill
• 47:17
  Speaker 1: next to my land? It's a hassle. It's noise. It's everything.
• 47:21
  Speaker 1: I don't get one iota benefit from it. So who decides? Politicians.
• 47:29
  Speaker 1: What's their incentive? To please their constituency. Their constituency has
• 47:35
  Speaker 1: no direct incentive to see any drilling actually done. So
• 47:42
  Speaker 1: no drilling is actually done? So there is not such
• 47:49
  Speaker 1: thing as a fair return. I invest. I take the risk.
• 47:55
  Speaker 1: I own. I make as much money as I can.
• 48:01
  Speaker 1: Give me one second. It gets hot here in Puerto Rico,
• 48:14
  Speaker 1: even in the so-called winter. All right. So, yeah, there's
• 48:21
  Speaker 1: a difference between a field's return on capital and the
• 48:25
  Speaker 1: extra value of lucky geology or lucky decade or lucky war.
• 48:33
  Speaker 1: But so what? It's so what? And what about the
• 48:40
  Speaker 1: unlucky stuff? Is there any ever a windfall subsidy? I mean,
• 48:49
  Speaker 1: sometimes they're bailouts. But no, it shouldn't be either side. Now,
• 48:58
  Speaker 1: it's better if the terms are set in advance, then
• 49:03
  Speaker 1: everybody can bid and compete and determine prices, knowing that
• 49:09
  Speaker 1: they have to set aside something for the state like
• 49:12
  Speaker 1: they did in the West. But you can't after the
• 49:19
  Speaker 1: money is spent. walk in and change the rules of
• 49:22
  Speaker 1: the game. Every windfall is connected to losses and risk
• 49:32
  Speaker 1: that kept you in business so that you could benefit
• 49:35
  Speaker 1: from the windfall. The 22... 2022 spike in prices came
• 49:42
  Speaker 1: after five years from 2015 to 2020. Well, LNG, when
• 49:46
  Speaker 1: LNG sold under $ 6 and companies were losing money, losing money, nobody,
• 49:57
  Speaker 1: nobody talked, called for a subsidy, a windfall subsidy. A
• 50:06
  Speaker 1: return of taxes on the upside and uncompensated on the downside,
• 50:11
  Speaker 1: that's not rent. It's just confiscating the risk premium, the
• 50:15
  Speaker 1: premium you get for taking on risk. Taxing, quote, rents
• 50:19
  Speaker 1: after the fact means taxing whoever turned out to be right.
• 50:23
  Speaker 1: But the whole concept is wrong. So that's what Australia's
• 50:30
  Speaker 1: resource rent tax tries to do, find the rent after
• 50:33
  Speaker 1: the fact. To do it, the government has to guess
• 50:36
  Speaker 1: the cost of capital, guess how much of the profit
• 50:38
  Speaker 1: comes from gas and how much of the profit comes
• 50:40
  Speaker 1: from plants that liquefies it, guess generously and get hundreds
• 50:48
  Speaker 1: of billions of, and you get hundreds of billions of
• 50:51
  Speaker 1: deductions and a tax that raises less than beer. The
• 50:55
  Speaker 1: calibration problem is built into the whole idea. Once the
• 50:58
  Speaker 1: risk has been born, there's no number. There's no number
• 51:02
  Speaker 1: to find. There's no such thing. Fair return. Give me
• 51:05
  Speaker 1: a break. Now, Norway, which is people's best example, Norway's
• 51:18
  Speaker 1: 78% tax quote works. It doesn't really, but it works
• 51:23
  Speaker 1: to the extent that it works for three reasons, which
• 51:28
  Speaker 1: the Australian proposal copies none of them. One, It was
• 51:32
  Speaker 1: said before the North Sea was developed. So every investor
• 51:35
  Speaker 1: priced it in. It taxes profit, not revenue. And here's
• 51:43
  Speaker 1: the interesting part of it. It refunds exploration losses in cash.
• 51:50
  Speaker 1: The state shares the downside. So 78% is a partnership
• 51:55
  Speaker 1: agreed in advance. Not a kind of grab afterwards. It's
• 51:59
  Speaker 1: a grab in advance, but better than a grab afterwards.
• 52:03
  Speaker 1: If you want Norway, the 25% export tax is the
• 52:07
  Speaker 1: opposite of Norway. The opposite of Norway. Now, in Norway,
• 52:13
  Speaker 1: the government is, in a sense, a partner. Now, I'm
• 52:16
  Speaker 1: against that. I think that's bad for Norway. I think
• 52:19
  Speaker 1: it's bad for everybody. But it's a far, far better
• 52:24
  Speaker 1: system than trying to tax excess profits, win-for-profits, It's far,
• 52:30
  Speaker 1: far better than the export tax. It's far, far better
• 52:33
  Speaker 1: than any of these Australian proposals or much of other
• 52:37
  Speaker 1: proposals that have floated out there. And, of course, the
• 52:43
  Speaker 1: 25% proposal isn't a quote rent tax at all. It's
• 52:46
  Speaker 1: a tax on revenue, and its sponsors say so. It's revenue-based,
• 52:50
  Speaker 1: not profit-based. It's permanent. Revenue tax hits a barely profitable field.
• 52:58
  Speaker 1: you know, causing it to basically, you know, having a
• 53:02
  Speaker 1: strong incentive to shut down. An industry consultancy told the
• 53:08
  Speaker 1: Senate it would push some projects' total tax rate past 80%. So, no,
• 53:15
  Speaker 1: this is a particularly destructive tax. All taxes are destructive.
• 53:24
  Speaker 1: This one is particularly destructive. As I've said many times
• 53:29
  Speaker 1: on my show, what you tax, you get less of.
• 53:33
  Speaker 1: You tax exports, you get fewer exports. Who pays? Well,
• 53:38
  Speaker 1: not Japan. Japan will just buy from Qatar or Louisiana.
• 53:42
  Speaker 1: The exporter pays on existing contracts, which is, you know,
• 53:48
  Speaker 1: the whole point. But the exporter also stops approving the
• 53:52
  Speaker 1: next field, the next contract. The Japanese are not going
• 53:56
  Speaker 1: to fund it. the next LNG development project? Why would they,
• 54:03
  Speaker 1: if the rules are changing them in the middle of
• 54:04
  Speaker 1: the game? I mean, if Parliament changes tax laws all
• 54:10
  Speaker 1: the time, why would you make investments that are long-term? Now,
• 54:16
  Speaker 1: you know, a cafe can raise prices with taxes. But
• 54:21
  Speaker 1: a $ 50 billion plant on an island off the northeast
• 54:25
  Speaker 1: coast cannot move, cannot be sold for anything near its cost.
• 54:30
  Speaker 1: It's going to run for 40 years, and it has
• 54:32
  Speaker 1: long-term contracts. It can't adjust to the new tax, and
• 54:36
  Speaker 1: it's competing on a global market. So the tax is
• 54:45
  Speaker 1: particularly destructive. So, no, this is an awful idea. I mean,
• 54:58
  Speaker 1: Britain ran an experiment like this. In 2022, it put
• 55:02
  Speaker 1: a windfall levy on North Sea producers that took the
• 55:06
  Speaker 1: headline rate to 78%. Shell told the Australian Senate its
• 55:13
  Speaker 1: British investment fell from $ 14 billion to $ 2 billion a year.
• 55:19
  Speaker 1: And Britain's budget office cut the levy's expected revenue by two-thirds.
• 55:24
  Speaker 1: They raised the rate, revenue collapsed. And indeed, drilling in
• 55:28
  Speaker 1: the North Sea on Britain's side almost doesn't exist. It
• 55:35
  Speaker 1: just doesn't make any sense, given the tax policy. This
• 55:38
  Speaker 1: was all part of Britain's attempt to go net zero,
• 55:42
  Speaker 1: which is one of the big reasons, one of the
• 55:46
  Speaker 1: big reasons that Britain is in such bad shape. Randall says,
• 55:55
  Speaker 1: I'm just going to read it here because it fits
• 55:56
  Speaker 1: right here. Another big difference between Australia and Norway is
• 56:01
  Speaker 1: that Norway does not produce LNG as they directly pump
• 56:05
  Speaker 1: the gas straight from the well to the consumers by pipelines,
• 56:11
  Speaker 1: meaning less capital is required, meaning lower costs. Yeah, I mean,
• 56:14
  Speaker 1: Norway has significantly lower costs because their consumers right there,
• 56:17
  Speaker 1: they're in mainland Europe, so they can pump it through
• 56:19
  Speaker 1: pipelines directly to the consumers. They don't have to turn
• 56:23
  Speaker 1: into NLNGs. The costs are lower. But, of course, the
• 56:26
  Speaker 1: consumer pays a lower cost as well. Japan pays a
• 56:33
  Speaker 1: much higher price for natural gas. Energy in Japan is
• 56:36
  Speaker 1: expensive because they don't get anything pumped to them. Everything
• 56:42
  Speaker 1: is through liquid energy. So, what Australian needs right now,
• 56:55
  Speaker 1: needs right now, is investments. They need massive investments. Now,
• 57:03
  Speaker 1: the investments, and I'm going to save them in the
• 57:04
  Speaker 1: next few years because these things have long life. It
• 57:07
  Speaker 1: takes a long time from the investment until you get
• 57:10
  Speaker 1: natural gas. But what they need right now is people
• 57:12
  Speaker 1: to invest so that in the future they can keep pumping.
• 57:19
  Speaker 1: Talk about taxes like this, it's not going to encourage investment. Now,
• 57:26
  Speaker 1: the Industry Association tried to fight this tax by arguing
• 57:35
  Speaker 1: that it already pays a lot of taxes. The Industry
• 57:39
  Speaker 1: Association's own survey says $ 21. 9 billion paid to government last year,
• 57:43
  Speaker 1: of which $ 13. 5 billion is ordinary corporate income tax, 1.35
• 57:46
  Speaker 1: is the resource rent tax, 6.6 is state royalties and fees. Plus,
• 57:55
  Speaker 1: they support 215,000 jobs. Cool. But this completely concedes the premise.
• 58:03
  Speaker 1: We pay our fair share. Means, you know, that the
• 58:09
  Speaker 1: share is deserved by the people getting it. Why? We
• 58:16
  Speaker 1: owe this and we're paying it. Do we owe it?
• 58:20
  Speaker 1: They're accepting that Australia owns the gas. And the only
• 58:24
  Speaker 1: question is the number. And on the number, you're going
• 58:27
  Speaker 1: to lose. Most of the $ 22 billion is corporate income
• 58:30
  Speaker 1: tax that every company pays, right? Australia's Home Depot pays
• 58:35
  Speaker 1: it too, but it isn't under lease from the government.
• 58:42
  Speaker 1: And again, what's the fair return? That relates to the
• 58:45
  Speaker 1: rent tax. That's only $ 1. 3 billion. That's not enough. Can't
• 58:49
  Speaker 1: be enough. Can't be enough. Something wrong. So the industry
• 58:53
  Speaker 1: goes in conceding, conceding all the issues, the main issues,
• 58:59
  Speaker 1: and therefore has to fail, has to fail. It's an
• 59:07
  Speaker 1: apologetic defense of, and you have to... lose when you
• 59:11
  Speaker 1: go in like that. A man who defends his profit
• 59:14
  Speaker 1: by pointing to the taxes he pays and the jobs
• 59:16
  Speaker 1: he creates is saying his profit is justified by what
• 59:20
  Speaker 1: he gives away, which is the standard altruistic basis for profit.
• 59:26
  Speaker 1: The supporters here, supporters of the tax here, Sorry about
• 59:30
  Speaker 1: the profits. Look at the tribute. Alex Epstein's rule is this.
• 59:37
  Speaker 1: Never argue on your opponent's terms. The standard is human flourishing.
• 59:42
  Speaker 1: And the question is whether our policy produces more energy
• 59:45
  Speaker 1: for more people or less. And to put it in
• 59:49
  Speaker 1: my terms, the standard of which is, does this belong
• 59:53
  Speaker 1: to me or not? Belongs to me, then it's none
• 59:57
  Speaker 1: of your business. Keep your hands off of my stuff.
• 1:00:04
  Speaker 1: So what should they do? Well, they should argue that
• 1:00:10
  Speaker 1: we made this. The gas was worthless rock for 100
• 1:00:12
  Speaker 1: million years. We risked $ 234 billion. We had a five-year bust.
• 1:00:20
  Speaker 1: Leave us alone. The reason you're paying $ 14 is because
• 1:00:29
  Speaker 1: your government has banned the gas under your feet. Not
• 1:00:34
  Speaker 1: because we sold gas to Japan. There's plenty of gas
• 1:00:38
  Speaker 1: to go out. The constitutional fracking ban, the 13 years
• 1:00:43
  Speaker 1: of one onshore project, six years to approve an extension
• 1:00:48
  Speaker 1: of a plant. That's why you're paying $ 14 and not less. We,
• 1:00:57
  Speaker 1: the industry, we want Australians to have the cheapest gas
• 1:01:00
  Speaker 1: in the world. Here's the plan. Push for abundance. Let's
• 1:01:07
  Speaker 1: open the basins. Let's have a 12-month approval clock. Let's
• 1:01:11
  Speaker 1: have pipelines all over Australia. You know, and get rid
• 1:01:21
  Speaker 1: of the rent tax. And get rid of the carry
• 1:01:27
  Speaker 1: forward balances that we keep having to drag along in
• 1:01:30
  Speaker 1: order not to pay the rent tax. Just get rid
• 1:01:32
  Speaker 1: of the tax. Right. I mean, here's the thing. The
• 1:01:39
  Speaker 1: industry is losing an argument. It should win because it
• 1:01:42
  Speaker 1: keeps answering. How much did you pay us? When the
• 1:01:47
  Speaker 1: question is, why is my bill so high? The answer
• 1:01:51
  Speaker 1: to the second question is the government. They caused it.
• 1:01:55
  Speaker 1: They caused it. All right, so that's the tax. Let's
• 1:02:02
  Speaker 1: now turn to the other proposal, which is actually the
• 1:02:08
  Speaker 1: government is actually passing, which is the proposal to reserve
• 1:02:14
  Speaker 1: 20% of all the natural gas for domestic consumption. So again,
• 1:02:23
  Speaker 1: let's make the case for it. Let's make the case
• 1:02:28
  Speaker 1: for this. And I'll remind you, just because Randall sponsored
• 1:02:35
  Speaker 1: the show doesn't mean you shouldn't be trying to reach
• 1:02:40
  Speaker 1: our targets for the hour we've already done and the
• 1:02:46
  Speaker 1: second hour we're already entering. So ask questions, in other words.
• 1:02:50
  Speaker 1: Ask questions on anything. On the topic we just discussed,
• 1:02:54
  Speaker 1: or anything else. All right, so let's talk about the
• 1:02:59
  Speaker 1: case for it. Well, the Australian government or the Australians
• 1:03:03
  Speaker 1: are going to say, it's our gas. Why is Australia's
• 1:03:06
  Speaker 1: biggest aluminum smelter bidding against the Japanese utility for it?
• 1:03:11
  Speaker 1: Australia first. Reservation taxes. Reservation, that is, reservation again is
• 1:03:17
  Speaker 1: the term for this export limit. Reservation taxes nobody. Sets
• 1:03:23
  Speaker 1: no price. It says offer a fifth of what you
• 1:03:26
  Speaker 1: ship to your own country first. Western Australia has done
• 1:03:30
  Speaker 1: it for 20 years. Perth gases are 10. Melbourne gases
• 1:03:35
  Speaker 1: are 14. That's 40% more. And Chevron and Woodside built
• 1:03:39
  Speaker 1: their plants under the rule. It protects households from a
• 1:03:44
  Speaker 1: Qatari spot price and a war in the Gulf. Well,
• 1:03:48
  Speaker 1: prices would still spike in those cases, right? The Asian
• 1:03:53
  Speaker 1: spot price hit $ 34 in March when the state of
• 1:03:57
  Speaker 1: Homo was closed. And here's the argument free marketeers usually dodge.
• 1:04:04
  Speaker 1: Three companies hold 90% of the East Coast reserves. They
• 1:04:08
  Speaker 1: can hold gas back, keep the whole market tight, sell
• 1:04:12
  Speaker 1: the rest abroad. This is the monopoly argument. Let the
• 1:04:17
  Speaker 1: market work. Assumes there's a market, but there's no market.
• 1:04:20
  Speaker 1: There are only three competitors that collude. where three sellers
• 1:04:24
  Speaker 1: reservation isn't interfering with competition, it's substituting for competition that
• 1:04:29
  Speaker 1: doesn't exist. And they promise. The plants were approved on assurances.
• 1:04:39
  Speaker 1: They'd run on their own export fields. They didn't. They
• 1:04:44
  Speaker 1: bought some of our gas that was targeted at Melbourne
• 1:04:47
  Speaker 1: and Sydney. We're just enforcing regulations. Enforcing reservations is just
• 1:04:53
  Speaker 1: holding you to the deal. Now what does a reservation
• 1:04:59
  Speaker 1: actually do? This export restriction. What doesn't it do? First,
• 1:05:09
  Speaker 1: it doesn't create one cubic meter of gas. All it's
• 1:05:17
  Speaker 1: doing is redistributing existing gas. 100 units of gas, 80
• 1:05:22
  Speaker 1: can be exported, 20 have to stay at home. Nothing
• 1:05:28
  Speaker 1: in the rule drills a well or incentivizes the drilling
• 1:05:32
  Speaker 1: of the well. If it lowers domestic price, it does
• 1:05:36
  Speaker 1: so by forcing this producer to take less for a
• 1:05:40
  Speaker 1: fifth of his output. That's just a transfer. It's just
• 1:05:44
  Speaker 1: a tax in another form. It's a transfer from the
• 1:05:48
  Speaker 1: producer and the Japanese buyer to an Australian factory. Now, yeah,
• 1:05:56
  Speaker 1: the government wants this transfer, but it's not more gas,
• 1:06:01
  Speaker 1: and it has no right to force such a transfer.
• 1:06:06
  Speaker 1: It's cheaper gas for some Australians, paid for by the
• 1:06:11
  Speaker 1: people who are not going to finance the next field
• 1:06:15
  Speaker 1: or the next plant. Now, what about this 90% concentration,
• 1:06:22
  Speaker 1: this oligopoly? Yeah, the concentration is there. But where does
• 1:06:27
  Speaker 1: it come from? It comes from the fact that these
• 1:06:31
  Speaker 1: three companies hold the reserves because the land around them
• 1:06:34
  Speaker 1: is closed. The constitutional ban in one state, the exclusion
• 1:06:39
  Speaker 1: zones in another, the on-off moratoria in Northern Territory. 13
• 1:06:45
  Speaker 1: years for one project. Nobody else can get in. Nobody
• 1:06:50
  Speaker 1: can compete. You worry about three companies controlling 90%? Open
• 1:06:57
  Speaker 1: the market. Let people drill. Reservation doesn't change that. This
• 1:07:05
  Speaker 1: export ban would secure the three. What would change it
• 1:07:09
  Speaker 1: is open the drilling. Now, look, if there were binding
• 1:07:20
  Speaker 1: conditions in the original approvals, enforce them, like their contracts.
• 1:07:26
  Speaker 1: That 15% in the West, as long as we accept
• 1:07:30
  Speaker 1: state ownership of resources, all right, they put it in
• 1:07:34
  Speaker 1: the contract initially, pay it. Do it. You made the
• 1:07:39
  Speaker 1: investment on that assumption. But keep changing the rules of
• 1:07:44
  Speaker 1: the game. Why would anybody invest in your country again?
• 1:07:48
  Speaker 1: when the investment's a long-term investment. You're changing the terms
• 1:07:54
  Speaker 1: of the deal. I mean, if you look at Western Australia,
• 1:08:05
  Speaker 1: the state's own parliamentary inquiry found producers actually delivered on
• 1:08:09
  Speaker 1: average about 8% of exports. Half of the 15, which
• 1:08:15
  Speaker 1: they supposedly were committed to by law, Why? Because the
• 1:08:22
  Speaker 1: state didn't need 15. Shevin Gogon has delivered about a
• 1:08:26
  Speaker 1: quarter of what it indicated. A quarter of 15%. Woodside's
• 1:08:30
  Speaker 1: Pluto plant, about a tenth. Because the rule says make available,
• 1:08:36
  Speaker 1: not deliver. It's measured over the life of the project.
• 1:08:41
  Speaker 1: And it said no price and name no penalty. One Plants,
• 1:08:46
  Speaker 1: gas needed a processing unit nobody was required to build.
• 1:08:51
  Speaker 1: Producers met the promise in the cheapest way that PayPal allowed,
• 1:08:55
  Speaker 1: which is what every quota without a price produces. Indeed,
• 1:09:00
  Speaker 1: Perth prices doubled between 2019 and 2024, and the grid
• 1:09:05
  Speaker 1: operator forecast shortfalls in the West from 2030. 20 years
• 1:09:10
  Speaker 1: of having this reservation, and the reality is Western Australia
• 1:09:14
  Speaker 1: is short of gas too, because these oil wells are
• 1:09:18
  Speaker 1: getting old. And again, not oil, gas wells. And investing
• 1:09:23
  Speaker 1: in new ones, if they exist, well, you'd have to
• 1:09:27
  Speaker 1: convince the investors that you're not going to change the
• 1:09:30
  Speaker 1: rules on them again. Plus, $ 10 owes more to geography,
• 1:09:35
  Speaker 1: the gas being so close, than to anything else. It's
• 1:09:43
  Speaker 1: not that 15% reservation that causes the low price. So, yeah,
• 1:10:01
  Speaker 1: 20% obligation legislated in 2026 over plans that were built,
• 1:10:06
  Speaker 1: invested in, in 2012 is a change of terms after
• 1:10:10
  Speaker 1: the risk was born. The government knows it. That's why
• 1:10:15
  Speaker 1: the new rule exempts old contracts, why one company's deals
• 1:10:19
  Speaker 1: are carved out, why the thought is slipped to 2028,
• 1:10:22
  Speaker 1: why it's up to 20%. They keep softening because they know,
• 1:10:29
  Speaker 1: they know that this rule would destroy investment in the future.
• 1:10:38
  Speaker 1: What about energy security? Well, energy security comes from supply,
• 1:10:43
  Speaker 1: not from who's first in line. A country with 100 wells,
• 1:10:47
  Speaker 1: a north-south pipeline, storage, nuclear plants, it hasn't banned, is
• 1:10:52
  Speaker 1: going to be secure, no matter how much Qatar is charging.
• 1:10:59
  Speaker 1: A country with bans in every southern state and a
• 1:11:02
  Speaker 1: rule that moves gas from one buyer to another isn't secure.
• 1:11:07
  Speaker 1: It's rationing that gas in advance. You don't get security
• 1:11:14
  Speaker 1: from creating a queue and then choosing who gets to
• 1:11:17
  Speaker 1: be in front of the queue and who gets to
• 1:11:19
  Speaker 1: be in the back of the queue. You get it
• 1:11:21
  Speaker 1: from drilling, creating more supply. Yeah, competing with foreigners? Foreigners
• 1:11:29
  Speaker 1: built the plants. Without Tokyo's 20-year contracts, there is no Gogon,
• 1:11:35
  Speaker 1: there is no Pluto, and there's no natural gas for Perth.
• 1:11:41
  Speaker 1: The export market paid for the plants. They paid for
• 1:11:45
  Speaker 1: the domestic supply. And you look, the same thing applies
• 1:11:51
  Speaker 1: to Trump's stupid idea of banning the export of diesel,
• 1:11:56
  Speaker 1: which luckily he has walked away from, I think, largely
• 1:12:00
  Speaker 1: because Secretary of Energy was opposed to it. The government
• 1:12:12
  Speaker 1: says reservation isn't a price cap because it sets no price.
• 1:12:17
  Speaker 1: But it has a reasonable price rule, which is still
• 1:12:19
  Speaker 1: in the books. And the minister stated purpose is downward
• 1:12:24
  Speaker 1: pressure on prices. Reservation plus a price rule is a
• 1:12:28
  Speaker 1: price control with extra steps. Price controls on a product
• 1:12:32
  Speaker 1: and shortage produces more shortages. A high price is a
• 1:12:39
  Speaker 1: signal that calls for more supply. Reservation mutes the signal
• 1:12:47
  Speaker 1: and calls it security, BS. So a reservation answers who
• 1:12:55
  Speaker 1: gets the gas. The only question that lowers your bill
• 1:12:58
  Speaker 1: is how do we get more gas? And reservation makes
• 1:13:02
  Speaker 1: that one even harder to get more gas. So what
• 1:13:08
  Speaker 1: should Australia do? Call it the abundance program. Now, there
• 1:13:16
  Speaker 1: is no free market policy that makes Australian gas cheap
• 1:13:20
  Speaker 1: next year. Gas takes five to ten years from decision
• 1:13:24
  Speaker 1: to delivery, and the decisions weren't made. The only thing
• 1:13:29
  Speaker 1: that helps before 2029 is what's already built and whatever
• 1:13:33
  Speaker 1: import terminals can be finished. What the program below does
• 1:13:38
  Speaker 1: is make sure Australia isn't having this debate again in 2036.
• 1:13:41
  Speaker 1: So what's the root fix? The Crown's claim to the
• 1:13:49
  Speaker 1: minerals is a monarchical leftover that puts a minister between
• 1:13:55
  Speaker 1: every Australian and the gas and turns every election into renegotiation.
• 1:14:01
  Speaker 1: The state's title isn't legitimate in principle, but it's a
• 1:14:07
  Speaker 1: legal reality. The clean way out is a one-way sale
• 1:14:13
  Speaker 1: with the proceeds returned through tax cuts and no further
• 1:14:17
  Speaker 1: claim afterwards. So basically, you know, sell the right to
• 1:14:25
  Speaker 1: drill with the idea that whatever you find is yours.
• 1:14:33
  Speaker 1: And existing, sell them, sell the existing, auction them off. Now,
• 1:14:47
  Speaker 1: You know, and the same is true of all the
• 1:14:50
  Speaker 1: onshore stuff. I mean, onshore, there's a lot of natural
• 1:14:59
  Speaker 1: gas in Australia. There's the Cold Steam County country in Queensland,
• 1:15:03
  Speaker 1: the band basins around Melbourne and Sydney, the shale in
• 1:15:06
  Speaker 1: Northern Territory, recognized title in the landholder. The Homestead Act model,
• 1:15:14
  Speaker 1: you know, ran to apply to the airwaves. Convert existing
• 1:15:17
  Speaker 1: licenses to permanent private title. Vest underdeveloped minerals in the
• 1:15:21
  Speaker 1: surface owner. Aboriginal land claims complicate this and should be
• 1:15:27
  Speaker 1: handled as what they are. Property claims to be negotiated,
• 1:15:31
  Speaker 1: not a veto. What does it do? It allows every
• 1:15:36
  Speaker 1: farmer and every land council with drilling the way Texas
• 1:15:40
  Speaker 1: is aligned. The anti-gas government is a strong party. No
• 1:15:46
  Speaker 1: ordinary Australian has a check from the well, so they're
• 1:15:50
  Speaker 1: never going to prove it. But if they get a check,
• 1:15:54
  Speaker 1: if they have a financial interest, of course they'll do it.
• 1:15:57
  Speaker 1: Just look at, talk about aborigines, look at how eager
• 1:16:02
  Speaker 1: many of the tribes in Canada are for more drilling. Offshore,
• 1:16:08
  Speaker 1: where most of the offshore, where most of the LNG is,
• 1:16:11
  Speaker 1: and there's no pharma, permanent tradable title sold once by
• 1:16:16
  Speaker 1: competitive auction with a fixed term. That's the U.S. offshore
• 1:16:21
  Speaker 1: leasing model, minus the habit of changing it afterwards. The
• 1:16:26
  Speaker 1: state gets paid the real value of what it holds
• 1:16:28
  Speaker 1: at the only moment that value can be known and
• 1:16:31
  Speaker 1: never comes back. She sell it, and then it can
• 1:16:36
  Speaker 1: be resold. So the mineral rights... at the bottom of
• 1:16:40
  Speaker 1: the ocean, are now a tradable asset. That's part one.
• 1:16:52
  Speaker 1: Part two, abolish the resource rent tax. Replace the rent tax,
• 1:16:59
  Speaker 1: the 14-step formula, whatever, the compounding uplift, the deductions, the
• 1:17:03
  Speaker 1: whole nonsense, right? Get rid of that, right? Again, auction
• 1:17:12
  Speaker 1: bid or flat royalty written into the agreement, immune to
• 1:17:17
  Speaker 1: later parliaments. Plus, you know, ordinary company corporate tax. Like
• 1:17:24
  Speaker 1: everybody else, sadly. Corporate tax should be zero. But, okay.
• 1:17:32
  Speaker 1: If Australians want a Norway-sized fund, well, they shouldn't. It's
• 1:17:38
  Speaker 1: a really bad idea. If you're going to have the
• 1:17:44
  Speaker 1: revenue from selling all this land, for selling mineral rights,
• 1:17:51
  Speaker 1: for selling all this stuff, use it to reduce everybody's taxes.
• 1:17:57
  Speaker 1: Use it to reduce everybody's taxes. Not give the government
• 1:18:02
  Speaker 1: equity so that they can control all these companies. The
• 1:18:10
  Speaker 1: original Northwest Shelf plant, the plant that did LNG, needed
• 1:18:16
  Speaker 1: six years of federal and state review to be allowed
• 1:18:18
  Speaker 1: to keep running past 2030. One onshore project, 13 years.
• 1:18:25
  Speaker 1: One offshore project lost two years to litigation over our pipeline.
• 1:18:30
  Speaker 1: Fix all of that. One combined federal-state approval. Statutory 12-month deadline. Uh,
• 1:18:39
  Speaker 1: Deemed approval when the clock runs out. If you haven't
• 1:18:42
  Speaker 1: approved that or not approved it within 12 months, it's approved.
• 1:18:48
  Speaker 1: Give standing in court for partiality. with a property interest,
• 1:18:51
  Speaker 1: not a national environmental veto. Repeal all the state bans.
• 1:18:57
  Speaker 1: Then go nuclear. Australia has a federal law banning nuclear
• 1:19:01
  Speaker 1: power and is one of the largest uranium exporters on earth. Crazy.
• 1:19:08
  Speaker 1: A country short of gas or electricity that forbids the
• 1:19:11
  Speaker 1: baseload alternative deserves the shortages that it gets. Add to that,
• 1:19:21
  Speaker 1: repeal the export control power that the government today has.
• 1:19:25
  Speaker 1: Repeal the voluntary agreement, the price code, the reservation, and
• 1:19:30
  Speaker 1: the standing threat of the tax. Honor the Western Australian
• 1:19:34
  Speaker 1: contract as contracts, not as a model. produces, sells to
• 1:19:37
  Speaker 1: whoever pays most. That's how Melbourne gets gas in 2029,
• 1:19:43
  Speaker 1: because that's how a board approves a field in 2026.
• 1:19:52
  Speaker 1: And then, you know, add pipelines. A pipeline south, a
• 1:19:55
  Speaker 1: pipeline east. But private, private pipelines, private risk, storage facilities,
• 1:20:03
  Speaker 1: import terminals. They've been proposed and they're killed over and
• 1:20:08
  Speaker 1: over again, together with nuclear and coal plants that run
• 1:20:11
  Speaker 1: until something cheaper replaces them. Define security by the number
• 1:20:16
  Speaker 1: of independent sources and count the ones Australia has forbidden.
• 1:20:23
  Speaker 1: Who should get whatever windfall happens? I mean, the windfall
• 1:20:31
  Speaker 1: is at the end cheaper energy, lower taxes. a royalty
• 1:20:36
  Speaker 1: check for landholders, jobs in ports and towns, Japanese contracts
• 1:20:41
  Speaker 1: that paid for all of it and will pay for
• 1:20:44
  Speaker 1: all of it. The fair return to Australians from Australian
• 1:20:48
  Speaker 1: gas is Australians using more of it more cheaply because
• 1:20:53
  Speaker 1: more of it exists. Scarcity policy asks how to divide
• 1:21:01
  Speaker 1: the gas. Abundance policy asks Asks how to make the
• 1:21:06
  Speaker 1: question unnecessary. Australia has enough gas to make it unnecessary.
• 1:21:11
  Speaker 1: And nine years of laws designed. To divide it up.
• 1:21:19
  Speaker 1: All right. So what do you say to somebody who
• 1:21:22
  Speaker 1: supports the tax? Well, you got to talk to him directly.
• 1:21:28
  Speaker 1: You know. Talk about what he got right. The resource
• 1:21:32
  Speaker 1: rent tax is a failure, no question. Santos' 11 zeros
• 1:21:36
  Speaker 1: are real. A tax that raises less than a beer
• 1:21:38
  Speaker 1: tax on 65 billion of exports is ridiculous. A government
• 1:21:44
  Speaker 1: that says our gas and can't keep the lights on
• 1:21:47
  Speaker 1: in Melbourne owes him an explanation. He's right to be angry,
• 1:21:51
  Speaker 1: but he's angry at the wrong people. The one question,
• 1:21:57
  Speaker 1: which do you want, the money or the gas? Because
• 1:21:59
  Speaker 1: the money comes from the companies that would otherwise drill
• 1:22:02
  Speaker 1: the next field. And the next field is the thing
• 1:22:05
  Speaker 1: between Melbourne and a shortage. Britain ran the experiment and
• 1:22:09
  Speaker 1: got a third of the revenue it expected. The theory
• 1:22:12
  Speaker 1: said rent would still be there. It wasn't. Because after
• 1:22:15
  Speaker 1: the fact, it never was rent. There was no such
• 1:22:18
  Speaker 1: thing as rent. The rent is the reason to drill.
• 1:22:23
  Speaker 1: It's profit. And, you know, what about the supporter, the
• 1:22:34
  Speaker 1: one who less gas is the point? Right? The Greens.
• 1:22:40
  Speaker 1: If your real goal is less gas, say so. Then
• 1:22:44
  Speaker 1: we're having an honest argument about whether Australians should have
• 1:22:47
  Speaker 1: cheap energy at all. I'll take that argument any day
• 1:22:52
  Speaker 1: because the standard I use is human life. This is
• 1:22:56
  Speaker 1: Alex's standard, right? Should be all of our standards. And
• 1:23:00
  Speaker 1: cheap energy is what human life runs on. For an
• 1:23:09
  Speaker 1: American listener, every piece of this is coming to you.
• 1:23:15
  Speaker 1: Our oil on federal land, energy security has reason to
• 1:23:19
  Speaker 1: ban LNG exports, which the last administration paused, and the
• 1:23:24
  Speaker 1: current one has floated for diesel, and went for a
• 1:23:26
  Speaker 1: profit tax. We've had them in America every time and
• 1:23:30
  Speaker 1: talk about it every time prices spike. Look, Australia, like America,
• 1:23:40
  Speaker 1: like Europe, like the UK, they have the gas. They
• 1:23:46
  Speaker 1: have the customers. They have companies willing to spend $ 200
• 1:23:50
  Speaker 1: billion on remote islands to get it out of the rock.
• 1:23:57
  Speaker 1: What Australia doesn't have, what the U.S. doesn't have, what
• 1:23:59
  Speaker 1: Europe doesn't have is a philosophy that lets them do it.
• 1:24:07
  Speaker 1: Give the title to the people who use it. Price
• 1:24:10
  Speaker 1: the access once. Start the approval clock now and let
• 1:24:15
  Speaker 1: them sell to the world. Do that. And in 10 years,
• 1:24:19
  Speaker 1: nobody in Australia will remember what a fair return, whatever
• 1:24:22
  Speaker 1: the hell that is, even means and what the debate
• 1:24:26
  Speaker 1: was all about because the gas will be cheap abundant
• 1:24:33
  Speaker 1: and people will have moved on to something else alright
• 1:24:38
  Speaker 1: guys that is the Iran book show on mineral rights
• 1:24:44
  Speaker 1: in Australia thank you thank you thank you Randall all
• 1:24:49
  Speaker 1: of you should be thankful to Randall hopefully that was
• 1:24:51
  Speaker 1: of value to all of you I did get some
• 1:24:58
  Speaker 1: input from Alex AI. I actually have access to something
• 1:25:05
  Speaker 1: called Alex AI Pro, which is Alex AI on steroids.
• 1:25:11
  Speaker 1: And it was incredibly valuable. So I did get a
• 1:25:13
  Speaker 1: lot of insight from Alex in order to do that.
• 1:25:16
  Speaker 1: So thank you, Randall. uh, for doing this and, uh,
• 1:25:21
  Speaker 1: for giving me the opportunity to learn something. I didn't,
• 1:25:23
  Speaker 1: I didn't know anything, all this stuff I had to
• 1:25:25
  Speaker 1: research and figure out and think about and, uh, didn't know,
• 1:25:30
  Speaker 1: didn't know it. I mean, the principles I knew, but
• 1:25:32
  Speaker 1: I didn't know the particulars, the concretes, always fun to
• 1:25:35
  Speaker 1: learn new stuff, new stuff. All right. Um, Let us
• 1:25:46
  Speaker 1: jump in with the super chats. I remind you that
• 1:25:53
  Speaker 1: you can still support the show with a sticker. It's
• 1:25:56
  Speaker 1: just dollars, value for value. I assume you got something
• 1:25:58
  Speaker 1: out of this. Or you can ask a question and
• 1:26:02
  Speaker 1: use the sticker and use the super chat. That's great
• 1:26:05
  Speaker 1: because then I get to answer what you want me.
• 1:26:07
  Speaker 1: I get to talk about what you want me to
• 1:26:08
  Speaker 1: talk about. All right, let me do some Randall, because
• 1:26:12
  Speaker 1: Randall also did some Super Chats in addition to everything else. Hopefully, Randall,
• 1:26:17
  Speaker 1: you got what you paid for. You got what you wanted,
• 1:26:19
  Speaker 1: I hope. So let me know if you're pleased. At
• 1:26:22
  Speaker 1: the start, Randall said, good evening, Iran. Thank you for
• 1:26:25
  Speaker 1: doing the show. Thank you, Randall, for making it possible.
• 1:26:28
  Speaker 1: Then he says the gas site is called Northwest Shelf.
• 1:26:33
  Speaker 1: For those interested, have a look. It helped put Western
• 1:26:37
  Speaker 1: Australia on the map. That along with iron ore helped
• 1:26:41
  Speaker 1: turn Western Australia into a very successful state. Natural resources
• 1:26:46
  Speaker 1: or entrepreneurs that turn natural resources into actual resources because
• 1:26:50
  Speaker 1: they're not resources naturally. Randall also says, ran out of
• 1:26:56
  Speaker 1: permission slips. Couldn't have said it any better. Thank you, Randall.
• 1:27:02
  Speaker 1: Let's see if there's any other Randall comments. No, I
• 1:27:05
  Speaker 1: think we're good. But we're getting some Australians on. That's good. Yeah,
• 1:27:11
  Speaker 1: a bunch of Australians here. Anthony, in principle, Trump's view
• 1:27:16
  Speaker 1: of the world is no different to the Australian model.
• 1:27:19
  Speaker 1: Note his initiative to own parts of corporate America. Disgusting
• 1:27:24
  Speaker 1: on all fronts. Your question is right. Who owns it?
• 1:27:29
  Speaker 1: In terms of minerals in Australia and U.S. companies. Yes. Yes.
• 1:27:34
  Speaker 1: The government shouldn't own it. Even if it pays up
• 1:27:37
  Speaker 1: front foot, it shouldn't own it. It's not its job.
• 1:27:41
  Speaker 1: It's not its responsibility. And it's damaging. And in terms
• 1:27:47
  Speaker 1: of natural resources, whoever finds it owns it. Or if
• 1:27:51
  Speaker 1: the land is already owned privately, whoever owns the land.
• 1:27:54
  Speaker 1: And then the person who finds it has to negotiate
• 1:27:56
  Speaker 1: with the person who owns the land. So, yeah. I
• 1:28:03
  Speaker 1: saw a movie on one of the channels, maybe Netflix, something,
• 1:28:08
  Speaker 1: about this black girl who, you know, during Reconstruction, they
• 1:28:16
  Speaker 1: gave land, and she got a piece of land. And
• 1:28:22
  Speaker 1: she was a precocious– this is based on a true
• 1:28:24
  Speaker 1: story– precocious little girl. And she went and she found
• 1:28:28
  Speaker 1: somebody to– to drill on her land and people objected
• 1:28:32
  Speaker 1: and it was all fight over the resources. And she
• 1:28:35
  Speaker 1: landed up making a lot of money from, the royalty
• 1:28:38
  Speaker 1: checks from the drilling on her land, from the oil
• 1:28:42
  Speaker 1: that they found there. This is in Oklahoma, Oklahoma territory. Rez,
• 1:28:47
  Speaker 1: 100 Australian dollars. Thank you, Rez. He says, Australia, especially Victoria,
• 1:28:54
  Speaker 1: feels like a lost cause. Speak to any member of
• 1:28:58
  Speaker 1: the public who and the concept of liberty has incredibly
• 1:29:01
  Speaker 1: fallen to them. I understand there are some in the
• 1:29:04
  Speaker 1: United States like this, but here I feel it is
• 1:29:07
  Speaker 1: a whole other level. I mean, that's, I keep hearing that,
• 1:29:12
  Speaker 1: and I, you know, I believe you. It's so tragic.
• 1:29:17
  Speaker 1: I mean, Australia has the makings of a don't tread
• 1:29:20
  Speaker 1: on me, liberty-based society. It was founded basically by pioneers. Now,
• 1:29:27
  Speaker 1: A lot of them who came there didn't come there
• 1:29:29
  Speaker 1: by choice. But still, it is a wilderness. It's a
• 1:29:35
  Speaker 1: place where you have to be pretty tough in order
• 1:29:37
  Speaker 1: to survive, much like the American West. And I think
• 1:29:41
  Speaker 1: for a long time, Australians were like that. And they
• 1:29:44
  Speaker 1: did care about liberty. But they were always tethered ideologically, philosophically,
• 1:29:53
  Speaker 1: to Europe and not to the United States. And Sadly,
• 1:29:59
  Speaker 1: you know, and maybe somebody in Australia can correct me
• 1:30:01
  Speaker 1: if this is not true, but I think this is
• 1:30:03
  Speaker 1: going to be true. Their intellectuals were tethered not even
• 1:30:07
  Speaker 1: to the UK, but to continental Europe. So that they
• 1:30:16
  Speaker 1: embraced kind of the continental culture. statist, socialist, what in
• 1:30:24
  Speaker 1: America was called progressive, you know, German romantic philosophy and
• 1:30:32
  Speaker 1: the politics that brought about, I think much earlier than
• 1:30:36
  Speaker 1: the United States, we're on that path as well. So
• 1:30:41
  Speaker 1: Australia is much more like Europe with the vibe that
• 1:30:44
  Speaker 1: it should be much more like America. So when you
• 1:30:47
  Speaker 1: hear Australians Not excited about liberty It strikes you as
• 1:30:53
  Speaker 1: much worse than when you When Europeans say it Because
• 1:30:57
  Speaker 1: you expect Australians to be different But I'm curious about
• 1:31:02
  Speaker 1: what Australians think of that And by the way You
• 1:31:06
  Speaker 1: should invite me to come to Australia And And Give
• 1:31:12
  Speaker 1: talks in Australia At the universities there And and we
• 1:31:19
  Speaker 1: can have a conversation about this. I'd love to learn
• 1:31:20
  Speaker 1: more about it and, and love to figure out how
• 1:31:23
  Speaker 1: we can strategize to make this better. So invite me
• 1:31:26
  Speaker 1: to Australia. It's a great opportunity to do that. Um,
• 1:31:30
  Speaker 1: you know, we're, um, there is a, um, screenings of
• 1:31:34
  Speaker 1: We The Living happening. Uh, I'm actually going to be
• 1:31:37
  Speaker 1: interviewing Duncan Scott, who is basically the producer of We
• 1:31:41
  Speaker 1: The Living, uh, of the modern version of We The Living. Uh,
• 1:31:45
  Speaker 1: there's a producer, he's, um, he's going to be on
• 1:31:49
  Speaker 1: the show on Monday. We're going to talk about We
• 1:31:51
  Speaker 1: the Living, the movie, and the improved version that is
• 1:31:54
  Speaker 1: coming out to Australia to you guys. I hope all
• 1:31:57
  Speaker 1: of you, all my listeners in Australia. On Australia is the,
• 1:32:03
  Speaker 1: I think I have the fourth most views of the show.
• 1:32:08
  Speaker 1: It's U.S., U.K., Canada, Australia. That's the order. And then
• 1:32:14
  Speaker 1: it's like Israel and Germany are the next places. places
• 1:32:17
  Speaker 1: where people listen to you on book show so i
• 1:32:20
  Speaker 1: have a lot of listeners in australia so but i
• 1:32:23
  Speaker 1: you know to come to australia would require quite a
• 1:32:25
  Speaker 1: bit of money because business class tickets australia basically it's
• 1:32:29
  Speaker 1: ten thousand dollars just travel uh but if somebody can
• 1:32:32
  Speaker 1: raise ten thousand dollars if somebody's willing to get to
• 1:32:37
  Speaker 1: to guarantee ten thousand dollars for my travel expenses i
• 1:32:41
  Speaker 1: think i could come to australia and give a bunch
• 1:32:43
  Speaker 1: of talks and and interact with you guys and figure
• 1:32:46
  Speaker 1: out how to do this. If somebody out there wants
• 1:32:49
  Speaker 1: to try to raise $ 10, 000 to pay for my travel
• 1:32:52
  Speaker 1: expenses to come out there, then I will come. Whether
• 1:32:57
  Speaker 1: it's for the We The Living screenings and then some
• 1:33:00
  Speaker 1: university talks attached to that or some other time, I
• 1:33:04
  Speaker 1: would be happy to come to Australia for something like that. Thanks, Rez.
• 1:33:12
  Speaker 1: Really appreciate it. Shazbat, You'd think that Australia would cherish
• 1:33:18
  Speaker 1: fossil fuel production. The Mad Max saga revolves around a
• 1:33:22
  Speaker 1: crippling oil shortage, which results in an age of savagery. Yes.
• 1:33:27
  Speaker 1: Mad Max movies are amazing. I love Mad Max movies.
• 1:33:32
  Speaker 1: The first one is brutal, brutal, brutal, brutal. But they're
• 1:33:36
  Speaker 1: all really, really good. I mean, it's heart-wrenching. The first
• 1:33:41
  Speaker 1: one is very difficult to watch. Later, they become, in
• 1:33:44
  Speaker 1: a sense, more entertaining movies. Still brutal, but more entertaining.
• 1:33:48
  Speaker 1: But Ben Rex, the whole, the trilogy and then the sequels,
• 1:33:53
  Speaker 1: all really good. I really enjoy them. So yes, Shazbat
• 1:33:58
  Speaker 1: is right. Let me just, let's see, Reza also says, God,
• 1:34:07
  Speaker 1: don't get Australians started on Aboriginal indigenous land. Totem mysticism,
• 1:34:12
  Speaker 1: collectivism when it comes to that. Yeah, I believe it.
• 1:34:16
  Speaker 1: I'm not surprised. Wes, thank you for this sticker. Really
• 1:34:20
  Speaker 1: appreciate that. Wes did $ 50 sticker. Who else did stickers?
• 1:34:23
  Speaker 1: We got Bethanol, Bethol, something like that. Who else do
• 1:34:29
  Speaker 1: we have? Stickers, stickers, stickers, stickers, stickers. I think that
• 1:34:35
  Speaker 1: might be it. A weekday for stickers. Oh, yeah, we
• 1:34:40
  Speaker 1: got Steven, Steven Kreisman. Thank you, Steven. So, yes, not
• 1:34:44
  Speaker 1: a lot of stickers today. but Wes did the $ 50,
• 1:34:48
  Speaker 1: so I appreciate that. All right. Jacob, what are your
• 1:34:53
  Speaker 1: thoughts on Enat Wolf? Can you consider inviting her for
• 1:34:57
  Speaker 1: a portion of your Israel election episode? So, you know,
• 1:35:00
  Speaker 1: I generally like Enat Wolf. I met her. She knows
• 1:35:04
  Speaker 1: who I am. She's a fan of some of my stuff.
• 1:35:08
  Speaker 1: She very much disagrees with other of my stuff, but
• 1:35:12
  Speaker 1: we had a cordial conversation at a conference a few
• 1:35:14
  Speaker 1: years ago. I was surprised she knew who I was,
• 1:35:17
  Speaker 1: but she very much knew who I was. And when
• 1:35:19
  Speaker 1: I told her I admired her work, she said, oh,
• 1:35:22
  Speaker 1: that's a compliment coming, real compliment coming from you. So
• 1:35:24
  Speaker 1: that was nice to hear. She is good on defending Israel.
• 1:35:32
  Speaker 1: She's good on kind of PR for Israel. She's right
• 1:35:36
  Speaker 1: on that. She comes from the left, right? She used
• 1:35:40
  Speaker 1: to be a member of the Israeli parliament from the
• 1:35:42
  Speaker 1: Labor Party, the left, so left also in foreign policy,
• 1:35:47
  Speaker 1: and she has moved foreign policy-wise very much to the right,
• 1:35:50
  Speaker 1: to the center-right, and she has good ideas about foreign policy,
• 1:35:55
  Speaker 1: and she's very articulate about making the case for Israel
• 1:35:59
  Speaker 1: against its enemies. The only reason I wouldn't invite her
• 1:36:04
  Speaker 1: to the show is is because she's actually running for
• 1:36:07
  Speaker 1: the Knesset in this coming election. And I don't interview politicians,
• 1:36:12
  Speaker 1: particularly not just before an election. I don't want to
• 1:36:14
  Speaker 1: seem to be endorsing anybody for election or anything like that.
• 1:36:18
  Speaker 1: She is running for a small political party called Miloim Nikim,
• 1:36:25
  Speaker 1: which is a small political party right of center that
• 1:36:30
  Speaker 1: is geared around Army reservists. It's led by a right-of-center
• 1:36:40
  Speaker 1: kind of foreign policy guy who is interested in defending
• 1:36:45
  Speaker 1: the interests of military reservists and by an economist who's
• 1:36:50
  Speaker 1: pretty good. He's not a complete free marketer, but he's
• 1:36:53
  Speaker 1: pretty good. The one thing that he's big on breaking
• 1:36:57
  Speaker 1: up monopolies, but the one thing he's really big on,
• 1:36:59
  Speaker 1: which I think would break up the monopolies in Israel,
• 1:37:02
  Speaker 1: is he's a believer in zero, unilateral zero tariffs. She's
• 1:37:07
  Speaker 1: a believer in lowering tariffs to zero. So I would
• 1:37:11
  Speaker 1: consider supporting this political party if I was in Israel.
• 1:37:14
  Speaker 1: I don't know. I'd have to learn more about the
• 1:37:16
  Speaker 1: different alternatives. So she is running. She's number three in
• 1:37:21
  Speaker 1: the list. Now, this is a party that's on the cusp.
• 1:37:25
  Speaker 1: I think you need three and a half percent of
• 1:37:27
  Speaker 1: the votes to get into the Knesset. Um, And they
• 1:37:31
  Speaker 1: are just there. If they get the three and a
• 1:37:35
  Speaker 1: half percent, she will be a member of parliament for
• 1:37:38
  Speaker 1: this party because I'll get four seats. You can't get
• 1:37:42
  Speaker 1: less than four seats because less than four seats would
• 1:37:44
  Speaker 1: be less than three and a half percent. And then
• 1:37:46
  Speaker 1: it's zero seats. That's how it works. And if that happens,
• 1:37:49
  Speaker 1: your votes are reallocated to the other parties based on
• 1:37:51
  Speaker 1: how much they got. So, you know, I'd have her on.
• 1:37:58
  Speaker 1: other than the fact that she is actually a running
• 1:38:00
  Speaker 1: politician right now in a political party engaged in the election.
• 1:38:04
  Speaker 1: And I don't want to get, I don't want to
• 1:38:06
  Speaker 1: go there for a variety of reasons. Andrew, but I
• 1:38:12
  Speaker 1: see it's a part one of two. So let me
• 1:38:14
  Speaker 1: wait with Andrew until I see the part two. All right. Ali,
• 1:38:22
  Speaker 1: Ali Islam. Last night, Elon gave us a plausible flying car,
• 1:38:26
  Speaker 1: with such a joy about what's possible and achievement in
• 1:38:29
  Speaker 1: this world. Yeah, it's a beautiful video. I saw this.
• 1:38:33
  Speaker 1: It's a car that goes up a ramp and flips.
• 1:38:35
  Speaker 1: And then, you know, instead of crashing down, it actually
• 1:38:40
  Speaker 1: engages these, what do you call them? God, the spaceships
• 1:38:45
  Speaker 1: have them like jets. And the jets kind of cushion
• 1:38:48
  Speaker 1: its landing and it lands. And it's really cool video. Now,
• 1:38:54
  Speaker 1: I don't know what that costs. I don't know how
• 1:38:57
  Speaker 1: realistic that is. Obviously, the physics work. But, you know,
• 1:39:01
  Speaker 1: flying car from that to flying car. is a big, big,
• 1:39:05
  Speaker 1: big distance. Ali says they're cold gas thrusters. Cool. Cold
• 1:39:11
  Speaker 1: gas thrusters. They must cost a fortune. It was a co-development,
• 1:39:19
  Speaker 1: which makes sense, of Tesla with SpaceX. This is SpaceX
• 1:39:24
  Speaker 1: technology that they use in satellites and they will use
• 1:39:29
  Speaker 1: in spacecraft and landing vehicles, landing modules and things like that.
• 1:39:33
  Speaker 1: So very, very cool technology. Whether it can be made
• 1:39:38
  Speaker 1: cheap enough to put into a car, I don't know.
• 1:39:44
  Speaker 1: You know, this is technology that is very expensive, but
• 1:39:47
  Speaker 1: therefore that can be used for very expensive projects. But
• 1:39:51
  Speaker 1: it was very cool. The video, super cool. So check
• 1:39:56
  Speaker 1: it out. Check out Elan's flying car. So whatever you
• 1:40:00
  Speaker 1: think of Elan and I think very low of him
• 1:40:05
  Speaker 1: when it comes to anything political and anything cultural. The
• 1:40:10
  Speaker 1: guy has amazing vision. He has, he's ambitious when it
• 1:40:14
  Speaker 1: comes to technology and he does cool stuff. He does very,
• 1:40:19
  Speaker 1: very cool stuff. I wish he would just focus on
• 1:40:24
  Speaker 1: that and leave cultural and political commentary to other people because,
• 1:40:30
  Speaker 1: I also found out today, and again, this is based on,
• 1:40:33
  Speaker 1: I think, an article in The Telegraph, so I don't
• 1:40:35
  Speaker 1: know if this is true, but it's what's being reported,
• 1:40:38
  Speaker 1: is that the idea for throttling the speed of Ukrainian
• 1:40:45
  Speaker 1: drones by limiting, I guess, the bandwidth they can use
• 1:40:49
  Speaker 1: by Starlink, while that was a Trump decision, the idea
• 1:40:55
  Speaker 1: came from Elon Musk. He gave the idea to Trump
• 1:40:58
  Speaker 1: and then changed his mind, and then Trump changed his mind.
• 1:41:01
  Speaker 1: But the idea was his. So I wish he'd just
• 1:41:04
  Speaker 1: stop thinking about these things. Stick to flying cars, please.
• 1:41:11
  Speaker 1: Drives me nuts. All right, Andrew, two-part questions. Question, $ 20 each.
• 1:41:20
  Speaker 1: Concrete-bound versus conceptual mentality. Donahue shocked, challenged Rand that Middle
• 1:41:27
  Speaker 1: Eastern oil was owned by Western companies that developed it.
• 1:41:31
  Speaker 1: But it came from under their ground. Rand sharply explained
• 1:41:37
  Speaker 1: that those nations did nothing to produce it. The real
• 1:41:41
  Speaker 1: export wasn't oil, but the mind that produced it. And
• 1:41:46
  Speaker 1: their expropriation from the West was a national disgrace. Such
• 1:41:53
  Speaker 1: clarity on property rights requires conceptualization. Yes, it really does.
• 1:41:58
  Speaker 1: I mean, it's theirs. And she could have added, if
• 1:42:01
  Speaker 1: she'd had the time and it wasn't an interview like that,
• 1:42:03
  Speaker 1: she would have added that you can't have collective ownership,
• 1:42:06
  Speaker 1: governments don't own anything, and certainly you can't have a
• 1:42:09
  Speaker 1: king owning everything. In Saudi Arabia, the royal family gets
• 1:42:12
  Speaker 1: all the oil. How is that their oil? How is
• 1:42:17
  Speaker 1: it not the people's oil if it's anybody's? And if
• 1:42:20
  Speaker 1: you're going to have... If the desert is all, nobody
• 1:42:24
  Speaker 1: owns it, then why not have a homesteading act for
• 1:42:30
  Speaker 1: ownership over the land over there? And why can't all
• 1:42:35
  Speaker 1: companies own the land that they're drilling in? It's just
• 1:42:39
  Speaker 1: the whole thing. But she was so sharp. She was
• 1:42:42
  Speaker 1: so clear. She was so unhesitatingly principled and conceptual. And 99.9%
• 1:42:51
  Speaker 1: of the people who heard that, it went right over
• 1:42:53
  Speaker 1: their head. Of course, it's the Saudi people's oil. But
• 1:43:00
  Speaker 1: then in America, we don't do that. Oh, oh, I
• 1:43:05
  Speaker 1: wonder why that is. I wonder why in America it's
• 1:43:08
  Speaker 1: owned by the people who own the land. That's interesting.
• 1:43:14
  Speaker 1: I mean, people don't think. She thought always. Always. I mean,
• 1:43:20
  Speaker 1: she was not just a real genius. There are lots
• 1:43:24
  Speaker 1: of geniuses. But she was a genius of conceptual thinking
• 1:43:31
  Speaker 1: with wide applicability. I mean, she was a philosopher. That's
• 1:43:35
  Speaker 1: what a philosopher is. She was a philosopher who understood
• 1:43:39
  Speaker 1: the applicability of philosophy. Applicability of philosophy. Yep. Thank you, Andrew.
• 1:43:53
  Speaker 1: All right. Robert is just checking in. Happy birthday to me.
• 1:43:56
  Speaker 1: Happy birthday, Robert. Happy birthday to Robert. I'm not going
• 1:44:00
  Speaker 1: to sing. Have a great weekend. You too, birthday boy.
• 1:44:04
  Speaker 1: Happy birthday and great weekend, everybody. Life is short. Stay informed,
• 1:44:09
  Speaker 1: but don't let the turkeys get you down. The turkeys.
• 1:44:13
  Speaker 1: Why would the turkeys get you down? They make that
• 1:44:15
  Speaker 1: funny noise that's kind of entertaining. Robert says, it is bizarre,
• 1:44:19
  Speaker 1: almost beyond belief, that monarchy, even if mostly ceremonial, symbolic,
• 1:44:24
  Speaker 1: is still a thing. It's 2026, for Christ's sakes. No
• 1:44:28
  Speaker 1: more kings. I'm with 100% with Robert on this one.
• 1:44:33
  Speaker 1: I don't get monarchy. I don't get kings. I had
• 1:44:36
  Speaker 1: this huge argument in Australia with these Australian conservatives who
• 1:44:42
  Speaker 1: thought they liked Ayn Rand, but they wanted to keep
• 1:44:46
  Speaker 1: the king. And it was like, what? I mean, I
• 1:44:49
  Speaker 1: get that the English like all the pomp and circumstance
• 1:44:52
  Speaker 1: or whatever. But Australians, I always thought Australians were more grounded. No,
• 1:44:59
  Speaker 1: they want a king too. They want a king. Tradition.
• 1:45:05
  Speaker 1: Deep with Diego says, hello, Jen. Hey, Diego. I'm talking
• 1:45:10
  Speaker 1: for Jen now. Bethel, we did an event in Sydney yesterday.
• 1:45:16
  Speaker 1: And talked about much of this stuff. The ludicrous tribalism,
• 1:45:19
  Speaker 1: energy policy, and intellectually bankrupt culture of Australia. Yeah. We
• 1:45:25
  Speaker 1: need more events like that. We need to talk more
• 1:45:27
  Speaker 1: about it. We need more people to attend. Need your
• 1:45:30
  Speaker 1: action to the test of words to the video. You
• 1:45:32
  Speaker 1: got it a few minutes ago. All right. We got
• 1:45:35
  Speaker 1: another $ 79 from Chuck. Chuck. From Australia. Yeah. We also
• 1:45:42
  Speaker 1: have immigration being blamed for shortages in housing in Australia.
• 1:45:48
  Speaker 1: The argument politicians make is to pause, reduce immigration for
• 1:45:52
  Speaker 1: housing and infrastructure catch-up. Instead of unleashing build, baby, build,
• 1:46:00
  Speaker 1: not just drill, baby, drill, build, baby, build. I mean, yes,
• 1:46:04
  Speaker 1: building is lag, but home building shouldn't lag that much.
• 1:46:07
  Speaker 1: Homes can be built very quickly. If you eliminate the controls,
• 1:46:11
  Speaker 1: the regulations, the restrictions, all the obstacles that government lays
• 1:46:16
  Speaker 1: before builders, you could have very fast building. And, yeah. Anyway,
• 1:46:27
  Speaker 1: good stuff. Like everybody else. Blame the immigrant. It's always
• 1:46:33
  Speaker 1: easier to blame the other. The other. Right? It's always
• 1:46:42
  Speaker 1: great to blame the other. Neo, isn't Israel an example
• 1:46:48
  Speaker 1: of a country that doesn't need immigration to have a
• 1:46:50
  Speaker 1: strong technological country? What the hell are you talking about?
• 1:46:54
  Speaker 1: Everybody in Israel is an immigrant. Hardly anybody has more
• 1:47:01
  Speaker 1: than maybe one generation born in Israel. The whole country
• 1:47:06
  Speaker 1: is built on immigrants. People that came from all over
• 1:47:09
  Speaker 1: the world. The last big immigration, huge immigration into Israel
• 1:47:13
  Speaker 1: was in the 1990s by Russians. Over a million Russians
• 1:47:16
  Speaker 1: immigrated to Israel. Israel at the time had a population
• 1:47:18
  Speaker 1: of what, 5 million? And a million people showed up?
• 1:47:21
  Speaker 1: That's 20% immigrants. Massive immigration. And a lot of those
• 1:47:28
  Speaker 1: Russians were engineers, scientists. So, plus, a country doesn't need anything.
• 1:47:40
  Speaker 1: Countries don't need stuff. The whole premise is a collectivistic premise.
• 1:47:45
  Speaker 1: The basis for allowing immigration is not we need strong technology.
• 1:47:51
  Speaker 1: The basis for allowing immigration is individuals have rights. Americans
• 1:47:56
  Speaker 1: have rights to employ whoever they want from anywhere in
• 1:47:58
  Speaker 1: the world. Immigrants, people in other countries have rights. One
• 1:48:03
  Speaker 1: of those rights is to go where they please. Who
• 1:48:06
  Speaker 1: are you to keep them out? So the defense of
• 1:48:09
  Speaker 1: immigration is not based on we need tech. I mean,
• 1:48:14
  Speaker 1: that helps in the United States, certainly, given how much
• 1:48:19
  Speaker 1: tech we want. how much progress we desire, we need immigrants.
• 1:48:25
  Speaker 1: And by the way, a lot of the immigrants that
• 1:48:28
  Speaker 1: start companies in Silicon Valley are Israelis who leave Israel
• 1:48:32
  Speaker 1: and come to the U.S. But immigration is not justified
• 1:48:37
  Speaker 1: on the basis of need alone. I reject that. It's
• 1:48:40
  Speaker 1: just worth pointing out to people what we lose because
• 1:48:45
  Speaker 1: the moral is the practical. The immoral is impractical. When
• 1:48:49
  Speaker 1: we deny immigrants entry into our country, we lose technological innovation.
• 1:48:55
  Speaker 1: On a scale we won't understand for another 10, 20
• 1:48:59
  Speaker 1: years what the damage Trump has already done to American
• 1:49:04
  Speaker 1: innovation and American progress with his immigration laws. Ali, would
• 1:49:13
  Speaker 1: a capitalist country allow voluntary kibbutz commune to take form
• 1:49:17
  Speaker 1: even though it infringes on individual rights? Well, it doesn't
• 1:49:20
  Speaker 1: as long as everything it does is voluntary. As long
• 1:49:23
  Speaker 1: as people can leave and as long as when people
• 1:49:27
  Speaker 1: give up their money, they're doing it voluntarily. And as
• 1:49:32
  Speaker 1: long as they can leave and as long as they're
• 1:49:35
  Speaker 1: not forcing anybody, there's no coercion. then it's a voluntary,
• 1:49:39
  Speaker 1: absolutely you'd allow it. Just like you'd allow people to
• 1:49:41
  Speaker 1: live in a commune, start a, what do you call it,
• 1:49:47
  Speaker 1: a co-op. All of those things are legal under capitalism.
• 1:49:51
  Speaker 1: They don't last for very long. They would fold very,
• 1:49:53
  Speaker 1: very quickly. They wouldn't exist for long, but they shouldn't
• 1:49:58
  Speaker 1: be illegal. There's no basis because they're not violating rights.
• 1:50:03
  Speaker 1: So only the government can, I mean, the only way
• 1:50:06
  Speaker 1: to violate rights is by the use of force. And
• 1:50:08
  Speaker 1: since they don't use force, they don't violate rights. And
• 1:50:19
  Speaker 1: they wouldn't have political independence. They'd be under the laws
• 1:50:22
  Speaker 1: of the state. But the laws of the state would
• 1:50:26
  Speaker 1: be very simple. Don't steal, don't commit fraud, and all
• 1:50:30
  Speaker 1: the implications of that. Bonnie, thank you for the sticker.
• 1:50:35
  Speaker 1: I think there was another sticker I didn't thank. John,
• 1:50:39
  Speaker 1: thank you for the sticker, John. Really appreciate it. Thanks,
• 1:50:42
  Speaker 1: you guys. Really appreciate the support. Australians, if you want
• 1:50:48
  Speaker 1: to raise the money to bring me to Australia, let
• 1:50:51
  Speaker 1: me know. And I will bid you good night. Tomorrow,
• 1:50:56
  Speaker 1: there will be a show. God, I still have to
• 1:51:00
  Speaker 1: work out on what it's going to be, but it
• 1:51:01
  Speaker 1: will probably be... an analysis of, uh, an anti-capitalist, um, video, uh,
• 1:51:10
  Speaker 1: anti-capitalist video. So, um, yeah. Uh, you cannot sign yourself
• 1:51:20
  Speaker 1: into slavery, but that's a whole other discussion, uh, that
• 1:51:24
  Speaker 1: we can have someday, but you cannot, uh, you know,
• 1:51:29
  Speaker 1: give up your ability to make any decisions for yourself.
• 1:51:33
  Speaker 1: You can certainly pay somebody to treat you like a
• 1:51:37
  Speaker 1: stave as long as you can walk away from that agreement.
• 1:51:40
  Speaker 1: You can't sign yourself into permanent slavery. And the same
• 1:51:43
  Speaker 1: with a kibbutz. You can sign yourself into a kibbutz.
• 1:51:48
  Speaker 1: Part of that signature cannot say you can never leave
• 1:51:50
  Speaker 1: or you can't leave for five years. You always have
• 1:51:52
  Speaker 1: the ability to leave. All right, guys. I will see
• 1:51:59
  Speaker 1: you tomorrow. Remember, Nikos and I will be talking FAUDA,
• 1:52:04
  Speaker 1: everything FAUDA, on Sunday, 2 p.m. East Coast time, Sunday.
• 1:52:10
  Speaker 1: And I will be talking about, I will be, an
• 1:52:15
  Speaker 1: anti-capitalist video I will be analyzing tomorrow. See you then. Bye, everybody.