THE CRUDE TRUTH Ep. 28 Robert Bryce
“Are we addicted to #energy. . . Or our we addicted to the #power energy creates?” We discuss that statement and many other topics on this episode of THE CRUDE TRUTH with renowned #author and #journalist Robert Bryce. We talk about local governments trying to ban #gas stoves, the release of his book “A Question of Power” in paperback and the difference between energy and power. This is an episode you don’t want to miss.
Please reach out to Robert Bryce on his LinkedIn HERE
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02:53 – Over 15 years talking about energy and just all the common sense that we really need in this world today
04:23 – I definitely want our listeners to know about you
05:41 – Power Hungry, The Myth of Green Energy and the Real Fuels of the Future
08:43 – Due to policies that they have cause them to be the only ones in the state of Texas almost to not have any power for a day or two.
10:05 – What has happened is that the oil and gas sector has been forced to be more to return more capital to investors
12:21 – Electricity helps the Energy Commodity
13:22 – Energy is the ability to do work power is the rate at which work gets done
16:49 – The Dark Money Behind the Gas Bans
20:18 – Stacey Abrams
22:37 – Secret banning of these natural gas stoves or the really the anti natural gas movement going on?
25:11 – How Electric prices have already began to soar and that this is actually due to the appropriations and subsidies possibly from the Inflation Reduction Act
28:37 – IRM Co, which is one of the biggest electric transformer producers in America.
it took us over a hundred years to build the infrastructure that we have today.
it took us over a hundred years to build the infrastructure that we have today.
29:57 – It took us over a hundred years to build the infrastructure that we have today we can’t just change it in a year or two, can we?
33:52 – Electrifying everything is really a path to fail
36:41 – For people to find your substack how can people contact you?
38:29 – Outro
THE CRUDE TRUTH Ep. 28 Robert Bryce
Rey Trevino [00:00:00] Are We Addicted to Energy? Or are we Addicted to the Power the Energy Creates? We’ll talk about that and much more on this episode of The Crude Truth.
Rey Trevino [00:01:08] Well, good morning. Good afternoon. Good evening how are you all doing? Thank you again for tuning in for another episode of The Crude Truth. Please be sure to like our channels subscribe to my substack. Subscribe to any notifications that I may have and thank you very much and please be sure to leave any comments or questions. I’d love to answer any questions that you may have on any of the episodes that we do here on the Crude Truth.
Rey Trevino [00:01:35] Today. I’m just too excited my guest today and I know I say that every time is a profound thought leader in the energy sector, not just oil and gas. He touches on everything from solar to nuclear and everything in between. He is a podcast host himself he’s actually a movie producer with things that he’s produced, like Juice How Electricity Explains the World.
Rey Trevino [00:02:03] He has authored books like Pipe Dreams, Greed, Ego and the Death of Enron, and also my favorite Power Hungry, the Myth of Green Energy and the Fuels of the Future. And also the host of the Power Hungry podcast our guest today is Robert Bryce, Robert, how are you?
Robert Bryce [00:02:22] Hi thanks for having me, Ray. Good to see you.
Rey Trevino [00:02:24] Oh, man. Great to see you and welcome a simulcast to The Crude Truth Studios here. I think you’re in your bunker down in an undisclosed location today, so I cannot complain. I know we had a great chance to visit during the introduction again.
Rey Trevino [00:02:41] I’m a huge fan. I had a great opportunity to read your book, Power Hungry, and also just the fact that all the great things that you’ve been up to for the last over 15 years talking about energy and just all the common sense that we really need in this world today more than ever.
Robert Bryce [00:03:01] Well, that’s very kind thanks you know, I’m passionate about energy and power networks. This is my purpose in my life and I’m working hard but having more fun than ever. But I also, you know, motivated by the fact that so much of the public and so much of what so many of our policymakers are innumerate and scientifically illiterate and that is something I try to address.
Robert Bryce [00:03:24] We need to be thinking about in in very cold and sober terms rather, I’ll say in sober terms about what we’re doing with our energy and power networks and how I firmly believe they’re being fragiles they’re being undermined by bad policy and bad incentives.
Rey Trevino [00:03:41] Well, you know, one thing I want people to know is that you’re not a pro-oil pro like you were just a commonsense guy when it comes to energy. And I just want all our listeners to know that out there, it’s like you’re not looking at one or the other. It’s like, hey, guys, this is what we need to do.
Rey Trevino [00:04:02] If we actually, you know, if we go more wind and solar, here’s what it’s going to take. If we go more the mining, you’re going to break it down on how much more land we’re going to use, you know. So Europe, your views in the way you look at things are from a very non-biased way is what I definitely want our listeners to know about you.
Robert Bryce [00:04:26] Well, that’s kind. You know, look, I try and approach these issues from the math and the physics, and they don’t lie the numbers or the numbers they’re not my numbers they are the numbers. And what I try to do, what are the best pieces of advice is advice I’ve heard in my career. Ray was a guy named Edward Tufte. He said, When you give people a number, give them something to compare it to. And I thought that was an interesting it is. It’s critical to have people, if you’re going to explain things.
Robert Bryce [00:04:51] I think about my late mother when I’m writing her will she understand this the first time? And so I rely on physics. I rely on basic math and also try to bring that then as I’m writing and explaining things and making graphics, how can I explain this in the way that is the simplest but also the most effective?
Robert Bryce [00:05:10] So and you know, to your you know, you made a point. I’m a reporter I don’t work for industry. I never have worked in industry I’ve been a journalist my whole career. And I bring my skill, the skills that I’ve gained, I think over the last 30 years of doing this as a reporter to shine light on these issues, because the energy, our energy and power networks are the most important networks in our society.
Rey Trevino [00:05:33] You know, I’m glad you brought up the energy networks because I want to kind of softly just dive into your great book, you know, I’ll show it here. Power Hungry, The Myth of Green Energy and the Real Fuels of the Future. If anybody has never read this book, it is a great read, and I promise it will not take you as long as you think you will to read this book. Why? Because you’re just enjoying it.
Rey Trevino [00:05:55] I know. I reread it after I got a chance to invite Robert to come on the show, and I had a good cup, a glass of whiskey and a cigar, and I knocked it out in about two weeks, you know, just smoking one cigar about every other day.
Rey Trevino [00:06:10] And so it’s a great read. So I recommend it to anybody but here you are talking about the infrastructure. And in your book, you talk about how just here in the United States we have built in, I think we’ve got new numbers. But in the book you write and granted the book was written 2008, a $14 trillion economy.
Rey Trevino [00:06:29] We now have above a $20 trillion economy that is based off of cheap, reliable fuel, which what provides us the power and the energy, which then provides us the power we need to be the powerhouse that we are here in the United States. And so I just think that’s something that’s awesome.
Robert Bryce [00:06:51] Well, thank you and that book now is 13 years old, who came out in 2010, and I’m proud of it. I don’t think it has aged much at all. I think, you know, I’d stand behind everything that’s in that book. I talk a lot in that book about coal, and coal continues to be a big driver and a key fuel for electricity systems around the world.
Robert Bryce [00:07:12] In fact, coal demand, the IEA numbers just came out a few weeks ago. Coal demand rose again last year in 2022, not not as much as it has in previous years, but it rose again. So did oil demand. In fact, oil demand grew last year faster than coal demand.
Robert Bryce [00:07:25] So what you said earlier, though, I think is key, and that is that we live in a hydrocarbon economy and we that was true 13 years ago. It’s true today. And it’s going to be true in a decade. It’s going to be true in two decades.
Robert Bryce [00:07:38] One of the things that I’m really focused on lately is the idea of the energy transition. We hear about this over and over, particularly under the Biden administration. I’m not a partisan, I’m not a Republican. I’m not a Democrat.
Robert Bryce [00:07:49] I’m disgusted. But this administration, more than any other, has pushed this narrative that we’re going to simply switch away from hydrocarbons we’re going to do it quickly and it’s going to be easy. No, it’s not. It’s not going to be quick. It’s not going to be easy it’s going to take decades if it happens at all.
Rey Trevino [00:08:04] No, you’re absolutely right you know, this administration is definitely the most anti-oil that we have ever seen. And coal. And due to their policies, like you mentioned, coal went up this past year and so did gas oil due to the fact that we had these natural disasters in America where we you know, we couldn’t get the solar to come in we couldn’t get the wind to come in.
Rey Trevino [00:08:31] I know there in Austin just last month and a half ago, they had a big major power outage. And that was actually due to some well, in Austin, Texas, that is that the due to policies that they have cause them to be the only ones in the state of Texas almost to not have any power for a day or two.
Robert Bryce [00:08:51] Well, that’s yeah, I mean, and that’s a that’s a kind of a different issue in terms of, you know, vegetation management and that they weren’t trimming trees enough. And so you had we had an ice storm here that, you know, it was freezing rain for 48 hours or so. So it was I mean, we lost tons of trees in my neighborhood.
Robert Bryce [00:09:06] But I think the key issues here that we have to be very sober about our energy and power networks and, you know, policymakers and, you know, I’m not here to bash the Biden administration, but I will agree they are they have promoted a lot of agendas, a lot of issues that, you know, have not been favorable I think that’s an understatement to the domestic oil and gas sector.
Robert Bryce [00:09:30] But I also think it’s true that the U.S. oil and gas sector has not been spending as much simply because they have been constrained by shareholders that, you know, during the shale revolution, $300 billion in in shareholder capital was destroyed.
Robert Bryce [00:09:45] Now, that was to the benefit of the US economy we got a lot you know, oil and gas were far cheaper for consumers. But I want to make it clear that it’s not just the Biden administration that’s constraining the oil and gas sector today there is there are constraints on capital.
Robert Bryce [00:09:59] And so I’ve interviewed Scott Sheffield. I’ve talked to a lot of people in the oil and gas sector. You know, what has happened is that the oil and gas sector has been forced to be more to return more capital to investors and that’s, you know, that’s what investors want.
Robert Bryce [00:10:13] And so this is a new paradigm and it’s one that I don’t think is going to change. You know, drillers are upstream. The upstream is going to be more cautious. They’re going to return more capital to investors because that’s what investors are demanding and rightly so.
Rey Trevino [00:10:26] No, I mean, that is something that is more than more than important to get your money back or get it get that monthly mailbox check for us at Pecos Country operating. You know, we’re a small operator, so we we the production that we do, it fuels us to do more, you know, to do more.
Rey Trevino [00:10:46] And if we do have every now and then, we’ll bring on some small investors and you know what? I know that getting them back their money are really getting them a check every month is our pride and joy because like, hey, man, this is this is what you invested in and here you go. This is your, you know, your dividend so to speaking.
Rey Trevino [00:11:05] And I remember one guy was like, surprised? Like, oh, wow, I get a check. And I’m like, Yeah, I. Cause I thought this was going to be nothing but a tax write off. And I said, No, sir. I said, You know, that’s not the way we do business. You know, you invest in us. You’re you’re believing in what we’re doing.
Rey Trevino [00:11:20] And so that is a paradigm that you mentioned that, you know, I think investors are a little hesitant with right now is like, is this really, really going to happen? Like, are we actually seeing these investments pay off now and we’re getting these checks? I mean, you look at what the boxes of the world and the exons of the world are doing they’re paying these large dividends now.
Rey Trevino [00:11:41] And then I think even Oxy’s even trying to now buy back more stock from stockholders or something there. I’m not a financial guy, so I don’t want to dive into that. But, you know, and then you talk about the paradigm of how, you know, there’s so many different ways of word, I guess I want to say there’s so many different ways to use the word power.
Rey Trevino [00:12:00] Here a minute ago we were talking about the power supply in Austin was bad. And then also we talk about how, you know, energy provides power for all these great things. But the other thing that your book talks about with the word power is being, again, a national powerhouse.
Rey Trevino [00:12:16] And that how we relate to how what your book talks about how electricity helps the energy commodity and what it does. It separates developed countries from the united, the undeveloped countries from countries like the United States. So the word power really means a lot of different things when it comes to the energy sector.
Robert Bryce [00:12:39] Well, yes, And that’s one of the things that I underscore well, one quick point. I just looked up. So pioneer. Natural Resources, of course, is the biggest oil producer in Texas. Just to give you an idea, I’m just looking at the dividend yield is almost 13% the price to earnings ratio is less than seven.
Robert Bryce [00:12:56] So, you know, it’s indicative of how investors are not you know, they’re shying away from any stocks. Right. Because they’re not you know, they’re you know, even though they’re on a numerical basis, you just look at those numbers you say, well, that’s an attractive investment.
Robert Bryce [00:13:10] Yeah, But yes, let me just talk about energy and power energy and power and I mean, I’m going to make this point because people in the energy business and I’ve talked to a lot of groups in the energy business, they don’t know the difference between energy and power, and they confuse them all the time.
Robert Bryce [00:13:22] Energy is the ability to do work power is the rate at which work gets done, and that’s a key distinction. Do not confuse the two. And if you don’t know the distinctions, you need to read my book Power Hungry. You need to educate yourself. But the you know, one of the reasons why I think that the policymakers were predominantly lawyers, let’s be clear, not engineers,.
Robert Bryce [00:13:42] But even among engineers, they confuse the two terms energy is the ability to do work power is the rate at which work gets done. We don’t care what energy is, we care what energy allows us to do and when and energy we don’t care what that form of energy is. I often say, you know, I have a truck. I’ll put, you know, sawdust or yogurt or beanie babies in the tank if I thought it would give me the motive power that I want.
Robert Bryce [00:14:04] What we care about is power. We don’t give a damn about what energy is we want, what energy provides, and energy provides us with power. And the higher the rate of flow and that’s the difference. Energy is a sum, power is a rate, and rates are more telling than sums we want to energy is worthless unless we can make it flow and the more we make it flow, the more power we have.
Robert Bryce [00:14:24] So now I’m being a little didactic here, but I think it’s key for people in the industry to know these that difference. I’m sorry to know that difference and to be able to really internalize it and understand what that means. Because energy and we they’re often confused even by people in the energy business. And so you need to understand these terms and that they are not the same thing.
Rey Trevino [00:14:46] No, no, they’re not and I’m glad that you said that, not me, because that was something I had written down in my notes, that energy is the ability to do work power is the rate at which work gets done. And again, I want if you the more.
Robert Bryce [00:15:00] And the more power we have, the more work we can do. And that’s the key thing the way we don’t, you know, like we want to we want to you know, I don’t care what kind of computer chip is in my computer. I only care that it has the power to to do, you know, make my spreadsheet work or, you know, edit my film project or whatever it is.
Robert Bryce [00:15:17] So that ability to do work is what we’re after. It’s not the energy we love energy itself. What we love is power, and that’s what we’re after. And of course, power has a lot of other connotations in politics. And, you know, and, you know, gender relations, I mean, a whole lot of things, right? You know, sexual power and, you know, political power, you know, all these things.
Robert Bryce [00:15:37] We talk about that in terms of dominance, but it is a fundamental that’s the fundamental driver. And the more power we have, the more power we want. That’s one of the other points I make. You know, horsepower is like sex the more we get, the more we want we can’t have an insatiable desire for power of all kinds lighting, amplification, computing, etc..
Rey Trevino [00:15:56] No, it is. And I just again, I cannot recommend more get out. Get his book. It’s on Amazon. It’s anywhere books are sold. Power hungry. Please check it out. But, Robert, I want to transition over to your substack, if that’s okay. RobertBryce.Substack that I have that Substack has such a following. it blows me away you what you do and what you talk about.
Rey Trevino [00:16:24] You know, here we just talked about a book that you wrote. Everybody out there, to all my listeners, if you can imagine something like that almost every day when Robert is breaking sit down, something talking about it, putting real science to work and putting the numbers with it.
Rey Trevino [00:16:42] You know, one that really kind of caught my eye the other day was actually one that was titled The Dark Money Behind the Gas Bans. And this was kind of talking about gas stoves. And I can’t believe here we are getting ready for summertime and we’re still talking about banning gas stoves. Can you.
Robert Bryce [00:17:03] Sure. Well, so about that piece and by the way, so I’m glad you’re talking about power hungry that books 13 years old. My new book is The Question of Power, Electricity and the Wealth of Nations and the paperback on this is going to be out in May, but so.
Rey Trevino [00:17:14] What? Oh, my gosh. I cannot wait.
Robert Bryce [00:17:18] Well, thank you. It’s but it’s this book has been out now since well, it’s been out three years.
Robert Bryce [00:17:22] That’s right.
Robert Bryce [00:17:23] Paper paperback will be out. So buy them all. You don’t have to read them. You just have to buy them. So even we didn’t want to walk that line, Andre. So the piece. Yes, the dark money behind the gas ban you know, one of the reasons that I wrote that piece was that we have heard over and over again from climate activists, from NGOs, from alt energy promoters, that, oh, there’s a lot of dark money on the right and that the oil and gas industry in particular is funding a lot of, you know, dark money groups that are, you know, preventing action on climate change.
Robert Bryce [00:17:54] This is one of the claims that has been made over and over and over again by Bill McKibben, by, you know, the Sierra Club, by other groups that are claiming, oh, we’re not getting climate action because of dark money groups.
Robert Bryce [00:18:07] The reality is the reality is that dark money groups on the left are from climate activist groups. They are some of the ones that are funding these efforts to ban natural gas stoves and the direct use of natural gas in homes and businesses all across the country.
Robert Bryce [00:18:24] So one of the groups I focused on in my Substack Robert Project Substack Rt.com is this group Rewiring America? They are a project, a sponsored project of the Winward Fund, which has annual revenues of over $200 million they don’t reveal the identities of any of their funders.
Robert Bryce [00:18:41] One of the other big groups that’s behind these efforts to ban the direct use of natural gas, which is the cheapest form of in-home energy. Yes. And according to the Department of Energy’s own data, is climate imperative. Who are the funders of climate imperative? Well, one of them appears to be Laurene Powell Jobs, Steve Jobs widow that group, Climate Imperative, is the biggest and richest NGO that you’ve never heard of their annual budget is over $200 million a year.
Robert Bryce [00:19:07] The amount of money and just in the dark money world and that is that where you know these nonprofits, these NGOs that are funding these efforts their budgets are measured in the hundreds of millions of dollars that, you know, the American Petroleum Institute, the other industry oriented or the groups that are backing the hydrocarbons, they are getting outspent by a country mile. I mean, it is not even close.
Rey Trevino [00:19:31] Yes. No. In the article you show here in just these four groups alone are already do are already spending money at a rate of basically these four groups with a rate of 25 pro hydrocarbon groups, basically. That’s right. And so so you’re absolutely right that they’re spending all this money.
Rey Trevino [00:19:54] And then they brought in, I think, Ms.. Stacey Abrams to help out in a way that I don’t want to I’m going to dance around it. But I find it interesting that they bring her in to help the communities is the way they use it to get them all on board for natural gas. I mean, excuse me for electricity rather than natural gas. But, you know.
Robert Bryce [00:20:15] And let me and if you don’t mind, I’ll follow up on that, Ray, because Stacey Abrams is you know, she’s interesting she’s a politician, right? She was in the House of Representatives, high profile politician. She ran for governor of Georgia twice, lost twice in the first election, I guess, in 2018. She refused to concede. Well, she just took a job with Rewiring America,. Which is a group that I was just mentioning, funded by the Winward Fund, a dark money group.
Robert Bryce [00:20:39] And she claimed in the press release that, you know, announced her hiring, that she’s going to help, you know, her communities and low income communities electrify everything. Well, electricity is far more expensive in terms of in a per BTU basis, the natural gas is.
Robert Bryce [00:20:55] So, you know, she but she is joining this group. You know, I don’t know what they’re paying her. Good for her. She’s got a job, you know. But does she really understand what’s going on here? And I don’t. If she does, perhaps she does or she does credit to her. But what this electrify everything push is in fact a regressive tax on the poor, the middle class. There’s no other way to put it and yet it’s being couched in these terms this is essential for climate change.
Robert Bryce [00:21:18] You know, we have to ban these natural gas stove, you know, residential use in the in the United States, rate has not changed. It’s been 5 trillion cubic feet a year, you know, since I was in grade school. Hasn’t changed at all in more than 50 years. And yet this is the big demon now that we have to get rid of.
Rey Trevino [00:21:32] Why is it such a big deal? Because you know what? When you go back and look at this rewiring America, it’s funded not only by these groups, but these groups all have people that have heavy dollars invested in wind and solar week . I mean, it’s like it’s almost like they’re trying to capture the next big energy source. You know,.
Rey Trevino [00:21:57] I’m going to play a little bit here on the dumb side that when oil became what it is, nobody knew that it was going to become the behemoth that it is. I’ll say that when we you know, when Spindle Top was discovered, when we really learned all the power that we have behind it.
Rey Trevino [00:22:15] And now I feel like the government and people are really trying to control the next big power source. And and they’re already controlling natural gas, which, like you’ve mentioned, is a very inexpensive product and it also burns very clean. So why is it that you have all this basically secret banning of these natural gas stoves or the really the anti natural gas movement going on?
Robert Bryce [00:22:45] Sure. Well, so just to put a you know, put some numbers to this. So in California now, there are over 70 communities that have banned or restricted the direct use of natural gas in homes and businesses. So and then the Bay Area Air Quality Management District just a few weeks ago announced that they will prohibit in the in that nine county area the sale of gas fired heaters and gas stoves beginning I think in 2027.
Robert Bryce [00:23:13] So these are regulations that are in the offing or being passed now that will begin taking effect. So what are the consequences of this, Ray? Well, California’s electric grid is already shaky. Right. And so they’ve had blackouts now for, you know, going ongoing for years. And so they’re going to put put yet more electric demand on a grid that is already faltering under existing demand.
Robert Bryce [00:23:34] And we haven’t yet talked about electric vehicles, which is the other part of the equation here that will add even more demand, as much as 50% increase in electricity demand on the California power grid, according to Southern California Edison.
Robert Bryce [00:23:49] So but now so that’s a preface to your question. Well, why are these groups doing it? Well, I look at it just in pure political terms. If you look at it from a hard political outlook and you think, okay, well, what is going to be the easiest battle for these anti hydrocarbon groups or these climate activist groups?
Robert Bryce [00:24:08] Well, it’s to I think the political fight is easier banning natural gas jobs by going to cities like Berkeley, California, the first to ban natural gas or Cambridge, Massachusetts, or other small liberal towns in liberal states where you can pass these local ordinances and then say, see, all these groups are doing it and we’re going to get more momentum. And in fact, that’s what they’ve done.
Robert Bryce [00:24:29] So give them credit for their political strategy. It’s working. But I think it’s also pernicious because they get it won it under it is showing. It is adding more power demand on a grid that is already pretty good in California. Can’t handle it. But also it’s going to cost consumers more money. There’s just no doubt about it.
Rey Trevino [00:24:49] Well, you know, I’m glad you brought up the fact that this is going to bring up this is going to cost consumers more money, because I wanted to highlight another one of your Substack articles titled on Transformed, where you dive into things like we were just talking about in California, where prices have already skyrocketed, but that how electric prices have already began to soar and that this is actually due to the appropriations and subsidies possibly from the Inflation Reduction Act. I mean, do you see that? I mean, what are your thoughts on that?
Robert Bryce [00:25:25] Sure. But this is another piece that I had been collecting string on for a long time. I speak to a lot of I do a lot of public speaking. That’s really how I make my money. I don’t you know, I don’t have any sponsors for my podcast. I don’t belong to any any outfits. I don’t you know, I’m a bad employee. I work for myself and I have groups that hire me to come talk to and explain what I see in the world.
Robert Bryce [00:25:44] So I speak to a lot of electric cooperatives around the country. And last May I was in Grand Rapids, Michigan, and I heard a presentation by Matt Brander, who’s with the Rural Electric Supply Cooperative, and he talked about price inflation.
Robert Bryce [00:25:55] Well, I checked with him a few weeks ago, and he sent me his latest data last year rate all across the electric sector in what are called utility products. So that. Everything from wooden poles and wire to transformers, padding out of transformers and, you know, even, you know, copper wire, Right. 18% inflation last year, 18%.
Robert Bryce [00:26:19] The U.S. inflation rate overall was 8% and electric prices last year went up 12 and a half percent. So when you add the inflation from 2022 of 18% on top of the inflation that occurred in utility products in 21, which was 14%,.
Robert Bryce [00:26:34] You’re talking about a 34% increase or an increase in.
[00:26:37] Price of one third for all these utility products that are going to be required under that for the demand for which is soaring because of this electrify everything push as well as the all this new solar and wind that’s being added to the grid.
Robert Bryce [00:26:51] So this indicates that these grid upgrades that are going to be required for this electric electrify everything, push all those, all that kit all the stuff that is needed for the to upgrade the network is soaring in price which means you upgrade the network over time. That means consumers are going to pay higher prices and it just it’s axiomatic.
Robert Bryce [00:27:09] So increased copper prices, of course, this is one of the things everybody have been talking about lately. Yeah, we don’t have extra copper the copper prices have been rising. This is just one example.
Robert Bryce [00:27:18] So yeah, but this is all tied in to shortages of labor, which are a common issue in the oil patch, of course. But all of this is connected. So I wrote that piece to underscore the fact that this is yet another example of unintended consequences by these people.
Robert Bryce [00:27:33] But these influential interest groups, these dark, many of them dark money groups that are saying, oh, we need to, you know, force everyone. It’s forced electrification, beneficial electrification, forcing consumers to use electricity and have less energy security and pay higher prices. It’s it’s bad policy.
Robert Bryce [00:27:50] Well, it’s very bad policy and especially when they’re trying to say that, hey, going electric, you know, this electric transmission is going to cost you next to nothing. Well, that’s not true, because like you just mentioned, you know, the supply chain right now is ridiculous. You got to get the transformers they’ve gone up in price, the wire, the copper. You know why? Because you can’t get the copper like you’re saying. And so, you know, you know, I’m glad you brought up Matt Barber up and because that’s who you were talking to in Michigan. Right.
Robert Bryce [00:28:22] Right, right. And I had him on my podcast on the Power Hungry podcast just recently, right? Yes. Yes. But then I also interviewed another co-op guy, the buddy Hasten from the Arkansas Electric Cooperative Corporation they own a company called IRM Co, which is one of the biggest electric transformer producers in America. And he pointed out that erm co they could hire six or 700 more people now. If they could find them to produce more transformers but they can’t find them.
Robert Bryce [00:28:48] So you know this is something I’ve heard over and over as I travel around the country talking to people, particularly manufacturers, all of them are short labor. And this is a situation that, you know, we’ve seen because of baby boomer baby boomers retiring post-COVID issues. But, you know, this is a problem that’s going to persist all across the economy and is going to add yet more inflation across the entire economy because employers are going to have to pay higher wages to keep people.
Rey Trevino [00:29:14] Yeah, no, it’s almost like it was the perfect storm with COVID baby boomers are now retiring. And then when you say when I use the word and use the words, hey, man, it’s a supply chain issue, we mean it from the start to the end.
Rey Trevino [00:29:31] There are issues everywhere, from making it to getting it delivered to getting it installed. We don’t have the people that can make the product. We don’t have the people that can deliver the product. We don’t even have the material to make the product.
Rey Trevino [00:29:44] And the weird the other crazy part is that the demand is still outpacing the supply, you know, due to these subsidies and other deals like people, we still are trying to get this grid to a place. And we got to remember it took us over a hundred years to build the infrastructure that we have today. We can’t just change it in a year or two, can we?
Robert Bryce [00:30:05] Do you know, we know it’s impossible. And that’s a key point. Remember, Edison began centralized electricity, electricity and electric centralized power plants 140 years ago in lower Manhattan. So we built the grid over decades. We’re not we’re not just going to simply change everything and do it in a couple of years or even a couple of decades.
Robert Bryce [00:30:29] One of the points that I made in that piece on Transformed on my Substack Robert Bryce dot substack dot com You can subscribe. It’s free. I mean, even something as common as wood poles that are up between 2021 that went up 25% in 2022, they went up 46%.
Robert Bryce [00:30:44] So you’re talking about a 70% increase in just two years for something that you don’t even think about that you see commonly around town or your city or local, you know, local neighborhood wood, wood, wood pole is up 70% in price.
Robert Bryce [00:31:00] And, you know, one of the other things that I didn’t talk about in that piece on transforming. Ray was that we’re looking at. This is now an international market and I focus in that piece on domestic transformers, pad mounted and pole mounted transformers, both of which are are are up dramatically over the past year or two years.
Robert Bryce [00:31:18] But the large what are called power transformers that you see in substations, effectively all of those are made overseas. We are not producing those here in the United States so we are not, I think, not thinking about this supply chain in terms of very basic energy security.
Robert Bryce [00:31:36] We’re relying on foreign providers, foreign manufacturers for supplies of critical infrastructure at our substations. Well, why isn’t this being discussed? You know, instead, it’s here’s the government, you know, particularly the Biden administration cheering on this, electrify everything, push with no understanding of what it means to the in the physical network. And that’s the key is that it’s easy to talk about policy and that’s one of the things these NGOs have an advantage.
Robert Bryce [00:32:05] They’re only pushing policy they don’t have to deliver molecules on electrons, the energy and power companies do. And so it’s not a symmetric fight. In fact, it’s a very much an asymmetric war and I think it is a war.
Robert Bryce [00:32:17] And I’ll be clear with you. I think the oil and gas sector, the coal sector, the electric utilities, they’re getting their butt kicked. I’m not it’s not even close. So they’re just getting killed by this. These influential groups have more money, they have the sympathy of the media and they have a lot of momentum on their side give them credit they’re doing they’re doing a good job.
Rey Trevino [00:32:38] They’re using they’re definitely using the tools that they have. And, you know, for all of my listeners and everybody watching this episode of The Crude Truth, I recommend definitely go and subscribe to Robert’s Substack. And looking at this on the excuse me and looking at this article on transformed because he really lays out the cost increase for specific utility products in the electric, you know, building a grid.
Rey Trevino [00:33:05] And I mean, you figure it’s an average of probably 30% on every product if you average them all out and in the oil and gas industry. I was actually talking to my producer, Andrew, one time before he goes, Well, what’s going on? A man, I’m trying to drill some wells and, you know, it’s like costs have gone up so much right now that since we’re not at, unfortunately, you know, steady at 75, $85 oil, we are finally getting back to there.
Rey Trevino [00:33:32] But it’s like, you know, it’s harder for us to drill right now because all these costs have gone up. But as oil went down and none of those costs went down. Right. So we’re in that, you know, same predicament on our side of things.
Rey Trevino [00:33:46] But really in, you know, I got this from you that basically the gist of these pieces, you know, that I wanted to share is that electrifying everything is really a path to fail. And, you know, and we’re we as a consumers are going to be the ones to pay the price if we really take this path of doing our best to electrify everything. Right. Robert?
Robert Bryce [00:34:06] Well, you know, the rules of plumbing also apply to electric grids, which is poop flows downhill, right? It’s the consumer is the one that is going to pay. That is always the case. And we’ve seen we saw that after winter storm Uri, that when the gas utilities, the electric utilities weren’t fully prepared and the grid didn’t function well and in fact, in some places just outright failed.
Robert Bryce [00:34:31] Now, we’ve had you know, utilities are securitizing a lot of their debt. Those are debts that are going to have to be paid by consumers. So all across the board, consumers are the ones that are going to have to pay for the costs of any of these efforts at the energy transition, etc.. But we have to be clear eyed about this.
Robert Bryce [00:34:49] And that’s what, if you know, what is my goal here? Yeah, what is my purpose in my work? It’s to shine light on what is really happening in the physical world and what are the numbers and what is happening in reality, not in the spin.
Robert Bryce [00:35:03] And so I consider myself very fortunate. Ray You know, I’m a very lucky guy. I live in Austin, Texas. I’m married to a wonderful woman and I’ve got three great kids and I’m able to work on issues that I think are important and I get paid for it and I get to talk to people like you.
Robert Bryce [00:35:18] So but I think that it’s imperative that people who are in the industry know what the you know, one know your numbers you have to know your data. You have to know the scale of the business. You have to be able to talk about it in an a clear and concise way and you have to be able to help people that you know who may not be as informed as you are, understand why it matters.
Robert Bryce [00:35:41] And so that’s that’s my hope. And I know that’s part of why you do what you do. But I think it’s certainly my motivation and my career. And, you know, I’m an old man now. I’m going to be 63 this year, but that’s my plan to keep going. I don’t have anything else to do, nothing else that I want to do.
Rey Trevino [00:35:57] Well, you know, I say to continue to I say continue the good fight and I know all our listeners and all your. Followers and people that listen to you would definitely say the same thing for you to continue this great fight that you’re doing, because right now, good, bad or indifferent, it’s an uphill battle due to all the things you talks about that right now.
Rey Trevino [00:36:16] You know, the media and the money are backing another way and so I can’t thank you enough for what you’re doing. And I’m excited for the paperback version of your book to be coming out here. This May also, you know, we’re running out of time here for for people out there that want to get you into one of their great symposiums and get you to come speak or again, you know, for people to find your substack how can people contact you?
Robert Bryce [00:36:44] Robert Oh, I’m easy to find, Ray I’m on, I’m on Tick Tock, I’m on YouTube, I’m on Instagram, I’m on LinkedIn, I’m on the Google. You can finally pretty easily. But Robert Bryce WSJ.com is my Web site and then I’m on Twitter at Power Hungry. P.W. are hungry. Tik tok this is the same. So I’m I’m the king of all media you review I’m not hard to find.
Robert Bryce [00:37:06] But yeah I love this I love these issues. I’m preparing for a presentation in Louisville in a couple of weeks to the Battery Council. Battery Council International talking about what’s happening in batteries, talking about the energy transition and speak to nuclear groups, cooperatives, electricity, oil and gas, you know, you know, all kinds of associations.
Robert Bryce [00:37:26] So again, I consider myself very lucky. But I think that the my book, by the way, the latest one you mentioned, a Power Hungry. The latest book is a question of power. You don’t have to read it. You just have to buy it and subscribe to my Substack. Yes. Robert Bryce dot substack dot com. But that’s great fun, Rey
Robert Bryce [00:37:43] No, I can’t thank you enough and again, please check out for anybody out there that hasn’t checked out a power-hungry podcast. Robert has some of the best guests on there, just like I do.
Rey Trevino [00:37:55] Robert, I cannot thank you enough, sir, for coming on to the Crude Truth. And I want to leave everybody again with a crude truth statement of this episode. Energy is the ability to do work. Power is the rate at which work gets done, and that’s The Crude Truth be sure to like subscribe. We will see you next time on The Crude Truth.
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