Long Run Plays In Energy

In this episode of The Long Run Show, we are going to be talking about energy , how effective the sanctions will be on Russia in the long run.

Hosted By:

Austin Willson

Michael O'Connor

Transcript:

welcome back to another episode of the long run show. This is Austin Wilson. I'm here with my cohost. Michael O'Connor. And today we are going to be talking about energy very timely subject at the, as we're recording this, there's the whole Russia, Ukraine, conflict, war invasion, aggression, whatever you want to label it happening over in Europe and obviously with Russia being one of the top producers of natural gas and.

In the global economic system we thought this would be a very timely subject. We've been wanting to talk about energy for a while though. Mike and. This is just there's a lot going on. There's talks of sanctions being thrown around. And how is that going to impact European countries in the U S and  Western countries.

 So China's role in all that is, there's a lot of moving parts here and some interesting solutions as well, maybe. We don't know all of those. But we'll just talk through that and try to think through what this means for oil stocks or companies and anything related to oil, which has everything.

So it's true. That's a good way to put it. And like you said, we've been talking about this for a while. We've hinted at we've definitely run into your energy discussions, especially in our ESG one the whole. Green energy thing. And then all that, there's a lot of been a lot of different opinions and different kinds of paths that different companies and especially national governments have taken.

 We've seen countries in the last decade, really abandoned nuclear war. I don't know. I pretty severely disagree with it's clean, enormous amount of energy. You're not necessarily reliant on other countries to supply the fuel. Maybe you don't have uranium mines, but you usually can usually pretty dependably get uranium as a national government.

So it's that's a whole thing. I'm a big nuclear guy. I think I've heard that you are as well. So we might, this would be maybe one where we're not really adversaries at all. We're just agreeing and on our soap box, but. Hey, what's a podcast for if not a soapbox. Exactly.

So it's been interesting though to watch okay. We've seen different, like energy has driven. Or it's driven the us going into the middle east and mulling around, over there doing different things. And so it drives a lot of foreign policy but also I think that the less more.

Commodity gas. As far as energy goes, that's very important for heating homes and businesses, and a lot of different things. Obviously oil touches everything.  Just about everything you've touched during the day has something to do with oil because of plastic and parts and.

Yeah, literally everything. My, my phone case here is got oil in it. The cord that's connecting my headphones to my laptop's got oil in it, essentially.  It's  in everything, but natural gas is also a huge factor as well, especially if we're talking Europe, they get a lot of their natural gas, like Poland to Germany, get a lot of natural gas from Russia.

And what is this whole conflict due to those supplies?  It's the middle of winter, so you're going to need to heat your home, whether you're in Southern Europe or Northern Europe and natural gas is is one of the things it's not a lot of people with. At least in Europe that I know of maybe some more in, in the Nordic countries  with their interesting cozy hygienic, he, I forgot how to pronounce it quickly or something like that.

Yeah. Going to pronounce that, but a nice cozy wood burning furnace. Yeah, exactly. So I think of the two almost at this point, as far as energy goes, Natural gas is something that hasn't been explored as much. Now I know that doesn't drive as many economic outputs, but it is definitely from the consumer, like direct directly of consumer impact.

 That is definitely a factor that I think hasn't been talked a lot. What are your thoughts there on the natural. End of things. That's an interesting point because we definitely live in a very oily world. We're very, everything's viscous and wonky   but that's a good point. I In order to so many, I'm a big.

Cooking guy. I like gas more than electric stove top. I'm a big gas ranger fan.  I love my natural gas Austin. I'll tell you what. And so the heat a house or to cook a steak like that is such a huge those are two very basic survival necessities heat. You got to stay warm to stay alive.

You got to eat to stay alive. Now you could just eat refrigerated foods instead of cooking steaks. But what's life that a good steak net here. And again, maybe I'm vegetarian listeners but Hey you could roast some nice broccoli or something with that, but here's the thing.

Even if you're roasting some nice broccoli or eating raw refrigerated foods, your refrigerator uses natural gas. That's a problem and it might be heating your home. So I think it's one of those things where people definitely focus on oil for good reason, but natural gas is also a somewhat of a large resource that I don't think it's enough, quite enough.

And it's w it's winter in the Northern hemisphere right now, too. It's smack dab in the worst, my least favorite part of winter, when Christmas is long gone, it's just cold and you just freeze your nose and you're just sad and just waiting for spring. So this is where it's time for no gas. Exactly.

Exactly. This is about the worst time to have a cold house. So it'll be thing to see what's done as far as sanctions. I know. This is a very evolving situation and I'm sure by the time you might be listening to it, it's going to be different than what we you time. But just a month ago in January, nobody would have been thinking that there was going to be any impact on oil or gas or sanctions in that realm.

And even at the beginning of the invasion, Eh, people were okay. There's going to be sanctions, but commodity markets are going to be. We're not going to see sanctions on oil or gas. That's a bridge too far for Europe, but it looks like the European union is trying to support Ukraine and however they can.

And so it seems like that options on the table and may by the time you listen to this, maybe a thing there might be sanctions out by that point. So what is that what does that do here in the us? I think we're very far shielded from. 8% of our oil imports actually come, we get a lot from Canada.

Like over half of our imports come from Canada and we produce enough oil to be self-sufficient. Now we still important export oil for various reasons. In the U S I don't think we'll be quite as hit by that as they will in Europe. But you're, what are your kind of thoughts on that? As far as what's the.

 As we look at Europe, having trouble with not being able to get enough natural gas or oil coming through their pipelines. Yeah. It'll be really interesting because we've seen a few days ago, Germany stopped the the Nord stream to a big pipeline. And that's interesting that the. I think the invasion was not what a lot of people expecting.

Like you say you're expecting a lower impact on commodities markets, lower impact on economic situation worldwide, less impact. Russia, because I think a lot of people thought it was going to be just a replay of 2014. They go in, they just make a lot of weird statements like, oh we're just protecting our, I said  this is insane.

I  Munitions and rockets on civilian buildings and stuff. It gets, it's very different. This is a kind of a war of attrition style invasion. And which is just so sad to see and so scary to see. And I think the interesting thing is. It's really galvanized the European union to say, Hey, you know what?

We're not afraid to lose out on some natural gas. We're not afraid to lose out on oil if it means having the safety of our citizens and of our neighboring countries. So I think the interesting thing is it's probably going to hurt the sanctions and the actions that are taking place are, I'm sure it's gonna.

Pretty much every country in Europe's and every citizens pocketbook, but I think it's the right call. And I think that in the long run, as we always talk about I think that it will push more energy independence on both the constituents of the EU and the EU as a whole. I think that you will probably be strengthened as a diplomatic entity and they're going to have to say, okay, let's maybe let's figure out.

Some sort of energy sharing program where member states are able to frequent. By cell transmit energy. Maybe I personally, I don't know if this already exists, but I would imagine if it doesn't that this will probably happen where you'll see. I would imagine and hope that a bunch of nuclear energy generation being built France has I think the highest penetration, highest amount of.

 Energy is nuclear of any country in the world, and I'm sure they have the the companies, the technicians the expertise to be able to rapidly scale that in the EU. So I think. A lot of collaborative action being taken, which I think is really interesting because at the end of the day, in the short term, it is going to Jack prices up.

It is going to hurt the pocket books of likely every European citizen. But what Putin's done is essentially galvanize all of your up against him and against his imports and his products. And really become a pariah that you know, is at the end of the day, I think simply going to integrate.

Collaboration and cooperation, especially on energy, which was this Trump card. Trump Putin ironic a Trump card that was holding over Europe. And now it's  all right there, Take it is what it seems like. Yeah. It's interesting because, and we've spoken about this a little bit. How we're we have grown up in, in the last 70 years has been some of the most peaceful times in the entire world and we've grown this interconnected global economy and of course that leads to.

Typically more peace. There's always people taking advantage of it, for sure, but there's typically more peace if everyone's relying on everyone else for resources and trade and imports and exports, but then The winners and losers in all of this, right? You have smaller European countries that are just going to totally pay the price for being dependent on Russia and gas and oil in the short term.

Now, hopefully like you're saying, I really hope that the European countries can figure out a way to satisfy their need for energy in them in a more efficient manner. But my it's interesting because I think energy independence is probably has been up to this point. I think this is a great global example, but it has been an underrated kind of national security protection that most countries have not thought about before.

 But I think they're going to think about a lot harder in the future and I wonder what that does for. This is not a political podcast, but I don't know what that does for relationships between countries, because economics obviously has played a huge role in the piece we've seen in the world over the last seven years.

 And I don't think that is at all by mistake. I don't think that's at all by coincidence. That's clearly been the case, but then  you. It's going to hurt European countries to not have this natural gas and oil. And also in the short term, Russia is creating its own rift with everyone else.

Besides some countries, China, North Korea Iran, some of their allies  and friends national friends. Russia's kind of creating this rift for itself over the long run. If we want to get back to a more peaceful world, how does it look? And obviously this is not to like, try to excuse what Russia is doing right now, because it's absolutely abhorrent.

But what does that look like? If we get past all this and hopefully no war like global war breaks out, it looks like. Country back into the fold after you've gained energy independence, right? Because Russia, some people have said Russia is just a gas station that happens to have a country connected.

 They're there Saudi Arabia that they're very heavily dependent on oil.  What is, what are the long-term impacts of this from a, both an. Economic standpoint and also a peace standpoint just because  the, those ties, those global ties and interdependencies really disincentivize people, countries, not people but countries and their leaders, whether rational or not to go to war.

  If you need something from another country, probably not gonna attack it. You're probably gonna find a better way to get whatever you're trying to get from it. And so I think energy independence is a good national security kind of strategy, but at the same point, how do you still. Or balance that with being somewhat dependent to be peaceful, it seems to me account everybody just being good pers clearly.

So there has to be some incentive, usually monetary to, to promote that. And here's the thing that has been blowing my mind is imagine 60, 70 years ago, right after world war II, Europe is rebuilding. Asia's rebuilding everything who would have thought that Germany and Japan would be our two.

Primary economic and diplomatic allies in this kind of a situation and the buffers to Russia, which was the ally in world war II. It's it's pretty crazy how in which I think that gives hope that in the long run. Over decades, whole countries can really be brought back into the global sphere.

 Germany is now a leader in European, the European union as a pretty much the diplomatic center of Europe, I would say. And Japan is absolutely economic powerhouse. Both countries have seen. Incredible regrowth and rebirth. And there's no reason why, you know, after all this, even in a worst case scenario, Russia, wouldn't be able to come back and I'm sure that the global community would be happy to receive it.

  Barring some sort of truly horrific apocalyptic event, I think in the long run countries. Are extremely resilient, similar to a person getting a cold or something they can knock you out for a few days. But I think that at the end of the day, the people of of a country. Always attempt to, to come back towards the community.

 The interesting thing in this situation is that just the amount of relatives across so that Ukrainian and Russian citizens are very close in terms of bloodlines and in terms of cultural heritage it's such an interesting situation to see, and it's sad to see such close nations fighting.

   And such aggression from Russia. Can you imagine if we just invaded Canada? It's wild. It's wild to think about. But I think it's also been a wake up call for the world and that wars do happen and it's important to be vigilant and be focused on the long run and say, okay, just because things are good right now.

It doesn't mean things can go crazy things mean things can't go crazy. And a few days think about even just a week or two weeks ago, it seemed like it was all just talk on, oh  it's probably just positioning whatever and that it's real.

So I think it's a good reminder. But in terms of back in terms of energy I think, like you said  going to a. Looking at energy as a national security interest and not to not to go too much on the Ukrainian situation right now is is powerful. Being able to provide energy to your citizens is.

Crucial in this day and age with the amount of infrastructure that relies on it. Refrigerator, washing, machine heating, we're talking natural gas heating. You're getting your house, cooking your food. That's about as basic of a national security interest as it can get almost. Yeah. It's it's amazing when you put it that way.

 It's like a. Pretty much all of the 21st century gins that we appreciate and love are our washers are just wash it. Here are our refrigerator, our clothes drying and washing machines. Those are all rely on energy. And so if you don't have that, you're really launching yourself back hundreds of years.

 If you can't provide energy, clearly a big issue. So let's dive into energy specifically, cause it's the broad term, right? Involves oil Metrocast, anything otherwise known as turbines. Sorry. The you can tell I'm really big on turbines anyways. Wind solar might be a thing.

 Nuclear, you mentioned earlier, you really  there's coal, which pretty much everyone agrees is one of the worst. So there's hydro hydroelectric power. There's a lot of different ways to create energy. We don't have a lot of good ways to store energy. That's one of our biggest issues.

 Humanity a thing. We don't really have a good battery yet to necessarily store  some less reliable forms of energy. But what far as the landscape that I just laid out? A lot of people break it down into like renewables and fossil fuels. That's the normal terminology. Is there a better way to approach that?

Because I feel  I feel like that's not always helpful to just break it down to, oh, this is renewables and green and these are fossil fuels and black and dirty. And. It seems, it must be a better way to, to look at this because from an innovation standpoint, usually you gotta come in and at a problem from a different angle  and approach it in a new way.

And so I like what you were saying about nuclear. I, for one have heard very convincing arguments on its benefits. And on its long run capabilities, obviously we've seen stuff like Chernobyl and what happened, I believe. Japan or it might've been in China with the tsunami hit a large nuclear reactor Japan.

Okay. Got it.  Obviously we've seen those disasters, but it seems  the way nuclear has evolved and the point that it's at now this is a beautiful case. Study run more than 70% of their country's electric grid on nuclear energy. And they're in for the long haul. Clearly they built up a lot of facilities for it.

 And so not just nuclear, but hydro electric power. That's another huge resource that's untapped, especially here in the United States.  Actually I talked with a company that was making  a process to allow fish, to go past dams so that they could hydro and more dams and basically not impact the natural environment around the dam and have free flow.

Wildlife, but also have electric power being produced there and balancing both sides of it. So what are your kind of off the wall, thoughts on energy? Like how do you think about it differently? Because I don't really like being forced in those two boxes. Okay. Green or fossil fuels.

That's the only two. I think it's very unhelpful when it, when we try and look at this problem, I actually really, I really appreciate that because I think. That's pretty spot on because if you just, if you're just categorizing all energy in terms of does it emit fossil fuels or not, or does it emit, does it use fossil fuels and emit some sort of  side effects into the environment?

 It's almost going back to our ESG episode of that's a certain methodology. I think that it doesn't describe what's actually going on at a deeper level. It's a methodology to ease. Look at the broad scope of, okay.  These things and it hearkens to. To design thinking and specifically called a one input system.

So let's say your car on a good day when your car is not breaking down, it's a one input system. So you just input gasoline and it works as a system is at least in terms of your psychological perception of it. Sure. You got washer fluid, you got oil, all those things, but in terms of your psychological perception, it's a one input system which makes it very easy for your brain to get.

Categorize it very well. And when it's working well, you have to use very little psychological energy to keep track of your car. Even better for a, something like a Tesla or an electric car where really pretty much is a single input system, except for windshield washer fluid. I think it's the only fluid in a Tesla.

 So in something like that, it's like a pretty much a true single input system. You put electricity and maybe you've got to worry about the washer fluid every three, four months or something like that. But it's really not that big of a deal. And I think that there's a tendency for both in terms of regulation on the governmental level, down to the consumer level to think of, to try and categorize.

Energy forms in a box and think of them as a single output system, almost okay. Wind and solar that doesn't put anything out. So that's a good, that's putting out like goodness into the environment. That's a net. Good. And then if you like, ah, coal, natural gas, that's a net bad.

That's putting bad things into the environment. And then if you see pictures of nuclear, Power plants. Whoa, what's the, all that like crazy smoke coming up. It's just water vapor. It's literally just water vapor, which always blows my mind. How many people still are like looking at crazy stuff coming out of the nuclear plant over there.

Oh. And you're like, yeah, look at the crazy stuff coming out of your bathroom door. When you're taking a hot shower, it's also called water paper. But your  your other housemates, don't worry about that. Cause it's water vapor. Exactly. Exactly Steve, you can you can, you don't have to worry about it.

I don't know who Steve is, but maybe he's our escape go to the show. But anyway, there's a human tendency to try and simplify these things into kind of single methodologies. And I think that the idea of the black and white of this is good for the environment, quote, unquote, or bad for the environment.

Quote unquote it's it's. At a ground level. You can't there's so much of a difference in nuance in really every single method, because solar it's okay, you only have it half the time. And that's, if you're lucky, if there's no clouds all sorts of stuff, so sure. If you, and they're expensive to build so sure.

If you can get them up, you can get the sun going. That's great. Wind is tough. It's also intermittent. So that whole battery problem is very prevalent. And yeah, with like cold yeah, that's a lot of, there's a lot of stuff coming out of there and there's more and more, they're more and more companies coming out with new and innovative ways to capture or even turn some of those emissions into good things.

But at the end of the day, it's still a process, but I think the part of the danger is. Saying that okay. We need to just shut down all of that stuff like that. That's just not going to work. And that's why I'm a big personal advocate for nuclear because that's nuclear is one of the few. Methods where it's okay.

 We have both the thing needed. We have tons of uranium. We have the capability to use it immediately. It would take, it takes a few years to build an and get a nuclear power plant operational, but it's not like Jesse, just a few years. It's you've read a decades of transitioning to wind and solar.

Like you. Pretty realistically, you transitioned to co like net zero energy production for most of the world, if you use nuclear energy and it wouldn't be that difficult within a decade to 15 years, which is mind-boggling. Yeah. Yeah. Okay. To push back and also support your argument. So  the output effect, I think people over.

 W I guess, value or think about they F they overemphasize. So it came out of  the plants and underemphasize, the inputs going into some of the, for instance, solar panels or some of the impact that it like wind turbines have directly on bird populations and local environment. Clearly bad outputs for both fossil fuels and both solar and wind.

There's obviously outputs that are negative and a negative consequences from hydroelectric. I'd like the company I mentioned earlier, there are some companies looking to solve those issues. I think what's really. Probably the best best course of action. And there's also problems with nuclear too, right?

Like what do we do with all of this uranium that we've used up that you can't really use anymore? And now it's radioactive and that's a problem for humans. Where do you store it? Is there enough space to take it out? Like mine it from the earth, use it and then store it safely. The capability for that whole process.

That's a whole kind of other question that we get into. Clearly every form of energy has some sort of negative output because we're humans and we're running around doing stuff and we're bouncing and bashing into things and screwing things up. Okay. So energy. It's always a problem.

There's always negative outputs. What I think makes the most sense is it. And it's interesting because this conversation always gets very dogmatic and political very quickly. It's oh yes. You're on the left side of the political spectrum. You line up with green energy. If you're on the right side, you just want fossil fuels and then they just go after each other.

 What's what seems like the better angle to come at it from is okay. We acknowledge that each has problems. Worse than others. Probably what we probably should do is take what we have now, whatever that is whatever's in place and make it less harmful. And then continue to look for motivation on the kind of  the solutions based around our current technology and reducing the harm of our current technology while also building.

Completely new technology to harness energy from our natural environment.  And so whether that's making solar and wind more efficient, whether it's companies like the one I spoke about earlier using solutions for transporting fish across hydroelectric dams. Great. Whether that's emissions companies creating solutions to.

Sure. Some of the negatives of  oil and natural gas and coal cleaning up the process while looking for better solutions, I think is probably the ultimate answer, but nobody ever wants to say that. Cause that's a bad sound bite that doesn't look good on TV. It doesn't look good on Twitter.

 But that seems like the best way to go about it. And oddly enough, it seems like the way that would pay off the best. Okay. Because a company, an energy company, who's only focused on one one resource, one way of making energy. It's very risky.  That's completely undiversified. So imagine if you had an energy company where you're yes.

You're you have some oil exposure, but you also have some nuclear exposure and then, oh, by the way, you have a subsidiary that runs an emissions company that reduces the emissions from both your oil and natural gas section and in the nuclear section. No, by the way, you have some windmills and solar panels to boot, it's tough to beat.

It is one of those subjects that will naturally create a tension and there can be contention pretty easily on it. So it's something where energy is a classic, especially in the last 40 even 50 years has been a classic political debate. When I think you're right, I think at the end of the day, it doesn't necessarily have to be, it can be a debate that is ensconced in moderate TISM and the.

It's enabled to be both sides can understand what the other side is coming from. I think that it's exactly like you're saying it just takes a cooler heads to prevail. Now there's an interesting point with the energy companies being diversified. It is really expensive to, especially especially nuclear is very expensive to get a nuclear plant up and running.

I'm sure you're going to, you're going to make that money back over the course of decades and then some, but it is very carefully. Heavy and with all the subsidies that been going on for wind and solar, there's been a lot of development there, but how long is that sustainable? And is that even a good thing that the government is offering subsidies?

Maybe not, maybe better off subsidizing nuclear or geothermal or hydroelectric, who knows? Yeah, there's some interesting there's some interesting. Talk and research and inventions being done on the hydrogen side of trying to create like hydrogen fuel cells to power vehicles or like small theaters.

 So there's some interesting things that we didn't even mentioned, like geothermal, you mentioned that we haven't even talked about that being a, an option as well, but there's Conversation with someone. Yes. Even when you're talking about Iceland, they run most of their infrastructure on geothermal, because it's basically just the one big volcano over there.

So they were lucky enough or lucky enough to live on a keynote. You call them lava land. So the Iceland There you go  the Vikings didn't get that one. But that's okay.  We won't hold it against them, but it seems like there's a lot of options out there. And  I hear what you're saying about the nuclear being expensive and obviously government subsidies planned all of that.

 But it would seem  and maybe we should go consult for some of the big  oil boys, but it seems. If they wanted to, they shouldn't have the margin to go off and try and do a nuclear power plant. But I would imagine that, and it's we were just talking energy for some reason. I really don't understand why, but it gets political at least in the U S very quickly.

And if I bet since oil has had a bad rap for the last few decades here if they went off and did nuclear, it would be the worst PR move. I'm sure their marketing department who would just be in their faces and do the desk going, no, why are you doing this? So it'd probably be a bad PR move, which is why you see a lot of oil companies.

 They're throwing money at wind and solar because it looks good, but it might not actually be. While for them, or they might not even be using reports of large oil companies putting up a solar energy, a field, and then they never connect it to anything. They just leave it unplugged, but it's just a PR stunt.

So they don't care. This is spill a little oil in the golf and build a solar cell, a couple of solar panels. It's all good. Anyways, it seems like maybe the real Kind of brunt of the energy question is look for more innovation and try to reduce the tribalism or political.

Political influencer or issues that arise in that sector. I don't think you're ever going to reduce the influence, but at least try to reduce the politics of it all because  when you get down to it we're talking about things that everyone needs, which is why, again, it seems like.

Interesting that it gets so divisive so quickly because everybody, I don't care how rich or poor you are. You still need a warm house to sleep in.  And that's something that we should all be able to behind. So it seems like it, it just needs to, like you said, cooler heads need to prevail and hopefully  we can see some of this  coming to a head I've seen.

Like with with Germany, we were talking about earlier and versus France Germany has gotten rid of all their nuclear has a lot of nuclear. Like I said, 70% of their grid is from nuclear power. It's going to be interesting to see how this plays out. Yeah. And I think on the international scale  the interesting thing is that France is such an interesting, I love that you brought up France again with the nuclear, because the.

The one other big input that nuclear requires is vigilance as human vigilance, which is not that easy to have. It's, it could, I'm sure it tires out and nuclear engineers to sit in the reactor room and know, you're constantly watching dials. Maybe it changed a little here and there, but usually nothing's going to happen in 10 seconds where everything's, everything matters.

It's the right once in a career. If that hopefully never ending. But maybe it does. It's like that's a really such a unique requirement. And maybe there's definitely been attempts at fusion power becoming realistic cold fusion, maybe as the holy grail of energy.  It's interesting.

And at the international level yeah, we'll see what happens if Germany kind of changes. Course. I think they're going to have to change course at least some direction whether that's nuclear or otherwise. Considering they're pretty much cutting off a lot from Russia, so it's going to have to be some, something's going to have to pick up the slack there.

Yeah. And I think the interesting question when it comes to that is, does this kind of. Increase the innovation that we see in the energy sector, or does this whole situation with just, and I don't just mean Ukraine specifically, but does the whole situation now where it seems that. The ground is shifting partially because of what Russia is doing, but also partially because we've been in this trend towards green energy and I say green, see, I'm using those terms again, but we've been to shift whatever green energy is.

Usually it's like solar and wind. Everybody's been trying to towards that, does this accelerate the trend towards solar wind and. Or does this decelerate that trend and then make everyone look differently. And which I think if the latter is done well if that kind of re-evaluation of what energy is, where we get it from, if that's done well, I think that could be a positive thing.

  I think probably solar and wind have up to, I'm not saying they don't, but It seems like this is a time for reevaluation. Obviously there's a lot more than that we need to focus on is more important.  We don't, I want, I don't want to minimize what's happening in Ukraine and use that as just oh, this is the energy game.

I'm not trying to say that.  But once this is over and the situation is a little more stable, I think there's gonna be a very big reckoning when it comes to the energy sector and how people look at it and move forward from. Yeah, I think that's a good point to bring up because the effects of everything that's going on will not be visible until after  so we're not going to be able to really understand exactly what's what the short, mid and even long-term effects are going to be.

But speaking of the long run what do you think in terms of everything we've talked about? What do you think are some action steps? Because it's interesting in terms of. Investments. I do personally. I have some portfolio picks that I have and I've been looking at that are long run energy plays, but I think even just from the last, the week, the last week of things that have going on, it might be rebalancing a bit.

I don't know. Yeah. Oh, even the, even the big energy companies are rebalancing. BP's divesting from a Russian holding. So is so shell there's some wild stuff happening. If you own those stocks, you're already divesting from some of the political conflict, but what's say is I think and this is my thesis going into it.

Almost if you could phrase it as follow the money. So the money right now is in all the fossil fuels that's where it is right now. Now we may, and I use fossil fuels, meaning oil, gas, coal. That's where the money is right now. There is probably going to be a shift from that. It seems like no matter what, there's going to eventually be a shift.

I don't think it's going to be a hundred percent or excuse me, 0%. No fossil fuels at all. I don't think that's ever going to necessarily happen, but there's going to be a large shift, but that's where the money is now. I think if the companies  that are have the capital. The large oil and gas producers, they're the capital.

They're going to buy up the next energy companies coming up just as a protection measure. And so I think at the moment, and this, I may change my opinion on this going forward come back to it five years later, I may change. But I think. Your long run play is probably better served by looking at some of the bigger names in energy and sticking to those rather than trying to choose, pick and choose  smaller cap energy companies that say they're doing something interesting.

Now, I think. If you are looking at let's say you have a portfolio and you're like, you have a subset that's just dedicated to energy. It would, it might be worth your while to allocate a portion of that energy section to picking some kind of moonshots. But I think what's going to happen is as those companies mature, they're going to get gobbled up by some larger players that have the capital to do  for some reason, see the large players actually being the innovators early, but I see them buying up the innovators.  I think that's just probably going to be their strategy because they'll see it as either competent. Hopefully they'll keep the innovation going. Hopefully they won't just buy 'em up and shut them down.

  And if we start to see that, then I might say, okay, But I think to change my thesis on that, but for the moment, I think that's probably the better long run play rather than just trying to focus on. Okay. Who's the big nuclear player. Who's the big solar and wind Claire. Who's doing hydro.

I need to find that company.  That's what I would be doing just to think through  how this is going to play out in this transition phase. And again, as we see with everything happening politically and internationally  it seems  there's going to be a reckoning of energy somehow that comes out of all of this after the dust settles.

So that would be my thought. But what are some of your thoughts on this? This is funny, cause you're going the risky. Innovation centric, small cap play. And I'm the opposite. So know I'm saying own the large caps because they're going to buy, they're going to buy the innovators. That's a thing.

 I don't know how it would be crazy if you could get in on the small cap ones before they're bought out. But how do you know for sure that's the million dollar question, but for me, yeah.  Putting bones on it, I just recently took a position in general electric.

 I think that their decision to split to break up the conglomerate in the few years down the road is a great idea. The whole list of fundamentals behind that, but essentially G energy will be its own stock as far as I understand if the plan carries forward. And if you just look back at standard oil, you look at John D Rockefeller.

Most of his massive fortune at its height was because of the stock value of the separate companies.  Over after standard oil was taken apart, all the companies still did very well and did better on their own because they were able to a whole host of things. But I think that the GE breakup is actually really good and will be good for GE because I think GE energy might do exactly what you're saying is that once they're their own thing, they might go grab some really innovative companies, integrate them and have a smaller  they're not have be to.

The budget, the big general electric methodology and shareholders it's they could be more agile.  Maybe they're going to innovate on a host of different things. And I think GE is a great play because they manufacture so many durable goods that go into electrical generation in the U S and across the world, whether that's wind turbines or the manufactured, I believe.

Second most nuclear reactors in the world. I pulled up, I Googled what companies build nuclear reactors, and I did that. They came up with the list and Rosa stone, or that's probably not how to pronounce it, but in Russia is built 68 nuclear accurate. So a Russian companies built the most nuclear reactors, but second is a general electric and Hitachi.

So I'm guessing. Joint venture, but together they built 64 nuclear reactors. And third place is very far away with KEPCO, which is a south Korean. But they built 20 themselves. So maybe KEPCO is a good stock to grab to. We'll see. But I personally recently got a position in general electric. I think another energy play that I've been in for awhile, I've mentioned several times.

And at this point I've lost a lot of money on, but I'm still in for the long run. Is I Tron? I think they have really good solutions for industrial electrical inputs and smart. The stock has not been doing. So take it as you will. Maybe it's a buying opportunity now. Maybe you shouldn't buy it.

Maybe you shouldn't dig my advice, but I'm still along. And I try and I'm not necessarily planning on buying more anytime soon, but still long on it. We'll see what happens with GE. Maybe I'll buy more of it before it actually splits up, because I think there's real opportunity there. That is pretty uncommon.

I think that the GE play could be a soft. Long run played like a three to five decade play. Could you make a lot of money on, but that's just speculation, not financial advice, like all this financial advice but yeah I think of a good point in looking towards nuclear. I just think at this point we have to  also.

I guess my reason for not looking to it quite yet, is it hasn't seen mainstream us adoption or like very good PR yet in the U S there's still a lot of people who think it's very unsafe and just, it doesn't have a good image. So until it wins me, not me, but until it wins the hearts and minds of the American people until it wins over one of the largest consumers of energy.

 China's there too, but I'm not looking to them to take on nuclear anytime soon. It, until it really wins some more mainstream adoption. I personally think it's a little far off, but like you were saying, if you can get in at the right time and early enough, you can definitely see some payoffs that are.

Impressive ginormous somites opportunity for alpha is what is, ah, there we go, which is a whole separate discussion because I don't know if that exists, but oh no, he's not. I set my golf. I knew that would put you off. So anyways, I think at this point we've about energized ourselves right out here today, but it's been a better pleasure talking with you, Mike, on this episode, a long road show.

And thank you again for listening. If you would give us a review. That would be amazing. This has been another episode long run show with your host, Austin Wilson and Michael O'Connor. We'll catch you later. .

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