The Barrel Returns: Venezuela and the new energy map of the Americas

0:00Hello, this is Todd Royall. I am your host of Geo Power Energy Real Politics. Got a special guest today, David Bikin. David is a 40 year industry veteran. What I'm going to say about David and what we're going to talk about today is not only he's extremely prolific. I would go to his substack. I would be sure you listen to him, listen, why read, whatever on LinkedIn. He's also has a couple different podcasts. He does himself, but you're getting somebody who's got these 40 years of experience, has really lived through from OPEC to the Shell Revolution to what we're seeing now. And some of the folks that I really love, I'd say David is very unique in that, how much he's putting out every day. And he really talks about things in a way that are easy to understand, but he can still be very specific, very quantitative, qualitative.

1:00And so love having him on the program. So David, thank you very much for being on the show. Hey, thanks for having me, man. I appreciate it. Absolutely. So let's just jump into this. A couple of months ago, you talked about the Venezuela oil deal, which we'll get to that, probably a second half. But you even put out a post a day ago about now the actual oil deal. We talked to the United States, talked about, hey, what are we going to do with all this oil? You know, that's in Venezuela. Now we're taking action. Would you even kind of take people down through your LinkedIn post? And again, I tell anybody, please go follow David on LinkedIn. Talk to us about that. And then I've got about a thousand other questions for you. Well, it's been a busy time since Friday when this deal is announced. In fact, the first inkling I got of it was on Wednesday. I was talking to a connection out in Washington who told me something big was coming. And then we had the story in the Wall Street Journal the night before

2:04Thursday night. So this all of course goes back to the deposition of the deposing of Maduro, Nicholas Maduro, the former socialist president who's allowed the industry in Venezuela to just fall completely apart while he's you know, looting the economy with China and Russia. And so the US opposed him in early January, installed. Delsey Rodriguez is the interim president. Delsey Rodriguez is you know, not an ideal national leader. She has strong opposition in Venezuela. But as Chris Wright said at the time and said again, this morning in Venezuela, you know, you the realities of geopolitics means you're not always dealing with an ideal person that you would like to be dealing with. And you deal with who who is there and ready to be in positions where already is in a certain position. And so

3:11but from January, you know, the United States got in there invited companies to come in the Venezuela government, reformed its oil law and regulations and you know, several significant operators have gotten in Chevron. It's already increased its position once. And now it's it was doing it again. Shlumberjee is there in a big way. Halliburton is there now and going to be there in a bigger way. So in Repsol and BP and Shell have all done deals in there. So productions already up 400,000 barrels a day since January. There was a lot of low hanging fruit dilapidated fields that operators could go in, stimulate wells, refurbish the equipment and the infrastructure and get you know, get more oil and gas production out of. And now the United States has done this 100 year lease deal. You know, and that involved at least nominally is 65 billion barrel reserve

4:14of crude oil across 17 different fields, most in the Ornoco basin, but others in in shallower formations. Some of its existing fields that have already been developed that need to be again refurbished and stimulated and in all that. And a lot of it is greenfield that's never been accessed and is going to require a lot of upfront investment in infrastructure, roads and pipelines and you know just everything you can think of that you have to have to get heavy equipment in and out and and be able to to operate an oil field. It's a it's a very it's an unprecedented deal for the United States government. I've tried to find anything similar. Can't really do it. But you know, it's kind of a it's a lease. And I've gone back and forth. If you've read my stuff on LinkedIn and ex up, you know, people arguing with me that oh, it's almost a two-shot one,

5:15the vendor's way of constitution and things like that. It's not in sense. The constitution and the paragraph they quote says, you know, that these underground resources are for the ownership of the Venezuelan people. And the government has the authority to develop them. And what do they think is going to happen that Delsey Rodriguez and her husband are going to run a drilling rig and go in and drill the wells themselves and hire a bunch of people off the streets to do it? No, they're going to do what what the Venezuelan government has always done. They're they're signing leases with with foreign entities to come in and develop the resources that they're incapable of developing. So, you know, this deal involves the government working with both governments working with an operator, a private company led by a fellow named Alejandro Betancourt. There's a controversial figure in Venezuela. Again, you don't always get to deal with the people you would ideally want to deal with. Mr. Betancourt has been the subject of investigations for money

6:20laundering and fraud in three different countries. While in most of it coming from the time he led Pettavasa, the national company there in Venezuela under Maduro. And he was also involved with Pettavasa during the Hugo Chavez regime, which nationalized a lot of assets of ExxonMobil, Conoco Phillips, and other countries back in 2007. So, you know, you say, well, okay, this guy is alleged to, you know, have committed crimes in three countries and never been convicted of anything. So, you know, we don't know how valid or invalid those claims are. But what we do know is he's led one of the world's biggest oil companies for several years. And he has that expertise and he's capable of leading an organization that can develop oil fields. So, there's the plus in it. You know, as you're well aware, any deal like this in the oil industry or

7:21any other industry, there's a thousand moving parts and the devil's always in the details and much of it require, you know, relies on not just the company to perform, but also the governments to remain stable and keep their words and their commitments under the contract. In Venezuela, that's, you know, an iffy proposition. And we don't know what's going to come after Delcy Rodriguez. Supposedly, there are going to be elections held, national elections in Venezuela as early as next year. And, you know, it's questionable whether Mrs. Rodriguez will be able to survive that election. You know, and so what comes after her? Who knows if a subsequent regime is going to honor this deal or not? We just don't know. However, my view is that this deal is going to go a mile,

8:21miles towards stabilizing the situation in Venezuela with the direct involvement and ownership of the United States government. That's going to mean and inevitably it's going to mean a security presence in those fields and around those fields provided by the United States military. That's just the way it's going to be. We're not going to, you know, let an asset of this magnitude sit there and protect, unprotected in that country. And so you know, there's an upfront, at least a head and a hot or handshake agreement with President Rodriguez that that's going to be the case. And a US presence in that country is going to stabilize things, not destabilize things. So that's, that's a positive. Anyway, go ahead. Sorry. No, no, no, that's a great overview. So, okay, you brought up, there's three things I want to ask you because I think you do such great work on this. Number one, you talked about when these companies are coming in the Chevrons, the Halliburton's,

9:25RESTful, Total, whoever, the infrastructure they're going to have to bring. Would you, would you talk about, because I don't think people realize the infrastructure that's brought in by these oil and gas firms when they do this. And then what are you talked about proven reserves, correct me from wrong, David, but Venezuela has more proven reserves than the United States. Oh, yes. Okay. By far, if you know the figure's great. And then lastly, you talked about, you know, they're going to be leasing these fields. This is what they've done. Others do it around the world. Is this similar to what's going on in Guyana because we've obviously seen with Guyana, one of the poorest areas in the world now become one of the wealthiest in a matter of what less than 10 years. So, let's continue. Take those three things from there and go with it how you would. Yeah. So, Venezuela's estimated proven reserves are around 300 billion barrels,

10:28which is far and away the biggest on the face of the earth. Most of it's the heavy crude, similar to what we import from Canada that are refineries along the Gulf Coast or set up the process. So, the thing you need to understand about it is the way proven reserves are calculated, it's what is supposed supposedly producible with current technology in fields that have already been tested and delineated. And so, that's a very conservative estimate. I mean, this is a very, for example, the US supposed proven reserves in the United States are 46 billion barrels. Well, we know that there's probably 10 times that in place underneath the Permian basin and all those formations in West Texas and South East in Mexico that isn't producible with current technology

11:29under the required way you calculate this stuff. But technology in the oil industry, just like every other industry, advances every day. 10 years from now, that 45 million barrel estimate might be 300 billion barrels. So, it is a way that has three hundred just for the audience. So, they have 300 billion barrels of proven reserves. Right. We have 46, let's just say an approximate 46 billion. We are considered this energy gigapower. And we are. And now you're saying those kind of proven reserves. Would you talk about, because I think it's such an interesting perspective you'll give. The infrastructure that these folks are going to bring these, you know, these multinational oil and gas exploration production firms like Chevron, what they're going to bring to these 17 sides. Do they bring roads? Do they

12:33bring schools? Is it more taxes? Is there a benefit? Because obviously the other side would say you're going to kill the environment and make the air dirtier. I'm just curious your perspective on this. So, well, yeah, of course, you always get those kinds of arguments from opponents. So, in the United States, every dollar, capital dollar that's invested by the US oil industry, in any given area, and there's a thousand economic studies that show this, creates six to seven dollars in ancillary economic impact. Okay. So, it multiplies throughout the economy in terms of jobs, you're buying stuff from local vendors, people in restaurants every day, buying clothes from clothing stores. It's a huge economic boost anywhere you go. Yeah, there's emissions. Yes, there's pollution that all has to be protected and properly regulated. And we do

13:36that well in the United States. They used to do it well in Venezuela before Hugo Chavez came along and started destroying and dismantling everything with his socialista government and got worse under Maduro. So, there's a lot of repair to be done and it's being done. These are big companies with big capitalization with, I mean, these are some of the finest operators on the face of the earth, Chevron, Shell, BP, Repsol, total energy is in there. You know, these are big companies that are well capitalized, know what they're doing and are able to get in there and do their business right. They have to be regulated. Okay. I'm not saying they shouldn't be regulated. They need to be regulated. The industry needs that. So, that's the job of the government. And of course, you know, the Venezuelan government is at least currently, you know, I was at Shell 20 years ago.

14:38We had operations down there in Venezuela dealt with some of the best people I've ever dealt with in my life with Petavasa. Really? Really fine people. That's all been dismantled now. And, you know, a lot of those folks left the country permanently. So, there's a lot of rebuilding to do with Impetavasa. And so, you know, this is a major decades-long project to rebuild that infrastructure and that industry inside Venezuela. ExxonMobilists stayed out because, you know, they had a bad experience under Chavez and actually had one before that, 30 years before that in Venezuela. So, you know, they're reluctant. I don't blame them. Connickville Phillips same thing. You know, the Venezuelan government owes them billions of dollars from what was nationalized back in 2007. But both those companies in recent months, now, the last two months have been negotiating

15:40deals that would get them back in there. And, you know, that takes time. And there's a lot of of fine print to be negotiated in those deals. So, I do believe a year from now, all these big companies are going to be in there. And it's going to be a boom time in that economy. And that, again, that's something that has to be carefully regulated as we've seen in the United States in these big shell plays. You can't just go in there, Willie Nilly and not do your business right. And these companies, the good news about having these companies doing it is, is their investors grade them on their safety record in their environmental stewardship. And so, it just, to me, it's a benefit for Venezuela, the United States and really the world to get this industry up and running again in that country. And then is this similar, you think, to what's going on in Guyana? Like, is it going to be this similar model where the majors are going to come in? They're going to

16:41help revitalize the country. And you'll see dramatically more oil and even possibly natural gas coming out of Venezuela. Oh, sure. Yeah, that's already happening. You know, the Guyana thing is the great success story that doesn't get enough. I've written 10 or 12 pieces about it at Forbes, but it doesn't get enough attention from the media. It's one of the finest industry government partnership stories, really in the history of the industry. They're already producing now over 800,000 barrels a day. They'll be over a million by this time next year. And out of one concession out there in the ocean, 12, 15 miles off coast, it's been an incredible benefit to the economy there. There's only 800, 900,000 people who live in Guyana. It has been the fastest growing economy on earth for the last four or five years running. And the government has been really well-run. It's a left-winged government, but the president there

17:50has been very diligent in making sure everything's managed properly. And the income has been used for the good of the public instead of going into people's pockets. And in developing countries, that's not always the case. So it's been a terrific story that both Exxon and Chevron, of course, are involved in it. Okay, I want you to say I'm going to give you a victory lap here because so I'm going to tell the audience right now. I'm going to give him a softball question victory lap to take because I love those. Okay, good. You were one of the first. I remember when we first took Maduro, which would have been, was that December or January? We did that January. Second or third? Okay, people came out and you were one of the very first people that said the oil majors will go back in. And then you I remember you just got excoriated online. I saw

18:50you. I mean, you got oh, you got excoriated. And then you said not only will they go back, but the country will turn around and all of this talk about Exxon mobile, Conaco Phillips, and all of the others. You said when there is that much oil and these people are in the oil, get it out of the ground business, it will be worked out. I don't remember if you exactly said if there would be a deal, but just tell the audience you're thinking based on your experience of why he wrote that. And again, I would tell anybody listening to this. David was one of the first ones that came out and said don't believe all the nonsense of them not going back down there. And then he stuck to it. Again, I would tell anybody in many ways, he was viciously attacked. So I'm going to give you your victory lap here and just take us in. Yeah, I think why you said this. Yeah, I get that a lot.

19:52But you know, it's from people who don't know anything about the business. So it just kind of slides off. Look, I've been around a long time. I've seen all this kind of thing happen many times in the past. It's there's no magic to it. It is the magnitude of the resource is irresistible to big companies. You know, these companies, and of course, I wrote that piece the day after Darren Wood said, Ben as well as uninvestable to his company. Yes, you did. It's on mobile. And at the time, that was true. I mean, I think I said that in that column. You know, for his company, which is more risk averse than most companies because of its side and the diversity of its operations all over the world, it has to be very careful from a risk standpoint on major investments. And the situation in Venezuela at that moment in time was very, very fraught and unstable. And you know, what I said, I think at the time, was that,

20:58yes, this is true for Exon right now. Six months from now, it may not be. It might have improved enough to where it is investible. And you know, I think it was in early July. We saw the first reports that Exon was looking at several deals and trying to negotiate a final agreement to get back in. And Conoco Phillips, same thing, you know, and it just depends on when you get the stability they need to where it fits their risk model. And every company is this different. Chevron, you know, has remained in there in Venezuela, only big US company that's been able to remain there throughout all of this. And so they were uniquely situated and it's been easier for them to, you know, not just maintain the current operations, but expand them as they just announced yesterday again for the second time, another expansion of their own operations there. And so when you're looking at this magnitude of a resource, these companies also, the old saying in the

22:02old business is, if your production's not growing, you're going out of business, okay. And it's true. I mean, that's what they're in business to do is produce soil. And if you're not producing more year over year, then your resources diminishing and you're effectively going out of business. So there's a lot of pressure at these companies, you know, to get into any big resource play that comes up. Well, there's no bigger resource play on her than Venezuela. And so it was inevitable that these companies start coming back in. It just was a matter of timing and the situation, the risk profile being acceptable to their investors. And so here we are. Okay, I want to go back to your LinkedIn post from a day ago. And I want to tell people to go to it. It's the, it says, the US Venezuelan oil deal, White House lays out key details. There's something I want you to talk about. And I want, because you talk about geopolitics a moment ago. And, you know, the name of the show is

23:07geopower, which is my way of talking about geopolitics, energy, and real politics. And you say this this bullet point, you know, the key points about what the deal really is. So you talk about North American, North American blue energy partners talks about they're being up to a hundred billion dollars of new infrastructure, which I would say is probably a low figure and roughly 200 billion in royalties and taxes over 20 over 25 years of production actually scales. So talk about that first. And then secondly, you say, which I think people don't realize this, much of this acreage, these 17 different sites was previously in the hands of the Russian, Chinese, or Madera, Erichronis. The point is to push those actors out of the western hemisphere and rebuild a supply chain we can defend. Would you talk about that entire bullet point for the audience please? Yeah. So first, I think both of those estimates, the numbers are probably going

24:12in. We'll look back 25. Well, I won't be dead, but people 25 years from now will look back and say those estimates were low. In both respects, the amount of investment needed an infrastructure related to these enormous fields. And the amount of royalties the government's going to collect in taxes, it'll be double triple that probably by the end of the day. Forgot what the second part of the question was. That second part. So let's just say what you, so again, for everyone, these are conservative estimates, David is saying. 100 billion of new infrastructure. And remember, people have to remember that number gets broken into something called direct, indirect, and induced. When you do economic development has three factors. That 100 billion, quite honestly, can end up being a trillion dollars, just so you know. And then you're talking about 200 billion in royalties and taxes for the government and people of

25:14Venezuela, when probably David just said you're looking at double the triples of 400 billion to 600 billion. The next part was talk about this. How that acreage was previously in the hands of the Russian Chinese and Maduro era folks. Yeah. And so this all fits in with with the Trump strategy that we've began to see develop last summer of, you know, reordering the Western hemisphere, getting China and Russian influence out of the Western hemisphere. And every action President Trump and his administration have taken related to to Venezuela, Cuba, Greenland, Canada, any other country in this hemisphere. And really over and around, the central focus is achieving that goal, getting Chinese and Russian influence out of this hemisphere. And that's, you know, the influence of those two countries that the government allowed inside Venezuela is why the economy, you know, fell into, I mean,

26:15this was once one of the wealthiest, the second wealthiest country in the Western hemisphere and is now a mass just a completely poverty-stricken mass. I don't know where it ranks now near the bottom. I'm sure. And it's, you know, it's because those Chavez and Maduro became close first to Russia and then with China. And all the Russian China are doing in that country is looting it. Okay, for their own benefit. And this is, this is the United States way, the Trump administration's way of getting them both out of there. I mean, Russia's already pretty much gone. China still has things in there, but that's all going to be gone. And that's important for the security of the United States, not just Venezuela, but also the United States and really the entire hemisphere. This is not China's playground, then it can't be. And that's a mistake the the county government in Canada is making right now too. I mean, the United States cannot have a client state of China perched on its

27:18northern border. We just can't. And so that's going to have to end one way or another. And that's another topic for another show. But this is just all consistent with the with the Trump policy now. You know, they call it the Don Roe doctrine, you know, the Monroe document. Yeah, yeah, it's name on it. And so, you know, that aspect of it should not have surprised anyone. And but of course, you know, hit so many people in our country are just inflicted with Trump derangement syndrome that they go crazy about anything he does. But this this was a very predictable move in that regard. Yeah, yeah. You talk about too. And I got just a few more minutes here in our first half. I love what you say. And I do want to talk about this in the second half of the show because you've been really good about saying gasoline prices are not set by your local gas station. Which yeah, I love how you've talked about that. You say in this

28:20LinkedIn piece, you go, you're like, what is this not about? And you say it's not about overnight $2 gasoline. Can you give give me like a quick two minute blurb on what you actually mean by that and then we can pick it up here in the second half of the show. Sure. You know, I mean, the first response to this, I started seeing on X and LinkedIn was people saying, Oh my God, gasoline prices are going to go down to $2 overnight. Well, no, this deal has nothing to do with low or in gasoline prices anytime soon. I mean, there's there's some low hanging fruit. These these brown field fields that you know, to go in and rework wells and marginally increase production, a couple hundred thousand barrels a month by the end of the year is what Chris Wright thinks. And he's probably right about that. But that's not enough to really, you know, offset what's happening in oil markets and gas prices are set by the oil market. All price goes up gas price goes up. All price goes down gasoline price goes down. That's how it works. And we were just we're in a

29:26non-balanced market right now. It's not nearly as bad as it was a month ago thanks to the US Navy, but probably still undersupplied, you know, by one one and a half million barrels a day. So it's not like it was. And that's going to rebalance soon. So, but that's what I mean by that. This is a long term geopolitical strategic play, not a short term gas price. Sure. Okay, I've got to take a break here. My name is Todd Royal. I'm your host of Geo Power Energy and Real Politics. And I'm with my guest David Blackman. We will be right back. I'm Doug Evans, author of the Sprout Book. I want to share something that's powerful. You can grow your own food right on your kitchen countertop. Sprouting is an ancient method that turns ordinary seeds into living vegetables in just three to five days. No soil, no sunshine, no fertilizer, just seeds, water for under a dollar, a serving, you can grow nutrient

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33:41250 years. America out loud.News is that place to awaken your heart, soul and mind to the out loud truth. Hello, this is Zion Todd Royle. We are back on your host of Geo Power, energy and real politics. And I have my very, very, very special guest, David Blackman. David, we were talking about, we're talking about gas prices. I want you to dig a little deeper. And we're going to talk about some diesel cracks, breads, because the shortage of decals become a big thing. But in regards to, you know, Venezuela will even throw Iran in there, because you met a really wonderful point that there in some ways they're interconnected. Let Pete just kind of break down for folks. Here's how gas prices work because you've,

34:41you've been on this from the moment the Iran tax happened to the closing of the Strait of Ormuz, to the reopening. Like you've really been good about and really, I believe clearly explaining what how to gas prices in the United States actually work. Okay, well, so, you know, gasoline prices are generally, mostly a function of crude oil prices. And crude oil prices are set on a global market because we're still a big importer of crude and we're not, and we're always going to be, we're not, not ever going to be disconnected from, from that market. So that's the first big element of it. And then, and, you know, so refineries go out and they buy oil for their refineries, you know, and based on these index prices, you see, WTI, West Texas Intermediate is the main index price that governs oil contracts domestically, the Brent crude price is the main index that governs international trades. And, you know, and so

35:46every refineries got a common, it will, some refineries, you know, deal exclusively in domestic crude, but most, especially along the Gulf Coast, or a combination of domestic supplies and international cargoes coming in on ships. And so, so they, they buy their oil, they refine it, they put it through the process that has a cost, right, that they're going to add to what they charge retailers in their wholesale prices, plus a margin for profit. And then, there's the transportation costs that's the third major element of this. And then, there's also regulatory costs and administrative costs that go into it. You know, right now, what we have, and, you know, what's causing the big blowout and diesel prices is the war in Ukraine, mainly. I mean, it's created a big shortage. Russia, prior to the war, was the major exporter of diesel to the open market, the refined product of diesel.

36:50And, you know, Ukraine's been very successful in damaging most of Russia's refineries now with their drones. And so, Russia's had to cut it way back on diesel exports. The Persian Gulf countries were also big exporters of diesel as a refined product onto the market. So, it's created a big shortage in diesel and jet fuel in particular, because those countries produced the right grade of crude oil to, to refine diesel and jet fuel. They're, they're almost identical, but not quite distilled. It's out of their crude oil streams. And so, we have a major shortage of, of that product on the open market in the United States as bigger producers. We are, we cannot make up the deficit caused by those two wires. So, the, and that's why diesel prices are hovering, you know, around $5.75 and 80 cents a gallon, which is almost the highest ever recorded,

37:50where, while gasoline's down around $4 a gallon. And that's what most drivers use. I believe that, you know, we've had a three and a half percent inflation this year on average each month. And, and I think almost all of that is in the high, you know, the run up in diesel prices, because everything, every consumer good is transported to market on trucks or planes or ship, certain trains that are powered with diesel fuel. And so, that adds a transportation cost on top of other costs and all of our food products are closed, everything we buy. That's been inflation. Once this is all over, once, you know, ran in Ukraine conflicts, we get settled, those prices are going to plummet, okay. And we're probably going to have a round of disinflation in all these retail products. And that'll be great for the economy, as long as it doesn't become a long term trend. So, that's what's happening there. Gasoline, you know, it's similar. It's a similar

38:57problem, caused mainly not so much by the, the Ukraine war, but mainly by the Iran conflict. And the, you know, shut down the straight of our moves for several months. Now, that's being resolved right now. And really, the United States Navy has control of the straight of our moves, the RGCE, you know, can still lob a missile here and there. But they obviously, their capabilities have been, you know, almost completely decimated now. And it's just a matter of time before that conflict gets resolved in America's favor. It's just, it's going to happen. It may take into next year, but that's what's the end game is going to be. And when that happens, gasoline prices are going to plummet. And because, you know, we've just had a shortage of supply on the market. And, you know, when, when any consumer good, when the supply of it becomes tight, prices go up. And that's essentially what's happened with gas prices. So, refineries have made a lot of money with their

40:00cracks-preds during this crisis. There's no doubt about that. You know, and this is the kind of of environment when refineries make big profits. And it's why companies like ExxonMobile and Chevron are fully diversified so they can take advantage of that, you know, while their production segments may not be making as much. And so everybody, you know, those of us who drive gas powered cars, it's an emotional thing for us. We have no choice but to buy gasoline, right? Yep. Yep. And, and you see the price on the gasoline is the only product that advertises its price on big sides, signs along the roadside every day in the, yeah, 10,000 different places around this country. Yeah. So when the price goes up, we get emotional about it and we blame, and whatever president's sitting in the White House for the problem. We do. But, you know, when the price goes down, those refineries are not going to be making a lot of money. In fact, many of them are going

41:02to lose their asses. And what you never see, you know, the president had these refineries up at the White House yesterday to brown eat them. That was a waste of time. We'll talk about that, I'm sure. But you're not ever going to see Congress or the president call executives of a refining company to come to Washington to get brown beaten when they're losing their asses. Yeah. And, and so it doesn't work the other way. You know, you're always mad at them when the price goes up. You never talk to them when the price goes down. But that's just part of being in that business, asking people to feel sorry for them. But, you know, we as Americans were spoiled because our refining industry is so efficient and effective at what it does, even though the capacity is pretty sharp right now, really. We've gone through this crisis without even suffering any kind of a spot shortage of gasoline to fill our cars up with, much less a

42:06national shortage. And very few countries on the face of the earth can say that. But there was no appreciation for our refining industry for giving us that gift. Let me ask you this about you brought up, you know, Russia and Ukraine and I don't know if you know anything about this. I'm asking you a big question here. So if you want to punch, if you want to punt this, feel free to. Why do you think or what do you know? Why is NATO in the United States allowing Ukraine to continually hit Russian refineries? When we know, like you just said, a large portion of the diesel in the in the world comes from Russia. So why are we allowing Ukraine to continually do this? Well, you know, I don't really understand all that myself. It's not in any way my area of expertise. So I guess I will have to defer on that. I mean, it seems

43:11odd to me as well. And I've had, you know, when that whole thing started, I thought it was completely misandled by the United States and NATO and then looked at me like things have gotten a lot better. It is. And I've kept up with it quite a bit and talked about it, written about it. There's a person named Matt to Libby or to lobby. Yeah, racket news. Right. He's a great writer. Yeah, I did the best historical breakdown of what we had promised the Russian starting and around. I think it was 91, 92. During the, you know, the kind of the towards the end of the Clinton administration all the way up to, you know, Merkel, lying, went NATO promised, etc. And gosh, you and I both know that the Russians that those are, those are pretty bloodthirsty individuals, but at the same sense, boy, we, we backtracked and lied on a whole lot of stuff. And I just wonder, yeah, no, I mean, yeah, I totally agree with you. Yeah,

44:16we made promises to Boris Eltsin that NATO would not expand towards Russia's, Russia's Western border. And they're in the Bush administration and within two years, you know, had broken that promise and continued to break it repeatedly, you know, even into, you know, well into this century. Oh, absolutely. Yeah, at many times over. And so, yeah, I mean, I'm not someone who says Russia has no legitimate claim to those lands. Those lands have been under dispute between those two countries for centuries. But, you know, why, why we, you know, I don't think we should have, as the United States, poured all that money into Ukraine. And, you know, which is really the most corrupt country on the face of the earth in many ways. And I don't think we ought to be involved in any way in it. And unfortunately, due to our NATO membership, we are. And, you know, I mean,

45:22that's a calculation. These people in the White House and the State Department have to make rebalancing with all the other things they're dealing with. And so it is what it is. It is what it is. And yeah, I was just, I just continued to wonder, David, why we the United States are allowing those refineries to be hit. Yeah. I mean, I can get into the whole, you know, it feels like a world economic forum, whatever, oh yeah, this agency, you know, wants people to suffer. So they'll be in charge more, but it just, it just doesn't make sense to me at all. I want to return to China and Venezuela. Let's head back there. And, you know, we know China spent years building these relationships throughout Latin America and specifically Venezuela. How much of this agreement

46:23should we understand? You talked about a little bit of the first step, but should we really understand energy security strategy? But then how much is really about pushing Chinese influence out of America's hemisphere? Well, I mean, I think everything we're doing, the White House has done in the State Department over the last year has been the main overarching goal is to get China out of the Western hemisphere. And so that's the main driving factor in anything we're doing in Venezuela. But, you know, like the like the big old companies, the US government could see the size of the prize down there. You know, you have now an equity interest in 65 billion barrels of proven reserves. That's going to be a major revenue stream to the Venezuelan government and also to the United States government and the taxpayers here. And so I think the economic prize is a big motivator for

47:26for sure. You know, the challenge to me is going to be, you know, setting up this private company in a way that makes it capable of actually getting the job done. And, you know, Mr. Betancourt, his background says he has the expertise to probably do that. But there's going to be, that's going to take some time. And I mean, in the BEP, the company, he currently is the CEO of is not a substantial operator, not a big operator like the one you would have to have to fully develop these fields. So you're either going to have to build out that organization in a very big way. Are you going to have to enter into joint interest partnerships with companies like Exxon and Chevron and Shell and BP? And I suspect the latter is going to be the approach. But it's going to depend on the willingness

48:28of those companies to do business with a company led by Mr. Betancourt. And, you know, because their reputations are at stake in any joint venture with any company. And, you know, their lawyers and their their risk assessment people are going to have to weigh in on that. So the administration may have to provide some, you know, even more security guarantees in that regard to get that done. And that's going to be, you know, I wish I was 20 years younger. I might go apply for a job on all this and be fun to be involved in it all. But yeah, it's going to be a real challenge for many years. Careers, whole careers are going to be made on getting this planning done. Yep, careers, fortunes. What's fascinating to me right now about the energy business and, you know, I'm involved in the New York Power business as well is that as we've seen the world move more to the left, more socialism,

49:34more, you know, green new deal and socially everything from transgenderism and limited abortions. I feel like what you're seeing though in the energy markets is that it creates so much instability that companies are constantly looking in the nuclear business we call it construction insurance. You know, I want to know that because of the heavy-handed regulations that then RC, the US government's going to give me construction insurance when things go over budget and over time lines. What I feel like I'm witnessing with something like this is these companies knowing the reserves that are down there, but it's political instability. It has nothing to do with the technology, the people are being able to get it done. But does it seem like we're in this world right now and Venezuela has kind of brought this front center of just political instability? Well, I mean, certainly there's a lot of it. I pay so much attention to it every day.

50:38That to me, there's a lot of political corruption and instability in the world, but I don't think really there's more of it than there was at any other time in my lifetime. It's just more public because we have so much access to immediate information that we didn't have before. The internet, I think, has made everything seem more like a crisis than it really is, including climate especially. But I do think, and the thing that troubles me more than anything else is the scope and scale of the corruption within our own government in the United States. I remember how many of our members of Congress are so obviously in the pockets with China and other adversarial countries. That is, you know, in the corruption of all of our institutions, I mean, literally all of them over the past 15, 20 years, including our universities and every agency

51:43of the federal government, which the Trump administration has done a really good job of weeding out and getting rid of a lot of people. That to me is the big danger that my kids and grandkids are going to have to face is, who can you trust when it's so obvious now, so publicly obvious that these institutions are so corrupt? And how do you get your kids at real education? When it's so obvious, the universities have become indoctrination factories rather than institutions of higher learning. That's a real threat to the security, the future of our country. And that bothers me more than anything else, but, you know, I'm not sure what else to say about. No, we've always had a lot of corruption though, you know, in all facets of our society, it just feels magnified to me here, just in the last 15 years or so.

52:46Yeah, I would agree. And it also feels like so much like when you, from the energy standpoint, when you take things like the clean air act or the clean water act or the national, nepah, the national environmental policy act that slows everything down and litigation and just regulation after regulation where you go, well, nothing's getting built, nothing's getting done. Or we share, Ron, we don't know if we can expand here, Exxon mobile because of politics. Something about that that just rubs me so the wrong way. Well, but, but, you know, a company like, like Shell, for example, is long been a producer in Nigeria, which is one of the most corrupt countries in, in the continent of Africa. And so these are companies that have dealt with similar situations in other countries, all these majors. And, you know, you look at the history of the oil industry going into places in

53:48South Asia, Tajikistan and Kazakhstan, you know, back at the turn of the 20th century. You know, that was a real adventure, even in Saudi Arabia when all those first discovered there in the 30s and 40s. Those were pretty fraught times for those companies that went into that part of the world as well. And so it's a real challenge in any developing nation with unstable governments, you know, for companies to get their business done reliably, even in Mexico, you know, the country just south of our border nationalized their whole industry. When was that in the early 1950s? And, you know, they couldn't do business with international companies, PMEX couldn't for decades. And, you know, yeah, it's always a big risk when you go into developing country like this. And Venezuela is unique in that it had become a fully developed country back

54:55in the 90s. And then for whatever reason decided to elect U.S. Chavez to be president and everything, you know, began to deteriorate again. Hopefully they won't make that same mistake again in the near future. Well, maybe we'll make it for them. It seems to me. Maybe we'll be the ones that they'll make it for them. But that's a bigger story about immigration as much as it is anything. Um, I want to go back to, I want to go to Canada. You talked about it in the first half. And kind of see what you think the geopolitical angle is with Canada because you've written this Venezuela deal. It's not about, let's say we're going to replace Canadian barrels, but over 10 to 15 years could Venezuela and heavy crude, which Canada has similar types of crude, could that become a genuine competitor to this Canadian heavy crude for U.S. gold for funders? For sure. I mean, especially if the Canadian government continues this move into China's

55:57orbit, you're going to have to have alternative sources because sooner or later there's going to be a crisis related to that Canadian one. And, you know, that's not, I'm not saying that's something I want to see happen. It just becomes an inevitability because we can't tolerate that in the United States. We already have a failed narco state on our southern border. Yeah. Can't have a China puppet on our northern border. That's just an intolerable situation. Well, hey, again, thanks for coming, you know, being part of the show, I appreciate it. Thanks for sharing your insights. And thank you. Yeah, thank you to the audience. My name is Todd Royal. I am the host of Geopower Energy and Real Politics. And again, thank you to my special guest, David Leichmann.