DAVID: THAT IS TRUE.
THEY’RE WELL-OFF.
HILLARY, THANK YOU VERY MUCH.
RECORD GAS PRICES, NOW INFLATION
AND REAL CONCERNS ABOUT FOOD
SHORTAGES NOT JUST BECAUSE OF
RUSSIA’S INVASION OF UKRAINE BUT
MOSTLY BECAUSE OF FERTILIZER
JUMPING IN COSTS BECAUSE ITS
MAJOR INGREDIENT IS A FOSSIL
FUEL.
THAT IS WHAT PRESIDENT BIDEN’S
INCREDIBLE TRANSITION ENERGY
PLANS HAVE GOTTEN US.
TODAY’S NATIONAL GAS ENERGY
REPORT AHEAD OF MEMORIAL DAY
WEEKEND WE’RE SEEING A BIG JUMP
IN PRICES.
I GUESS WE’LL GET THAT UP IN A
MINUTE.
THERE IT IS.
WELCOME TO THE SHOW FOX NEWS
CONTRIBUTOR, SENIOR MARKET
ANALYST AT PRICE FUTURES GROUP,
PHIL FLYNN.
GREAT TO SEE YOU.
>> THANKS, DAVID.
DAVID: LET ME TALK ABOUT FOOD
SHORTAGES BECAUSE THEY ARE
DIRECTLY RELATED TO THIS WAR ON
FOSSIL FUELS.
FERTILIZER WENT UP 80%, NOT
AFTER RUSSIA’S INVASION OF
UKRAINE, BUT IN 2021, LONG
BEFORE RUSSIA’S INVASION OF
UKRAINE, IT WENT UP 80%.
SINCE 2022, BY THE WAY, OF
COURSE IT WAS AT THE END OF, END
OF JANUARY, BEGINNING OF
FEBRUARY WHERE WE HAD THE
INVASION IT IS UP 30%.
80% INCREASE IN 2021.
THAT IS BECAUSE THE MAIN INGREDI
IN FERTILIZER IS NATURAL GAS.
THERE IS WAR ON FOSSIL FUEL
INCLUDING NATURAL GAS.
THAT IS CAUSED THE COST OF
FERTILIZER TO JUMP, IS IT NOT?
>> IN FACT YOU LOOK AT THE PRICE
OF NATURAL GAS TODAY IT WENT UP
TO $9 A MILLION METRIC BTU THAT
IS THE HIGHEST PRICE WE’VE SEEN
SINCE THE FINANCIAL CRISIS IN
2008.
THAT IS SCARY IN OF ITSELF.
WHEN WE TALK ABOUT FERTILIZER,
WITH HIGH INPUT COSTS BAD ENOUGH
FOR COUNTRIES THAT CAN AFFORD
IT.
WHERE I REALLY FEEL BAD A LOT OF
POOR COUNTRIES WON’T BE ABLE TO
AFFORD IT.
THAT IS GOING TO BE LEADING TO
STARVATION AND OTHER THINGS.
THE SAD PART OF THIS, DAVE, IT
IS AVOIDABLE.
NATIONAL GAS -- [INAUDIBLE]
FEDERAL BAN ON DRILLING.
BECAUSE ABOUT 20% OF OUR NATURAL
GAS PRODUCTION COMES FROM
FEDERAL LANDS.
SO WHEN WE SHUT THAT DOWN, THE
WELLS PLEAT, PRODUCTION DOESN’T
GO WHERE IT SHOULD BE, WHEN THAT
DOESN’T HAPPEN, THE SUPPLIES ARE
LOWEST LEVEL -- [INAUDIBLE]
DAVID: WE SHOULD MENTION BY THE
WAY, WHEAT PRICES ARE AFFECTED
OBVIOUSLY BY THE WAR IN UKRAINE.
RUSSIA AND UKRAINE COMBINED MAKE
UP 25%, 24, 25% OF THE WORLD’S
WHEAT PRODUCTION.
SO THAT DOES HAVE AN EFFECT BUT
WHEAT PRICES, LIKE FERTILIZER,
HAD THEIR BIGGEST JUMP IN 2021,
ANOTHER 80% RISE IN 2021.
NOW YOU’RE IN CHICAGO.
YOU DEAL MOSTLY WITH ENERGY.
BUT YOU KNOW A LOT OF TRADERS
WHO TRADE IN FOOD PRODUCTS AND
THEY MUST, THEY HAVE SEEN THIS
WHEAT PRICE INCREASE FOR A LONG
TIME, LONG BEFORE RUSSIA WENT
INTO UKRAINE?
>> THEY HAVE.
DAVE, I’M DOWN ON THE BOARD OF
TRADE FLOOR IN THE GREEN ROOM.
BELIEVE IT OR NOT I TRADE
SOYBEANS AND ETHANOL AND ALL OF
THOSE THINGS AND ALL OF THESE
ARE BEING IMPACTED BY BAD ENERGY
POLICY.
YOU CAN’T MAKE A STORY TO CHANGE
THIS BECAUSE AT THE END OF THE
DAY WHEN YOU LOOK AT THE INPUT
COSTS ACROSS THE BOARD, JUST TO
PLANT GRAINS, RIGHT?
YOU HAVE TO PUT DIESEL FUEL IN
THE TRACTORS.
YOU HAVE TO USE NATURAL GAS TO
MAKE THE FERTILIZER.
AND WHEN YOU RESTRICT THE
SUPPLIES OF THAT, AND THOSE
PRICES GO UP.
IT GOES TO THE COST OF FOOD AND
THE PRODUCTION OF FOOD WHICH IS
GOING TO BE LOWER THAN IT WOULD
HAVE BEEN, YOU KNOW, IF IT WAS
EASY TO GET THOSE SUPPLIES
AND -- CHEAP.
DAVID: BIDEN IS WILLING TO
ACCEPT THIS INCREDIBLE
TRANSITION AS HE CALLS IT AS A
COST OF DEALING WITH GLOBAL
WARMING, ET CETERA BUT I DON’T
THINK MOST AMERICANS ARE, DO
YOU?
>> NO.
BUT I THINK IT IS INCREDIBLE
THAT HE FINALLY TOOK
RESPONSIBILITY FOR IT OPENLY,
RIGHT?
YOU KNOW -- [INAUDIBLE].
OUR POLICIES HAVE NOTHING TO DO
WITH THIS, DRILLING BANS,
PIPELINES, NOTHING TO SEE HERE.
AND AT THE SAME TIME TALKING
ABOUT NATURAL GAS PRICES, RECORD
HIGHS, THIS IS THE SAME
PRESIDENT THAT PROMISED OUR
NATURAL GAS SUPPLY TO EUROPE.
IT’S CRAZY.
DAVID: YEAH.
SO MANY OF HIS MOVES KEEP MAKING
THINGS WORSE.
NOW, THE BIDEN ADMINISTRATION
SAYS IT IS NOT RULED OUT EXPORT
CURBS TO EASE FUEL PRICES.
NOW WE KNOW THAT THEIR RELEASE
OF THE RESERVES, MASSIVE RELEASE
OF OUR PETROLEUM RESERVES HAVE
NOT DONE ANYTHING TO BRING DOWN
THE PRICE OF OIL.
I DON’T THINK THIS WOULD EASE
FUEL PRICES EITHER, DO YOU?
>> IT WOULD MAKE IT WORSE.
IT IS A TOTAL MISUNDERSTANDING
HOW GLOBAL ENERGY MARKET WORKS.
LISTEN, THE EXPORT BAN IS LIKE
SHUTTING BARN DOOR AFTER THE
HORSE HAS LEFT BECAUSE WEE
ALREADY EXPORTED OUR ENTIRE SPR
TO OTHER COUNTRIES, RIGHT?
DAVID: YEAH.
>> NOW WE’LL BE BLOCK BEING
BLOCKING EXPORTS REPLACING WITH
[INAUDIBLE].
NOW WE’RE TELLING COUNTRIES LIKE
INDIA, SOUTH KOREA, STOP PAYING
FOR OIL FROM RUSSIA WHILE WE
KEEP SENDING IT TO THEM.
DAVID: YEAH.
BY THE WAY, VERY QUICKLY, YOU’VE
GOT A SCOOP THAT THE SAUDIS
DESPITE THE FACT THEY’RE TICKED
OFF AT US, THERE IS A DELEGATION
FROM THE BIDEN ADMINISTRATION
GOING TO SEE THE SAUDI ARABIANS
TO PUMP MORE OIL TO LOWER
PRICES.
THEY HAVE BEEN INEFFECTIVE ANY
OTHER METHOD TO LOWER PRICES.
WILL THEY HAVE ANY EFFECT IN
THIS BID?
>> I DON’T KNOW BUT I WILL TELL
YOU THIS, THIS IS A TOTAL
REVERSAL OF POLICY FROM
JOE BIDEN MAKING SAUDI ARABIA SUPPLY US.
SUPPLY US.
HE IS GOING BACK TO THE TRUMP
ERA POLICIES ENGAGING
SAUDI ARABIA WHICH WILL BE GOOD.
AT LEAST -- [INAUDIBLE]
DAVID: THE SAUDIS HATE THE IDEA
OF A NEW IRANIAN DEAL.
THEY DON’T LIKE THE IRANIANS.
THEY FEEL THEY’RE A THREAT TO
THEIR NATION’S FUTURE.
SO THEY, IT ES GOING TO TAKE
SOME ARM-TWISTING TO GET THE
SAUDIS TO GO OUR WAY IF THEY
WILL CONTINUE WITH IRANIAN DEAL.
MAYBE PART OF THE SAUDI’S COST
TO US, IF WE GET RID OF IRAN
DEAL WE’LL PUMP MANY MORE OIL.
THAT MAY HAPPEN.
WE’LL WAIT TO SEE.
THANKS, FOR THAT SCOOBY THE WAY.