What can President Biden do. What should he do. What will he do. Well there's not much you can do. Obviously everybody's talking
about the Strategic Petroleum Reserve which always comes up when prices are high. Obviously President Biden has been in
Washington a long time and knows that high gasoline prices are not good for incumbents.
But he's jawboning OPEC OPEC plus. But the one thing that's been left out of the discussion he's actually present is a country
that is the world's largest oil producer. And there seems to be no dialogue between the administration and the oil industry. And
you know the rest of the world is saying this is really strange. The U.S. is not importing 60 percent of its aura. The U.S. is
basically independent. Right. Why. Well I think there's a basic antagonism and lack of interest indifference to the industry
although it has 10 and half million people work in it. But you know they call it the Glenn Young con factor. They're obviously
worried about 2022. And people do vote their wallets. Dan it's guy in London is the president looking in the wrong
direction. He is talking about OPEC opaque plus which does include Russia. But nevertheless I'm wondering whether or not
actually what we're seeing in energy markets right now is a broader reaction to Russia's apparent decision to keep its cards
close to its chest when it comes to supplying Europe with gas. The implication of that is that it bleeds out into the rest of
the energy space and generally energy has gone higher. Well look I this really I think really started in China which that economy
was go into overdrive with the pandemic. And then coming out of the pandemic cold became short supply LNG became short supply.
So gas it was going to Europe ended up going to China and then Russia sitting there. But you know when we do our numbers we
don't see that Russia is a great deal more gas to put in because they've been putting gas into their storage for winter because
their inventories have been low. Europe's inventories are low. So marginally Russia could do more. But this really has to do
with the fact that we have that this is an energy crisis that didn't begin with oil but it began with coal and LNG. So do you
think that we could ever see a gas crisis like here in the U.S.. I keep hearing how we're exporting so much LNG and some of those
terminals are running like full tilt. Do we get a gas crisis here. Well I don't think we get a gas crisis because I mean our
prices are up and it's up because these inventories have to be felt filled. And of course the winter does in the US has lots of
natural gas. But we have a shortage of his pipelines to move the gas which again bring us back to D.C.. Yes it's back to
politics. Do you think the administration our politicians are getting the right message. Well I don't I think that they're
very that the opposition to new pipelines is pretty strong. And I don't see that changing. But I think that also as production
starts to increase in the Permian down in Texas and in New Mexico there's associated gas which will also come out. So I
think in the U.S. this is more of a winter problem. Oil prices are responding both to this boom to the general crisis that's
out there. And at the same time the fundamentals do start to get tighter as you move over the next couple of years because of
lack of investment. I just mentioned some of the OPEC countries can't even meet their quotas because they haven't been spending
money on maintenance and their systems are not working as well as they can.
Dan last week was about cop in Glasgow and rising energy prices around the world.
Is this something we're just going to have to get used to. The energy volatility is going to become part and parcel of the
energy transition as we move away from fossil fuels. Guy that's a very important question and I think it's a question. Is this a
one off that we're seeing or are we going to see a series of shocks because of what we might call pre-emptive
underinvestment. That's not that's not synchronized with the growth of alternatives. And I
think there are some and I know some European prominent Europeans are starting to war. And if we have recurrent crises
like these there'll be a pullback. I mean you saw Britain says we want to get off coal and what are they doing there. Burning
coal at a plant that was supposed to be shut down because they need it for electricity. So where do you think the balance of
power will will lie now. I mean if it's been Saudi Arabia with oil for so long and then I told them to the US which feels like
a flash in the pan like what was going to hold the power in the energy market and the energy. Well if we if we look at oil I
think certainly OPEC plus has been a balancer. But what's underestimated and and since we're not hearing this from
Washington which brought energy security generally it's been the growth of U.S. energy supply. That's why when we've had crises
like a serious attack oil facilities in 2019 it did nothing for private enterprise because the U.S. is there and the U.S. is
actually a bulwark of energy security. Then when I think about what happens next and looking at the
United States it's gonna be fascinating to see ultimately whether the government does change its its sort of tune on on
hydrocarbons at least in the short term and help out the energy sector. But in the longer term there's clearly huge amounts of
money. They're going to shift away from investing in hydrocarbons to investing in sustainability. At the moment it
seems it is slightly unguided missile. And as much as we're just investing in everything.
When do we start to figure out what's going to work and what's not going to work and understand what the long term energy
picture is going to look like. Well I think I think we're in a period of great experimentation going on right now. You know
they committed to one hundred and thirty trillion dollars of investment and sustainability in Glasgow. And but is it going to
be hydrogen row of carbon capture. How much more is going to happen with wind and so forth. So I think a lot of money is
going to go in a lot of direct. Until it becomes clear until we see what's really working.
Last question then I'm going to OK. This will be fun. So it's a last question on that I guess. If there was one thing you think
that would incentivize oil producers right now or natural gas producers to produce more when their shareholders actively don't
want them to. Short term what what could that be realistically. Well I think it is going to be price. I mean we actually think
next year U.S. oil production could go up by as much as 800000 barrels a day. So the price signal will work. The price signal
will work. We've seen it working with the private companies are still being cautious because there's a second shale revolution
which is the relationship with investors. But I think as there's money to return to investors we'll see it go up. But we're not
going to see it go crazy I think. So I think that's the direction that things take time. I think really the critical
period now is the next couple of months this winter. If it's a cold winter the pressures will increase.