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In this episode of Energy Newsbeat – Conversations in Energy, Stuart Turley discusses key topics with Steve Reese, CEO of Reese Energy Consulting, and Karr Ingham from the Texas Alliance of Energy Producers. They explore the role of Texas in the energy sector, focusing on natural gas and oil production, the state’s influence on energy markets, and the challenges posed by legislation and regulation. The conversation highlights the economic significance of oil and gas in Texas, the state’s approach to balancing renewable energy, and the global demand for U.S. LNG. The trio also discusses the ongoing legislative session and the future of energy in the U.S., emphasizing the importance of free-market solutions.
This was a huge conversation about the Texas oil and gas markets and it’s impact on the global energy market. Texas is impacting the world.
Natural gas is not a bridge fuel; it is part of the change in molecule demand. Electricity demand is growing, and how it is generated matters. The EIA has stated that the US has continually lowered its emissions, and the largest reduction was closing coal plants and increasing to natural gas.
We are seeing this same global trend in shipping and long-haul trucking. Let’s save the environment, while being fiscally responsible is a vast topic.
Please reach out to Steve Reese on his LinkedIn here:https://www.linkedin.com/in/steve-reese-185a86/
Reese Energy Consulting Website:
Please reach out to Karr Ingham on his LinkedIn here:https://www.linkedin.com/in/karr-ingham-9b62333a/
Check out the Texas Alliance of Energy Producers site here:
https://www.texasalliance.org/
Follow the Texas Alliance of Energy Producers on LinkedIn here: https://www.linkedin.com/company/texas-alliance-of-energy-producers/posts/?feedView=all
Thank you, Steve, for your energy, leadership, and for sponsoring the Energy News Beat Daily show. – Stu
Karr, it was an absolute thrill to spend some time with you, and I am really looking forward to our next visit about all of the great things you are doing for Texas and the energy producers. – Stu
The video is a little washed out, and we are working on the next time for better lighting. So we recommend listening on Spotify, or wherever you get your podcasts. Besides, Stu looks better in the dark. We have the embded sound player, so you can listen here.
We also have the washed-out video on the Energy News Beat Substack Here: https://theenergynewsbeat.substack.com/p/texas-oil-and-gas-insights-lng-exports
Highlights of the Podcast
00:00 – Intro
00:34 – Steve Reese Introduction
01:04 – Karr Ingham Introduction
02:52 – Texas Legislative Session Impact
05:00 – Texas Oil & Gas Economic Impact
07:50 – Texas Energy Mix: Gas, Coal, Wind, Solar
08:39 – LNG Exports & Economic Impact
09:43 – Renewable Energy Failures in Spain/Portugal
10:36 – Natural Gas as a Solution
16:06 – Need for Natural Gas
20:33 – Texas Election Trends
27:11 – Texas LNG & Oil Exports
32:06 – Permian Basin’s Energy Role
39:27 – UK’s Windfall Tax on Energy Companies
42:31 – Future of Texas Energy
47:48 – Contact Information of Karr Ingham
48:20 – Reese Energy Consulting Website
Stuart Turley [00:00:07] Hello everybody, welcome to the Energy Newsbeat podcast. My name’s Stu Turley, President CEO of the Sandstone Group. Today is an outstanding day, because I’m on site, and I’ve got two fabulous industry leaders today. Let me get our first one here. And we got Steve Reese. Steve Reese is the owner and CEO of Reese Consulting. You can find him at ReeseEnergyConsulting.com. If you want to know anything about oil and gas, talk to him. Welcome, Steve.
Steve Reese [00:00:34] It’s a pleasure to be here again. For sure.
Stuart Turley [00:00:37] I think this is the first time I’ve ever heard you speechless, but you know, it was that good of an experience like trying to figure out some kind of thing back.
Steve Reese [00:00:45] I’ll give you that hundred here in a minute.
Stuart Turley [00:00:47] And we also have Karr Ingham, correct? All right, I got it right today. That’s an amazing kind of a thing. And you are with the Texas Alliance of Producers.
Karr Ingham [00:00:59] Energy produced, yes.
Stuart Turley [00:01:00] That’s an outstanding organization. Tell us about what’s going on.
Karr Ingham [00:01:04] That’s a great organization. The Texas Alliance of Energy Producers is a statewide Texas upstream exploration production focused trade group. So our core membership is oil and gas operators and producers, and then service companies and drilling companies. So the upstream segment of the business, that’s who we represent. And then of course, we also have other members that are connected to the industry. Lawyers and accountants and and midstream companies and water guys and you name it and but we exist to represent oil and gas producers in Texas and that segment of the business.
Stuart Turley [00:01:41] I want to give you a shout out, because I saw some of the clips when you were in front of the Texas legislature, outstanding job. We need people like you up there. And I don’t want to be nice to you, but holy smokes, Batman, great job.
Karr Ingham [00:01:55] Aren’t, aren’t you kind to say so? Uh, and I truly do appreciate that. I, the, the legislative session is happening right now in Texas, as you know, the legislative in session in Texas only happens once every two years for 140 days. And so it’s an intense time and everything has to get done within that timeframe. When it gets to be June the second, the legislative session is over period and there’s no going past that constitutionally can’t do it. Everything has to be crammed inside that period. And in this particular session, more bills were filed than ever before. And I’d have to go back and look at that number, but it’s upwards of 8,500 bills that were filed that have to be disposed of somehow during that 140 days. And so it’s getting to be crunch time and it’s going to start getting really, it, it already has been, and I’ve testified, I probably testified 10 times at this point before one committee or another.
Stuart Turley [00:02:52] What is the biggest trend that you’re seeing in front of this legislature? Because as a Texan, on the outside looking in, I’m seeing a bunch of rhinos running it, which is kind of frustrating on our part. Sitting there kind of going, there’s some bills going on. There’s some great people in the legislature. There’s rhinos, and then there’s Democrats, and we’re seeing a little bit of a kind of thing. What is your biggest thing you’re seein’?
Karr Ingham [00:03:14] Well, so you’ve got the legislature, broadly speaking, and these issues that are really high profile and Texas and red States and conservative Republican States are what historically have been conservative Republican States. And you’ve got really just as a practical matter and observation as just a matter of reality, this thing that’s playing out in D.C. And nationally, locally in many elections, statewide taxes, what kind of Republican are you? Who’s the better brand of Republican? Are you Republican or conservative enough? Do you support vouchers? Do you supports this or that? And so that’s what a lot of these discussions are about. So what has to happen during a legislative session is things like this play out. Right. School vouchers and how we fund education in Texas. A budget has to be passed a budget that last two years. It doesn’t start until September. And so you have to look out, you know, almost three years and figure out what the economic landscape is going to look like and try to put a budget into place. As you can imagine, I’m focused on oil and gas and things that affect oil and guess operators. And I’m going to let everybody else worry about these other things. I pay attention to them because things matter to me. I’m a Texan and I have a family and I one grandchild and I hope to have more and what this world looks like in the future matters to me because of them. Uh, but I get paid to focus on oil and gas issues in Texas. And these are, these are specific bills that get filed that we either like, or we don’t like, or we think there needs to be some work on. And our job is to try to make them as, as good for the industry as possible and in many cases, the least burdensome for the industry that they can be, or to try and put them down if they’re not going to work for us.
Stuart Turley [00:05:00] I’ll tell you, the great thing about Texas ERCOT grid is that it’s got a balance. It does have the balance of wind energy, you’ve got the wind, solar, we’ve got nuclear, we got coal, we got natural gas. The abundance of the ERCot plan for natural gas out of Texas is great. I’ve done an analysis of our grid in the United States. Oklahoma is okay, Texas is okay. Boy, some of the rest of the place is not so good. I mean, we saw what happened with Spain. We saw what had with Portugal with the renewable wind and those kind of things. And I love the oil and gas focus in Texas that you’re able to do because it’s paid through the university system and the budgeting we’ve paid for. A huge part of that deal of Oklahoma and Texas is there, but you’re focusing on the Texas. Oil and gas pays a huge Part of the Texas.
Karr Ingham [00:05:56] Does it ever? I mean, it’s been a while since I’ve run these numbers, but broadly speaking, I think you can say this. Oil and gas and the taxes that are paid just at the state level alone by the oil and gas industry, which is direct taxes paid, severance taxes. Every time you pull a barrel or an MCF out of the ground, a little chunk of that goes to the state of Texas. You’ve got that you’ve got sales tax the industry is a huge pair of the sales tax in Texas the automobile sales tax. I mean, they own fleets of vehicles, hotel, motel tax. I mean have you been to Odessa or Midland and seen just rows and rows of company vehicles and folks in a company car staying there overnight, getting up to go to work every morning? So the industry is a huge payer of all of these things. And you add all that together. And again, just state taxes collected. By everything from everybody, the oil and gas industry directly pays somewhere between 20 and 25% of that number. Isn’t that great? But then throw in local ad morum taxes. We tax property in Texas and oil and gas reserves, provable reserves underground, producible economically at a given price level or taxable property in taxes. And so, in the oil and gas producing regions of the state, which is virtually all of the State. Well, I guess activity, the existence of wells and the existence of these resources pays for local school districts and municipalities and hospital districts and you name it, things that are paid locally. So this 20, 25% number doesn’t even include that. So funding of school districts and public education and other local things happens as These numbers are extraordinary and it’s impossible to imagine the state of Texas without the vibrant oil and gas industry that we have.
Stuart Turley [00:07:50] And we take a look at the what happens with the renewable energy versus, you know, you take the UK and the EU and Germany, they’re failing, then you take a look at fiscally failing. But you take at Texas, and Texas is, is doing so much better in electricity prices for businesses and everything else than California, New Jersey. Delaware and all those others because of natural gas, oil, the balance of nature that they have on their things. I wonder how much money Carter, I’m going to go look this up because how much money is Texas getting from exporting LNG out of the fort of Corpus Christi and all of the other ones because Secretary Chris Wright was put out that LNG is going to be our number one to that they weren’t easily coming around to pull them. Well, that’s a huge mo-
Steve Reese [00:08:40] Right now we’re doing about 15 DC up and adding this set of record exports. And he was kind of like when you had the panel at Ted Cruz last summer. Right was was between the LNG exports and now the data center demands. Texas is there. People want to start data centers to Texas. And then there’s a pipeline availability and gas availability. I mean, obviously the home and G thing lay in the porch. Offshore stuff there is is crippled and what do I read the other day? Texas if you have all the countries as a world texts and got the clock 20 of any country’s GV is world right Electricity crisis this we have in carbine of others. We have an office in Proland and we’re doing an LGVL and Electricity prices in Germany or person for he sends the pay those Birds are out here in Texas your bullet eight to twelve sits, right? Yep. So it’s it’s a big deal and Other places in the world are waking up and realizing that it’s amazing how the sun doesn’t shine all the time all the time. That’s what happened in Portugal, Spain, but
Stuart Turley [00:09:44] right and the satellite they lost 40 megawatts within three seconds yeah it’s not renewable nor is it sustainable
Karr Ingham [00:09:51] No, that’s right. And, uh, listen, I assume, I assume we’re going to get into this stuff a little bit. And I also don’t assume that we’re simply here to just pat one another on the back and have this mutual admiration society among the three of us. Maybe we are, I don’t know, but we may find a thing or two to disagree on, but I’ll tell you, I, I did not meet Steve in person until today. Um, but I certainly know who Steve Reese is. This is, well, it’s one of our members for one thing. They support us, they, they steep that company. They come to our meetings. They provide sponsorship dollars. They exhibited our trade shows. I mean, I saw one of his folks at a booth of ours in Wichita Falls at our newly revived trade show expo golf tournament thing we do there. And there was Reese energy consulting with a booth and, uh, Steve’s not my favorite employee of Reese energy. Consulting. Kimberly is he’s, he’s second. So, so again, we, so I, but again, I did not meet Steve until today. However, I became, I become Steve’s biggest fan listening to one of your podcasts with him. What I should ask him what it was. He thinks he said that turned me into his biggest fan. I won’t put him on the spot like that, but I’ll tell you what it was, he said natural gas is not, should not be considered a bridge fuel or something that is considered a backup in any respect to renewables and wind and solar. This is the mantra out there. You know this. And I was beginning to think. That I was just on an island. So I was going, what about this? Do I not, do I not get, I’ve been preaching this from the mountain tops from the first second I heard anybody even make a remark along those lines. And I thought, nonsense, natural gasses is not playing second fiddle to renewables in terms of being a backup, you know, when we don’t, when the wind is not blowing and the sun is not shining. Or is the bridge fuel to the so-called lower carbon future? And natural gas is none of that to me. Natural gas is a miracle molecule that solves energy problems for us in the U S from now until for decades into the future, same globally, and our ability to send our access to them through LNG and export markets. And so anyway, I, I was already a fan of the company, but, um, that was the thing that he said that just really piqued my interest and I wasn’t good. At least there’s two of us. I mean, uh, the oil and gas companies and, and, oil and, gas representatives. So this is the thing that they’re fond of saying. It’s almost like they’re, it’s almost, like, you know, we’re apologetic for petroleum energy and we need natural gas to get us to the natural gas is the future, at least in my view. And, um, and again, I assume we’ll get into this a little bit. I’m, I’m not scared of renewables. I don’t dislike renewables. I don’t hate wind and solar. I hate things that are brought to us by something other than freely functioning markets. And we have a much higher install capacity for wind and solar and renewable energy in Texas and everywhere else, only because we have artificially and dramatically incentivized the build out of that capacity through direct subsidies and tax incentives and so on and I hate everything about this. I am a purist free market economist there’s no wiggle room in this for me. This plays out well for consumers over the long run and it plays out for oil and gas and natural gas in particular in the long ride.
Stuart Turley [00:13:31] Because we’re about to see that you’ve been saying what do you hear is the lifespan of a window in 30 years right and when we sit back and take a look at four years they’re starting to replace the turbines to get the extra subsidy money out of the like bills like the inflation reduction act and those kind of things and that’s how they do that. We have 79,000 wind turbines in the United States right now. Of those 79,00 how the subsidies are ending now in most states are starting to wake up and realize that when’s the land reclamation going to start happening. It costs between $350,000 and $950,000 total wind turbine just to take them out and that only gets to the three book level of it. It’s not the full land reclamation. I can sit here and I went to Oklahoma State and had to cover up that degree with a degree for net opal on the city.
Karr Ingham [00:14:30] Careful there. I love my let’s not get carried away here
Stuart Turley [00:14:33] But I’m telling you that’s a lot of money and it’s about to come due in the next two decades in order
Steve Reese [00:14:39] It’s going to do with all these turbines that are worthless and they’re toxic. I mean, it’s terrible. Now, you know that, Atrecia, what you said, probably what comes down to is it’s not economics. It’s not power density. It’s reality. Hey, that’s reality natural jazz. And now it’s hard for me the objective because that Wallachiole has done my family for 45 years, right? But but I’ve been around enough and haven’t such a great team with what did everything We’ve been approached by Lynn and solar and nitrogen and all those other things. There is a place for those that search the choice. A solar project of the desert may work out a little bit. It doesn’t go to any verge. But it goes down to reality and it does come down to energy density as well. I love the meme that shows a giant field of wind turbines and then a little five acre well pad producing the same amount of heat.
Karr Ingham [00:15:38] Absolutely.
Steve Reese [00:15:39] Which one you want, you know, and so on.
Stuart Turley [00:15:41] And a pipeline. Here’s a beautiful green grass of a pipeline that’s buried. Or in the aliaska pipeline case, I have to sell a bunch of equipment up there. You see it was actually modified for the caribou and the carabou don’t like the aliesca pipeline. Oh, by the way, the alie… Alaska is going to be needed again even more so.
Steve Reese [00:16:06] Well, the large LNG products that they’re doing to man their bushes spin on, yes, such as 4,000 mile pipe that’s been to LNG clipperbacks facility. So it’s, you know, at some point, people wake up and realize everything in my house was made for control. And if and if you want to do the don’t stop oil thing like these terrorists are doing around the world, excellent. That’s perfectly fine. What you need to do is take all your clothes off and go live in it because because you can’t do this.
Karr Ingham [00:16:39] Well, your daily existence depends on petroleum energy.
Stuart Turley [00:16:43] I can’t make a knife.
Karr Ingham [00:16:43] Everything about it. I was particularly struck and you, you may recall this, the set of remarks and this controversy from the, uh, from the North face, remember that? Oh, so there was a, there’s an oil gas company and Odessa, I believe it was that wanted to order some North face attire with the company logo on it. for their employees and giveaways potentially. And they refused because this is an oil and gas company. And, uh, my goodness, it’s just not a, it, so that’s a disfavored industry in their mind that this is as comical as it gets.
Steve Reese [00:17:22] Uses well virtually all of it company or clothes are made out of
Karr Ingham [00:17:26] They are, and, and the, either you, you could go to their facility and there’s a truck that runs on petroleum that’s backed up to the dock, bringing their supplies and hauling their supplies away the, the, it may have been the CEO and need to go back and look at it again, but whoever it was from North Face that was making this remark, like in the industry to pornography and tobacco, and I just, there’s so much I can write about this and I really wanted to, uh, I really want it to just quiz. So listen. Every part of your daily existence is tied directly to crude oil and natural gas to petroleum products and petroleum energy. It may be that the rest of your days tied to pornography and tobacco. I don’t know. And I make no judgments, but in theory, you can live without those two. You can’t live without petroleum energy and to throw those in the same. This was just so insulting to me and non-thinking that.
Stuart Turley [00:18:20] What was the toughest conversation you had at the Texas legislature? Because we see these absolute morons in our national government, and I haven’t seen a lot of them in the Texas, but have you had some tough grillings in front of testifying in front of the Texas?
Karr Ingham [00:18:38] Well, it hasn’t been as bad as it may become one of these days. And frankly, it is nothing like DC and we are an organization that plays in both places. We, unlike most other organizations in Texas and most other statewide oil and gas trade associations we have, we do work directly and on an ongoing basis in DC because there’s well, there’s a lot there that happens that affects. Oil and gas guys and independent oil gas companies in particular. So we have our own D.C. Lobbyist who’s full, who’s up there. And I spend time there. I’ll be there later this month. And so but the state of Texas is nothing like D. C. There are Democrats in Texas that will introduce legislation that looks a lot like the stuff you’re talking about. But still in Texas, you know, so some of these will be these 8,500 bills that were introduced, but the worst of these, and in fact most of these introduced that would do great damage, still I guess in Texas. We’ll never see the light of day. The Republican committee chairs won’t bring them up, and they have a lot to say about what comes before the committee and what doesn’t. So most of that, you, we know what’s out there. We see the bills introduced and we read them and we just make sure we kind of know. What’s going on, but they will never surface because the Republicans won’t let it happen.
Steve Reese [00:19:57] That’s our world, what are we feeling? You know, prior to the last election, there was this day curve or thought or whatever about Texas moving towards pro-Ford, and then of course Trump went to fight over me, Paul is creative, and it’s by double digits or whatever. Your gut tells you, and I know you live in Amarillo, which is not even that, but what’s your gut telling you? Statewide, they have your rattlesnake, such and every thing it is, it is. Where’s the pendulum now that you think would drop safely and deadly and strong that we’re continuing to move to the right in Texas or do you think there’s still a potential to sway the other way?
Karr Ingham [00:20:33] Well, the fairly recent history of this, you may recall, was Ted’s prior election. So we’ve, we have a great relationship with Cruz’s office. I met with him personally last year, sometimes, and maybe on a couple of occasions and know his energy staff. Well, he’s, he is cool cat. He’s a go-getter. He’s the techno prisoners guy, and he is strong for conservatism and oil and gas in Texas. Anoying man we He’s got one of his own and I haven’t been invited to it yet, but you know, I’m certain that’ll happen one of these days, Ted.
Stuart Turley [00:21:07] Please come on my podcast and I’ll promote yours because I have a feeling mine gets more views
Steve Reese [00:21:13] By the way, sir, if you’re watching, remember Christine, this big pumps that she had on a Dallas. I think I’ll just leave that.
Stuart Turley [00:21:20] I love his verdict is a great podcast.
Karr Ingham [00:21:24] Yes. So he, you know, his race against Beto, Beto not, I don’t mean to be disrespectful. I’m not sure what, which of those is actually correct, but Beto or that that was a title race and most of us were comfortable with and, and that he was comfortable with.
Stuart Turley [00:21:42] Oh sure, well listen if you don’t think the national
Karr Ingham [00:21:47] an interest in snagging a statewide elected seat in Texas and the senator particularly. And again, this was uncomfortably close, if you’re me, and I think Republicans in Texas and generally conservative people and industry friendly and all of this. And so this last election, I think, was one that we were all watching with great interest just to see if that was going to continue to narrow like that. And my goodness, I saw him during this campaign. I listened to him speak to some groups of we had, we had Karl Rove come to our annual conference last October in Fort Worth and you know, you may be a big fan of his, you may not, but listen, this is a guy like your president. You have to understand that he’s a guy that knows what’s going on. And he thought in early October, a month out from the election, that the cruise race was simply too close to call who knew which way this was going to go. I think it was broadly understood that Trump was going carry Texas without too struggle but that race to cruise himself. To Karl Rove, to me, to all of us, just partly because of the close race in his prior election. Is this again, is this propelization trend going to continue? And then, you know, the national media was just foaming at the mouth that the prospect that he might actually lose that race, and then he wins it strongly and handily. And so to answer your question, I think what we continue to see, if you look at the down-ballot levels, local races. At the, even at the city and county level. I believe you can make the case that the state has become more purple over time. Um, and that’s a trend that may expand into statewide races. But the other thing that’s happened is constituencies that may have made Texas more purple. Um the African American community, the Hispanic community in particular. I thought, you know, it just clear the Hispanic community in particular, and in South Texas in particular has, has ceased to moving to the left and broadly speaking is beginning to move back to the right. How are we going to find that?
Steve Reese [00:23:55] Voted.
Karr Ingham [00:23:56] Right. South Texas district. Yeah, South Texas. Yeah, I see which one it was, but.
Stuart Turley [00:24:02] Dallas though is pretty sad as far as just the state rep the federal representatives from Texas are embarrassing. We’ve got a few of them that are just absolutely embarrassing to say that They’re from Texas.
Karr Ingham [00:24:18] We’ve got some great ones.
Stuart Turley [00:24:20] Great ones, but I’ve got a few that are like really we elected that
Karr Ingham [00:24:24] Well, you know, when you get, we have as many as we do, and we have the second highest number of members of Congress, uh, you, you’ve got big, big metropolitan areas, Houston and Fort Worth is still, you know, uh but Dallas and Houston. And, uh maybe even San Antonio, maybe Austin. I mean, uh it’s, it’s worth watching, but, um, but I think common sense and just this.
Stuart Turley [00:24:50] He seems to be setting himself up for fun.
Karr Ingham [00:24:54] Isn’t that gonna be a fascinating race?
Stuart Turley [00:24:56] It is gonna be a fascinating one. I mean, if ever a-
Karr Ingham [00:24:58] I mean, if ever a guy could have been hobbled politically in Texas, you might think it was Ken Paxton, but he emerged from those issues that he had and that bruising battle in the legislature to impeach him still standing. And, um, so I have no idea how that’s going to go. And I, the other thing I’ll say. Yeah, I’ve been around politics for a long time. I was on staff of a U S congressman was in my late twenties. No way thought I knew, you know, something about anything then, but it was a great experience. Well, we had, that’s back when we had air. I certainly, I did, I was, you know, 50 pounds is 50 pounds lighter and had a full head of hair. So the things have changed since then, obviously. But, but again, I’ll been, I’m just been in and around politics. I’m my favorite thing. I mean, I, um, you There’s politics and then there’s real life, you know, and I kind of like real life a little better but representing your constituents Well, whatever I think that I used to know about politics. I’ve just decided, I don’t know anything about politics now. I would have, I would’ve sworn that Trump was talking his way out of getting elected in 2016 and there he went and did what he did. And so me trying to call a race between Paxton and Cornyn got me. I don’ know, but it’ll be interesting to watch.
Stuart Turley [00:26:11] To be an interesting one, because I see major changes coming around the world. But what I see me is, and I want to get back to molecules, because in my conversation with Dillberg, it really hit me. Dillburg is one of the greatest art authors out there. In fact, he’s the number one substack out there in energy in the world, and just as a side note. That’s not Blackmun. No, it’s not. Blackmun was on the podcast.
Karr Ingham [00:26:39] He’s pretty high on my list, but…
Stuart Turley [00:26:41] Of black and I that’s why I invited him on the podcast with doomba because uh he brings up great points that I don’t normally uh think of and that’s what I visit with him every Monday morning on the energy realities love dated black And when Doombird said the molecules are changing, it dawned on me because I watched the numbers of the ships that are being built, how much LNG we’re shipping every week. I looked at the molecules, I look at the oil, what’s happening as a global perspective. And Doombir, right, we are watching China going to LNG. The tankers are all being built dual fuel, LNG and diesel, but they’re being primaried on their tanks LNG. You start looking at the bunkering ships that are being ordered around the world, the number of ships being built is amazing. And it’s all LNG. It’s going to be here for a long time. Steve, I want to give you a shout out. Last time, two or three podcasts ago, you made it very, very clear that Germany is willing to pay a little bit extra for the LNG because of guarantees of product delivery and how important that is. To me just means so much. What a statement. And that you even had some of your team meet with our folks over in
Steve Reese [00:28:05] As already with that list are all the syndrome in Haiti, Germany follows to be a higher percent of all the US natural gas sale, LNG, new side, not take the green as for 3,000,000 tons all the way to the S4, and what we’re getting ready to partner in that with Chris Wright Warsaw, now he’s here ready to set up a meeting with the Germany Chancellor and the Polish head. In friz in poland hopefully this summer and basically to to exacerbate a lot of things never one of the clocks to put in what if he then took the war retune is europe is screaming for lg the linkers may come out and talk the you know three newples but behind the scenes i got invited by drugers the sports really well right they’re saying we got to have natural gas over here or we’re going to be losing Tens of thousands of jobs since we had, we have been, look at the ASF and Mercedes, they’re all these places, and, and they’re saying, you know, yes, Russia could start moving gas back in near the other is such that they don’t trust anybody but the United States producer. That’s a shout out to your your guys. That’s that’s where they want it. They are willing to pay not as much as they’re paying now right now. Still, they did price over there as a north of 16 dollars. And when you’ve got three or four dollars in the practice, so we’ve got margins to come and evolve away. A lot of people are. But there’s there’s a long way to go. The good thing is, with Trump, and Chris, and these guys, fast-tracking some of these security boards, right as they’re building these assets takes a long time, so…
Stuart Turley [00:29:46] And the ships like Apollo is a group that has just bought a great I believe they just bought 10 tankers We’re gonna go from one tanker to about 50 in less than two years And that to me says just volumes because we’ll be able to guarantee past sanctions We need to have our own tank in order to make sure that we can deliver those, even though there’s tankers all over the place, you can get a ferry on one, but you got to be able to bypass sanctions from other countries.
Steve Reese [00:30:16] Well, you know what? Our first game club business plan lies. We’re going to deposit them on the Delphine boat that they built in South Korea. And they’re going live all year. I’m not sure how long they’re gonna take. And so now we’re with the liberal. We’re actually hopefully working with a major producer to look at building a liquefaction facility. Average it. Nice. So think of the time savings and travel savings of living gas of Virginia to Western Europe instead of, you know, traveling. That’s a show.
Stuart Turley [00:30:47] Absolutely great to be able to do that out of the Marcellus and Nick Villias up there with CNX up in the Marsellus. A fantastic CEO and he is basic the Marcellous is just got gassed
Steve Reese [00:31:01] We did a lot of business up there and other facts to them, then the Hangsville too, which fakes it. And they were asked to leave them for training and really, really most of the LNG being exported to the ISD for Texas. Right. Right. And the Pergian gas is going to move that way. You know, the Californians that told us to go away with natural gas, so all the gas out of Wabaw that always ran on trans-Western and El Paso in California is now turning All right. And it’s that price has suffered for a while, but the outwith data center in the LHC market, West Texas is going to be tiny.
Karr Ingham [00:31:39] Oh, I think, and in most respects, even including that one, West Texas was always king. I mean, the Permian’s a big dog on the block. We’ve had the shiny new roses come along, which would be the Bakken and the Eagleford and the Marcellus and, you know, there was, I was, I’ve been working with the alliances, our petroleum economist since about 2003 or so. And so I watched as the as the, as natural gas. Uh, uh, was beginning to be developed in Texas through horizontal drilling hydraulic fracturing. So this was the Barnett shale, of course, and the first grand experiment with these production techniques and the deployment of these at scale. And then, um, so all of this is happening in the natural gas world in the early to mid part of the decade of the two thousands, the Ilford comes along as principally then oil producing region in 2008, 2009 or so. One, a barrel of oil coming out of the Beagle ford before that. And so there for a few years, it was the shiny new bloom on the rose. And listen, I love it. I still do, but you could sort of see the permanent over there. Just kind of percolating and rumbling underneath all of this and waiting for the same techniques to kind of, um, make their way out there. We start to produce oil in the same way. Where’s all drilling hydraulic fracturing and watch the efficiencies at at work out there and the increase in production, which has just been unfathomable, frankly, when you understand what has happened out there. And so the Permian was always the big dog on the block, and it has really flexed its muscle now, as you know. And most of the attention has been paid to crude oil out there, and the growth in oil because that’s what everybody’s drilling for. Nat gas was a pain, not gas, it was a pain and still is he knows this. Well, I mean, he knows his better than, than I do, but I, but as an economist and a data watcher and a, and a upstream oil and gas guy from a trade association standpoint, the average price for the entire year, calendar year, 2024 for Waha was negative for the whole year. I mean we’ve, we’ve seen days in a month.
Steve Reese [00:33:58] The unnamed giant data center guys and they you know it’s all that’s what we picked it up so leading to the first plot you did was where you’re putting your facility is about 40 miles from the nearest hot spot yep and i said number two big gas isn’t there Right. And I said, if you’re going to take these kind of ball again, you’re gonna have to like later on, but we zoom in spot by two balls. Exactly. But I got plus today was that by the dollar and yeah, it’s, it sends a volatile, but let’s get the LNG shipping and cost of known. I say going to Europe, the thing thing far East bow that that market isn’t as stable or say, let’s go get that going guys. The basis of a CVAC.
Stuart Turley [00:34:42] I, it’s coming online and I’ll tell you why. Take a look at Vietnam, take a look a Taiwan and take a look at all of the other markets. The LNG to electric plants that are being built and the number of those are coming online back. Elsa, think about…
Karr Ingham [00:34:58] What has to happen though before West Texas gas makes its way to somewhere overseas. It has to get out of the Permian to that location. What does that mean in the state of Texas? It means an intra-state pocket. And so most of the negative natural gas pricing out there had, and Steve is welcome to correct me if I’m wrong, I don’t mind, because he knows more about all that than I do, but… This is was clearly a takeaway issue problem. So you had exploding growth in crude oil production, which meant exploding growth and associated gas. And I, he knows this, but I don’t think most people do of all of the gas that comes out of the ground and is marketed in the Permian Basin. Some 60 to 65% of that is associated gas, it’s not there. They’re not drilling for it. They’re now producing into that market. Just comes out of the ground with the crude oil, think about that number 60 to 65 percent. And by the way, with all of this focus on flaring and related activities in Texas, our flaring rates pre-COVID and before we were adding pipeline takeaway capacity may have gotten as high as approaching 3 percent, which is not a terrible number. And that was a spike upward in the army invasion and now with increase takeaway capacity and the development and there’s much more of this to come the development of local markets out there that numbers back down well below one percent. I mean think of all the gas well that’s exactly right and the Permian gets a lot of focus from the environmental community for reasons that don’t really make a lot of sense. All that means is they don’t like what we do.
Stuart Turley [00:36:46] That oil? No. Thank you.
Steve Reese [00:36:49] Well, it was explained that the beautiful thing about associating gas or fission of gas is it’s rich energy of bright light. That means a lot more district service to have. The other thing too that the pernion initially Delaware and the Wolfsbury and some of those formations when they first started about, you know, 10 to 12 years ago, I think some of those wells are so large that the district is like, should I build a four-inch pipe, I hate each part of the fo- This could be the flying and it was a hard economic decision but they could take the way for all that initial production right knowing in a year will be half of that or a third then whatever He hasn’t that false of worrying issues plus with that type of gas We have something earth’s right have so much to conceive to the H2S upon But, you know, we shake things out. I’ve got a mistress in the midstream industry out there is done. The clinician facility is out there and that does such a great job. What’s so exciting? You ought to give it to where it’s fungible, dry gas, it’s high pressure and get it to market. Right. No, that’s now that that gas out there’s going to feed the world. That’s gonna say. Our message to the Germans, the reaper said for a laugh when the war started was, we’re here to save jobs, isn’t that great, the ASF turned around and laid off like this.
Stuart Turley [00:38:14] Quality. Germany is a perfect example of going to the green energy and then economic failure and decline. California, New Jersey, New York, Delaware, California have all followed in that path. And I have said publicly that green energy will cause a fiscal and financial problem and then regimes change. And then sure enough, this morning, we’re seeing that oilprice.com put out a notice that the US and Russia is quietly talking to try to get pipelines back into the EU, but they don’t know the backstory of that. And it is just trying to get Putin to stop the wars, all that it’s like. But anyway, let me ask you guys this, because the EU and the UK, the UK has been mistreating and doing windfall profit taxes to the BP and Shell horribly and they shut everything down in the North Sea. There’s now rumors that there are multiple big American oil companies looking to buy BP and shell. This is now a real thing. What happens to the UK when there are only two oil companies?
Steve Reese [00:39:27] That’s a big question. Same thing in California that they’re not going to have any refining testing in about five years. What are you thinking? Don’t you feel like something’s being far down the trash down? And at some point in time, it’s a national security issue. Remember, it exists, of course. So, you know, there is, I don’t know, you know, this net fearing thing that they want to put in in telephones in a space of use. That could be in the social scoring of an area. That are what puts his test later. But the grids have a problem, the government just decides, let’s look at his social score. What’s he posting on social media? What’s his voting? Forgive us, so much electricity out of his car. And this is happening in certain places now. And the board is deafened.
Karr Ingham [00:40:13] Don’t forget who else left California recently. And that is the and they are great. They are, believe it or not, the great, great member of the tax allies of energy producers. And that’s Chevron. Let’s go visit with the CEO. Welcome home. Welcome to Texas where you belong and energy, the CEO, because I would really want to do that. But he’s, he’s I’ve met him once or just fantastic guy. And it’s correct. Welcome Elon to Texas as well. And, uh… And Glenn Powell, I heard he’s moving back to Texas. I just saw that this morning. I.
Stuart Turley [00:40:48] But you know, Carl, you represent one of the greatest states in the world. I love Texas. I love being able to say, I got Texas license plates and you represent the state, but so goes Texas in energy. So goes the U S and there are 11 states that have legislation that can follow California. Do you want to move out of those 11 states?
Steve Reese [00:41:10] Let me look at the numbers, as you projected the 2030 census, right, there’s going to be 8th and 8th electoral votes that are going to move from California, Oregon, and New York, wow, and Illinois, to Texas, Idaho, and Swarovski. You’re talking about 9 electoral votes in the 2013-2013 and future elections. Wow, they’re going to move there to here, which is really a difference of 18 and the QBM is at, right? Now, you need to follow that those people are giving California eyes your state like they did to pop a lot of what is it?
Karr Ingham [00:41:47] That’s the truth.
Steve Reese [00:41:48] As much nettle.
Karr Ingham [00:41:50] I see less of that now. I mean, there was some concern about a lot of the folks moving to Austin, for example, from California that, don’t forget why you left. Let’s be careful about that.
Stuart Turley [00:42:05] You know, back in, in 77, when I graduated high school and, uh, we would watch the Iranians, uh protest at Oklahoma state universities. The cow rope, the goat ropers there would show up and throw eggs at them. That was entertainment back then. So, you know, I mean, you sit back and kind of go there, there’s a lot to be said for Oklahoma. And, but now when the Oklahoma wrestler took that, that was a great match, shout out to Oklahoma state wrestling.
Karr Ingham [00:42:31] Well, that’s one of, as I was telling Steve earlier, I, I didn’t go to Oklahoma state. My, I am a Texan, a Texas panhandle guy. My father went to Oklahoma State. My younger brother went to a coma state. I went to smaller schools and so I had to.
Stuart Turley [00:42:47] Should I go on the arm?
Karr Ingham [00:42:48] I had to pick a, uh, I had a pick a D one school for my loyalties. And because of my family connections there, that ended up being Oklahoma state for, so I was telling Steve for a guy that didn’t go to school at Oklahoma state, which I did not wish I would have. If that I might, if I had it to do over again, although I loved where I went, I am as rabid, a remote throwing sports fan of Oklahoma state as anybody who ever did go there. And, um, they make my life really difficult sometimes.
Stuart Turley [00:43:17] I just released this week an interview with the director for the OU energy department. And the students that I got to interview there and the director of OU, Mike McConnell, absolutely a top notch human. I mean, I left OU on a high after visiting with those great students. Carl, we are in great shape with those future leaders.
Steve Reese [00:43:44] Coming out of the other years inside. And then obviously the leaders that built the price tower and all those down there, and yeah, the energy centers and that gives you all that feeling that the guns, the young ones that I’ve been toward, you know, they’re obviously a lot brighter than we are with respect to a lot of technical things and social media and a new way to do business. Right. But they’re also kids who they want to do the right thing. I think they were staying in the chat. We got it.
Stuart Turley [00:44:14] This has been such a fantastic conversation. We got about three more minutes here. Carl, what is hot on your plate during the rest of this legislation click?
Karr Ingham [00:44:23] So we’ve got a month to go in the legislative session. There, no, not much. And then I’m running back and forth to Austin all the time. Again, I live in Amarillo, but I’m in Austin virtually every week for a goodly portion of the week, just managing and managing our team through what we need to do there. And this is not a session that has been horrible for oil and gas. And most of them aren’t, but occasionally, you never know which direction this may go. We’ve got two or three pieces of legislation that we’re trying to manage through to a desirable outcome, whatever that may be. And, you know, they’re kind of inside baseball under the radar things, but they are things that the state of Texas is trying to decide which direction to go in terms of some types of regulation. And all of this is a function of great things. And the great thing is the growth in Texas crude oil production from a million barrels a 15 years ago to 6 million barrels a day now. All of this is a function of that. So I don’t mind having the conversation and the discussion, the argument if you need to have it, but we’re playing defense on a few things that add cost to oil and gas operators and smaller independents in particular. That may put some of those companies or a goodly number of wells in Texas. And by the way, most of the wells in taxes are low volume wells, marginal wells. And so they don’t have a lot of wiggle room. And when you start layering costs in that jeopardizes those wells, I don’t have any interest in seeing those go away. And so it’s that kind of thing that they’re.
Stuart Turley [00:45:52] 50% of our oil is done by independents, and those independents a lot of times are smaller. And I actually like looking in my day job, looking at well economics and whether or not when I invest in a well, I like looking at that well and going, can I make it at $30 oil? Can I make a $50 oil or do I make $60 oil?
Karr Ingham [00:46:13] Well, and that price per barrel, the economics of that changes when the cost of operating that well goes up. And if you’re not careful, the cost, the added cost of regulation and legislation, even in Texas can take a well from economic to uneconomic within a several month period of time. Stroke. Whatever we’re paying you is not enough. I’ll, I’ll find somebody and tell them you said that. Do we do a little work on that?
Stuart Turley [00:46:38] Steve, what do you see coming around the corner?
Steve Reese [00:46:40] Well, it’s, you know, for me it’s it’s becoming kind of ubiquitous for us as far as the natural gas scene. Now we’re literally in every base and because we’re marketing or for auditing or doing audits or setting up measurement equipment. And you know it’s just another cycle for the 40 something years of natural gas again on the upswing. Right. And car said it car said a great or whatever I said. Whenever and you know it is the future we’re still gonna be until something’s indebted better cheaper etc i i love the both both in order to find that their dear friends and debt that will actually pass just down the street yours it’s a plane of data ubiquitous affordable than u.s may and we know now that we’re stretching our arm overseas the engagement there probably of malta south america look at this in missus of africa all of these politics and and my rep in caracas is like everybody wants the united states energy they don’t they don’ know there there’s there’s great production in ecuador and right beyond and other places but people trust the way we do this
Stuart Turley [00:47:48] and they want to avoid Trump’s tariffs. So with that, with that everybody like, subscribe, share and car, how do people find you?
Karr Ingham [00:47:56] Well, we’re on the internet out there as you might imagine. So you just go to Texas Alliance spelled out dot O R G. That’s our website. Uh, my, uh, my email address is Kay Ingham at Texas Alliance.org is my wife looks to point out that looks like King Ham, but it’s not Kay Ingham that Texas Alliance dot We don’t have a spell check in
Stuart Turley [00:48:20] And Steve Reese’s at Reese Energy Consulting dot com. Steve, thank you so much for your time and leadership as well. Thank you.
Karr Ingham [00:48:29] Thanks for having me.
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