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Flash Episode on Oil Prices
00:02:01
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| Hey, everybody. | |
| It's a flash episode of the Charlie Kirk Show. | |
| We have Dan Eberhardt, who explains everything to do with oil and natural gas, especially gas prices. | |
| If you're confused about the price of gas and you want to dive deep towards the truth, this is the episode for you. | |
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| All right, everybody, welcome to this episode of the Charlie Kirk Show. | |
| We're going to get down to the basics. | |
| We're going to explain gas prices, the oil and gas industry from the bottom up. | |
| For those of you that know very little about it or nothing at all, that's okay. | |
| This is kind of your gas prices, oil and natural gas industry 101 crash course session, I should say. | |
| I know a lot of you guys are emailing us and asking us questions about it. | |
| And so we have with us right now someone who is an expert, who is the CEO of Canary, best-selling author, commentator on politics and energy. | |
| Dan Eberhardt. | |
| Dan, welcome to the Charlie Kirk Show. | |
| Hey, I'm a big fan. | |
| Thanks for having me on the show. | |
| You bet. | |
| Thank you. | |
| Okay, Dan, let's just start at the very basics. | |
|
Fracking Technology and Resources
00:10:53
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| Why do gas prices go up? | |
| Why do they go down? | |
| What are decisions that leaders make that influence those things? | |
| And we'll go from there. | |
| Sure. | |
| So, well, it's all supply and demand, and it's a worldwide market. | |
| So, you know, what happens in the U.S., in Europe, in Russia, all of that matters. | |
| But look, the price of oil, the price you pay at the pump, that's the most visible commodity price that everybody knows. | |
| So it definitely affects everybody's life and what we're doing. | |
| The price of an Uber is 40%, the price of oil. | |
| The price of your plane ticket is 40% based on the price of oil. | |
| So it impacts everything in everybody's lives, pretty much. | |
| So, you know, there's a lot of different influences towards that. | |
| So just walk us through some examples of public policy decisions that then impact that price of gas that all of us are paying, whether it be leases, pipelines, or how significant are those things in actually influencing the price of gas? | |
| Sure. | |
| So I think they affect the things around the edges. | |
| Look, the number one driver is going to be: how is the economy doing? | |
| And do people have a demand for oil and gas? | |
| But that aside, you know, the administration, the Trump administration, or now the Biden administration have many, many levers, and they pull on these levers and push on these levers. | |
| And that's policy, right? | |
| And that affects how much supply there is and potentially how much demand there is and moves the price up or down. | |
| So you recently said that the decision not to import oil from Russia was smart. | |
| Asking the Saudis, UAE and Venezuela and Iran to increase production is not only foolish, but on America. | |
| Tell us exactly why and walk us through that. | |
| Sure. | |
| So, and forgive me, but this actually makes my blood boil. | |
| But look, you know, in the past month or two or three, as the oil prices kind of creeped up and like Pre-the Ukraine war, the Biden administration keeps continually reaching out to OPEC to produce more oil and has been completely silent and deaf on the U.S. industry. | |
| And so, for those of us in the U.S. industry, this is just maddeningly frustrating. | |
| But why is Biden calling OPEC when he could be calling Texas? | |
| He could be calling North Dakota, he could be calling Western Pennsylvania. | |
| So, that's number one issue. | |
| Number two, I don't think we need to be dependent on. | |
| Look, we were energy independent under President Trump. | |
| There is no need for us to be dependent on OPEC for us to call Venezuela for help. | |
| This is absolutely ridiculous, and I think is a completely wrong-headed strategy by the Biden administration. | |
| So, walk us through how significant America's energy minerals and deposits are. | |
| Walk us through the Permian basin, the Marcellus shale, and the Balkan shape, the Balkan shale. | |
| How much oil and natural gas do we actually have? | |
| There's a lot of misinformation about this. | |
| Some of the greenies say that we would run out in five years. | |
| Go ahead. | |
| Yeah, we're definitely not going to run out in five years. | |
| Look, the worldwide market is about 100 million barrels a day, give or take. | |
| In general, you can think about that as 10 million U.S., 10 million Saudi Arabia, 10 million Russia, and then the other oil-producing countries make up the balance. | |
| So, in the U.S., we produce about 11.4 million barrels a day right now, to be exact. | |
| Before COVID, we were producing about 13 million barrels a day. | |
| I think that decrease is based on policy response and different changes in the Biden and the Trump administration has pushed the production down a little bit. | |
| We've got an enormous amount of resources here. | |
| We are more or less energy independent. | |
| We are right now importing about 20% of what we consume, but we have the ability to change that and produce that here in the U.S. and not need to be relying on OPEC or Russia or anyone else. | |
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| How much oil and natural gas do we have long term? | |
| How significant is the Permian basin? | |
| How widespread? | |
| I mean, the research, what does it show? | |
| Walk us through that. | |
| I don't think people have an understanding of how much oil and natural gas our country actually has. | |
| Okay, sure. | |
| So, so plenty. | |
| So, you know, I think we can produce 75 to 125% of what we consume every day right now. | |
| And we could do that for 50 or 75 years. | |
| The Permian Basin is one of the most prolific basins in the entire world, absent maybe two fields in Saudi Arabia. | |
| I would say it's the third or fourth most prolific field in the entire world. | |
| You know, a lot of these countries we think of as oil-producing nations like Iran, they produce one point, you know, at best, 1.1 million barrels a day. | |
| Kuwait, the entire country produces 2 million barrels a day. | |
| Well, the Permian produces about 4.5 million barrels of oil a day, and it's going up. | |
| So, you know, relative to even what we think of as being major oil producers, the Permian Basin is a very prolific field. | |
| We also have a field in North Dakota called the Bakken that produces in excess of a million barrels a day. | |
| That's also a world-class oil field. | |
| And we've got, you know, several medium-sized ones in the U.S. too. | |
| So the U.S. is very, very prolific in oil. | |
| In terms of natural gas, we're the Saudi Arabia of natural gas. | |
| We have more natural gas than any other country, and we're better at extracting it. | |
| So we can produce natural gas for decades and decades and decades at pretty low pricing with no problems. | |
| So let me ask you a theoretical question. | |
| So the Germans and the Europeans have seemed intent on buying natural gas via Nord Stream 2 from the Russians. | |
| Do we have enough natural gas? | |
| Is the technology there for America to be able to supply Europe for all of their natural gas needs and demands? | |
| Theoretically, yes, and practicality, no. | |
| So first of all, I would say that, you know, Germany is getting about 40% of its natural gas from Russia. | |
| And their butt's really in a sling right now as this war develops. | |
| And I think they're really going to have the hardest choices. | |
| It's easy for us to ban Russian oil, right? | |
| It's 5% of what we import. | |
| And the Biden administration was late anyway. | |
| U.S. oil companies have already self-sanctioned it. | |
| These European countries are really going to have much tougher decisions. | |
| Oil is much easier to move around the globe. | |
| The natural gas is more of a continental price and is harder to ship. | |
| I can also say that there's six export terminal permits the Biden administration has been sitting on for over 12 months, not issuing permits to continue, notices to continue. | |
| And so that's slowing down our ability to export natural gas. | |
| If those permits would have been greenlighted at the beginning of the Biden administration, probably two of those six terminals would have been up and running, and we could export natural gas to Europe to help solve this problem. | |
| And unfortunately, right now we can't. | |
| Is the easiest and best way to transport natural gas is it via pipeline? | |
| And then therefore something 3,000, 4,000 miles away logistically just makes it nearly impossible. | |
| Is that right? | |
| Yeah. | |
| So, well, in terms of getting it to Europe, we would need to use a ship, right? | |
| But as far as moving it around the U.S. or around Europe, yeah, pipelines make way more sense. | |
| I've always thought that people that are trying to kill pipelines really don't understand, really haven't taken a look at the entire issue. | |
| Because if you don't want to use oil, you don't want to use gas, then you want to kill the demand. | |
| You don't necessarily want to kill the supply. | |
| You're just making it less safe and the costs go up by not having pipelines. | |
| So I want to ask you a question about fracking. | |
| There seems to be a war against fracking. | |
| Can you go into some detail? | |
| What exactly is hydraulic fracturing, otherwise known as fracking? | |
| What is the technology behind it? | |
| How incredible is it? | |
| In your own personal opinion, maybe it isn't. | |
| I believe it is. | |
| How is it developed? | |
| And what has it meant for American energy superiority? | |
| Well, it's really an amazing invention. | |
| So before fracking, we would go, we would drill a well. | |
| So call it one mile, two mile, whatever. | |
| And you're really only looking for these. | |
| The geologist is really only looking for this two or three inches or eight or nine inches near the bottom of that hole. | |
| And that's where they think the hydrocarbons are. | |
| Well, with fracking or well, with horizontal drilling, being able to go down and then go left or go right, and then fracking, we're able to take that kind of three inches or eight inches that the geologists want, and we're able to create a bunch of mini explosions. | |
| And so increase the surface area by 500 times or 1,000 times of the amount of the pay zone or the geology we're looking for. | |
| And so it's magnificent in terms of efficiency and increasing our ability to extract hydrocarbons cheaply. | |
| Yeah. | |
| So what is the controversy around it then? | |
| Why is it that it seems that the entire American left wants to get rid of fracking? | |
| What is it that they deem to be so controversial about this amazing technology? | |
| Well, I think there's concern that it affects the water table, which it doesn't, in my opinion. | |
| It's going to be well, well below the water table is generally 600, 800 feet. | |
| We're talking about, you know, one or two miles below ground. | |
| So big, big difference. | |
| And I think a lot of people just don't understand the technology, haven't taken time to understand the technology. | |
| And in general, are, you know, reluctant to side with oil companies on anything. | |
| So I want to ask you, if you were, let's say, czar for a day, or if you were in charge of all the energy decisions for America, knowing where gas prices are right now and having the opinion that you would want gas prices to go down, I know that is a mixed opinion in certain oil circles. | |
| In Midland, they're actually really happy the way they are right now, but they understand the danger of high oil prices. | |
|
Banks That Hate You
00:02:27
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| What could be done right now to lower oil prices? | |
| Would it be the Keys or XL pipeline, leasing on federal lands, offshore drilling? | |
| You could wave a magic wand. | |
| What could be done right now to lower oil prices? | |
| Well, first of all, I think that the Biden administration should get out of the way of the industry. | |
| And, you know, I would channel what Larry Kudlow says, drill, baby, drill. | |
| But, you know, in terms of specifics, what the administration should do is the offshore leasing blocks that are scheduled to expire in June, they should continue those. | |
| They should stop the federal moratorium on drilling on federal lands. | |
| And they should stop the death by 10,000 cuts where they're putting in this kind of chilling effect on the industry by reducing the financing and access to debt and equity markets. | |
| These things would encourage the industry to go out and drill more. | |
| Look, I think the policy response of the Biden administration is why our production right now is 11.4 million barrels a day and it was 13 when COVID hit. | |
| The administration needs to get out of the way and let the U.S. industry produce more. | |
| And over time, that will cause the oil price to go down. | |
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|
Nuclear Coal And $200 Oil
00:03:54
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| So there's a lot of different types of pressures on there. | |
| You mentioned one in particular. | |
| Can you expand upon ESG or the environmental sustainable governance, how hard it is for individual wildcatters, if you will, entrepreneurs to actually be able to acquire financing because of some of this kind of woke capital structure that exists through Wall Street? | |
| Yeah. | |
| So I really believe there's been a chilling effect in the Biden administration on a lot of these Green New Deal or Green New Deal light policies they've been pushing and kind of the general apparatus has got investors really focused on staying away. | |
| What is it? | |
| BlackRock or Blackstone has said they're not going to invest in oil. | |
| Several of the charitable foundations and stuff have deinvested from carbon. | |
| And these kind of things I think are a little bit nonsensical in terms of, look, we need an all of the above approach and renewables and green are the direction. | |
| And we all want to be, we all want clean water. | |
| We all want clean air. | |
| But look, even Elon Musk in the last few days has said, we've got to drill. | |
| In terms of a transition, in terms of getting where we want to go, we need oil and gas and we need natural gas too. | |
| Look, the power plants are powered by coal, nuclear, and natural gas. | |
| Nobody wants coal. | |
| Nobody wants new nuclear plants. | |
| So when you plug your Tesla in, you're plugging your Tesla into a power plant that's powered by natural gas. | |
| And yet they don't want to actually have the policies that would allow us to get more natural gas. | |
| I want to ask you a couple of things as we close here. | |
| Just being very, without being, let's say, trying to get a headline grabbing, without being hyperbolic, which I know you're not, where do you think oil will go to? | |
| Some people are saying $200, $300 a barrel. | |
| You're an expert in this field. | |
| Where's oil going to? | |
| Yeah, no, I was just talking to my team. | |
| Look, I think oil is headed to $200. | |
| It's a situation Ukraine doesn't change. | |
| If you look at the Western European nations, if they put on similar sanctions on Russian oil, which is very easy for the U.S. to do, it's harder for the Western Europeans to do. | |
| But I think if they do that, oil is going to hit $200. | |
| And I don't know how if this crisis gets worse and worse and worse, I don't know how with a straight face they're going to be able to buy Russian energy. | |
| So just in closing, tell us about your story, how you started your company. | |
| It's a very amazing, it's an amazing Only in America story. | |
| And do you think you'd be able to flourish and create the business you have under this current regime? | |
| Well, it would definitely be harder under this current regime. | |
| I feel like Biden just keeps throwing wet blankets at the oil and gas industry. | |
| And to see him say that he's, you know, his speech yesterday just really upset me. | |
| You know, my story is, you know, I was working for another company and there was a deal that, you know, I really liked that I thought the company should acquire. | |
| They didn't want to acquire it. | |
| So I went and went and bought this company in North Dakota myself. | |
| And then, you know, we kept growing and the Bakken kept growing. | |
| And today we've got 25 locations and a few hundred people and are really have really had just an amazing, amazing success. | |
| I feel lucky and blessed. | |
| And I think that's something that can only happen in America. | |
| Well, amen. | |
| I totally agree. | |
| Well, Dan, thank you so much for joining us. | |
| And thank you for walking us through all of this. | |
| It's a very scary time. | |
| People have a lot of questions when it comes to oil and natural gas. | |
| And again, that is canaryusa.com if people want to check it out. | |
| And thank you so much for joining us, Dan. | |
| We really appreciate it. | |
| Thank you for having me. | |
| Big fan of your show. | |
| So it's an honor to be on. | |
| Thanks so much. | |
| Talk to you soon. | |
| Thank you. | |
| Thank you. | |
| Thanks so much for listening, everybody. | |
| Email us your thoughts as always, freedom at charliekirk.com. | |
| If you want to support our show, go to charliekirk.com slash support. | |
| Thanks so much for listening. | |
| God bless. | |
| For more on many of these stories and news you can trust, go to CharlieKirk.com. | |