When the transcript becomes available, we will include it here. -Thank you!

David Blackmon [00:00:09] Hey, welcome to the Energy Question podcast with David Blackmon. I am, amazingly enough, your host, David Blackmon, surviving here on the floor Nape because they’re setting this thing up on Wednesday. What’s the day? The 7th of February? Yep. We’re here with Stu Turley, of course, my podcasting partner, Energy News Beat Sandstone Group. What else Stu? 3 Podcasters walk into a bar and Karr Ingram, executive vice president, acting president of the Texas Alliance of Energy Producers. Petroleum economist extraordinaire. Karr. How are you doing?

Karr Ingham [00:00:45] I’m I’m doing good. David Blackmon Stu, good to see you guys and appreciate the kind words. Well, completely made up, but I appreciate

David Blackmon [00:00:53]  some words for somebody does, such great work for the industry putting out the the Texas Petro Index for what, since 1997. Yeah.

Karr Ingham [00:01:03] Well it’s based in 1995, actually created the thing in 0203. And we rolled it out as the Alliance in 2003.

David Blackmon [00:01:12] Okay. Well, it’s.

Karr Ingham [00:01:13] So 20, 20 plus years we’ve been putting this thing out now.

David Blackmon [00:01:16] So what’s what’s the purpose? Tell us the purpose of the Texas Petro Index

Karr Ingham [00:01:21] Several years ago. And by several, I mean just coming up on 25 or 30 now, in the late 90s, I was doing general economic analysis at city metro level around Texas. And one of the early places I started doing that was in Midland, Odessa. And of course, it doesn’t tell you, you know, you don’t even have to be very smart to figure this out. You can’t do general economic work in Midland Odessa without turning yourself into an all out gas guy. That’s. So I created a kind of regional oil and gas activity index out there called the Texas Permian Basin Petroleum Index. Right now, this was just an activity index to lay down next to the general economic index. And everybody knows what this looks like. And in the Permian, unlike anywhere else in the country and in Midland, Odessa, whatever oil and gas does is what the general economy does. But we still needed to kind of quantify this and show what that looks like and create a picture of it, which we did with these two indexes, general economic index for the combined Midland Odessa metro area and then the regional gas index. Well, the alliance, the Texas Alliance of Energy Producers, which you may recall, did not exist as a statewide organization until 2000, but its two predecessor associations date back to the 1930s. That’s North Texas Oil and Gas Association and West Central Texas Oil and Gas Sociation. So these two guys, Alex Mills with North Texas and Bill Stevens with West Central Texas, took notice of this. And I was also doing general economic work in Abilene, where west central Texas was. And we would talk of all the gas, and Bill Stevens would come and participate in some of these things. And so they they caught sight of, of the Permian Basin piece and asked me to create a statewide upstream oil and gas activity index that really, again, paints a picture of the upstream oil and gas economy in Texas. And so, so I said, well, yes, absolutely. I’d be thrilled and honored to do this. And so, as any index does, you pick an arbitrary point in time, in our case, January 1995, and you pick an arbitrary number, 100.0, in our case, and you calibrate all of these indicators, represent representative components of the upstream industry in Texas and calibrate them all to January 1995. Well, then you just calculate that thing every month going forward. And we’ve done it every month since then. And, what are these components? Forgive the econ speak, but I would I would be asking these questions if I were listening to me do this out there, inflation adjusted, which is critical. I mean, it’s just critical inflation adjusted prices paid to producers for crude oil and natural gas statewide. Rig count, number of drilling permits issued by the great state of Texas, oil and gas well completions, the estimated volume and real, which is to say inflation adjusted over time. Value of crude oil and natural gas production. Wow. And then last but not nearly least, the number of people that are employed directly by the upstream oil and gas industry in Texas, which is what people are on the payrolls of operating in producing companies, drilling companies, service companies, that’s upstream oil and gas employment to me. And so we put all these into this index, and I create this model and turn out the Texas petrol index every month. So that’s what it is. And that’s its history.

Stuart Turley [00:04:55] How much. And in billions. Because I know you and I have talked about this in state revenue taxes from the oil and gas industry, that that is such a boon to Texas.

Karr Ingham [00:05:06] Oh, well, think about what this is. So the industry directly pays money into the state’s coffers, right? Most directly, they do this by paying a separate tax. I mean, just call it a production tax. If you bring a barrel of oil or an MCF to the surface. With a few exceptions, you’re paying a little money off the top of the revenue of that barrel or MCF, into the state coffers. And it’s called a severance tax once you separate from the Earth. Wow. Then, you’re paying a little money to the state of Texas, and then you’re the industries. A huge direct pay or the sales tax. They huge. They pay motor vehicle taxes, they have fleets, they buy cars left out.

Stuart Turley [00:05:46] Huge.

Karr Ingham [00:05:48] Huge, huge. And, and, hotel, motel taxes. I mean, just go to Midland and look at who’s parked in the parking lots of every hotel around there. And it’s, it’s every service company using those hotels as workweek housing, particularly when they had a massive housing shortage out there and things were booming. So they’re paying directly into the state coffers. In addition, they’re paying localized level or, taxes on their the value, essentially the value, producible value of their reserves to school districts, municipalities, hospital districts, I mean, the amount that the industry pays in terms of funding, local municipalities and school districts and hospital districts and you name it is, is just astounding. I mean, and all of this together and your $2,030 billion in the state of Texas. But, I mean, think of it. So the state of Texas gets revenue, broadly speaking, from two sources, from the taxes it collects on all of us and industry, again, you know, every state tax there is, and then we get a fair amount of federal government money as Texas revenue, the part that.

David Blackmon [00:06:57] Wants to talk about that.

Karr Ingham [00:06:58] But no, and I’d rather not talk about that. But so so let’s not let’s carve that out and just think about all the Texas taxes collected. And you’ve got somewhere between 20 and 25% of all state taxes that are collected that are paid directly by the oil and gas industry. That’s a massive number. And, just imagine if this goes away.

Stuart Turley [00:07:19] In Texas, GDP is number seven if it was a country in the world.

Karr Ingham [00:07:24] right? Yeah.

Stuart Turley [00:07:25] Wow.

Karr Ingham [00:07:27] Yeah. I’m not I haven’t looked at that number in a while, but I mean, it’s 6 or 7, I mean.

Stuart Turley [00:07:32] And is we’re.

Karr Ingham [00:07:33] Just the

Stuart Turley [00:07:34] Third Largest energy producer in the world.

Karr Ingham [00:07:38] The last time I looked at that number, which was early 2022, when Russia, Ukraine started happening and prices started to skyrocket, and I put those numbers together and it was us at the top, right? Russia. Saudi Arabia. And then, Texas was maybe fourth or fifth on that.

David Blackmon [00:08:02] Texas would be third on natural gas and fourth on, on.

Karr Ingham [00:08:06] There’s a guy who yeah, who knows stuff.

Stuart Turley [00:08:09] But, LNG the U.S. is number one on exports. Oh, absolutely. And cutter is probably going to, surpass us in the next eight months. If I was calculating with the.

Karr Ingham [00:08:21] Yeah, I mean, the, the, the global LNG powers or US Russia cutter. But but we’re at the top of that food chain and rightly so. Hope we’re trying to screw that up, as you well know. But, hopefully we won’t get that done.

David Blackmon [00:08:38] So, so you just issued a new iteration of the Texas Petrol Index. I got some question specific to that for you. But first, talk about where the index stands right now. I assume it’s a pretty healthy state.

Karr Ingham [00:08:51] It’s a pretty healthy state, but the nature of this thing has changed. There’s been there have been structural changes in the upstream oil and gas industry in Texas, and they’re all for the good. I mean, you look at this thing and you say, okay, it was that really for the good? What’s it’s just a different scenario. It used to be that a boom in Texas, oil and gas and the Texas oil and gas industry, upstream segment of the industry of boom was really clearly defined. Yes. A boom is defined by growing recounts, growing numbers of drilling permits issued, growing numbers of employment. There’s actually relatively minimal effect on production itself. Just the volume of stuff produced, an extraordinary effect on the value of that production as prices go up. But on on the actual volume, minimal, relatively minimal effects on the actual production volume. Some warehouses changed. I mean, the apex, the apex is at the top point anyway. The the all time high of the Texas Petro.

David Blackmon [00:09:55] It doesn’t make me feel good.

Karr Ingham [00:09:57] That’s this. I mean that just for you Stu the all time high of the petrol index was at the end of the last. True. Easily defined boom in oil and gas in Texas and nationally. And that’s in the end of 2014. She had the all time record. Employment for sure. Not an all time record rig count, because you got to go back to the 1980s for that. But certainly in modern oil and gas, the highest it’s been and will ever be again was in late 2014. Same with drilling permits.

Stuart Turley [00:10:33] But what about and David, what about the, advances in technology that have. Well, see, Stu.

Karr Ingham [00:10:42] You’re jumping the gun here, so I’m. I’m kidding. Exactly where I was headed. Now we have the the. I’m just giving you a hard time and up. I’m just. Yeah, I’m just kidding. Yeah, that’s a very astute observation, because it’s really at the crux of what’s happening. Thank you very much. Post 2014, 2015. You know, we have nasty bloodbath of an industry downturn and, you know, 2015 and 2016. And you would think as we recover from this, that we would start getting back and returning to higher rig count levels, prior employment levels, drilling permits, all of these things. No, not at all. We have not sniffed 2014 levels in terms of the rig count. Permits employment for sure. What we are doing as we’re not growing all of these things is growing production itself. So we started to set new all time production records and, what, early 2018, maybe, for crude oil in Texas and I mean, breaking 1972 production volume records. Right. So we did that and I think early 2018 continued to grow production right up until March of 2020. And so just under advance of Covid, we had about 5.4 or 5 million barrels a day. And Texans are, oh, by the way, crude oil production in Texas in 2010, about a million barrels a day, right? Million barrels a day to 5.45 million barrels a day. And then, of course, in April and May falls off the cliff because of Covid. Then we start to finally get we start to recover this number, but we don’t get back to that 5.4 or 5 million until March of 2023.

Stuart Turley [00:12:24] Wow.

Karr Ingham [00:12:25] And we’ve continued to set records since then. So we’re coming up. We’re over 5.6 million barrels a day in Texas now. So we’re setting crude oil production records in Texas and nationally, but we’re doing so without record recounts, without record employment, without record drilling permits, fewer resources being deployed to produce record and growing volumes of crude oil and natural gas in Texas than nationally. But it’s all led by Texans and the Permian.

David Blackmon [00:12:51]  And that’s all created by technology, right? And process advancements that are dramatically over the last five years, raise the per well, recoveries in the shale.

Karr Ingham [00:13:04] Just to extraordinary gains in efficiency and productivity. That’s what’s at the heart of all of this. This is, by the way, what all industries endeavored to do over time, produce more with fewer resources deployed and at a lower cost.

David Blackmon [00:13:17] But we industry, that is, so that.

Karr Ingham [00:13:20] You don’t get as many, certainly as directly as I do all in gas. But it’s hard to imagine that, that oil and gas is rivaled by any other industry in terms of the extraordinary efficiency and productivity gains, that have been, achieved, really for the benefit of the American people. But what does that mean in terms of what we think of the oil and gas industry and its connection to the Texas economy? You know, back in the 80s, oil and gas was directly a massive portion of the Texas economy, even by, you know, the 2008 timeframe, as were growing, up through mid 2008, before the onset of the Great Recession, the oil and gas economy in Texas was, probably 12 to 14% directly of the overall state economy. Now, that number might be 6 or 7%.

David Blackmon [00:14:18] It’s become so huge and diversified.

Karr Ingham [00:14:20] Well, that’s exactly right. But again, we’re having to use fewer, Texas economic resources to produce these massive, again, record and growing volumes of crude oil and natural gas and or and doing it with fewer employees, by the way. I mean, we had 307,000 ish direct upstream employees in December of 2014. That number is maybe 200,000 right now, and we’ll never get back to 300,000 again. I mean, it just doesn’t need to.

David Blackmon [00:14:53] Well, you know, I mean, but but that’s that’s a positive thing when you consider the health of the state economy as a whole.

Karr Ingham [00:15:00] That’s exactly right.

David Blackmon [00:15:01] All these alternatives now because of all the diversification.

Karr Ingham [00:15:05] Absolutely. I mean, you. Got medical, you’ve got technology, you still have agriculture, which is a massive player in Texas. But we are an extraordinarily strong, large, huge diversified economy. And oil and gas is a big part of the mix. So economic impact of the industry is one thing. What we pay in terms of taxes, employment, these are, by the way, the highest paying jobs in Texas easily. Right. So they’re high impact jobs with with big wages.

Stuart Turley [00:15:35] And so and David, the the one of the key reasons for Texas success is the low cost of energy. And when you take a look, we’re half, half of New York and half of, California. And people are moving out of those places because of the policies up there. So great job on tracking those things, because the cost per kilowatt hour, thanks to our great natural gas is even bringing us.

David Blackmon [00:16:06] I talked with Robert Bryce yesterday. We did, yeah. With Robert Bryce.

Karr Ingham [00:16:10] Yeah. Great. Yes.

David Blackmon [00:16:12] Absolutely.

Stuart Turley [00:16:13] I love Robert Bryce.

David Blackmon [00:16:14] Yeah. He’s one of the best. He pointed out to me that in San Diego, you know, I was complaining about my $0.11 per kilowatt contract for a contract through August. Right. And then I can renegotiate in San Diego. Folks, it’s $0.48.

Karr Ingham [00:16:31] Oh my Goodness.

David Blackmon [00:16:31] Kilowatt hour. Nobody in Texas is paying that. No. Anything close to that? No, no.

Karr Ingham [00:16:37] And they’re not paying for housing here. What they’re paying there although are the.

Stuart Turley [00:16:40] Markets going up card.

Karr Ingham [00:16:42] This is oh my goodness.

Stuart Turley [00:16:43] In the green room card just told me that he hopes you leave your voting policies there. You move.

Karr Ingham [00:16:52] You’re moving for a reason. Yeah.

Stuart Turley [00:16:54] Yeah.

Karr Ingham [00:16:55] Well I don’t know why you’d want to turn us into them. Okay. Let’s not.

Stuart Turley [00:17:00] It’s great. Green room.

Karr Ingham [00:17:03] Yes. I don’t see any any green and

David Blackmon [00:17:07] Hitting our California room.

Karr Ingham [00:17:10] Correct. And I didn’t get any snacks in that green room either, so. Well.

Stuart Turley [00:17:15] The mini candy bars are over here. No. Serve yourself.

David Blackmon [00:17:21] What’s going on, man? What’s happening at the Alliance?

Karr Ingham [00:17:23] Well, so the Alliance, again, became a statewide organization in 2000. And at the on the day of its formation, just because of the history and legacy of North Texans, of west central Texas, that was an influential organization then. But then you throw in a guy named Alex Mills, who was president of North Texas Oil and Gas Association, became president of the Texas Alliance of Energy Producers, and give him about 18 years, 17 or 18 years until he retired at the end of 2017. To grow this organization into a large 3300 member, influential, impactful statewide oil and gas association. That, by the way, does advocacy work in both Austin and DC. But who do we do this for? We do this. The the Alliance has its legacy and history and still current focus, independent oil and gas producers, independent oil and gas companies, the independent oil and gas industry, which is not just operators and producers, tons of independent, smaller drilling companies and service companies out there. I’m telling you, a family owned company. So, we have proudly we have larger members, of the alliance, because we can come alongside them and work with them in Austin to accomplish things that are helpful to them. And for the most part, they don’t conflict with, with the interests, of independent operators. And so we’re proud to have larger companies as members. And, listen, you’re not going to hear me talking these guys down. We need to every barrel from where we can get it. But when you think about how the industry is structured, you’ve got great big guys drilling boomer wells out in the Permian and in other parts. But their focus is on the Permian for a reason. Right. But then you’ve got oil and gas wells all over the state of Texas that up and drilled by these, by these large companies originally. And then they move on through the progression of business. They hand these companies, pardon me, these wells off to smaller and smaller, smaller companies. Right. But these guys are still drilling in West Texas, the Panhandle, North, Texas, west central Texas, east Texas. Permian is really, you know, where most of the drilling happens. But man, I talked to one of our members who just just completed a new gas. Well, and North Texas out there, so there’s this is still happening. So you’ve got.

Stuart Turley [00:19:57] Eagle Fields got a recent.

Karr Ingham [00:19:58] Oh, absolutely. I mean, well, first of all.

Stuart Turley [00:20:00]  a Haynesville.

Karr Ingham [00:20:01] Don’t you love this about Texas? There was not a barrel of oil to. We got produced in the Eagle for Tim till what, 2008.

Stuart Turley [00:20:09] Right.

Karr Ingham [00:20:10] Some time. And just leave it to Texas to, to explode this brand new production region onto the scene in 2008? Yeah. And that production was really fantastic up until the downturn of 2015 and 2016.

David Blackmon [00:20:24] Yeah. And for 2015, there were 275 active drilling rigs in the Eagle Ford Shale alone. Wow. The rig count is for 99 nationwide, so that’s sure how much it has changed.

Karr Ingham [00:20:38] That’s absolutely right. So that was that was the blooming rose on the scene and the late 2000. But all the while we’re talking about the Eagle Ford. I’m just sort of watching the Permian percolating over there and just kind of this rumbling underneath the, underneath the surface. And I just have this sense that a crazy, extraordinary thing is we’re getting ready to happen out there. You know, the Permian was not leading the way in terms of, these new drilling technologies, horizontal drilling and hydraulic fracturing. But, man, when it took hold out there, here’s where we find ourselves and, ourselves. And now you’ve got the Permian as a whole, including New Mexico, producing more crude oil than the state of Texas as a whole. So if you want to line up who’s biggest now, you have to slot the Permian in above Texas. And that hasn’t been that way for very long and certainly was not the case 10 or 12 years ago. So that’s pretty extraordinary. But anyway, the Alliance has again, as our representative focus, independent oil and gas companies, smaller independents in particular, people that don’t have their own government relations shop, not employees, they’re not hiring. They’re government relations consultants. Who do they rely on? They rely on us. The Texas Alliance of Energy Producers.

Stuart Turley [00:21:55] Hey.

Karr Ingham [00:21:56] I’m telling you, we got our work cut out for us.

David Blackmon [00:21:59] Also, just to add in here, I was always with the larger independents, Burlington Resources and then El Paso Corporation in my career and always made sure we were part of the Alliance and supporting the Alliance and the work you do in Austin, in Washington, because it’s always done. That association has always been really one of the very most effective voices for our industry in Texas, in both of those places. And, you know, always make great company there, even though we have our own government affairs.

Karr Ingham [00:22:33] Sure. And again, this is not unique. We still have, I mean, Diamondbacks, a great member of our pioneers, a member of ours, oxy, Chevron, ConocoPhillips, what I call a major independent. I mean, they’re still independent, but they are major independent. That is a great that’s a great company. Coco Phillips and they’re all members of ours. And I’m thrilled to death, that they are.

David Blackmon [00:22:56] But I’m still Mad at Conoco Phillips for buying Burlington Resorts.

Karr Ingham [00:23:00] I can’t do anything for you there. So, I’ll let you take that up there.

Stuart Turley [00:23:05] He was also telling you in the green room. David was telling you in the green room how big

Karr Ingham [00:23:14] I said, yeah, I oh, gosh. And, we’re we’re one of the we’re really the only Texans organization that directly plays in DC. Austin is a place you can work. We have a sensible legislature. We have a sensible governor, lieutenant governor, we have a sensible but very effective know what they’re doing, regulating agency for the industry in Texas, which the railroad commission, the TC Texas, Commission on Environmental Quality, does their work, but they’re not. They’re not insane about this. They’re not the EPA. Thank goodness. And so, Austin, we can be very effective there because the state of Texas understands this industry. D.C. is a much more difficult slog. But it’s where independents get hammered. Now, all of these things, every bad tax policy that has something to do.

David Blackmon [00:24:11] With fought over.

Karr Ingham [00:24:12] Oil and gas and now methane, you know, all this, all methane all the time now. And so quad. Oh.

Stuart Turley [00:24:19] What are you doing there?

Karr Ingham [00:24:20] What are those?

Stuart Turley [00:24:21] Well, David and I have been talking about that.

Karr Ingham [00:24:24] Well, the first thing we did and we’ve been active in DC, as an organization. Just with staff and volunteer folks that will go do the work up there. The Alliance hired a D.C. lobbyist and. While 2020 2021 somewhere around in there. So we’ve got the great Chris Carney who does work for us up there. He also does work for the National Stripper Association. We got a lot of common membership and an interest in those two groups. And does some, I think, work for Permian Basin as well. So we have our own DC lobbyists to carry the ball for us in DC, and we still go up there and do the work. But, you got to have a guy on the ground there, and we do. And so EPA is a tough place to get into and talk to anybody on anything now because they don’t want to hear it. I don’t think EPA cares whether they’re smaller, independent oil and gas companies exist or not. And they’re doing their level best to put them out of business, or if not, put them totally out of business, shut in a large, section of their wells. And, so in a, in a a man think about what we had, leading up to. This, you know, last reversal in the House where the Republicans got a minimum of a majority before that, meaning majority. But it’s but it’s helpful because they can throw up a wall to the worst of these things. And what you had there was a couple of years where you had, Biden, a Democrat, House Democrats in it. They all hate oil and gas. They have no affinity at all for smaller, independent oil and gas producers. Pardon me.

David Blackmon [00:26:10] They don’t have any affinity for Texas.

Karr Ingham [00:26:11]  although I certainly do not have any affinity for Texas.

Stuart Turley [00:26:15] But how do we get around in solution wise? And this is a question from both of you, because I’m a little weirded out by the, legislation through regulations or the regulatory process. How do we get around the the EPA or the the forceful nature of these regulatory issues that are killing us? Scope one. Emissions. Scope two. So three. How in the world can this world.

Karr Ingham [00:26:42] Indeed. Yet another astute observation by the great stewards.

Stuart Turley [00:26:45] I’m so sorry.

Karr Ingham [00:26:46] I think about how they think about how this works. These guys, and I’m speaking principally of EPA, but also SEC, which is the scope one, scope two ESG nonsense. These guys, are operating. Under the, I think, really misguided notion that the Clean Air Act and Clean Water Act of the early 1970s, right. Whatever the authorizing act for SEC was, I forget. But anyway, that’s about that dated as well. They believe that these pieces of legislation from decades ago authorized them and permit them to do any bloomin thing they want to now. And and they believe it was justified because we were authorized to do so under the Clean Air Act, Clean Water Act of 19 early 1970. Whatever. Same with the SEC. So what does that mean? That means Congress number one, has utterly abdicated its authority, right? And responsibility to the agencies rather than listen, if Congress wants to put a methane regulation into into place, introduce a bill, debate it. See if you can get it passed and see if you can get it signed. You know, if you do, I’m on. I like it, but at least you’ve gone through the process. Same with this FCC nonsense on requiring these emissions, climate change related additions to financial disclosures. And, you know, things that take what are very defined financial targets, right. Revenue expense, profit return on investment, things that are, that are, that are clearly defined. Right. And you know, what they look like over time.

Stuart Turley [00:28:24] You know.

Karr Ingham [00:28:24] So not so with this climate change nonsense. It’s a very moving target. And I assure you that target will never be met to their satisfaction.

Stuart Turley [00:28:32] Although, you know, since this is on the energy question, I can sit here and say, do you want to know what that man does on his other podcast? And, and I mean, this is a hoot. He had one with Megan Lapp, and I mean, she is a great lady that is advocating for the whales and the fisheries and the wind farms. I want to just give a shout out to the Biden administration, for doing something right. They’re equally racist, to all people, all forms of energy, because they’re regulating the snot out of everybody, raising the price for the consumers and killing the whales. You got to give them a hand.

Karr Ingham [00:29:13] At least they’re consistent with what you’re saying. I guess there’s something to be said with, but, you know, you know, again, we’re we’re talking about the extraordinary economic impact of the industry in Texas and beyond, but certainly in Texas of just what oil and gas producers do of all scopes and sizes. The real benefit, though, is to the consuming public. I mean, what have we done? I mean, you you to know as well as I do that as recently as mid 2000, we were importing, you know, easily the lion’s share of our petroleum energy consumption. I mean, 65% or so of our crude oil usage came to us from outside the country. We were dependent on geopolitical events that happened over there that are spiking prices upward all the time. And so the mantra then was, I want to be great. If we were not so reliant on these foreign sources of crude oil, and particularly from we, we we’ve had a long connection with Canadian crude oil. So that’s great. I’m not talking about them. I’m talking about OPEC, Middle East. So what do we do? Well, we we finally achieve. I say we feel better now. We finally achieved what everybody said. oh. Well, you quit laughing and then I’ll finish this one. Sorry we finally achieved we. Meaning? Not me. I’ve never produced a barrel or MCF of anything, and I stand in awe of people that do. Because what did they do? They put a lot of capital at risk, for one thing. And they figured out ways to grow us domestic. I mean, not only grow, I mean explode in US domestic crude oil production, to where we are, much less we’re a lot I mean, that’s 65% went down to 14 or 15%, and maybe lower. Yeah, absolutely. And, and so, just by adding that volume to global supply, we’ve really stabilized markets, kept consumers from being impacted by, any short term or long term impact, negative impact on supply. This is extraordinary. We’ve kept energy prices low and stable to consumers. And I mean, you know, from electric power to to a gallon to the price of a gallon of gasoline, which, you know, consumers metric about energy costs out there, what am I paying for gasoline today, in this week? And this thing that we said we always wanted in the US. Affordable, reliable, abundant energy. These things are all created and the latter to come from the abundant part. We’ve created abundant sea and us domestically produced petroleum energy, both crude oil and natural gas.

David Blackmon [00:32:03] And here at Texas.

Karr Ingham [00:32:04] Boy, have we ever I mean, again, we’ve led led the way here with a six fold increase. And, you know, in 2010, Texas was producing a fifth of all U.S. crude oil. Well, that’s a big enough number coming out of that number is now 43%. Wow. 43% of all U.S. crude oil production. Great state of Texas, 45 for.

Stuart Turley [00:32:26] How much?

David Blackmon [00:32:27] 34% of the natural gas in December. Oh, wow.

Karr Ingham [00:32:31] It’s a big number. But, you know, and cutting into us a little bit is the great Marcellus.

David Blackmon [00:32:35] Of course.

Karr Ingham [00:32:36] So. Well, well, let them.

Stuart Turley [00:32:38] But you know what? Again, we’re going to give a shout out to the Biden administration to keep Texas up there because they have got so many pipeline regulatory issues. And shutting down the Marcellus could just blow us out if the Biden administration.

Karr Ingham [00:32:56] And we that number one were coastal and number two were connected to Mexico. So we don’t have to go into a state with a lot of gas. Texas purchased natural gas. We can pipe it to the coast and get it on out of here. And we can pipe it to Mexico across the border and send it down there for their use. So thank goodness. Listen, the Biden administration has a Texas problem, right? We don’t have a lot of federal lands and waters in Texas. Right. And our pipelines don’t really. I mean, there are some obviously, but our our our our from the field to the market pipelines don’t largely leave the state of Texas. They’re trying to figure out how to cut into us. They can’t do it with the stroke of a pen.

David Blackmon [00:33:39] What they can do with the.

Karr Ingham [00:33:40] EPA, but they can do it with the EPA.

Stuart Turley [00:33:43] And they can solve and limit our export growth. They can limit the contracts with the ban there and every.

Karr Ingham [00:33:50] Bad decision you can make, they are making. And I don’t mean just bad for oil and gas.

David Blackmon [00:33:56] about the election.

Karr Ingham [00:33:57] About, oh, is this, is this even, a question that this is whether this is politically motivated or not? Absolutely not. Which tells you what you need to know what they need. Listen, I’ve got a problem with this term, the public interest. And yet again, this is an authorizing piece of legislation from decades ago that says we’re going to do these export facility reviews and make sure they’re in the so-called public interest. Well, you know, I guess 40 years ago, maybe you didn’t see it coming, that, kind of fanatical administration that has a singular agenda and misguided agenda and that climate change would begin to make some public interest determination about whether or not these facilities are authorized. In addition, as David mentioned earlier, to being, you know, buy an exact whatever you want to call it at the Texas Alliance of Energy Producers. And I’ve been our EVP for a while. And as he said, I’m currently our interim president. Mostly what I am is an economist, and I’m a market economist, and I’m a dogged, unapologetic.

David Blackmon [00:35:09] Unambiguous.

Karr Ingham [00:35:10] Unambiguous free market guy. And there’s no wiggle room for me on this.

Stuart Turley [00:35:14] I knew it, I knew I liked, you.

Karr Ingham [00:35:16] Know, excellent. I think the public interest determination is made when somebody determines there’s a market for these facilities, determines there’s a market for that product. Right. And determines that money, can and should be put at risk to bring these things into being and, and foster these processes. I am an unambiguous free trader as well. Meaning. And again, I’ll come into conflict with some people over this, but, whatever I don’t care of.

Stuart Turley [00:35:47] It’s great. Here, show that you can cancel.

Karr Ingham [00:35:52] One of my heroes, the great doctor Walter Williams, used to. Used to. I used to sit in for rush now and again.

David Blackmon [00:36:00] He is.

Karr Ingham [00:36:01] Fantastic. He passed away, what, a year or two ago, which is a great loss. Six. Six seven. Six eight. Black out. Philadelphia used to be a Marxist kind of guy. Turned into one of the most extraordinary free market economists that I’ve, I’ve ever known or known. But, you know, in his some of his later speeches, he used to say, listen, at this stage, the game just tab at me. I’m, I’m uninsulated. So, you know, there’s nothing you can say to me. That’s kind of how I feel about this. Now. I’m an insult to Bill at this stage of the game, so I, I don’t mind having this free trade argument with, with anybody. So what does free trade mean? It means, that the government has very little to do or should have very little to do with what comes in here and goes out of here. And we’re talking about sending. Think about the development of this process. My goodness. You get your produce. Natural gas. An extraordinary and growing quantities. And you get it to the coast and some company that has put billions and billions and billions of dollars into learning this process, establishing these facilities to turn natural gas into something that’s loadable onto a boat and shippable across the ocean and significant enough volumes. To make an extraordinary difference in supply in whatever part of the world do you happen to be talking about?

David Blackmon [00:37:20] Europe would be absolutely dead without it.

Karr Ingham [00:37:23] They most certainly would. And so this is the essence of trade and free trade and energy trade. Is is, listen, has just been put at risk because, I mean, the administration may well approve these after the election, which, again, is pure nonsense. But what they’ve done is in certain is, is and.

Stuart Turley [00:37:46] I think it’s nonsense.

Karr Ingham [00:37:48] I think it’s not.

Stuart Turley [00:37:49] Okay. I was just checking, I, I think, yeah.

Karr Ingham [00:37:51] Not just cars opinion but. Yeah. Yes. But what they’ve done is just insert this extraordinary level of uncertainty now in to any investor or anybody who’s thinking about plunking money down to, to create one of these facilities, as a part of this process and I, I, I don’t know, I mean, you know, good and well that these, DC folks intentioned, well intentioned, I don’t know, have no knowledge of what this process actually looks like and entails. And this is why we turn these decisions over to the market rather than politically motivated and, politically self-interested. Folks up there, and while I’m sermonizing about this stuff.

David Blackmon [00:38:38] All right, one last point. One last overtime.

Karr Ingham [00:38:40] Oh, of course we are a lot. I tend to do that. Think about what all this means. Green. Just think about green New Deal. Which, by the way, I was the first guy that I know of to call this green raw deal. So anyway, so. But that was a long time ago when that first came out. So think about what that and all everything that’s happening now is kind of affiliated with that concept too, right. What does that do to our economy as a country was based on free markets and people around the country, making everyday economic decisions for themselves, for their household, for their family and for their business. And so economic power, economic decision making power was very broadly diffused across the country and all of its players and states. The Green New Deal, the Green Raw deal, everything we’re talking about now takes that power, yanks it out of the hands of you and me. Right. The states, our citizens, households and businesses and concentrates it in the hands of a few. Let’s just call them elites. It’s an overused term, but it’s true. Decision making people in DC who think they know more than you do, who think they know better than you do, even the best intentioned of those I would not trust to run this economy, because they don’t have the knowledge of of the complex inter workings of the economy. One of the most brilliant economists or ever was the great Farr. Hayek used to call this the knowledge problem. The knowledge problem means you don’t have it. I’m sorry you don’t have the knowledge to run this economy, so you have to leave it in the hands of markets and all of these things that are green, raw, deal related, yank this power out of the hands of markets and concentrated in the world of politics Thank you David.

David Blackmon [00:40:25] Thank you sir. Discipline and education as usual.

Karr Ingham [00:40:28] Pleasure was mine. Thank you guys for having me.

Stuart Turley [00:40:31] I was doing my Biden Biden imitation.

David Blackmon [00:40:34] So far later today, so that’s awesome. Thank you all for joining us. We’ll talk to you again very soon.

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