Chuck Yates Needs A Job

0:20 Hey everybody, welcome to Chuck Yates. Needs a job, the podcast. In another bit of trying to exert influence over the railroad commissioner race, which today I've had zero impact on. Welcome my

0:35 guest on today, Luke Warford. The Democratic candidate, you're the Democratic candidate, right? 'Cause you didn't have an opponent - No, that's perfect - And we're gonna pass the run off. So I

0:44 can't - There we go - Yeah, we're gonna pass the run off. Are you done? Welcome in, Luke - Yeah. Good to be here. Thanks for having me - Well, I'm good - And God's name, do you wanna be

0:50 railroad commissioner - Look, I mean, mostly I'm sick of the people who are currently on the railroad commission messing things up, right? And that's from the winter storm to their inability to

1:02 enforce flaring regulations to how much we're all paying for energy now. Like, I just care a lot about these issues. And, you know, happy to, we'll get into my background and all this stuff.

1:14 But like, I care deeply about - the intersection of energy and politics. And I think that has just a huge impact on people's lives. And there's no office that's more important than this one from

1:25 that perspective - So do this, go through your background. How did you get to feeling that way and how did you get here - Yeah, for sure. So I studied political science in college, did a masters

1:38 at the London School of Economics, have always - A fellow alum with Mick Jagger - Yeah, there you go - There's some good ones, I think he might be the coolest, honestly - Well, he's coolest

1:49 period - Yeah, just a lot in general - Yeah, so while my growing up, my dad owned a CD store. And so my middle and my parents, my parents met waiting in line for Bob Marley tickets and my middle

2:02 name is Dylan after Bob Dylan. So like grew up just like idolizing - Okay, that's very cool, I'll give you that - Mick Jagger and I mean in a lot of, yeah, just - I was supposed to be Dylan Lucas,

2:15 not Lucas Dylan, and my grandmother was like, no, that's it. I don't like that, I don't like Dylan, I don't know, I shouldn't like it. But so went to the London School Economics, just where

2:28 was Undergrud? University of Delaware. University of Delaware, okay. Which is kind of random, but then gave me a decent scholarship and so got out of there with no privileges. Good move And just

2:42 like, have had a bunch of different jobs, but all, you know, went to work on the Obama campaign, worked at the World Bank where I did some energy, international development policy work,

2:56 was a, worked for a nonprofit in DC, went overseas, lived in Ethiopia

3:02 for a year, working on international trade and energy work, worked in consulting where I had like, actual oil and gas clients and renewable clients and we're in tech, came, worked at the Texas

3:16 Democratic Party for a couple of years, and then ran for this office. And I just like have always, I don't know, I mean, I think energy is everything, right? Like it's like so important to, I

3:29 mean, and just even as we've seen this year to our national security, to how we live our lives, with the grid failure, to just like our ability to function as a society on a day to day basis And

3:40 so I, it's just been like a running theme on all of these jobs I've had that kind of feel a little disconnected, but are super connected in my mind - Well, and that's why I'm glad you came on,

3:51 because one of the things I've always said is, unfortunately, people die when energy costs are high. People die when you buy energy from authoritarian dictators. And it just, because of the

4:06 importance in our life, it deserves way better than just chinklism, you know.

4:13 or throwing mud at each other or one liners, it deserves to be thoughtfully discussed because

4:22 I always say if we ignore the rise in carbon and the atmosphere and the rise of a degree, degree and a half, if we ignore that, we're doing that at our own peril. But at the same time, if we

4:36 don't recognize the good that hydrocarbons have done, we're basically throwing stones at poor people. 'Cause the rich people aren't gonna suffer any, but yeah - Well, 100 and I think, there's

4:52 nowhere

4:56 that is clearer than, I spent a year living in East Africa, right? And I know you've talked about this on the pod before too, but just like how we're thinking about the energy transition in the US

5:08 versus how it's gonna affect the rest of the world, the development world, I think is huge. But I think something that we don't give enough credit to, and frankly, like Democrats don't give

5:18 enough credit to, is that we need reliability, right? And like making sure the lights can stay on, not just in periods during the winter storm, but like we need oil and gas in order to have a

5:30 system that works here, right? In order to have an economy that that functions. And I just think we get into this doom and gloom sort of like, are you pro or anti-oiling gas? And it's like,

5:43 that's way more complicated than that, right? And like we need Texas oil and gas so much right now. And the situation in Ukraine has made that just so incredibly clear - Yeah, so walk me through,

5:57 well, let's do it this way. I make you energy czar of Texas tomorrow. You don't even have to listen to the governor, you don't have to listen to the legislature, lay out the plan for me. What

6:09 are you doing? Yeah, so I think there's a few. really important priorities, right? Number one is answering the question, you know, like we literally in our slogan on our website is let's keep

6:20 the lights on, right? So a huge thing behind why I'm running is making sure that we can keep the power on in extreme, all the time, but in extreme weather, right? And so I think one really,

6:31 this is not, you know, all powerful, this is like literally the railroad commission should be doing this right now, is creating and enforcing a clear weatherization rule for the most important

6:42 producers in our system - Senate bill three from 2021 says they're supposed to be doing that - Right, well, and I mean, something that I think a lot of people don't realize is even going back to

6:53 2011, like they've had the statutory authority to do this and 'cause there was a big, you know, there's a big storm in 2011, great almost fails, natural, there's natural gas problems because of

7:04 the lack of weatherization. And there are all of these recommendations from UT, from Nat from the national sort of regulators saying like, hey, your natural gas infrastructure is at risk. Like

7:17 you need to make sure that it's prepared for cold weather, at least the, you know, critical producers. And the railroad commission just like, didn't do anything. Like every lawyer I've talked to

7:29 has been said, yeah, they have authority to do this, but they just didn't do anything. And, you know, I think like number one, had they done that, that would have prevented what happened last

7:40 February. Number two, it's now been 18 months. They're, you know, we're in the public comment period for a new weatherization rule, just wrapped up on Monday on the 15th. And,

7:56 but there's essentially no transparency about who has to comply or what complying looks like. And they've got a terrible enforcement track record, right? They don't enforce the rules on flaring and

8:08 venting. They're not capping orphan wells at the rate we need them to. So down the line of things that they're not doing that they're supposed to, so even if they made a strong weatherization

8:20 standard and there was the transparency we needed on it, I have no confidence based on the last 30 years that they're going to enforce the rules. Yeah. My pet peeve on the winterization thing is,

8:33 at one point, the government can't do that

8:39 and they can't actually make you produce. Right. I mean, that's a taking of property and all that. So there's a little bit of the, I'm going to make you prepare and train for the marathon, but

8:51 you don't actually have to go run it. So that's one of the things that kind of bothers me, but I do get the sentiment behind it. The industry was caught ill-prepared for the freeze that happened.

9:03 No, granted it was the first time we'd had a freeze like that but still so I kind of get that. But, well, and I think that's only, I mean, to your initial question about, okay, I'm energy czar,

9:16 that's only part of the solution here, right? Like there is a huge other part of the solution that is increasing production, right, in oil and gas, but also expanding when solar, hydrogen, you

9:30 know, geothermal as it becomes more viable I think we need

9:36 a, there is a security in expanding where we're getting our energy from and having more production, right? We have more production capacity than any other state. Like we should be the fact that

9:50 you don't need to be an energy expert to look at like, oh, they have more production capacity than anyone else, but they're, you know, paying more, they have neither affordability, we have

9:58 neither affordability nor reliability. Like something's clearly wrong Yeah, I talked about this with a guy named Campbell Faulkner about six weeks ago in the podcast

10:09 Urkot and his take was we kind of have just sleep walked into where we are and we basically set up a free market system for generation that is pay for energy only, which might have worked okay except

10:28 you've got a federal tax code that in

10:30 effect subsidizes renewables. So you can build, I don't know the tax law well enough on it, but I get pitched all the time by people, hey man, we're going to get all our money back through tax

10:39 credits. So if the solar farm makes any money, that's where we get our return. And so you in effect have renewables being built for free when they generate electricity, they get paid. And

10:52 unfortunately because there's not a penalty or something based around reliability of that producing source, you don't have the economics to do base load type stuff. And so I think we were talking

11:07 this morning on the BDE show about it, that to me is gonna be the big thing that has to be addressed is how do we do that? Do we say, okay, it's great, we'll pay you for electricity and if you

11:18 can't deliver, you have to pay X. And that's what, do you have a solution for that or some thoughts on how - I mean, I mean - How to handle the reliability dispatchability, if you will - Yeah, I

11:30 mean, I think one, it goes back to just a general expansion approach, right? That we should be increasing production. But I do think specifically on the last point you made that paying folks,

11:44 even when they don't have to produce makes sense, right? Like we, if you're gonna try to keep costs down and or, but then sacrifice reliability, I think we've seen really clearly that that

11:54 doesn't work. And there's also, I think pretty widespread, you know, this is what, you run for statewide office, travel all over the state, right? I'm in Houston now, but we are, you know,

12:06 off, and I was in Marlin and Madisonville in these like deep red town - I got a trivia thing for you about Marlin, Texas - Yeah, okay - Do you realize that is where Hilton built his eighth hotel in

12:21 his career - No - There is a downtown Marlin, there is a 10-story building that's been abandoned. It was, I'm making up the year, maybe 1932 - Yeah, I was gonna say - It was built as a Hilton

12:33 hotel because there are mineral springs kind of right across the street - Wow - It services there. Hilton supposedly built, call it eight hotels and Texas lost his shirt and went away. But anyway -

12:45 Yeah - You know, also the home of Will BBQ, but go ahead - Yeah, he could cut - Well, I guess the point is, you

12:54 know, in that pretty much every room I'm in, right, I go, you go to political events, you talk, and I always say, okay, how many of y'all lost power during last February's winter storm or know

13:04 somebody who did and sort of like half. people shout out what that was like. And in obviously in, you know, rooms of Democrats, people are pissed and whatever, but like have been in rooms full

13:14 of independence and Republicans where people are also upset, right? They, no one thinks that where we currently are is striking the right balance. And so I think we have to take steps to increase

13:27 reliability. And there's some things that are like directly railroad commission related, like weatherization, like mapping out who our critical producers are, the supply chain mapping that they're

13:37 also supposed to do from Senate Bill 3 - So that's my, that's my PEP P on Senate Bill. So sorry, Senate Bill 3, sorry to hear this is. Okay, so what they did is they went through and they

13:49 basically said, if you produce more than 50 MCF of natural gas, you're deemed critical. If you're deemed critical by any entity, you cannot participate in the Lars program, the load reduction

14:02 program for our COT. So we have these water floods out there with 25 megawatts, 30 megawatts, 35 megawatts

14:13 of demand on power that produce 57 MCF a day that are now deemed critical and can't participate in the Lars program. Now, the railroad commissions will tell you, we're having these hearings, we're

14:29 gonna work through it, but people are actually saying, that's a million dollars worth of legal fees to me Why am I gonna do that? Right, of course. So my fear is we're gonna have the New York

14:37 Times headline that says, XYZ oil company produced their water flood all through the winter storm and killed people. And it's, there should be a basic recognition at the railroad commission to say,

14:52 if your electric load is way more than the amount of gas you're not deemed critical. You should be able to turn it on. and I'm a libertarian here - It's counterproductive. You should have to,

15:02 right? Is that what you're gonna say - Well, I could even live, the libertarian in me could even live with, not only are we gonna exempt you from being critical, we're gonna force you to

15:11 participate in the Lars program - Yeah - 'Cause that's at least in my mind because it would make sense 'cause that would be a policy that would make sense - But I think the point that you're getting

15:20 at, and this, you know, like I'm, this is my first time running, you know, like I care a lot about politics. I've been a political nerd since I was young, but like this is my first time

15:30 running for office. And I think, you know, I saw this working in tech. I've seen this, you know, doing energy work, like having regulators or people, elected officials who don't understand,

15:43 like a lot of these issues are incredibly complex, right? And nuance, then you need complex, nuanced solutions. And having people in power who like don't understand that complexity or that nuance,

15:54 like we end up with programs that don't make sense, right? And I think that is - you know, one of the biggest, so when people get frustrated about government, it's like, yeah, a lot of times,

16:06 there are people who don't understand the thing they're making rules about, making the rules, that doesn't make any sense - Yeah, and I think it's also a second point, 'cause I've always been a

16:13 political junkie, and it's actually been nice me being a political junkie 'cause I've been a libertarian, so I always know I'm gonna lose. You know, so to some degree, that gives me a healthy

16:23 view on everything There's also needs to be a sense of humility within the government to understand that everything's a trade-off - Totally, right - There is no panacea. There is no

16:36 one-size-fits-all. There's only better, you know - Right - And we can all fight about what's better, but we cannot fight about this as utopia - Yeah, well, and I think, I mean, part of doing

16:49 this too is like, frustration at my own party about that also, right? frustration at Democrats in general, in like large part for not, you know, like, I'm sort of a pragmatic incrementalist and

17:04 not to, I don't really like labels, but like to your point, I think we should be making things a little bit better, a little bit better, you know, that's like really how progress happens. And

17:15 too many people in, too many Democrats are, you know, wanna say, oh, this is the solution, this entire industry is bad. It's like, that's what, like, that's so dissociated from reality,

17:30 from like any understanding of our history of our economy, of

17:36 just like the role that Texas Oil and Gas has played both in the state but across the country for, you know, a hundred years - In World War II, right - I mean - We talked about that on BDE today,

17:47 too. The Germans had way more coal than anybody else on the planet. We're using Fischer trope technology to create gasoline, but we're almost tank stalled because - that gasoline's not as good as

17:58 stuff for fun from the

18:00 East Texas oil field. Right. And we, there's, I think like, there's so much pride that Texans have about that and should have about that. And I think like, you know, we, again, I am like

18:18 beating up on the Democrats, but I genuinely just, I just think it's not, if you don't understand history, if you don't understand what's happened and what has gotten us to hear, it's really hard

18:30 to then figure out where we need to go. Well, let's go to that point. 'Cause at the end of the day, at the end of the day, I think what the argument against you would be is, okay, we may be the

18:43 most horrible place in the world. We still have this amazing economy. Everybody wants to move here. You know, say what you want about Abbott, say what you want about Patrick, you know, say what

18:55 you want about the existing - I'm out of commission all that sort of stuff. You seem like a pragmatic type guy. Okay, you're obviously pretty sharp all that. If we let you in, how do we not get

19:08 AOC John Kerry, Elizabeth Warren, President Biden

19:16 in, how does that not happen? Look, I got this question all the time and so I actually like loved it. I'm not that smart, met original stuff. No, but I genuinely love talking about it I was,

19:28 yeah, genuinely pretty regularly. Someone will raise their hand and be like, well, how does AOC affect your policies? And I'm like, I don't, just to be clear, I don't really care what national

19:37 Democrats are doing. I don't really care. AOC is doing what is best for her and her constituents and her district. That has nothing to do with what I would do as railroad commissioner, which is

19:48 the reason I'm running for this office is because I think the people who are in this office serving the public, right? Like I was raised with an idea of what public service means. And I think that

19:59 people in this office are not serving the public. I think they're serving their really rich billionaire donors and everyone, like Texas consumers are getting hurt by that. And so I want to run to

20:11 do what's best for Texas. And that is what I would do as a railroad commissioner. I think like the, so we were talking about this before we started recording, but, or maybe it was now order of

20:27 things. Did we talk about my dad before? No. So growing up my dad owned a CD store and like it was the 90s, I would, it was like right down the street from my elementary school. So I'd walk

20:43 there every day after school and I grew up in the CD store, right? I thought it was the coolest thing. They were like Nirvana posters on the wall I call this really cool shit. You know, it's so

20:53 funny that you say CD store instead of record store, but I - Yeah, well, no, it sold records too, but it was like, but nobody, so at that time, nobody was buying records were not cool, right?

21:05 Records were cool before the 90s and then they'd become cool - Well, they were only - It's not that they were cool, they were the only thing - They were the only thing - They were on the, yeah,

21:12 yeah - Well, no, and I have a record player and a bunch of my parents old records and all that. Like, I like records a lot, but at the time, it was a CD store, right - Sure, absolutely - That

21:22 was the bread and butter of what they sold. And yeah, I guess it is my youth a little bit too, but, like, and then, you know, 2000 internet gets invented, Napster file sharing comes about and

21:36 people like stop buying CDs, right? Like it got to the point where, and Walmart and a bunch of this stuff, like you could go to Walmart and buy a CD as an individual for cheaper than my dad as a

21:50 small business owner Right - And that's like, oh, this market's dead, right - Right - And so then he closes the store, he was in his mid-fifties, he'd never, you know, he'd never really done

22:03 anything else other than work at CD store, record stores, and then run one. And he like never for the rest of his life never really got a full-time job again, right? He did, you know, some

22:14 part-time stuff with my neighbor who built houses, he worked at the local housing authority for like part-time for a little bit And so that really informed, and like that was hard on our family,

22:25 right? It was financially hard, I think it was hard on him in a way that he didn't really know how to process, right? Like so much of our identity, I think especially as men is wrapped up in like

22:39 providing for your family and your job - That's our pressure point as men - Right - Because if we can't fix something, that's where we get a shit - Yeah. And he couldn't, he didn't know what to do

22:49 And I like that's like. One of the things that that's how I got interested in economics, right? That's how I got interested in business in general. And

23:02 like it informs, you know, when I talk to folks who work in the oil and gas industry, who are worried about like their long term job prospects, who's, you know, I was out in, in Midland a few

23:13 weeks ago talking to a geologist who was like, this is my career. Like I've done this for 30 years. It's the only thing I've ever known And like you can't just talk about job retraining or like, I

23:23 mean, easily switch industries or anything. Like that's not going to happen. It's not, it's not as easy as that. And so I think, um, yeah, there's just like, uh, anxiety, like everyone

23:35 knows that the economy is shifting. Everyone knows that the world is changing, right? And it's a matter of like, how do we fit into that change and how do we position ourselves and who wins and

23:45 who loses and who gets left behind? And so, like, when I - you know, your question was about how do we worry about the economy, right? Like the reason I'm doing this is 'cause like of the

23:56 economy, I wanna leave to my kids and my grandkids, right? Like that's like what this is all about for me - Yeah, so let's do this. Let's

24:11 go into kind of

24:14 just some specifics here just to kind of, so we could start at the top. I mean, Biden was gonna get rid of hydrocarbons. You don't sound like you're getting rid of hydrocarbons. Federal lease is

24:26 okay. I know

24:30 we don't have them in Texas. You won't be messing with them, but - Yeah, I think - Federal leasing for oil and gas is okay - Yes, it's such a small, I don't, like that's not an answer, right?

24:43 Like I think the whole discussion about federal leasing is like, and even like misses the point. was tweeting about this the other day that like, you know, private, especially in the Permian,

24:54 right? It's all private production. And so like, yes, for sure, but also that's like not, I don't know, talking about the federal piece of it, I think is sort of missing the full picture -

25:05 Yeah, no, I'll get that. I think, and maybe that was a bad example that is the railroad commissioner, but it was just, I was gonna run through - Yeah, no, please, yeah, certain policies just

25:17 to try to say, here's AOC, here's Luke - Yeah -

25:23 You know, I think another big issue, again, doesn't necessarily affect the railroad commission and doesn't affect Texas, but I think what, bigger picture, and maybe I should have started with

25:35 this, is to the extent we create a narrative or a feeling that an industry is gonna be regulated out of existence, it dries up the capital to it - Yeah - And even more importantly than that, is the

25:51 valuation multiples on that industry become lower. And so right now in oil and gas company trades, it kind of three times EBITDA. Guess what, a three times EBITDA, I am not in Senate to go create

26:03 more EBITDA. I'm in Senate to send that money back to my shareholders instead. And that's what we're seeing, right? And that's exactly what we're seeing. And so I think like the whole narrative

26:14 starting at top is what filters down and ultimately leads to that -

26:20 Another, do you think that's changing though? Do you think Ukraine's changed that a lot? Like I feel like in the last eight to 12 months, there's been a total shift in the national conversation

26:32 around oil and gas in the future of oil and gas in this country. And I'm curious if that has had any, I don't follow the finance side of it as closely as you do, but I'm curious if you've seen that

26:44 shift - Yeah, so my two cents on that looking at it is I mean, you had a presidential election where it was literally, we're gonna stop fracking. Yeah. I mean, that was the narrative. Then we

26:58 saw the inevitable, what I think is the inevitable result out of that was just flat out higher gasoline prices. And you had the political pressure of that's bad. 'Cause that's the one metric that

27:10 people can actually look at and have an opinion on and somehow relate back to So I think that started to shift the narrative somewhat. It feels begrudgingly like, and I'm talking about Biden, Biden

27:29 is begrudgingly having to say, this isn't the worst thing on

27:35 the planet. And then I think you're right, Ukraine, I mean, Putin marching in there and us going, guess what, when you buy from authoritarian dictator? So I've heard one of the large investment

27:47 banks has actually put on the ESG favorable list if you can get LNG to Europe, which is big, 'cause that's a big change - Yeah, so, but I mean, you still look at the trading multiples and they

28:02 have, the stocks have gone up, but so has the even DAW, so I don't know that the multiples have changed that so And. - Well much, and if you're gonna, I mean, this comes back to just like

28:13 problems with our political system in general though, right? If you're gonna connect the causality there back to the narrative around oiling gas and regulating oil and gas out of existence, right?

28:25 Like the reason that is a democratic narrative, right? The reason that that's a democratic narrative is a few reasons, I mean, a few reasons, but I think one of the biggest is the same reason

28:37 that we see Republicans in primaries shifting further to the extremes, you also see the same thing on the democratic side, right? that there's pressure to make. absolute statements to have those

28:51 absolute statements be as far to play as much to the base as possible in order to win democratic primaries. And I just think that

29:03 it's one of the really fortunate things about me not having a primary opponent is like, I didn't have

29:14 to deal with being attacked from that. You know what I mean? I can say, hey, these are the practical, reasonable solutions that I believe in that I think are, you know, that the vast majority

29:23 of Texans want and benefit the vast majority of Texans, right? We don't have to have this conversation that's on either fringe, ideally. And I think it's going to be interesting in November to see,

29:34 you know, people are so tied up to party identity. And, you know, like they're going to see the D next to my name and we'll see if they'll get past that. But I mean, we've got what was the max

29:46 race? And then the low race, I mean, in terms of statewide, what was the highest percent a Democrat's gotten in the last few runs? 'Cause - Better lost by 26 - Better lost by 22 - Okay, so

29:60 that's kind of the max race - Yeah, 214, 000 votes - Okay -

30:07 And no Democrat has won the railroad commission since 1990 - Yeah - So that's the year after I was born.

30:16 So, yeah,

30:19 I mean, it's been a long time, but it's interesting because we've pulled this race, right? And you look at the top of the ticket race, the top of the ticket, and it's in a poll you might see,

30:32 okay, Abbott versus Beto, you say a bunch of bad stuff about one of them and it moves voters like a pointer to, right? Everyone's opinions are already formed. Wayne Christian, my opponent,

30:43 mostly hangs out in his office in Austin. 70 of voters have never heard of him, right? And so what that means is the combination of people not really knowing who he is, plus the fact that almost

30:57 everyone in the state had a negative experience with the grid failure. And so in a typical election year, like people are not directly experiencing his failed leadership, but this year they did.

31:09 And so when we tell voters, and this is true with even independence and Republicans, when we tell voters that Wayne Christian and the Railroad Commission could have prevented the grid failure, they

31:20 swing in our favor pretty massively, right? And Texas is

31:24 huge. There's a lot of things that play about if we can communicate to enough people to get them to move. But I think like one of the reasons that we have that opportunity with this race is that,

31:35 I'm not really running on partisan issues. It's not Republican or Democrat. If you want to keep the lights on, it's not Republican or Democrat to want people to have more affordable energy or to

31:45 not like. pipeline monopolies, right? And so - I've often said that Sarah Stodgner lost the Republican primary for US Senate, not right or not right, or a commission, but - Yeah - I like it -

31:58 Yeah, we did a podcast where Wayne had put out a piece on - Yeah, no, I'm sorry - Sarah was asking me, yeah, yeah - Yeah, for sure - We were talking gun control, all of these sorts of things -

32:10 Well, and look at the science on his website, right? He's just like pandering to the base, right? And unfortunately, that is where we are in US politics in a lot of ways, but Canada, I mean,

32:22 like, I agree with a huge amount of things Sarah said, right? Like she was totally like a pragmatist, trying to solve some of these issues, trying to make them better for Texans, for people who

32:34 work in the industry, because like, the argument, I mean, even take flaring, for example, right? Like I've gone to folks in the industry and said, Hey, this is a, you know, The railroad

32:46 commission is not enforcing the regulations on bad actors, right? There's bad apples who are spoiling the bunch for everybody that hurts the reputation of the Texas oil and gas industry. And

32:57 especially with what's happening in Europe right now, European buyers are going to be looking to buy natural gas from other places outside of Russia. And if Texas wants to compete, they're going to

33:09 be willing to pay a premium for lower emissions hydrocarbons, right? And so looking at, again, this goes back to where's our economy going, looking at the global natural gas market of five years

33:20 from now or 10 years from now, we need a regulator who can

33:25 say with some credibility, Hey, this Texas oil and gas is clean, right? It's good. And we just don't have that right now. Not only is the railroad commission not enforcing the rules, literally

33:39 just like the rules on the books on flaring, but if they said they have no credibility. that they were, no one would believe them - Yeah. I mean, in fairness to the railroad commission, it's an

33:55 awkward position there in that they have to advocate for the industry, you know, 'cause I mean, it has led to a lot of economic good and Texas and et cetera, but then at the same time, you're

34:08 playing the regulator. And so it is an awkward position for them to be in And I will say this, as the libertarian, I'm not sure I have some great idea for a better system. You know, 'cause at the

34:23 end of the day, I've always been kind of free market guy and all that, but who is actually penalizing you in the marketplace if you're flaring illegally? Nobody, right, right, yeah. And being

34:37 the libertarian in the free market depends on incentives and penalization.

34:44 And so, yeah But there's - Let's work through that a little though. Like there is inconsistent, there are rules that some people abide by and some don't. And there's inconsistent enforcement of

34:56 those rules. Like that from an economic perspective, even as a libertarian, just starts the market, creates messed up incentives and hurts in this case, often Texans, right? I think you would

35:08 argue that if there's gonna be rules, we should enforce them consistently and clearly, right - Well, and I will even go stuff further to join your side of the argument is, the rules just aren't

35:20 that arduous - Right - They're not that hard. I mean, I'm an oil and gas guy, blah, blah, blah, blah, but I mean, it's not that hard to follow the rules and yes, it costs a little extra money,

35:31 but it's not the end of the world. I mean, it's not like we're playing in Colorado. It's not like we're playing California, you know - No, and you would think that even just as a baseline having

35:44 someone who's gonna. consistently enforce the rules would be beneficial. I think a couple other things I'd introduce that I'm curious what your thoughts are. Like in the last reporting period, 99

35:57 of Wayne Christian's campaign contributions came from oil and gas executives. Like 25 people gave him donations. We had over 2, 000 donations over that period. 25 people donated to him. Like

36:09 there's no world where that incentivizes him to

36:14 do what's best for the public rather than what's best for those 25 people, right? Like that, I don't think anybody would look at that regardless of your political leanings and say, Yeah, that

36:24 makes sense. And then the last point that I would just make is they are,

36:33 if you go back to 1891, the Railroad Commission, the foundation of the agency was around preventing monopoly behavior in the railroads at the time. But preventing monopoly behavior. And now what

36:43 they're doing is the exact opposite, right? transparency in the interstate gas market. They are totally, the pipelines are making huge amounts of money. I mean, even just like you look at the

36:56 winter storm, Kinder Morgan made a billion dollars in a week. Energy transfer made 24 billion in a week and then gave a bunch of money to the Abbott and to Wayne Christian and to the candidates who

37:11 protected the system that allowed that to happen It's wild that we, the amount of power that the pipelines have and that has a negative impact on operators, on producers. It's got a negative impact

37:25 on the power plants and then it drives up prices that Texans are paying for electricity that consumers across the state are paying for electricity. And like when a system like that, when there are

37:38 such a small number of people benefiting And there's also a money trail that. in political donations, like explaining that, it's not a huge surprise that we're in the situation we're in - Yeah,

37:49 now,

37:51 pipeline stuff's always murky because you get into FERC approval on everything - But I'm just talking about interest state, right - Yeah, so - Yeah, so - Which within the state - Yeah, so, you

38:02 know, and you get into the whole thing, if you sign leases for life, and so you do carve out monopoly type positions

38:11 That being said, the origin of all those pipelines was like 10 cents an MCF for transit. And so it's really the merchant arms around them in terms of buying the gas. And so I have less of a problem

38:25 with, well, we bought the natural gas and a price spike happen. And so, yeah, so we're gonna go, we're gonna go sell it. So I have

38:36 the problem when the regulated entity utilities are the ones doing that Because that's ultimately where. comes back on the rate payer in terms of, well, we took a bet, we bought all this stuff and

38:48 look, we were wrong and you're gonna have to pay it through rate recovery. So yeah, we could probably do a whole podcast on that. So well, and even the, going back to like, yes, there are not,

39:02 I mean, to your point though, there are natural monopolies, but one of the rules back in Econ 101, right? And a natural monopoly is that you have a regulator making sure the natural monopoly is

39:11 not exploiting that power to the, like, and

39:16 having a negative impact on the public and on consumers, right? So that is just like the, we could talk about this for three hours - Right, yeah,

39:27 like I said, I don't know that I have a perfect solution here for a better regulatory framework. I mean, I do think, I do think we have to be very, very careful about it because. We have this

39:40 amazing opportunity in Texas and that we're so big, we have so many resources and we don't have to touch FERC for a lot of this stuff 'cause the biggest thing, and I think it's also incredibly

39:52 underreported that happened is, Biden got to point the three, two majority to the FERC and they changed the rules. Now it's all about climate change. So there will not be massive pipelines ever

40:03 built in the United States again until we go to your incremental approach. Is this better for climate change? I could live with that as this thing. Yeah, yeah. But yeah, so we have potentially a

40:16 lot of opportunity to export

40:21 LNG, Bitcoin, mine, everything you wanna do because of our unique kind of status as an island. So we do have to be careful and thoughtful about this as we go forward. Well, and I think it, you

40:34 know, I've talked about this a bunch on the campaign, but we're Texas, we should get our own house in order and so that there isn't risk of the EPA or the feds coming in and messing with our - I

40:47 agree with that. I get shit on by my Republican fans on that one, but I truly believe that. I go, your alternatives to the EPA - Right, like, you know. And I think, you know, we continue on

41:02 this path with this sort of like inconsistent or lack of,

41:08 I just think when I look at Wayne Christian, I look at the decisions, it's, they don't seem like they wanna solve the problems. Like they don't, like, I'm young and I am so fired up to go,

41:19 these are really complex issues to think them through, to try and solve them, to like move us in the right direction. And I just don't see that from him and from, you know, from the agency in

41:32 general - Yeah, so, okay. I've gotta get you out of here. 'Cause you got another way more important thing to do than this, but I mean, this is more fun than that. Give me one or two more things

41:45 you would do kind of as energies are and

41:52 then we'll close on the big question course of, So Yeah.

41:58 we talked about weatherization, we talked about I think the massive transfer of wealth during the last February's winter storm in terms of

42:13 how much money the pipeline's made.

42:18 I think like we need a different solution for that. So that's both going forward, increasing interest state gas market transparency I mean, we have transparency on the electricity side, we should

42:27 have it on the gas side. I think that would help protect Texas consumers. I'm talking a lot about. enforcing the existing rules on flaring, dealing with the

42:41 Orphan Well situation. There's all this federal money that we're, that you could be bringing here, taking advantage of creating jobs, addressing the Orphan Well situation. I think like we're not

42:53 doing that with sort of the vigor and focus that we should be. I know you've spent a lot of time on Antina Ranch and just like groundwater is a huge issue, right? Like you

43:06 look at

43:09 the 100, 000 campaign contribution that Wayne took right after approving a waste disposal project on top of the Ogallala aquifer. Like three days later - Over the objection of staff - Right, right,

43:23 literally. Like the way the railroad commission works is that staff experts evaluate a thing and make a recommendation and he was just like, No, I'm actually gonna ignore you. and use my

43:34 experience as a gospel singer to make this decision that benefits my donor who's three days from now, I'm gonna give me 100, 000, right? So I think like they're getting the balance wrong on

43:47 protecting groundwater. I think that's incredibly clear. Like the fact that, you know, yeah, it just is like over and over again, I think not fulfilling that the part of their mandate that's

44:01 supposed to like keep the public safe I think it's super important - Got it - Yeah - If you'll permit me one bit of advice and take it for what it's worth from the random libertarian, I actually

44:14 think as hokey as this might sound is, and you may have already done this 'cause I did not produce your website before we did this, but if you literally listed out specifics on everything and in

44:29 effect signed it and pledged, for this, not a vote for that. I think that would help a lot. Because there's

44:38 just no way to get away from

44:42 AOC, and the like, and I think with as much specificity as you could do all that, that may go a long way for a moderate to say, Okay, he's not gonna cross those lines - Yeah - Well, I think

44:56 that's a great idea. We have,

44:59 I think we have an issues page that like pretty clearly outlines it, but I'll send it to you afterwards. And you can tell me, you can say, This isn't clear enough, I want more clarity. And I'm

45:08 in, it sounds great - Okay, so let's close with the big question - What's the big question - Do you plan any nudity during this campaign - I knew that was coming up. I do not plan any nudity. I

45:20 frankly, I don't think any of your listeners or anyone in the state would wanna see that. I think faced with the opportunity to, like if I could guarantee myself a victory, but I had to get naked,

45:31 I would do it. Nice. I hope not on this podcast. No, I'm sure. I'm certainly not. Well, Luke, I appreciate you coming on. This was cool to talk. You're welcome back anytime. And like I said,

45:46 I think energy is too important for not everybody to be talking about this. And more importantly, listening. Yeah, 100. Thanks for having me on track.