Defying Gravity: Energy soars in 2024 and will be Popular in 2025

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Hill Vaden:

Welcome back to EnergyCents, an S&P Global Commodity Insights podcast, covering all topics on the intersection of energy and finance. This is your host, Hill Vaden, and I'm here as always with Sam Humphreys. Sam, how are you doing?

Sam Humphreys:

I'm doing great, thank you Hill, how are you?

Hill Vaden:

I am doing well. We are talking on December 9th and I understand that it's the 50th anniversary or the upcoming 50th anniversary of Dungeons & Dragons, and I know you're a sci-fi person. Is that a game that you play?

Sam Humphreys:

I don't play. My friends have just built a bespoke Dungeons & Dragons table and it is phenomenal. There's a smoke machine in there. They've got the little dice, cubby holes and places for snacks, and it's amazing and I'm just not part of that campaign. This sounds so nerdy, but it's phenomenal and I do love it very, very much. Do you play it? Are you as geeky as I am?

Hill Vaden:

I think I am as geeky as you, but no, I don't play, but I'm really intrigued by the game and I've just never gotten into it, partly because it sounds like a huge time commitment, but apparently-

Sam Humphreys:

It is a lot.

Hill Vaden:

... it's become a lot much more mainstream.

Sam Humphreys:

I think that's Instagram's and TikTok's fault, which is not a bad thing, or the algorithm has totally skewed in my feed, so it seems like everyone is playing it. It's just what I see. But yeah, they did a film, right? It was great.

Hill Vaden:

I did not see that.

Sam Humphreys:

It was phenomenal.

Hill Vaden:

So you saw it?

Sam Humphreys:

I saw it. There was a gelatinous cube and it was wonderful.

Hill Vaden:

As you looked around the theater, was the audience geeky or mainstream?

Sam Humphreys:

Yeah, it was quite geeky.

Hill Vaden:

It's geeky.

Sam Humphreys:

We embraced that and it was great.

Hill Vaden:

Well, speaking of geeky anniversaries, this is also the anniversary, I think the sixth anniversary, of our holiday special with Reed Olmstead and David Vaucher where we talk about the year before, so 2024, make a few predictions on 2025. And this will be our last episode of 2024 before we take a two-week break for the holidays heading into January. So we thank all of our listeners for the past, I guess 50 weeks or so, of listening. As we hand off into the conversation, what are some things people should listen to from the conversation with David and Reed?

Sam Humphreys:

Well, this is always a great conversation. It's lovely to have them back again. And like you say, we had a little talk back of the year that's just gone, and one thing in particular that we kicked off with was the gas markets and gas industry and looking at how prices have escalated somewhat in Europe due to various reasons and what the outlook might be going into next year. And also the rise, or continued development of EVs, and how the recent elections might have impacted that again going into next year and there are some cool resolutions that we talked about at the end, which is always fun. And what about you? What did you think?

Hill Vaden:

Yeah, just so overall I love doing this with David and Reed. It's a lot of fun to have them on every year to do a look back and armchair quarterback predictions of the coming year. And I think just big picture that there's just so much investment going into the energy sector right now that new things are coming in that are surprising people, old things are continuing to surprise people, and it's really interesting to be a part of an industry where there's a lot of money going into it and continues to go into it, so nuclear is obviously one of the flavors of 2024, gas is having quite a resurgence, so just plenty to talk about and a lot more fun when you're seeing investment than when you're not seeing investment.

Sam Humphreys:

Absolutely.

Hill Vaden:

With that we'll hand off to the conversation and thanks everybody for listening this year.

Sam Humphreys:

Thank you all.

Hill Vaden:

We are recording our annual Christmas special with Reed Olmstead and David Vaucher, great day that so many of us look forward to and all of the friends of EnergyCents look forward to this episode, so how are you guys?

David Vaucher:

How's everyone?

Reed Olmstead:

Doing well.

Sam Humphreys:

Good.

Hill Vaden:

Very good. So the drill here is to review 2024 and share some expectations on 2025. We mix pop culture, we mix energy, and we try to do it all with some fun. This is a Christmas miracle in a way, becoming a Christmas miracle, because this is six years in a row and there's a lot of turnover in companies.

David Vaucher:

I wondered how many we were at, six sounds about right.

Hill Vaden:

I think it's six in a row. So we have all stayed in the same employment place for now six years, so hooray.

Sam Humphreys:

Hooray.

Reed Olmstead:

Testament to inertia.

Hill Vaden:

Physics is a wonderful thing. So let's start with energy. Reed, you and I have had a lot of fun this year going out and talking to people about natural gas. If we think about natural gas today, natural gas is, in the US is what? $2, $3 or something? It's not a very rich commodity in terms of the price that it's warranting. As we're thinking about natural gas this year and next year, this year's been a bad year for natural gas. Do we think next year will be better in North America?

Reed Olmstead:

Anybody that's been in natural gas for more than a couple of years always thinks next year will be better. I've been in this business for 13, 14 years and that's been the mantra every year. It's bad this year, it'll be better next year though, just wait.

I think you mentioned how low prices are. They've been really bad this year. We've seen a lot of shut-ins, curtailments and whatnot, but a big pop earlier this week, I think, on some expectations of a good cool, cold winter, so that'll be nice.

Look, I think that when we're considering natural gas next year, if you look at the strip, it's still not great, it's about three bucks for next year, but there is definitely some demand on the horizon with LNG starting up. And so if that materializes, which there's still uncertainty, we're going to have a lot of LNG coming on stream all at once. Will anything be delayed? Are we going to be able to hire? Will we have a cool winter, cold winter such that Europe needs that LNG? Look, if all that happens, it will be a good year for natural gas.

That's if and a lot of things after it. So I'm not saying it won't be good. If you look at the situation now, you can definitely build a case for rising gas price, but there's a lot of opportunity for that to not materialize.

Hill Vaden:

All right. David, what about the other side of the pond? Sorry Sam, I'm interrupting you.

Sam Humphreys:

Not sir, I was going to also say

David Vaucher:

Standard disclaimer applies here, which is I appreciate being asked about a range of topics, but within the company I'm an expert, even to that extent on a very small range of things, so what I'm about to say is more just my perspective is someone who spent a lot of time in North America and now lives in Europe because I'm European. And one of the things I was sharing with Sam and Hill before the show started was that the way that France does a lot of its billing is that you pay a flat rate every month and at the end of the year you either get money back if you overpaid or you pay money in if you underpaid.

My wife and I bought a house at the end of last year and it was a smaller surface area than the apartment we'd had before by quite a bit. The original apartment we were in was something like 1600 square feet, so 160 square meters, which is quite large for Europe. And the point I'm getting to is that the heating was gas and I'd been paying something like 250 euros a month for the mix of electricity and gas with most of that being a cost of gas. And this was like Ukraine conflict was in full swing, and I was looking forward to moving into this current place which is all electric so it's no longer gas radiators, it's electric radiators in a smaller space.

So I talked to the energy company when I was swapping my contract and they said, "You should be good for 130 euros a month, given your square footage." So I pay my 130 euros a month. I've been hit with some tax bills at the end of the year because it's Europe, it's France, and I get this bill for 1800 euros for electricity.

Sam Humphreys:

Whoa.

David Vaucher:

I'm thinking, "Surely this is wrong." And so I went and looked at the counter, looked at what I've been paying per kilowatt, so if you all want to compare, I think I was paying, they call them full hours and empty hours. So peak demand time, you're paying something like 20 euro cents a kilowatt hour and empty demand is like 15 cents a kilowatt hour, and so you map it up and it's like here I am. And it gets really complicated to take this back to gas because, not only do we have the complexities of the European power market, which my colleagues at S&P Global can speak to, but I can't. But the gist that I understand is that the cost that it would cost in France to produce is not actually what I would see as a consumer, it's a market driven rate.

So that's disappointing because we are a leader in nuclear power. France has a long history and a long positive history in terms of how it manages its nuclear facilities which are not being managed to its full extent now, so that's disappointing. And then on top of that you have the fact that if you were getting any heating or energy from the gas side, you have this LNG question which is the capacity, which is like Reed said, what is the weather going to look like? We had snow yesterday, so that to me seems like we might be having kind of a cold winter. And then on top of that, this is way out of the scope of this call, but you have the regulatory and tax portion because I know that my French government has to make up quite a shortfall that they had from doing among other things, shielding people from the huge increase in energy prices during COVID. We called that the fiscal shield basically.

So you have all of that combined, which is that whereas Reed is saying it might be a better year for natural gas, that's on the producer side because I remember the curve, the price for Henry Hub actually goes up as that gas leaves the country. That curve is supposed to come down on my side because of the fact that we have more supply coming online. Do I actually think that is going to lead to lower energy prices for me? I don't know, but I will say that the company I get my power from has now said, "Okay, you're not paying 130 a month, you're paying 310 a month now." So that's where I'm at now and I'm in a position, these calls get to be fairly wide-ranging. I will say just before we move on to the next comment or question is that stuff is important, because I'm lucky, I can absorb that. The average person cannot.

So when we look at some of the things happening around the world, that cost of energy is directly related to all of that, because it's one thing to say the market rate for power is this, it's another thing to be the person that has to actually pay that, and then what does that mean for their decisions going forward? It's important, so I hope someone way above my pay grade in some public offices thinking of how this stuff is interconnected because I think we're going to be talking more about energy prices and future calls in years following and how that may have impacted some of the things that happen later on.

Sam Humphreys:

I feel for you there because yeah, I think the government announced today in the UK that the price cap is crazy by 1.5% for power for UK people, so it's exactly the same. It's high and slightly depressing going into Christmas, but we're going to race through to the next subject and I'm going to chuck in some of the pop culture stuff because its my favorite. Wicked is out. Wicked is out and they've done some phenomenal marketing. It is just exploded over social media and everywhere you look, you're seeing stuff pop out and I'm somehow going to relate this to nuclear power. There is a correlation somehow because we've seen this, we've seen come front and center in a lot of news, particularly in the US and like David you just mentioned in France, it's a big part of the power mix in France and even in the UK, we've got a nuclear plant that they're hoping to establish. So I don't know, Reed, do you want to take this one? What has happened in the last year that you think is a highlight?

Reed Olmstead:

For Nuclear or for Wicked?

Sam Humphreys:

Both. I would love your take on Wicked.

Reed Olmstead:

Look, I have a fourteen-year-old daughter, so anything with Ariana Grande is great. So look, I'm excited about it and I wondered why we're doing a podcast the day it comes out right? But that's fine. That's fine. I'll go with it.

Hill Vaden:

There are no movies on at nine o'clock in the morning.

Sam Humphreys:

You're going to the wrong cinemas Hill.

Reed Olmstead:

Yeah. Yeah. The big story this year, what was big? I think the big story for energy in North America was just, as a colleague used to say, the dead cat bounce, which is, it was a thud. Prices weren't great. They were fine, obviously the gas price that we talked about. But just if you look at what happened on the oil side of North America in 2023, it was huge. It was phenomenal. It was, I wouldn't say unprecedented because it's happened before, but it was amazingly different than what we saw this year. I mean a million barrels a day of growth in 2023 and basically flat this year. That's surprising. It's a lot more fun to talk when things are moving than when things are not, things are just flat, but for me that was the big story in energy this year.

David Vaucher:

My view on this, the European, I think one of the larger stories which maybe Samantha you can speak to, is the tax regime which the UK had announced had a huge effect. I don't have any specific values to list, but when I looked at some of the FID impact, it was big. And usually when companies threatened, faced with regulation to scale back or move, you, at least I, roll my eyes. I'm like, "Okay, whatever. You're not really going to do that." But I think in this case they actually did take quite a drastic step, so that's important.

In terms of nuclear, I will say, and this is again, not only am I not the expert, this is now my personal point of view, so anyone listening to this, this is just me speaking, but one of the things I really like about living, and this is French, because I think when you talk nuclear, I think the French come up pretty often. One of the things I like about living here is that there is a very strong history and there's just a technical pedigree, there's a pride in doing big engineering projects. If you look at a nuclear plant, that's exactly what it is, and I think it's... My personal view is that any source of energy, there is a downside. There's no doubt that nuclear waste is a problem, which I don't fully comprehend, in the same way that fracking has downsides, in the same way that you can put up an offshore wind farm and that has potential ecological impacts or maybe the blades aren't engineered properly and one snaps off and causes damage, you can come up with any number of downsides. So I am definitely on the green side of things for sure and my personal of view is that we need more of every type of energy, but nuclear especially because, and someone, correct me if I'm wrong here, but the output is water vapor.

So if you can manage the nuclear waste part, the emissions part is zero basically. And so again, speaking someone who has to pay energy prices, I would much rather have a source of that clean, quote unquote, however loosely you want to make those sources of energy. So I know in the US there is nuclear, I know that around the world they having problems with nuclear, but I also think that with any technical project, when you have the right people in charge, you have the right funds associated with it and you have the right regulations, you can do that. So for me, that means thumbs up to nuclear and thumbs up to everything else because re correct me if I'm wrong, but oil and gas is not going to supply all of the world's energy needs. It's the right application, the right... I mean they can't do that, so we need more of everything is what I think.

Reed Olmstead:

I fully agree. One thing I'll push back on you a little bit though, David, is there's a move now particularly in the US to capture the full cost of energy production, whether it's with emissions or whether it's with water disposal, all kinds of stuff. And while I totally like nuclear, I think that one of the problems that faces certainly in the US is that as we want to fully capture the cost of the power, or the energy, we don't understand the full cost of the disposal. So that's the big thing with the nuclear is what do we do with it when we're done? Nobody knows. There's not a good solution. And so capturing that full value or the full cost is going to be really difficult to do and I think that that's going to be the achilles heel of getting that in the US. That and probably lobbyists.

David Vaucher:

Yeah, that's fair. I've got some mental notes I'm making to bring up with you next time we meet at CERAWeek Reed because we could have an hour conversation on this, but I think that's fair. Look, I mean it's the same thing people say with electric cars. What's the full cycle cost of that? Yeah, I mean I think it's always going to come down to pros and cons. At the end of the day I want to turn my lights on for as little as possible and then hopefully as responsibly as possible as well and people are still figuring that out.

Hill Vaden:

Everything has trade offs.

David Vaucher:

Yeah.

Hill Vaden:

Well I want to come back to Sam's question on Wicked and maybe point this at Sam.

Sam Humphreys:

Oh no.

Hill Vaden:

Two follow-up questions on Wicked. One, Glicked is the new double movie thing because Gladiator II also comes out.

Sam Humphreys:

Does it?

Hill Vaden:

So will you tag team it to see Wicked and Gladiator II back to back, and two, is it okay to sing along in either of those movies?

Sam Humphreys:

If you can sing along in Gladiator, I'd be impressed. I've never seen Gladiator I, so this is a shock. It offends everyone.

Hill Vaden:

We'll cut that out.

Sam Humphreys:

A bit like Barbie and Oppenheimer, there was no chance of me going to see Oppenheimer. I will not be seeing Gladiator, but I will be seeing Wicked and no, you're not allowed to sing along. Oh, this is not true. If you're in the theater you can't sing along, cinema, maybe sing quietly.

Hill Vaden:

Reed, David, can you sing along to Wicked? I am on the same thing.

David Vaucher:

When you said the pop culture stuff, I actually found myself realizing I didn't know much of any of it. I mean maybe that's just a sign of me going on in the years, but I'll say that the Wicked thing, I know what it is. I will also say, and this is probably about as much as I can say on a work call, but the last musicals I saw and no joke, were the first South Park one and I'm not going to say the title because that's not appropriate. And then Team America World Police, which I can't say anything more about either, so I think it's great that this is happening, but yeah, musicals, not my deal. But Samantha, if you go, knock yourself out.

Reed Olmstead:

I think if you go to the matinee, which is just by nature going to be chaotic, you're going to have people walking in and out and spilling popcorn, yeah, sing along. The average-

Sam Humphreys:

They do do sing along versions, I will just say that. And you can go and everyone can dress up and sing Defying Gravity.

David Vaucher:

I will say though, I don't personally go to the movies anymore. I had this break after COVID and so to me from a strategic point of view, if you're in the movie theater, that's the kind of thing you want people together for, this common experience, so maybe you have one singing screening and one non-singing screening. Just anything to get people through the doors because otherwise I could just watch it at home.

Reed Olmstead:

All right David, what would be the common experience for Gladiator?

David Vaucher:

20 people walk in and one person walks out. That's a good question too. That's a film that I'm surprised exists. I mean there's certain movies that get sequels and you think, why that one? Why did Gladiator need a sequel? And here we are, so hopefully it's awesome. I'll let you know in six months when I've seen it on Netflix.

Hill Vaden:

All right, so moving back to energy. We've talked about gas and it sounds like the general consensus is that gas prices have opportunity to be higher next year, whether that be at David's house or in North America. Oil had a bit of a dud in 2024. Nuclear had a big resurgence in 2025. As we're looking at some of these low carbon investments, hydrogen was one of the bells of the ball, if that's an appropriate metaphor when the IRA first took shape and a lot of European interest in it, and Asian as well. The IRA hourly matching guidance that came out right around Christmas Eve of last year changed some of the enthusiasm in the US and it hit a soft spot. As we're looking at some of these emerging technologies in 2025, do we expect soft spots for anything or do we expect some surprise growth by any of these innovative energies? David, we'll start with you.

David Vaucher:

I can only reason by analogy, I mean, hydrogen, correct me if I'm wrong Reed, Hill, Samantha, it isn't transport something like 25% of hydrocarbon demand like oil demand, isn't it just transportation, trucks, cars, that type of thing? It's some huge percentage.

Hill Vaden:

I don't know. We'll go with it.

David Vaucher:

Okay, cool. All right. Again, not the expert on that, but the reason that I bring it up is because hydrogen is supposed to be vehicles. So if you take out the vehicle demand, you take out a lot of the oil or the hydrocarbon demand basically, and reading up on this a couple years ago, Toyota, it was made very clear that they had a test bed for, I think it was them for hydrogen and then in the end, they didn't even go full electric. Their thing is hybrid. And so Toyota either putting its weight or not behind other things is really pretty significant, which I think tells you where it is for that sector. I know that in France, Alpine, which is Renault, they have one concept car on hydrogen, but Alpine, which is like Renault's Lexus equivalent, if we're talking Toyota, they've pledged to go all electric and I think Porsche, BMW, I mean it looks like all the European car makers are going electric.

So I guess what I'm saying is this, is that, I can't speak for what the hydrogen team is saying, but it does sound to me like so much of energy and investment is built on what the current sentiment is and hydrogen seems a little bit like it's gone under. I'm trying to think back to a chart I put together with share of investment for energy, for green energy. So basically it's a percentage of all these different types of outlets for cash and CCUS is actually very high up on the list. So I think what that actually says to me is that oil and gas is going to keep being the dominant player because people being operators in this case, they want a way of continuing to sell as they've done before, but mitigating obviously some of the aspects on the pro and con balance. So very light prediction is yeah, I think oil and gas is going to keep going forward. What do you think?

Reed Olmstead:

So interesting thing you brought up there with Toyota, they do actually have a hydrogen car and you can go buy it if you live in California, the only place where they have-

David Vaucher:

I didn't know that.

Reed Olmstead:

Yeah, I think it's like hydrogen pumps, I don't know what you call it, but where you can fill up your car to drive. I watched a review and it's a very nice car and it is a very poor performing car. It is not fast. It is like a Toyota version of a Crown Victoria. Its beautiful and slow. But they do make it. Look, I'm going to go out on a little bit of a limb here. I think it's pretty safe to say that the drill baby drill mantra is probably going to take precedent over anything else in the US for the next several years. That being said, US hydrocarbon production hit an all time high under the current administration, so we're not on the cusp of big changes yet. I think that everybody's still talking about it, there's still desire, there is still, we're going to invest in all of the above and see what takes off, but the underlying business is still hydrocarbons.

David Vaucher:

Yeah, and I'm going to put on my personal hat here. I read somewhere that you're not going to capitalist your way out of a capitalist problem. I mean the emissions thing that comes with industrialization, building an electric car sounds great, but really the way to do it is to just drive less miles. And I mean, personally I love cars, I don't drive one. I'm certainly not saying people shouldn't be allowed to drive cars, but I think that, as I said this on last year's podcast is that the energy mix changing is one thing, but for all of the outside effects, I think that's going to require a change in behavior, which I don't see happening actually. So I think until that really changes, there's a real conviction around the world that people agree on of, maybe we should do things a little differently. It's very hard to see oil and gas not having the same hold it has on people because that's how it's been done always. So when you think of the inertia in that system, it's extremely hard to turn around or even slow down.

Reed Olmstead:

A couple of other things, I mean a colleague was in China recently and said that 52% of the cars in China are electric. I have no reason to doubt that, but it's like if China, one of the largest economies in the world has just spent all this investment for electric vehicles, they got to get a return on that. Similarly, speaking of transportation, President Elect, his new best friend, owns the largest electric car company in the world, or in America, that is worth more than the next 20 legacy companies combined and so it's going to be really hard to turn that ship quickly.

David Vaucher:

Those cars are good too. I mean if you look up YouTube videos of what some of these electric cars look like coming out of China, they're phenomenal.

Reed Olmstead:

Oh yeah, BYD is phenomenal.

David Vaucher:

But I think this is where that lifecycle question comes in because whenever I hear this talk about electric vehicles, I mean I've read here and there while the lithium mining and I mean all of these things for sure, so I don't really know that I have obviously no answer to this or anything like that, but I do think all of this is going to become interconnected because I know Europe's scared of the Chinese electric vehicles. So is America. I heard one example, if you listen to Doug Demuro, Lotus, which is a niche English brand, they were going to sell an electric vehicle which cost 200,000 roughly, but then you put tariffs on it and it's now... Because it's made in China basically, so it's Lotus branded but made in China, it's a $400,000 vehicle now coming to the US and that's just not competitive. So one thing we haven't talked about is the tariff situation, which to me, in upstream supply chain, that's the biggest question mark for next year because everything's going to cost so much more if everyone's putting tariffs up against all of their usual trading partners.

Reed, does that show up at all in your world? I mean you're dealing with the American system, how does that affect you?

Reed Olmstead:

So I mean as far as energy goes, I mean we're not making that into our numbers yet. I was listening to a podcast about the election just this morning as I was coming home from dropping off my daughter, saying there's a lot of noise, there's a lot of talk, you've got to look at what actually happens. And the problem is we like to hear things to give us an expectation of what will happen. The commentary from this panel that I was listening to said the incoming administration, you're really just going to have to look at what they do. So there's a lot of talk, so uncertainty. We'll just leave it at that. Uncertainty.

David Vaucher:

Yeah, I had a history professor who I think about a lot who was in high school. He said, "Companies that trade with each other don't go to war with each other." So what happens when companies or countries stop trading with each other?

Hill Vaden:

Was Henry Kissinger your history professor?

David Vaucher:

No, no. I mean maybe he looked up, I don't know. But that's one of the things, I remember exactly when he said it, where I was... And so I think about that a lot and yeah, I think we might be having an even more far-reaching conversation next year because when you start saying, me first, me first, me first, then you stop talking to the person across the room, I think that's when you get misunderstandings and everything that comes from that unfortunately.

Sam Humphreys:

All right. Does this mean that, this is what I'm taking away, you won't be buying an electric car for next year?

David Vaucher:

Oh no. Actually, you can't see it actually, but my wife has been super chill about this, but I built myself a racing car simulator in the back because I love-

Sam Humphreys:

Oh my goodness.

David Vaucher:

... the idea of racing cars, it's just not a practical thing to own. I would love to own any number of cars, but Europe just doesn't make it very practical. But I'd love to drive one, so if any of you drive those BYD electric vehicles anytime, I would love to hear what you think of them because they look just awesome. Really, really well done.

Reed Olmstead:

Come visit me and you can drive the Rivian.

David Vaucher:

Oh. Okay.

Sam Humphreys:

Oh, did you get one Reed?

Reed Olmstead:

Yeah. You're going to have to put a deposit down on the tires though, because they don't last-

David Vaucher:

I'll say that is definitely the American way of doing an electric car. It's like, you know you can save emissions on this and make it really small and someone, an American, was like, "No, we're just going to make some absolute gigantic truck and put a five ton battery in there and that's what we're going to call our electric vehicle."

Reed Olmstead:

Its awesome, though.

David Vaucher:

I'm sure it's awesome. Yeah, I'm sure it's a rocket ship.

Reed Olmstead:

Oh, yeah.

David Vaucher:

And it's fantastic. Yeah.

Reed Olmstead:

I drive it every chance I get. Every chance I get.

Sam Humphreys:

Oh, wicked. Hill, I don't know, I've just looked at the time, because we could carry on for ages. You do this cool predictions, resolutions for New Year. Do you want to kick that one off?

David Vaucher:

Reed, you first.

Reed Olmstead:

Prediction or resolution?

Sam Humphreys:

So a prediction for the world and then your resolution.

Reed Olmstead:

Prediction for the world.

Sam Humphreys:

We'll hear it next year.

Reed Olmstead:

I'm going to go out on a limb here and that we're going to do this podcast in 2025. Prediction for next year, I hadn't even thought about it, shame on me. I will predict the second Wicked will come out. That's risky. I'm a very risk averse person, I'll say that.

Hill Vaden:

November, 2025.

Sam Humphreys:

Yeah.

Hill Vaden:

We were asked to provide this by the people at Comcast.

Reed Olmstead:

There you go. Prediction for 2025.

Hill Vaden:

Or resolution if you need to buy time to think about your-

Reed Olmstead:

Can I go real political here?

Hill Vaden:

Sure.

Reed Olmstead:

I think the Republicans are going to way overstep their bounds. I'm not saying that's a good thing or a bad thing, I just think they're going to. I've thought about this a lot. I follow a lot of politics.

Hill Vaden:

In energy?

Reed Olmstead:

In everything, because I did like game theory analysis of this. So the Republicans have the House, senate and presidency, so I thought if they don't go full bore, then the diehard conservatives won't vote those same people back in, or they'll stay home at midterm. If they do go full bore, then we're going to get the pendulum swinging back to the Democrats who are going to show up in the midterms. So either way, they've got to walk on the knife edge. So if you believe my theory here that they're going to lose the midterms, go all in, that's my take. Little game theory there.

David Vaucher:

I'll do a political one, but first you have to do your resolution, and then just so we even it out, I'll go politics first.

Reed Olmstead:

All right, resolution without going into my year too much, my resolution next year is just to get back into a healthy routine and cut a few of the cookies out.

David Vaucher:

Hopefully you won't say no to a croissant if you're ever in town, I'll take you for one of those.

Reed Olmstead:

I love carbs.

David Vaucher:

Yeah, so the saying history doesn't repeat itself but it rhymes, I think that applies currently. I think all these problems that have led to... I say problems, I guess it depends who you ask, but I mean people made fun of the argument, well it's the price of eggs that got Donald Trump elected. But the fact is, I don't worry about the price of eggs, but I'm one of a very few number of people that can say that. I am completely sympathetic to that argument. And the trouble is that there is a structure now that's in place where the main stakeholder is not the person just trying to live their life and have a little bit leftover at the end of the month. It's not structured that way and that leads, and has led to, a lot of different things.

So my prediction is that the state of the world that we're in now, it's going to get worse next year before it gets better, so that means more volatility, more uncertainty. And we may feel that to different degrees. I am shielded from it. You three on this call are shielded from it, but I think at some point, we're going to start feeling that and that's just unfortunate. That's just the way that the world is. And hopefully anyone listening to this podcast, if you catch me somewhere in public, we can talk about this more. I'll share my thoughts. Yeah, because I think we can discuss this and we all have reasons, but that's just my view on things.

My resolution, I think honestly the day I retire, I will have even less time than I have now, because I just wouldn't know... I'd have too much stuff to do and so I hope that this year I have time to look at that, maybe time to do some more things, time to be with my family and just appreciate what I do have with all the craziness going on around. So I think I'm thankful I'm allowed to explore interests and for the ones I have.

Sam Humphreys:

That is lovely. Go on then Hill, I mean you don't have to do both, but definitely your resolution. Give us a prediction as well if you want.

Hill Vaden:

I'm going to do both because Reed and David are pessimistic and I'm often accused of being skeptical.

Reed Olmstead:

I'm not pessimistic.

Hill Vaden:

You're not pessimistic.

Reed Olmstead:

No, I'm not saying I think they should or shouldn't, or that I like or dislike their policy, I just said what I think would happen.

Hill Vaden:

Okay. Well I think that 2025 is going to be pretty good. A lot of people have asked about this, sitting in the US, and so there's people who feel strongly one way or another about the election and I think that things work out just fine and that energy, I know that people sometimes get very passionate about energy in terms of fossil fuel or non-fossil fuel, the fact is there is a ton of money going into energy and that is going to allow low carbon technologies to develop, that is going to allow other fossil fuel technologies to decarbonize. There's a lot of good things happening that what we'll see more of in 2025 and so I'm actually pretty positive and I trust governments and bureaucracies to keep things moving up into the right, so to speak.

Maybe piggybacking on this Sam, is a resolution. I think my resolution last year on this was to lean into things and to say yes to more things and I did and it made for a pretty good year. So I will try to continue doing that next year, 2025, and maybe see Wicked, but probably not because I don't think that I would enjoy it. I don't really like singing in concerts either.

Sam Humphreys:

It's going to be good.

Hill Vaden:

Sam, your prediction, your New Year's resolution.

Sam Humphreys:

My prediction, well, I'm going to go fairly optimistic as well. I'm just going to look at it from the UK, it has been a really US focused one, so I'm going to go UK. So in terms of energy, see there's been a lot of changes this year, so upstream is going to be a bit tricky, but on the flip side of that, CCS industry is starting to really pick up and I think next year there's going to be some really big moves in what's happening in some of these big projects. I think if some of those projects could at least get closer to FID and some of the injection tests go well, I think maybe they might start really making some headway at establishing this big industry in Europe, which will knock on to the rest of Europe, particularly in the North Sea, which I'm trying to be positive and then at least recapture some of the emissions. So oil and gas production continue and we keep getting energy, so that's my thoughts. We'll see what happens.

But my resolution is the opposite of Hill's.

Hill Vaden:

Say no?

Sam Humphreys:

Just do a couple of things. So I said it's been a great year, but my kids are starting to get to a really cool age basically and they're asking loads of questions. A lot about oil and gas because school is teaching one very firm track of thinking of fossil fuels are bad, so I just want to spend more time with them to just sort of explain what's going on in the world and to maybe do some more fun things with them. Work is fun, but I want to do some fun things with them to. Maybe go to Disneyland.

Hill Vaden:

Oh. Or Universal.

Sam Humphreys:

I'm talking about Paris.

David Vaucher:

Paris.

Sam Humphreys:

Still not close.

David Vaucher:

I was going to say that's the closest one, but not a bad place to have it either.

Sam Humphreys:

Exactly. It's great. So that's my resolution. Resolution is Disney again, basically.

Hill Vaden:

Resolution is Disney. All right, well I think that we probably are out of time. Thank you all. This has been fun.

Sam Humphreys:

Yeah, it has. Thanks guys.

Hill Vaden:

I look forward to doing it again next year.