I went on the popular tech show TBPN yesterday to discuss the cause of rising electricity prices (hint: it’s not cutting solar/wind subsidies), our dysfunctional electricity “markets,” solar and wind as fuel saving devices, the criminalization of nuclear energy, the oil situation in Venezuela, and my hiring search for energy freedom lobbyists.
John Coogan:
For those who don’t know, you please introduce yourself. How are you describing yourself these days? Obviously you’re an author. The book is Fossil Future. You can get it wherever books are sold, I’m sure.
Alex Epstein:
Yeah. Traditionally, I do “energy expert” and “philosopher” because I actually think philosophy is the reason people disagree about energy. And then these days it’s really “independent policy advisor” since most of the stuff I do is behind the scenes with government trying to get them to adopt energy freedom policies.
Jordi Hays:
Interesting.
John Coogan:
Do you feel like the book touches on the philosophical debate around energy?
Alex Epstein:
Yeah, “touches” would be—
John Coogan:
Centers on it.
Alex Epstein:
—would be an understatement. Yeah, I think of my life really, or the last 19 years in energy, have been basically two things.
One is trying—and the one the book addresses—is trying to shift the conversation from an anti-human conversation to a pro human conversation about energy. And actually, I think ... Did we meet at Hereticon? Is that where we met?
John Coogan:
I think so.
Alex Epstein:
We might’ve met at Hereticon or one of Peter’s other things. But I gave an example in my talk there that I think is the easiest way to see that we have an anti-human way of thinking about energy, which is I’ll ask people, “Hey, which of the following words would you use to describe our current relationship to climate? Are we in a climate crisis? Do we have a climate problem? Do we have a climate non-problem? Or do we have a climate renaissance?”
And that audience is going to be more...It might even consider “renaissance”—but most people won’t. Most people will say “crisis” or “problem,” and then the extreme is “non-problem.” But then I share the data, which, you can actually look at the rate of deaths from climate disasters such as storms and floods, extreme temperatures, et cetera. And it’s very clear cut. And we have this just incredibly dramatic 98% decline in those deaths.
Jordi Hays:
Which would imply “renaissance”?
Alex Epstein:
Which would imply “renaissance.”
John Coogan:
Oh, and that’s over a hundred years?
Alex Epstein:
That’s over the last hundred years. Yeah. And if you go back further, it’s even more. And then if you look at the data in terms of damages—
Jordi Hays:
Even with the California wildfires a year ago, I think there was something like 30 deaths, which was the most deaths in a fire in recorded history in California, from what I remember.
Alex Epstein:
Yeah. And wildfires is actually, I was going to mention the economic piece of it. Even economically, if you adjust for GDP growth, the damages are flat.
So you would say it has to be a “renaissance,” right? I mean, we’re much less threatened from climate than ever. And if you think about that in fossil fuels, and if you think for a minute or two, you think, well, that actually might have to do positively with fossil fuels because fossil fuels power the irrigation systems that alleviate drought. Drought is actually the number one climate killer historically.
They obviously give us heating and air conditioning to deal with extreme temperatures, and even abnormal temperatures—and cold is by far the bigger killer than heat. And we have all kinds of sturdy infrastructure and storm warning systems. So it’s this really interesting phenomenon where what actually happened is, as I put it, fossil fuels didn’t take a safe climate and make it dangerous; they took a dangerous climate and made it safe.
But the interesting question in terms of philosophically is: why is it that so many people say we’re in a climate crisis, even though from a climate livability perspective or a pro human perspective, we’re in a climate renaissance?
And I’m telegraphing it a bit, which is that they’re not looking at it from a pro-human moral perspective. They’re looking at it from an anti-human moral perspective. But specifically the perspective that our goal should be to reduce or eliminate our impact, which is the idea of being “green.”
John Coogan:
Yeah. Is there a factor here of just media awareness? The fact that in times of old, if there was a fire, like the Palisades fire, you wouldn’t see that everywhere for weeks on end, but now there’s much more visibility? So I hear about an earthquake over there or a storm over there, and so it feels like there’s more happening because it’s availability bias?
Alex Epstein:
Well, that’s a mechanism that people can use, but of course they could use the opposite mechanism. They could say, and this would happen all the time, “Look at this minor climate problem that a hundred years ago would have been a total disaster.” Like, compare this to the Galveston storm a hundred years ago.
My conclusion is the people leading the charge who think it’s a climate crisis—like, there are a lot of people who just ignorant of these facts—but the people who know these facts, who know that we’re in a renaissance from a climate livability perspective, they’re evaluating the state of the climate, not by how good it is for humans, but by how little impact we’ve had.
John Coogan:
Sure.
Alex Epstein:
So their goal is an Earth with minimal human impact. And by that standard, we are in a climate crisis because we have had some—
John Coogan:
Impact.
Alex Epstein:
Impact.
John Coogan:
Of course.
Alex Epstein:
And so my view is if our overall impact is positive for humans, that’s a good thing.
John Coogan:
Sure.
Alex Epstein:
Their view is if there’s more impact, that’s a bad thing.
And this illustrates that this is overwhelmingly a philosophical disagreement. So whether you view today—once you know the facts about climate livability—whether you view it as a climate renaissance or climate crisis, that’s not based on science. Nobody has disputed these facts.
I mean, New York Times tried, everyone tried, nobody has successfully—Vivek really popularized this when he ran for president because he learned this in Fossil Future. And everyone tried to refute him and nobody could do it. So it’s only that you have a different what I call in philosophy—or what we call in philosophy—standard of evaluation. You’re looking at the same facts, but you have a different measuring stick.
And my basic contention is if you look at fossil fuels in a balanced way from what I call a human flourishing perspective, the benefits are obviously far, far greater than the negatives, including climate wise.
But that’s why I have The Moral Case for Fossil Fuels and Fossil Future, which is about why global human flourishing requires more fossil fuels. But the number one thing I’m doing is I’m just changing the yardstick by which we’re measuring it and I’m using that very consistently.
Jordi Hays:
Do you think AI is taking the wind out of the climate crisis sales? In the sense that the climate crisis was a powerful story for the media industrial complex because let’s say you have a slow news day or week, then TV can just show a big chart on the screen of a bunch of counties and they’re all red and it looks really bad just because the way the graphic design is done, and now we have this worldwide sort of systemic fear of this impending—
John Coogan:
Oh, so you’re talking about, there’s two sides here. People are talking about AI doom, not climate doom anymore—
Jordi Hays:
We’re just using way more energy. We need new gas turbines. And then there’s also the media story of just giving this sort of like, the media industrial complex loves a sense of impending doom.
John Coogan:
Like, Eliezer Yudkowsky is more popular than Al Gore as of yesterday, or as of last year.
Jordi Hays:
Yeah, that content is getting much eyeballs.
John Coogan:
Yeah, AI doom is just a bigger media storm.
Alex Epstein:
I think right now it’s much more the energy side. It’s much more the energy side. But the doom side really concerns me, and AI is actually the only issue I’m considering getting into in terms of mastering it and mastering how to communicate it—just because I feel like nobody has really mastered it from the pro-human, pro-technology side, and it’s hard to do.
Jordi Hays:
No, no. I said this yesterday. The tech industry right now suffers because nobody can speak to, let’s say, the Super Bowl demographic. If a tech founder went and talked at the Super Bowl during the halftime show and they were like, “We’re going to automate all the jobs.” Everyone would be like, “Boo.” I’ll hit the “Boo” button. But like, “Boo, this guy sucks. Get him out of here.”
And so it’s been very difficult. And people talk about UBI and the sort of post-scarcity element if you can just bring a bunch of robots online—but nobody, especially at the labs, I feel like has—I don’t even think this idea of like a personal tutor or personal expert in your pocket is really, I don’t think people appreciate it that much even though the labs talk about it. So, finding the pro-human narrative I think is super important.
It’s something that’s critical to the industry because I think we’re in the beginnings of the second real tech lash. You had the social media tech lash era. Now we’re in the AI tech lash era and it’s only going to get worse if we just keep promising the world, “Hey, we’re going to automate your job away.”
Alex Epstein:
You’re motivating me to—this is the tension in my life right now, because I’ve been working in energy for a long time and we’ve gotten to this point where the opportunity, like, a lot of the debate has shifted and I’ve had some role in that. But also the politics have shifted where I and others have never had more opportunity to actually change the policy for the better. But then AI—
Jordi Hays:
You’re kind of getting a shiny object.
Alex Epstein:
Well, I’m not deterred yet, but also I need to innovate in AI actually for what I’m trying to do in energy. Anyway, so it’s tempting, but I would just say, if anyone here is watching who thinks that you might be able to be this, I would much prefer to help you and teach you what I’ve learned in energy and apply to AI than do it myself.
It would be more of a matter of—I’ve got plenty to do in energy, but there needs to be somebody doing this. So alex@alexepstein.com, just send me an email.
John Coogan:
Can you set the table for me on the state of the American energy industry? Because I grew up at a time when the big oil companies were the biggest companies in the world. ExxonMobil was the largest company in the world. And then now we live in the era of big tech, and I’m wondering if the big oil companies are still well run.
They don’t feel founder led. They don’t feel like they’re in founder mode. I don’t know the names of people who are running large energy companies. I can’t name theElon Musk of energy.
Jordi Hays:
Kids at elite universities are not like, juniors being like, “I’m going to work in oil.”
Alex Epstein:
I’m older than you guys. And I remember, because I was at one of the top math science high schools in the country and then I was at Duke—and I just remember thinking later, because I myself had no interest in fossil fuels at the time and a little bit of an aversion, looking back, none of those brilliant people wanted to do this. It wasn’t aspirational. So interestingly—
Jordi Hays:
But is it an industry where the product has such insane product market fit that you don’t need the most elite executives and operators?
Alex Epstein:
Well, you get some. So here’s the thing is, I don’t think oil and gas has attracted overall the best of the best. There are definitely some brilliant people. The bad news is that electricity is much, much worse.
John Coogan:
Okay, explain that.
Alex Epstein:
Well, so the thing about oil and gas is, and a lot of this, the two variables are going to be what’s the degree of freedom in the culture or in the political system for achievement, because that’s going to determine largely the economic upside, and then there’s the issue of the culture.
So with the culture, obviously there’s been huge hostility toward oil and gas and of course coal as well, and that deters a lot of people early from even wanting to go in.
The positive of oil and gas is that within the energy industry, it’s by far freer than many, many other parts of the energy industry. If you look at, say, particularly in Texas, you look at where the Permian Basin dominates, you can get a permit to drill in the Permian in a few days.
Now, if it’s the Texas Permian. If it’s the New Mexico Permian on federal lands, much different story. That stack of paper is probably 10 times higher, but a lot of oil and gas doesn’t involve federal permitting, which I hope we’ll talk about, because we’re trying to fix that at the moment. So that means that you can act a lot more quickly on good ideas, which attracts good people.
Now, if we shift to the electricity sector—
Jordi Hays:
Real quick, last year I was at a VC founder dinner and one of the founders there had some company, I think in advertising, but he had a piece of land in California that he had been drilling for oil.
John Coogan:
Really?
Jordi Hays:
He just had a small kind of lifestyle business.
John Coogan:
That’s crazy.
Jordi Hays:
But he ultimately, there was some new regulation that was getting passed and I think that basically put him out of business.
John Coogan:
Oh, weird.
Alex Epstein:
Yeah. I admire all these people in California to some extent Colorado. It’s hard. I actually refuse to invest in energy just because I advise politicians and it creates conflicts of interest. But I just say as a hypothetical investor—
Jordi Hays:
Are we out of the post-conflict era?
Alex Epstein:
No, I’m very extreme about conflict avoidance.
Jordi Hays:
I’m kidding. I appreciate that.
Alex Epstein:
But California is really hard. You can of course imagine high-risk, high-reward things, but it’s just, you look at the Governor on down.
Jordi Hays:
You think we import so much oil, wouldn’t we want to produce some and the politicians don’t feel that way.
Alex Epstein:
There’s a bit of a shift there just as there is in New York and Massachusetts—they’re a little bit more open—but it’s bad.
But if we take the power sector. First of all, we’re talking about something that is institutionalized as a monopoly in the first place. And then, not to go into too much detail about the power sector, but we started “deregulation,” which is just a new and in many ways worse form of regulation. We start that a couple decades ago.
And broadly speaking, there are two really big types of electricity systems. One is a traditional utility model where the utility does everything. So they have the generation, what’s called the transmission, so the longer distance travel, and then the distribution, which is the more local stuff. So in that, you can imagine that doesn’t tend to attract the best people because like a lot of monopoly-type things, like a lot of the military stuff, it’s a cost-plus model and you get paid for spending more money, you get paid for incurring more cost.
But then as bad as that is, the market model is a mess in part because they allowed, once intermittent solar and wind came on, they allowed that to be treated as a reliable power source when it’s not in fact a reliable power source. Now it has utility, but it’s primarily a fuel saving device. So people think like, “Oh, you hate solar, you hate—” It’s not about that.
It’s just what does it functionally do? What it functionally does in the vast majority of cases is it saves you fuel on a reliable power source. Because most of what we need in electricity is we need on-demand electricity, and with the solar panel or wind turbine, you can’t get on-demand electricity. Both the existence and the amount is weather-dependent.
So there are situations such as say China with coal where they have a lot of coal power and they need enough coal power, they need that much capacity to meet their peak demand. But if you have a bunch of solar, and particularly if they overbuilt a bunch of solar that they were trying to sell to the rest of the world and it didn’t work as well as they thought, you can have basically coal-ar, right—coal plus solar—where every time the sun shines, to what extent the sun shines, you’re saving fuel. And depending on your fuel cost, that can be efficient.
John Coogan:
Yeah, that makes sense.
Alex Epstein:
Now it tends to be efficient at lower levels versus higher levels. So the electricity to markets got screwed up for many reasons, but that was the biggest one, where if you allow solar and wind to compete as reliable sources, it screws up everything. And in particular, it screws up the economics of the reliable sources because if it’s a monopoly and one person owns everything, you can decide, “Hey, I’m going to pay this much for solar for fuel savings.” And you can make it work when it works.
But if you have a “market” where all the generators are competing independently and you allow solar to be its own independent generator whenever it’s available, that natural gas plant doesn’t benefit from the fuel savings, it loses operating revenue. And so this is what we did to all the reliable power plants on the grid. We subsidized the hell out of solar and wind, spammed the grid with this fuel saving infrastructure, but on the power markets, it doesn’t benefit them, so it’s screwed up.
So this gets technical, but you can imagine that a lot of the people who’ve succeeded in this field, there can be a scam element. You have some smart traders, but their efforts are not going to a productive thing. So it’s both talent level issues with the utilities, but then you even have some smart people on the “markets,” but their intelligence isn’t being well directed because it actually can screw up the grid.
And then the culture has pushed so many people into the “green” space where the relative opportunity was much less than in fossil fuels and in nuclear if you had a proper market. So it’s a really bad situation.
John Coogan:
You mentioned nuclear. Get us up to speed on how you’re thinking about nuclear these days. It feels like there’s incredible energy, both the government just announced a $2.7 billion grant yesterday and it feels like there’s nuclear startups for the first time in my lifetime getting funding.
Jordi Hays:
I learned yesterday that we get enriched uranium from Russia.
John Coogan:
Or we did. Hopefully not anymore.
Alex Epstein:
Yeah, there are other people who can do it too.
John Coogan:
It’s rare.
Alex Epstein:
So, I know you wrote that really interesting essay yesterday on energy production. And I think in your space that there’s many forms of energy production, but the main thing is going to be electricity production, and specifically it’s what’s called dispatchable or reliable electricity production, so on-demand. We can talk about how AI fits into that, but in general, I think there are four things that have screwed that up.
And one is the near criminalization of nuclear power. The issue with that is that’s a hard one to unwind quickly. So if you look at, there’s this attempt at a nuclear renaissance, and I’m working as hard as anyone to try to make that happen, but we’re not yet having any kind of rapid build of new nuclear infrastructure.
Since the establishment of the Nuclear Regulatory Commission in 1975, we only started building any reactors, we only started conceiving and completing reactors in 2023, which are the Vogtle plants in South in South Carolina [correction: Georgia] and they were—
Jordi Hays:
When did they actually—you’re saying they didn’t—?
Alex Epstein:
There was nothing that went from conception to completion from 1975.
Jordi Hays:
So, they got completed in 2023.
Alex Epstein:
2023, but with 10X cost overruns. Now, there was already some progress before this administration. We had what’s called the ADVANCE Act, which was a significant improvement, tried to redirect the NRC. There are definitely much better people at the NRC now.
So they’re headed in a much, much better direction. Congress, both Republicans and Democrats, are aligned. But we’re just talking about something that we’ve lost arguably 50 years of potential progress, because we had something in the late ‘60s where nuclear was by many estimates the cheapest form of electricity and the safest in terms of reliable electricity. It was already true with that technology and we somehow managed—
Jordi Hays:
Cheapest, safest, cleanest.
John Coogan:
Yeah.
Alex Epstein:
Yeah. Obviously, cleanest.
John Coogan:
The talking point that I hear about the NRC is that we haven’t approved any new nuclear reactor designs, but we also haven’t just been copy-pasting the ones that work. So it’s like twofold problems.
Alex Epstein:
And the nuclear industry is fascinating in terms of communication, because their usual thing is just, “we have to change everyone’s opinion about perception about nuclear and then we can do stuff,” which, I think that the public is more pro-nuclear than they think, even historically. Right now, it is.
I think we have to do what you’re looking at, which is say, wait a second, we could already produce these large nuclear plants and get this incredible result. Why don’t we fix that problem first because we actually know how to do these things?
There are all these exciting companies doing new things. But part of the reason is, these communications people have an aversion toward traditional nuclear because it has these negative associations.
But you have to kill those associations. You have to kill the idea that this was uniquely dangerous. No, it was uniquely safe. Chernobyl has nothing to do with what we would ever do in the United States. That was like a half-weapon, half-reactor. And even that damage doesn’t compare to the damage done by a lot of other things—
John Coogan:
Totally.
Alex Epstein:
—in the Soviet Union. As one economist put it, Soviet toasters probably did more damage than Chernobyl.
John Coogan:
That’s crazy.
Alex Epstein:
I don’t know if that’s a stat, but that’s—
John Coogan:
No, no, no, it’s well taken.
Alex Epstein:
So nuclear, what we need to do is we need to fix the political stuff as quickly as possible—and we’re getting some funding there—but we have to recognize that the overall problem is just a political restriction problem. So that is a very exciting thing to do, but it is the least near-term of the four things.
So the other things are, I mentioned, the electricity markets are screwed up. That’s part of a broader set of preferences for solar and wind or for intermittent energy, let’s just say. And the other piece of that, which I was involved in and has largely been fixed, but not totally, is the subsidization of intermittent energy. So that was in the Big Beautiful Bill. That was a lot of what I spent 2025 on, is trying to help people who wanted to kill those, kill as many as possible.
So we’ve got the nuclear criminalization. We’ve got the preferences for intermittent energy. The biggest thing by far is we have the prohibitions on reliable fossil fuel energy. And that’s, you’ll hear about things like the Endangerment Finding. There was the Biden Clean Power Plan 2.0 that basically made it illegal for existing coal plants to function, for any new natural gas plants to be built past a certain date.
And then we have the general permitting problem, which is anti-development permitting.
So just imagine we had all of these factors restricting the supply of electricity, and then we had the previous administration and others artificially increasing demand through electrification. Forced electrification, so trying to shut off natural gas and homes, trying to force us to use EVs—which I’m totally in favor of people using freely—but we pay over $50,000 per EV. Taxpayers pay for—
John Coogan:
7,500.
Alex Epstein:
No, that’s just one small part of it. We could go into all the different subsidies because there’s a lot of fuel economy trading—
John Coogan:
Deeper in the supply chain.
Jordi Hays:
It’s wild too because you get the subsidy and then the consumer buys a vehicle for $60,000 and it’s worth half that 12 months.
Alex Epstein:
Yeah, but it’s also the way the fuel economy things work at the federal level and the California level. A lot of what they do is they set the fuel economy standards impossibly high for regular vehicles, and then they give EVs this ridiculously high fuel economy score.
John Coogan:
Sure, sure.
Alex Epstein:
And so everyone, Tesla on down, just makes huge amounts of money trading their emissions credits.
John Coogan:
Oh, got it. And that’s per vehicle.
Alex Epstein:
Yeah, and by the way, that’s something the current administration has been doing a good job in terms of the administration, executive actions trying to undo a lot of these things. But you want as many undone congressionally.
So again, we have these factors of artificially restricting supply, artificially increasing demand. And then of course the one you guys are focused on is the organic increase in demand via AI. So what I’m trying to fix is just stop restricting supply.
Jordi Hays:
How do you predict, this feels like, rising energy costs have always been a political issue. They’re going to be at the forefront, I think, of a lot of debates going forward. Politicians, I imagine, are going to try to score points by beating back data center development just because they know their constituents are going to cheer it on.
How are you advising all these different players at the center of these debates on how to—knowing that energy usage is going to go up dramatically with data centers, one way or another, how do we kind of thread the needle?
Alex Epstein:
So there’s what to advocate policy-wise and what to advocate messaging-wise. So let’s start with messaging-wise. So one thing is to pin the recent and baked-in rises on the proper culprits. So there’s an attempt to pin it on reducing subsidies. So it’s in particular, I try not to be political about this, but there’s this idea of “Republicans reduced subsidies, therefore that’s why your electricity bills go up.”
The timing doesn’t even work on these things. The logic is actually the opposite. The subsidies by depriving, one of the things they’ve done is they’ve deprived the reliable power plants of capital. They’ve had less reliable power.
And so what happens is you have shortfalls in supply relative to demand, and that puts the market prices up, in particular what’s called capacity markets, which you see, particularly in regions like PJM—Pennsylvania, New Jersey, Maryland, that whole region—those prices go up.
So there’s just all this false narrative. So what people need to recognize is the reason prices are going up is because of prohibitions on reliable power and preferences for unreliable power and then artificial force electrification. They need to understand that.
The data centers, one thing people need to understand is new demand does not inherently increase electricity prices. In fact, usually what it does is it decreases electricity prices because you have the same amount, you have relatively the same amount of capital spending spread out over more different entities. So you’ll have different—so, Burgum, Interior Secretary, former Governor, like he and Chris Wright, Secretary of Energy, have been pointing out, “Hey, North Dakota is looking really good price wise. And they’ve had massive increases in data centers.”
John Coogan:
Because they’ve been investing more in energy?
Alex Epstein:
Well, no, because on any grid, you have the peak usage and then you have the regular usage and you very rarely hit peak. So when you have more demand, you’re actually spreading out the cost among more.
So one of the questions with AI that’s interesting is, what’s the flexibility of the demand profile going to be? Because the more flexible it is, the less you need to increase the peak, which is good to increase the peak, but that’s the most expensive thing to do. The more you can use off-peak, the more you’re actually lowering prices.
John Coogan:
Yeah, and this is already happening a little bit where sometimes if you prompt an image generator, it will, in the middle of the day, it’ll go across the world and it’ll use it where it’s dark there in the middle of the night because there’s maybe more energy or something away from peak load.
What do you think about my question of energy production growth in America, 2026, are we going to see a break in the curve? Are we already seeing a break in the curve? Is this even the right question to be asking about just energy progress in America over the next few years?
Alex Epstein:
It’s a good measure of progress, particularly industrial progress, to look at energy production in general in a country. And the fact that we’ve had flat electricity usage—and if you look at ours versus China’s, I think we’re at about one fifth their industrial electricity usage—so those are really bad signs.
So it’s a sign that you’re being less productive than you can and often that you’re offshoring things because you have such a restrictive anti-development environment. With the electricity thing, it’s one of these things where I’m trying to create the future, so I try not—I’m trying to make the future happen, but—
John Coogan:
Okay. Yes, yes, yes. But you’re rooting for 5% growth this year.
Alex Epstein:
Well, yeah, I’m rooting for the enablement of the capacity. And the nice thing is you have a lot of smart people in the administration who are really interested in this problem. So that’s a good thing at the margins because then you can make things happen more quickly. Private industry is very focused on this because of AI, whereas they haven’t been before.
So you’re getting a lot of ingenuity. And it’s going to be really interesting to see there’s going to be a lot of things at the margins, and we’ll see how they add up. One thing is we’re using very small oil plants, natural gas plants. They’re talking about using the backup generators in Walmart.
There’s going to be these interesting questions, and we have a new class of smart people who are now being added, whose now focus is on generating more dispatchable power.
John Coogan:
I love that.
Alex Epstein:
There’s lots of things you can do. There’s interesting things you can do with batteries, like you can—this I’m an agreement on Elon with—you can build batteries and you can charge them off-peak.
People think you need solar and wind to go with batteries, but actually the easiest way to deal with batteries and the way most batteries get charged today is you have a reliable source of energy and you charge it off-peak. You can run your nuclear power plant at night and charge batteries and then for a few hours you’ll have those batteries to meet peak demand.
John Coogan:
Sure, sure.
Alex Epstein:
You can also what’s called uprate natural gas plant. So a lot of the natural gas plants in the country were built a generation or two ago and they might get 30% less capacity than a new natural gas plant, but you can, without dealing with the fundamental supply chain issues in many cases, you can actually add capacity to hundreds and hundreds of existing gas plants.
So we’ve got, there’s a lot of industrial potential. There’s a friendly administration. What we have fundamentally though is ultimately the administration doesn’t properly make any law. It enforces the law. It administers the law. And so what we need as much as possible is to do things congressionally.
So subsidies were one piece of it. The thing right now that I’m very focused on is permitting reform, because it’s impossible to get permits for things. It’s so difficult, and I don’t know how much time we have, but there’s a lot that needs to be fixed and it’s actually hanging by a thread right now.
Jordi Hays:
We have a lot of time because you’re our new energy correspondent.
John Coogan:
Yes, yes. We’ll have to have you back.
Jordi Hays:
We can’t let you leave without talking about the actions in Venezuela, how that’s impacting global energy markets. Everybody on X has their own theory of why we did it and all that stuff, but let’s talk about realities of how this can impact just different geopolitical dynamics.
Alex Epstein:
All right. Let me just say one thing to the audience, because one reason I was excited about coming here is you’ve got a group of people that’s very engaged and I think interested in these issues, but that I don’t always get to speak to.
And I just posted this on X, but I want people to know, if you find this exciting, we’re hiring. And I just put out for one of my groups, Energy Freedom Fund, which is the only principled pro-freedom lobbying group in the world basically, we are offering a $50,000 referral bonus if you can find anybody. And we have an assessment. There’s an assessment that will tell us whether you can do it or not.
John Coogan:
Oh, interesting.
Alex Epstein:
So it’s two hours. So if people are up for it, it’s worth doing. If you do a decent job, we’ll at least give you good feedback. But yeah, that’s my limiter right now in fixing these problems, is we have enough money fortunately, but we have a talent deficit. So this is one reason I wanted to come on today.
John Coogan:
Cool.
Alex Epstein:
So let’s talk about Venezuela. I try to be a master of energy and not pretend to be a master of other things. So obviously many aspects of the Venezuela situation are beyond energy. I think there’s two really interesting things about this that are important.
So one is that this is not making a big difference to global oil markets in the near, near future. So we’re talking about something where, Venezuela is kind of like, Venezuelan oil in some ways is like nuclear power, whereas it used to be good and it should have gotten better, but you’re talking about going from—
Jordi Hays:
It’s all potential.
Alex Epstein:
Yeah. Well, it was once, I think its peak was three and a half million barrels a day. So right now we’re at about 102 million barrels a day. And by the way, a barrel is 42 gallons. So it’s about 500 million gallons or so of oil produced a day. And 1% of that right now, a little less than 1% is coming from Venezuela.
And both because of how dilapidated so much of the industry is, how much incompetence there is, and also because physically the crude they use in terms of heavy crude is more difficult to process than other things. It’s not like this is just, you’re going to go from one to three anytime soon. So there’s a lot of investment. This is not any kind of slam dunk.
By the way, Canada has in some ways better oil. It’s a lot for your country. I think we’re totally underutilizing Canada as a trading partner. So I think economically near-term, it’s not super interesting, it’s not as exciting as people think. It’s probably most exciting for oil field services.
If you invest a bunch of money and send a bunch of people down there, yeah, that benefits Halliburton and Schlumberger and that kind of thing. Also benefits potentially Gulf Coast refineries who are very good at this kind of crude. Then they don’t need to get it from Canada. So then it comparatively hurts Canadian people. So there’s that whole thing.
The thing I find most interesting though is that for the first time that I can ever remember, a pet issue of mine is now in the public—or this pet issue is in the public—which is that all of these oil countries stole our oil. I don’t always agree with exactly how the administration is saying it, but it’s very important. And the book The Prize is really good in this regard by Daniel Yergin.
He’s not as judgmental as I am about this. He probably doesn’t have as negative a judgment, but you just look, in country after country, what happened was they had some random, mild dictator type person or king or it wasn’t the most evil person in the world, but they made a very clear deal with the West.
So, take Saudi Arabia. Saudi Arabia couldn’t even find water before we came there, before the West and particularly the US came there, Standard Oil, and they couldn’t find water. That was their big problem at the time. And then we of course make it possible.
We get what’s called these “concessions,” so we’re getting a kind of right. And what happens is just, they keep pulling back on these things and because of cultural and political forces at the time, nobody stands up to them. So they keep stealing more and more and then they just totally nationalize it. They declare it their “national heritage.”
They’ve totally broken the agreement and then they use this to fund some of the worst dictatorial behavior in the world. So I think it’s very, very important that people are now saying explicitly, “Hey, we had rights to that oil and it’s been stolen and there’s some sort of reparation.”
Jordi Hays:
This has been memed to no end over the last few days, which is when people see Trump say, “That’s our oil” or something to that effect, people normally dunk on it, because they’re like, “Well, how could that possibly be the case? This is not the 51st state. It’s not our land.” But you’re pushing back and saying, “No, we actually did originally have—”
Alex Epstein:
It’s not “we,” it’s specific companies, so we need to be clear, it’s not the government’s thing. But it is an interesting, it’s a real case of reparations because the seizures happened not too long ago. You’re talking about a lot of them culminated in the ‘70s and then happened, you’re talking about the ‘40s maybe through the ‘70s and ‘80s. And then even once they nationalize it, they screw over companies in different kinds of ways.
So I think this is a really good thing, but it needs to be talked about in a very precise way. One thing that Trump will do that I think is wrong is like, he’ll have sort of a feeling of like, “I want all these other countries’ resources.” So like, “I’m so excited about Greenland,” and even making Canada the 51st state, and then talking about Ukraine in certain ways.
And I think you’re on really firm ground when somebody actually broke contracts with your companies. There’s a difference between like, “Oh, I’m really excited,” having the mentality that others have—
Jordi Hays:
“It would be nice to have access to that” versus “there was a time when there was a contract in place.”
Alex Epstein:
And we can access them in a very real way by trading with them. So with Canada, we have enormous opportunity that I think we’re squandering right now. I think we should be, there’s a lot, Ukraine is a whole other issue, but I think we should be supporting Ukraine a lot more. So yeah, but it is a really interesting narrative shift that is a good thing.
John Coogan:
Well, thank you for getting us up to speed. We have to jump to our next guest but we’d love to have you back on the show, this was fantastic.
Alex Epstein:
Anytime.
John Coogan:
Thank you so much. The book is Fossil Future. The author is Alex Epstein.
Jordi Hays:
Go get that job, take the assessment.
John Coogan:
Thank you so much for stopping by.
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