Doomberg on why oil is still cheap despite the Strait of Hormuz closure and what it means for AI data centers

Speaker 7: Hey, guys. Doing great.

Speaker 1: Thank you so much for taking the time. I love an animated avatar. Can you what can you tell the audience about who you are, why you chose, anonymity, pseudonymity, any of that, just as a way of an introduction?

Speaker 7: Sure. Brief intro. First, thanks for having me. Of course. Great to be here.

Speaker 1: Thank you.

Speaker 7: Yeah. We are a anonymous team of former industry executives that write about the energy markets.

Speaker 1: K.

Speaker 7: When we launched Doomberg five years ago this month, we had nothing. And so we decided to build Doomberg on Twitter back then. Good decision. The choice came down between another middle aged white guy in a tie

Speaker 1: Yeah.

Speaker 7: Or a green chicken. And you can't be remembered if you don't stand out. And so that decision actually accelerated our early growth. Then once a brand

Speaker 9: A 100%

Speaker 1: believe it.

Speaker 7: Kind of kind of blows up. Yeah. We observe other other Twitter accounts de anonymizing, and it kinda destroys the brand mystique. So it's nothing more than that, really. No. Just

Speaker 1: the chicken green?

Speaker 7: Well, another master stroke of marketing by our co founder and editor in chief.

Speaker 1: Love it.

Speaker 7: So our ideal clients have Bloomberg terminals.

Speaker 1: Oh.

Speaker 7: And the colors on the Bloomberg keyboard are pretty iconic.

Speaker 1: I get it.

Speaker 7: And and the most dominant color on that keyboard is is a close proximity to the green that we currently wear.

Speaker 2: I love it.

Speaker 7: You know, so yeah, it's just a the a brand is the gut feeling you induce in people when they interact with your product. That's right. If our ideal clients have a Bloomberg keyboard and they see the green chicken, you know, Doomberg chicken little kits of terminal was our first

Speaker 1: Yeah.

Speaker 7: First tagline. And they don't know why they like it. It's some combination of the colors and the stunted eyes Yeah. We think. Yeah. Yeah. Works. And then when you got a winner, know, just keep riding it.

Speaker 2: I love it. I love I love I love combining this this high love Yeah. Right, which is like, you know, serious content with

Speaker 1: Sorry. I yeah. I I want to talk about energy and AI, but I also want to talk about the like the workflow here because like, am I just watching like a looping animated GIF or m p four file or can you actually puppeteer this like a v tuber or have you considered

Speaker 7: is very low tech.

Speaker 1: Okay.

Speaker 7: There's no new Coke yet in design. Okay. This is a GIF Yeah. Animated as our background Okay. On Zoom.

Speaker 1: Cool.

Speaker 7: And I'm speaking to you through a Roland VT four. Oh. Slightly modified in real time.

Speaker 1: Sure.

Speaker 7: The latency is perfect.

Speaker 1: Yeah.

Speaker 7: Build on your last discussion. Yeah.

Speaker 1: We had a couple guests come on and want to do voice changers no one's landed the plane like you have. So congratulations and for Technology dialing

Speaker 7: is one of the five pillars of any business and we decided to invest in our technology plan to execute the vision of the green chicken. Come on. Mean, works.

Speaker 5: Every time

Speaker 7: I see advertisement of all these serious finance people in suits and ties speaking at a conference and then a green chicken sitting there.

Speaker 1: I'm going take the suit

Speaker 7: off makes real quick. Me makes me laugh every time.

Speaker 2: Yeah. It's so good.

Speaker 1: Talk about the other four pillars.

Speaker 7: Brand channel technology, demand creation, and operations.

Speaker 1: Okay. Makes sense.

Speaker 7: And we have a plan for each. Mhmm. One of the hallmarks of Doomberg's execution on Substack is that we openly shared how we built Doomberg from the beginning. Sure. In a series of monthly pieces called the work of my life.

Speaker 1: Yeah.

Speaker 7: And it's been fun. Been a fun ride. We've got almost like 400,000 email subscribers now.

Speaker 1: That's amazing. Wow. Congratulations.

Speaker 7: Crazy. How makes this Crazy run.

Speaker 1: You said it's just a couple of people. Right?

Speaker 7: Our official statement is that you could count them on one hand with a few fingers left over.

Speaker 1: Sure. Okay. I like that.

Speaker 2: Leaving some ambiguity but with a few is a a few

Speaker 1: Yeah. Three? Yeah. Let's yeah. Let let let's start with, let's start with energy markets. Let's start with the Strait Of Hormuz. I've heard it's closed. Is that good? How bad are things? How serious is the situation in the oil and gas markets? And then we can go through some of the knock on effects. But just in terms of like, like, you know, a lot of people have been tracking this, but where are we on the cutting edge right now in terms of where this all goes?

Speaker 7: Yeah. We're launching a piece tomorrow. Look, if you had given us this fact set in February and asked us to bet the over under of $1.50 on oil, we would be homeless because I would personally have mortgaged the house to greedily bet more on the over

Speaker 1: Right.

Speaker 7: And and would have lost. I think one of the great mysteries of this whole affair is why is oil still so cheap? Yeah. And it's a really interesting mystery. Go ahead.

Speaker 1: Yeah. And and I that feels like that's true for also just like the broader market. Like, the market is not processing in the same way. And maybe it's like the AI narrative which we can get into, but it feels like there's a very, very big historically significant thing happening and everyone's just sort of like closing their eyes. I don't know. How do you explain it?

Speaker 7: So we've got a deep think on it. Nobody knows. So one of the things about the oil markets is everybody lies. That's the

Speaker 5: first thing.

Speaker 7: And one of the sort of theories I was bouncing around with a guy who traded oil for fifty years over the weekend was there was an enormous excess of oil all of last year. China bought most of it. They lied about it, and they're bleeding that into the market now to keep a lid on prices.

Speaker 1: Got

Speaker 7: it. That's one sort of conspiratorial look.

Speaker 2: Yeah. And and sorry, just to double

Speaker 7: Yeah.

Speaker 2: Ahead. Tap there. You're saying they were lying about their the the levels of their oil reserves? So saying like, you know, basically under underselling Yeah. So there's

Speaker 7: a lot dirty oil. There's a lot of dirty oil on the market, and they were buying it, you know, sanctioned oil, shadow fleet, Russian oil, Iranian oil.

Speaker 1: Sure.

Speaker 7: And and so you

Speaker 2: Yeah. Because back at the beginning when it first closed, weren't people saying China has forty days of oil or something like something to

Speaker 7: They they have 1,800,000,000 barrels is our best guess. They probably bought a million or 2,000,000 and a half barrels a day extra all of last year.

Speaker 1: Wow.

Speaker 7: And they're using that for geopolitical leverage now. They're cutting refined fuel deals with Australia. They're helping out their neighbors, looking like the mature, stable, don't have a truth social account to post on during the day. You know, ascending power with Trump going there this week. Yeah. Look, I just want to say, in a world where oil is more expensive, oil doesn't matter like it used to.

Speaker 4: Mhmm.

Speaker 7: It used to be 55% of global energy. Now it's 30 and change. And so the stock market, look, the AI revolution is powered by coal in China and natural gas in The U. S. And natural gas in The U. S. Has been made cheaper by this war for reasons that we can explain. And coal is basically insulated from oil. And so I don't think it's all that crazy, of course, with the benefit of hindsight. Yeah. Doesn't mean we would have predicted a $100 oil sixty days into the Strait Of Hormuz being closed or seventy five days, whatever it's been. But I I anybody saying that they would have not predicted a calamity is lying.

Speaker 1: Going back in time, are you learning any lessons or pulling any historical lessons from the previous wars in The Middle East? I grew up at a time when the war in Afghanistan, the war in Iraq were breaking out. And the protest signs said no blood for oil, which is a completely reasonable thing to say. But I was surprised by the fact that if you look at the oil markets during that time, it feels like even if you took the cynical approach that The US was going there to steal the oil, it didn't seem like that oil was successfully stolen and flooded the market. And I'm wondering what else you've learned from history and the various conflicts in The Middle East about oil prices that you can, like, draw on today, if anything.

Speaker 7: Well, the for that war, James Baker went went around the world and told all of our allies to start pumping Okay. To to insulate

Speaker 1: Okay.

Speaker 7: The world from it. The real comparison everyone draws is the Iran embargo following the war in the Middle East in 1973.

Speaker 1: Okay.

Speaker 7: But the big difference between then and now, aside from the fact that oil just matters

Speaker 1: less So

Speaker 7: is that there's an organization called the IEA that exists. And they have worked with the developing world to ensure that countries have a stockpile of oil for this exact situation. And they flooded the markets shortly after the Strait was closed with 400,000,000 barrels. There's still, when you do the math, oil prices should be higher, and they just aren't. So there will be lots of time for an after action report when this war is done. Mhmm. But for AI and for the tech world, natural gas in The US being cheap and coal and China being cheap means those data centers are humming and all is good.

Speaker 2: What's driving natural gas prices right now?

Speaker 7: Great question. So the shale revolution in The US not only made The US a net oil exporter, it twinned the production of natural gas and oil. It used to be that natural gas was drilled for on purpose, oil was drilled for on purpose. And now in the shale patch, in the same well, you get natural gas and oil. Got it. Especially in the Permian. Yeah. We're drowning in natural gas in the Permian. So when the strait is closed, oil spikes, drilling goes up, and you've got all this natural gas to get rid of.

Speaker 2: Yep. Got

Speaker 7: it. It's coproduction economics, which is actually not widely understood. And it that's like pulling on our industry days. Whenever you have to compete against a co producer, it's terrible. Because if either of the markets are hot, they're producing too much and they're flooding the market with the unwanted byproduct, which happens to be what you make.

Speaker 1: Yeah.

Speaker 7: And so when the war broke out, we correctly predicted that natural gas in The U. S, despite a global energy shortage would prices would go down. And in fact, as we're talking today, natural gas is trading in The U. S. For like $3 a million BTU, which is about $18 a barrel oil. Yeah. And in the Permian Basin, it's negative spot prices. They're giving it away. Yeah. They're drilling for the oil. The natural gas is a nuisance. And So it's possible there's

Speaker 2: a super intelligence that's already in control that wants to feed on natural gas and so here. Playing, yeah, this four d chess.

Speaker 7: This is the ultimate, you know, Claude agent Conor. Yeah.

Speaker 1: Yeah. How is China is China potentially like the biggest loser here? Because I imagine that coal and oil cannot be co produced in the same and so you don't have that dynamic playing out. Are they being squeezed? Like, who who is suffering the worst from the closure of the Strait Of Hormuz, I suppose?

Speaker 7: Europe and Australia. China is going to come out the big winner in this.

Speaker 1: Okay. Why?

Speaker 7: A variety of reasons. So first of all, China has been building out something we've chronicled to the tune of hundreds of billions of dollars, the ability to convert coal into oil products.

Speaker 1: Oh, interesting.

Speaker 7: The only two regimes to have done this historically are the Nazis and apartheid South Africa. It's quite the exclusive club the Chinese have decided to join. Yeah. You do that out of necessity when you're worried about losing access to oil. Mhmm. It's very expensive, very environmentally taxing. It's not something you would do spontaneously to create shareholder value. Yeah. You do it for geopolitical insulation. Mhmm. And but also China's sway in The Middle East is going to grow Mhmm. If Iran continues to resist The US Israeli strikes and controls the Strait Of Hormuz because Iran is being backstopped by Russia and China. And so in a world where The US has lost some geopolitical leverage in a zero sum game, China benefits. And we'll see what happens this week. I think this is going to be a historic summit.

Speaker 1: Yeah. That's what I was going to ask you next. What are you expecting?

Speaker 2: Before we before we dive into that, I did want one one more question around oil. Sure. How are you forecasting whether we get high prices or massive shortages with, you know, oil, you know, everything from gasoline to other oil based products. Because I think they're I think like a lot of people right now are are kind of projecting, hey, we're just gonna pay more at the pump. But then there is some scenario depending on how things play out where you actually have, you know, you can't just go to the, you know, we were talking yesterday, and, you know, maybe there's a scenario where depending on the last digit of your license plate, it's an odd or an even number, you can only go on certain days, and you get actual rationing.

Speaker 7: That's not going to happen in The US. It depends where you are. So The US is a net oil exporter. It's a bit complicated. We're detailing it all tomorrow. Trump is playing a careful game where he is allowing the export of gasoline, diesel, and jet fuel to try to help the rest of the world, and The US is still well supplied, but is paying more. So we see $5 gas, $67 diesel. Trump could reverse that at any time just by limiting the exports of refined products. He's choosing not to yet. But if you're in Australia, you're already in situation where you have to have urgent intervention by the government, who who have done a great job, by the way. And Europe, you know, when you don't make your own hydrocarbons and you're beholden to the rest of the world, well, if everybody turtles up and says, we're not going to export until our domestic, you know, demands are met, then you will see real shortages and no amount of price will clear. And so North America is fine. If you draw a circle around Canada and The US, the two countries are self sufficient in oil, diesel, gasoline, jet fuel, fertilizers, wheat, corn, sulfur, helium, all the things that people are worried about globally. We have not yet instituted export controls. But before the stocks would run dry, especially with the midterms coming up, you would assume that Trump and Kearney would collaborate on such a such an action.

Speaker 2: Have you been tracking the diet coke shortage?

Speaker 7: I have not been tracking the diet coke shortage.

Speaker 1: Apparently, 8% of aluminum goes through the Strait Of Hermes.

Speaker 5: Oh, I

Speaker 7: did. And so the

Speaker 1: cans are in short supply now.

Speaker 2: Yeah. And this is top of mind top of mind for us because John could run to the to the studio if he didn't have gas, but you know, the show wouldn't be possible without him going through three or four of these Well,

Speaker 7: I I got one word for you too. Yeah. Plastics.

Speaker 1: Plastics. Not gonna be popular with

Speaker 2: technically can get a Diet Coke. You can get a DC.

Speaker 1: You could just buy a two liter bottle or maybe fountain. Maybe fountain is the future.

Speaker 2: It could. Fertilizer was was my last last question around, yeah, how, you know, how are you I don't know if covering, you know, future, you know, food prices, commodity pricing, etcetera.

Speaker 7: We we sure are. Again, North America, both in, well, in nitrogen and in phosphorus and potassium, the big three. Canada and The US are self sufficient. Canada has the world's biggest, most fantastic potassium deposit, potash deposit up

Speaker 5: in Saskatchewan.

Speaker 7: We wrote about this a couple of months ago before the war. The U. S. Ammonia is basically just a natural gas play and The U. S. Is drowning in natural gas. Oh, sure. Through the Haber process, you just take natural gas and long story, but you make ammonia that way. There will be shortages of fertilizer around the world. There will be food shortages. And all that really means is it will be more expensive for the rich countries and there won't be food in the poor countries. This is what we see historically, is the market clears

Speaker 5: Mhmm.

Speaker 7: And the poorest countries in the world suffer, and the rich countries complain.

Speaker 1: Black pill. Do you have any white pills? Is there a good ending that you are guiding towards optimistic about? Is there anything that you're optimistic about right now?

Speaker 7: Yeah. Okay. I think a major deal is in the works between look, I don't think Trump would be going to Beijing. I know we wanted to talk about that. Yeah. Trump wouldn't be going to Beijing if there wasn't a major deal, and the list of CEOs going with him

Speaker 1: Yeah.

Speaker 7: Is quite the tell.

Speaker 1: Yep.

Speaker 7: Broadly, you don't have the president of China and the president of The United States get together in such a high profile visit without a bunch of stuff worked out in advance. And I would I personally, being vehemently anti war, would love to see a solution to Iran and Ukraine all tied up in a nice bow. And The U. S. Focus on its neighborhood here in the Western Hemisphere. And we get back to growing and computing and competing and drilling for energy and, you know, making money in stocks and, you know, let the president make all the money he wants in crypto. I don't care. But another war in The Middle East was not on the It's not on the bingo card for us in 2026.

Speaker 1: I don't think many people voted for it. Well, let's shift over to what's happening in America if we can get back to domestic policy. What are you tracking on the AI build out? How important is energy? Everyone's been going back and forth on the chip bottleneck, the energy bottleneck. The chip bottleneck, the energy bottleneck, do you have a viewpoint? Has it evolved? Where do you see the build out going these days?

Speaker 7: Yeah. We're we're an energy newsletter, and so

Speaker 5: Yeah. I'm

Speaker 7: holding that hammer, all we see are energy nails

Speaker 1: That happens.

Speaker 7: Around the AI space. Look, I think natural gas is so cheap and abundant. So then, okay, what's the constraint downstream from being able to produce electricity from natural gas? That's gas turbines sold out. So then, can I make electricity with anything other than a gas turbine? All right. Well, solid oxide fuel cells by Bloom Energy, their stock is booming. Okay. If I wanted to get sophisticated, half the energy used at a data center is for cooling and the boy is an awful lot of natural gas in British Columbia. And last I checked, it's colder up there than in Texas. And so maybe I might want to look at British Columbia, Alaska, Iceland, to cold build my data centers. And you're seeing some of that. Yeah. But there's just so much fuel that has become almost taken for granted in The U. S. That this is the fuel of choice. And now you're running into grid connection issues. And so one of the pieces we wrote, again, before the war changed everything, was called irreconcilable differences where we predicted that most data centers would have to go off grid because like the clearing price for retail electricity is not what a data center is willing to pay for it, and no politician can absorb those increases for industry and for you and I at home. And so we sort of envision these buildings where natural gas goes in one end and data comes out the other. Yeah. And everything happens under the same roof.

Speaker 1: So in your

Speaker 2: What's the what's sorry to interrupt, but what what's the downside there? Hasn't it been, in in some instances, generally beneficial to bring a bunch of new energy production onto the grid, just due to, yeah, the yeah. More supply overall?

Speaker 7: Prices are set at the margin, and the rate of demand for electricity for data centers is growing faster than the bureaucratic ability to bring on new grid connected power. Yeah. The way in which the grid is operated, managed and built out in this country would shock you. And it is utterly incongruent with the Silicon Valley break it, you know, move fast and break it mindset.

Speaker 2: So A little Freudian slip there. Sometimes just break it. Just break it.

Speaker 5: Yeah. Well

Speaker 1: Yeah. You might be moving slow, but you're still gonna break it.

Speaker 7: That's the massive unfunded. I'll just pour money on the founder until they get it. Look, we wrote a piece called the exception that proves the rule where we we showed that, you know, Elon Musk built this major natural gas power data center for XAI in Tennessee by breaking all the rules, right? He just built his own natural gas power plant.

Speaker 1: Yep.

Speaker 7: And it proved to us, the exception that proves the rule, that the current rules need to be broken for stuff like that to happen. And so you since Microsoft and Google aren't ever going to behave like Elon, you need to do this stuff off grid. And so there's a hybrid solution where most of the power is off grid, but they still connect for backup.

Speaker 1: And

Speaker 7: you build these at old shutdown coal plants. That's another trend that we're seeing in Appalachia near the big natural gas So shale patches up you have an old coal plant with all the connections there that's shut down and you build new natural gas plants there powered by local natural gas. And you use the connections to the grid for backup. Yeah. But you're not leaning on the grid for most of the power, and that's kind of a win win.

Speaker 1: Walk me through what an off grid natural gas powered data center in Alaska would look like? I'm a big Alaska fan, but do they have natural gas deposits up there that you would need to go set up drillers and then Like, how would that work? And what what is the timeline for that versus something like nuclear?

Speaker 7: Much much quicker depending on bureaucracy. Okay. One of our operating mental models is that The US has an infinite supply of natural gas.

Speaker 1: Really?

Speaker 7: It's just a matter of going and getting it. Yeah. And so if you made it for example, if if we made it a let me put it this way. If Trump issued a nationwide price floor of $5 a million BTU for natural gas, The US would be the drilling stampede that would erupt would blow the world's minds. The US produces so much natural gas. I'll just give you some numbers. The entire European Union's dependence on Russia before the war was like 15,000,000,000 cubic feet per day, and The US alone produces a 110,000,000,000 cubic feet per day.

Speaker 2: Wow.

Speaker 7: It's just this mammoth machine of fuel. And so, yes, there's plenty of natural gas in Alaska. You could build it in British Columbia. Sure. Next door, a little to

Speaker 2: the infrastructure, south like, isn't part of the strategic importance of The Strait that they have the infrastructure to, what is it, liquefy the natural gas so it can be transported? Are we are we way behind on on that infrastructure?

Speaker 7: The US is stampeding to the lead in this regard. So when I was in industry But Freeport LNG

Speaker 2: But when did that stampede start?

Speaker 7: 2015.

Speaker 2: Okay. So it's been in process.

Speaker 7: When I was in industry, Freeport LNG was meant to be an LNG import terminal. And then the share revolution happened. So just to go back to those same numbers, by the end of this decade, The U. S. Plus a sprinkling from Canada and Mexico will have gone from zero LNG export capacity to 30,000,000,000 cubic feet per day. And in Qatar today, about 15% to 20% of the world's LNG capacity sits at a place called Ras Laffen. And a couple of trains were blown up there, two out of 14. But LNG is still a small part of the global natural gas trade. So the Strait Of Hormuz is not really a natural gas problem in the way that it's an oil, fertilizer, you know, refined products problem.

Speaker 2: Right.

Speaker 7: Qatar is, let's say, just to make the numbers round, Qatar's 20% of LNG and LNG is 20% of natural gas. That means Qatar is 4% of natural gas.

Speaker 1: What has the environmental pushback been around natural gas? It feels very intuitive. It's burning fossil fuel. Sure. It's not scarce, but it feels like it could create global warming, And yet I've been shocked that there's been so much focus on the water that's consumed by data centers because that feels much more plentiful and much much easier to keep on.

Speaker 2: There's a certain irony that fear around global warming has been replaced by fear around AI mainstream media narrative. Yeah. Yet the

Speaker 1: So Yeah. Basically, root causes the same.

Speaker 7: Yeah. There's always a fear campaign around whatever America's excelling at. That's sort of our mental model. Like, America's dominating with AI and data centers, we better whip up some fear.

Speaker 1: Yeah. It's really a tall poppy syndrome in our culture.

Speaker 7: It's, well, who knows, foreign actors who don't necessarily want to see The US succeed.

Speaker 1: Sure.

Speaker 7: So to your specific question, natural gas is super clean burning, produces the least amount of c o two per energy.

Speaker 1: That's good.

Speaker 7: In fact, while you can cook with it in your homes with no ventilation, nobody would say that you would bring your barbecue indoors.

Speaker 1: Oh, yeah.

Speaker 7: Which is basically coal. Right?

Speaker 1: Yeah. That's right.

Speaker 7: And so you you have natural gas in your furnace, and you have it on your stovetop, you have it in the restaurant.

Speaker 1: Mhmm.

Speaker 7: And it's just burning away nice and cleanly. There is one made up problem with it. Well, I say made up. There's if natural gas leaks, it's considered a very potent greenhouse gas. Methane leaks. They've even launched satellites to try to track where industry is leaking methane directly into

Speaker 1: Got it.

Speaker 2: The Amsterdam. Were talking with Will from Planet Labs. Oh, he was saying you can use, know, sort of like real time satellite imagery to track natural gas leaks and they've been pretty effective, I think, at helping countries and companies identify leaks. This

Speaker 7: will blow your mind. Natural gas is so cheap historically and such a nuisance that they would just release it and vent it into the air to get the oil. This is before the

Speaker 1: bigger plant. Right?

Speaker 7: People cared about methane leaks, to be honest with you. And look, this is a much much smaller problem in The US. US is very regulated. Environmental permits and controls are tough. Where it's a big deal is places like The Middle East, Venezuela

Speaker 5: Mhmm.

Speaker 7: Where there's, you know, weaker governments, weaker environmental controls.

Speaker 1: Yeah.

Speaker 7: But you can go online and find a bunch of people really hyperventilating about methane leaks.

Speaker 1: Who else is big in natural gas across the world? Like, who are they do you know what country is number two, three, something like that?

Speaker 7: Yep. I know them all. Yeah. So US is by far the biggest. Okay. Russia's number two.

Speaker 1: Oh.

Speaker 7: Oh, is that some kind of

Speaker 2: It's an eagle. That was an eagle for us.

Speaker 1: For America.

Speaker 7: Yeah. So chickens don't like eagles.

Speaker 1: Oh, no. Oh, no.

Speaker 7: Yeah. So you're kind of giggling, kind of triggering me over here.

Speaker 1: You have

Speaker 7: to be careful. So Iran, Russia, Iran's a big natural gas player. Interesting. Obviously, Canada is a growing natural gas player because of the shale patch they have up Australia is a big LNG exporter. Qatar is a big LNG exporter. But Russia is the second biggest. They probably produce about half as much natural gas as The US. Mhmm. And then, you know, a sprinkling throughout the old Russian the old Soviet Union, the Confederation of Independent States, I believe they're called now.

Speaker 1: What are you tracking on the nuclear side? Every time we talk to a nuclear founder, they're ready to run through walls. They're they're well funded. They're ex SpaceX, ex rocket scientists, geniuses. They're like then they're like

Speaker 2: is 2035.

Speaker 1: Yep. Is there any optimistic scenario where we get nuclear a little bit earlier?

Speaker 7: So there's only one way to do it, which is not seductive and doesn't require any technology, which is just build a lot of the stuff we already know how to build. So that's AP one thousands and can do reactors up in Canada. There's no like, fusion is a fake solution to problems that don't exist.

Speaker 5: Sure.

Speaker 7: Like, we don't really have a nuclear waste problem, and we don't have a meltdown risk problem with the latest designs.

Speaker 1: Yeah.

Speaker 7: And so all we have to do is build what we have, but that's not sexy. Mhmm. And that's not a technology story you can sell on Wall Street and Mhmm. Have your IPO and, you know Mhmm. So that that's our

Speaker 8: Well, there

Speaker 2: are some that are not trying to reinvent the wheel and are just saying like, let's just do more of what we already know. Correct. Whether or not they should be venture backed is another question.

Speaker 7: I think there's better use for venture money than nuclear. Yeah.

Speaker 2: Where is solar in all of this? How much out of out of all of your coverage, how much is dedicated to solar? I think that will

Speaker 7: We write about intermittent renewables from a pretty critical lens. Broadly speaking, there's an awful lot of misinformation and disinformation about solar. The biggest one is that the sun is free as though the price of a fuel is the only input into the cost to use it. Yeah. As we're learning with natural gas, it's free in the Waha Hub. Doesn't mean that you can buy your turbines and build your data centers. And the biggest challenge with solar is that sometimes the sun doesn't shine, and dealing with that intermittency is a real challenge. And the expenses associated with making room for solar when it's there and getting out of solar's way when it's really hot and the sun is really shining, but also standing in for solar when it decides not to show up for work. Those expenses are never ascribed to solar. They're just piled on to all the other technologies that have to stand ready. And so historically, whenever you reach a certain threshold of solar on a grid, things start to break. I could explain technically where that breaking point is, but it's probably beyond today.

Speaker 1: Doomberg, is the name Doomberg, like, reflective of your demeanor at all times?

Speaker 7: It's mostly tongue in cheek sarcasm. We're techno optimists. And we are defensive pessimists. We spend a lot of time pondering worst case scenario risk, then once those are properly abated, we feel that we're in a position to take more risk personally. I'm personally a prepper, for example.

Speaker 2: That's good to know. I wouldn't have guessed that Doomberg was a prepper. Actually, maybe

Speaker 1: I would.

Speaker 2: I had one question. You Sure. One last question, then I I know we're out of time. Would love to do this again soon. I enjoy talking with the chicken, although your eyes do make me kind of go cross eyed myself, which is a challenge. Do you believe that we've seen videos online of people filming data centers with generators outside them. They seem to be not exceptionally loud, but loud enough to be mildly annoying, lower decibel than sort of legal limits, but still maybe not something that someone

Speaker 1: wants Do in

Speaker 2: you think there's any innovation on reducing overall noise pollution on that front? Or is that to date, at least we talked to somebody yesterday who was like, that's at least my issue. But it feels like something that probably can and should be worked on. Yeah. In Alaska.

Speaker 7: Nimbeism is real and I don't think should be dismissed. And I think local concerns are always worth listening to, especially if you want to be durable as a good neighbor and as a as an industry that has, you know, persistence.

Speaker 2: Yeah. Historically, factories were very ugly, but they provided a lot of jobs. So Right. If you just come through and you're like, hey, we're gonna build a new factory, but it's not gonna create a lot of jobs Mhmm. That's not a super compelling

Speaker 7: pitch Right. For community. And it's going be loud, you know. So I I assume that the diesel generators are there for backup power predominantly.

Speaker 6: Oh, that's what

Speaker 1: we're looking at. Yeah. That's right.

Speaker 7: And I would suspect that there's all manner of venture backed companies pitching stationary batteries. A stationary battery for backup at a data center is a different problem set than, say, a battery for an electric vehicle, which gives you some more degrees of freedom and design than as because with a car, for example, you care a lot about gravimetric energy density, whereas you might have different CTQs for a battery setup to provide backup power for a data center. And so there's lots of people working on it. I see some private deals floating around in our own personal lives. Look, the speed with which this revolution is unfolding means that you're going to break a few eggs. Like we were talking about earlier, move fast and break stuff. It's happening, it's real. And you'll see local communities embrace it because there are jobs, construction jobs, and you know, so on that come with these things. They're not all yet staffed by robots.

Speaker 1: Chicken legs or both? What are we breaking down?

Speaker 7: I'm I'm in the egg business, you know. Okay. It's a renewable resource from where we are.

Speaker 1: It is a renewable resource. That's an optimistic

Speaker 2: Last last question. Do you think California will be producing more or less oil in ten years than it is today?

Speaker 7: Oh, way more. Yeah. They're they're heading for a big crisis, and, you know, California needs to drill more, refine more, and connect pipelines to Texas. And and I do think one of the big laments of the Trump supporters is that this Warner Inn may have squandered the opportunity to get domestic energy projects like that over the line where he had political wind at his sails. We'll see. But I think let's put this well, I'll leave you with this. Please. California has as much oil and gas as Texas. And the the reason why Texas is a global energy superpower and California is a flaccid energy vassal is little more than politics, and you get a big enough energy crisis, politics is easy to wipe away.

Speaker 2: Yeah. I I had the pleasure of having dinner with a guy who had basically like an oil drilling SMB in California for like a decade and then ended up shutting it down about a year ago because of some new regulations and he was just sitting there being like, I don't you know, just kind of at at a loss because he's like, we use so much oil. We Yeah. We depend on it. We should be making it here versus just importing it. So

Speaker 1: Well, thank you so much for coming on the show. This was a pleasure. Pleasure. And we appreciate

Speaker 7: it guys.

Speaker 1: Yeah. Rest of your day. We'll talk to you soon. Awesome.

Speaker 2: So much.

Speaker 7: Thanks, guys. Talk soon.

Speaker 1: There's a good note for the listeners. If you're looking to build a diesel refinery on Malibu, reach out to me. I'm happy to finance it. It won't be a problem. We'll build a massive diesel refinery right in Malibu. Jordy's not paying attention. Westinghouse, they make nuclear reactors. We are in an AI boom. We are in an energy crisis. What do you think the stock's done over the last six months?