LOBBYING FOR OIL & GAS, RENEWABLE ENERGY AND ELECTRIC VEHICLES

Robert Hansen

I have heard from a number of different people that lobbying, which you eventually became a lobbyist, is the most hated profession. How do you respond to that? How do you think about it? How do you get up in the morning and say, "I want to do this?”

Kinnan Golemon

Well, influence and policy is really what you're trying to do. You're an advocate on behalf of a constituency or a particular business. The fact is, everybody has a place in any public forum for their voice to be heard. The fact is, my clients have a particular perspective. And there are other perspectives in the room.

Most often, people don't want to hear the other perspective. They don't want to study why something they may be saying may make some sense or why it totally doesn't make sense.

My view has always been that good policy involves good people with different perspectives. Everybody's opinion needs to be heard. I don't ever dismiss someone as being irrelevant. They may be misinformed. They may not have as complete of information, but they're not irrelevant.

To me, good lobbyists approach public policy with that kind of background and perspective. Oftentimes, maybe there's 20% of what we agree on and 80%, we don't.

I'll always try to go, “Let's go get to 20% done, and let's put the other in the parking lot and work together to go make some progress. It's not an all or nothing game. Legislature meets every two years, the regulatory agency’s there all the time.”

Robert Hansen

Right. I can make a lot of friends in those two years.

Kinnan Golemon

You can make a lot of progress, and you can then begin to develop and have a better understanding. And sometimes, it's just merely a matter of timing. You can't change bad behavior or bad things that have happened overnight when maybe the economics don't work, even maybe with the community’s support.

There's a lot of things that go into maintaining businesses in Texas. You can't just close the door on something because they will just get up and leave and go to wherever. Those jobs are important. But to make progress over a four or five, six-year period, sometimes it takes 10 years.

Robert Hansen

Why the energy space? What about that attracted you? Was it just there's a lot of opportunity there?

Kinnan Golemon

When I grew up, my father was under what I always called the wrench into the oil business. He grew up, he started building wood derricks when he was 14 years old. He shifted to steel derricks when he was about 16 years old.

He built the old standard drilling rig. They were scattered all over East Texas and West Texas. But he spent most of his time in the coast in East Texas until about 1946 when the tilt-up drilling rigs came into existence. But I had been around the oil and gas business as a kid. He would from time to time take me out to sites.

Then he actually started a construction business, got lured back into the oil and gas business, went to South Louisiana. Actually, he and his mother's younger brother started the first oilfield service company in the Gulf of Mexico.

The energy business, for the last 100 years, it's been the most important thing. It’s the difference between poverty and wealth.

Robert Hansen

Interesting. You've been in this business a long time. When did you start, you said?

Kinnan Golemon

Well, I graduated from law school in 1967.

Robert Hansen

So about 60 years?

Kinnan Golemon

Yeah, roughly. The pollution world 60 years in 2024.

Robert Hansen

How would you say Texas politics has changed in that time period?

Kinnan Golemon

Drastically.

Robert Hansen

That's my impression. Obviously, I think you have more background than the average person. So I'd really be curious how you see it.

Kinnan Golemon

Well, it's changed drastically. First of all, let's go back to the 1960s. There was essentially no Republican Party in Texas. There were conservative Democrats and liberal Democrats. And then there was a small group in the middle trying to figure out which one of those they would go with on any given occasion.

The Republican Party really started to grow after Johnson beat Goldwater in the election. The Republican Party in Texas started to grow, and then a number of the conservative Democrats moved into the Republican Party and really got it going in the early 1970s. But I think when I first started lobbying the legislature in 1969, there were only like three Republicans out of 181.

Robert Hansen

Wow. With the conservative Democrats, were they basically Republicans as we know them today or were they really Democrats?

Kinnan Golemon

They would be generally what you would call moderate Republicans, probably.

Robert Hansen

So not particularly fiscally responsible, not small government, the things we typically think of as very right.

Kinnan Golemon

They were fiscally conservative. They were generally more liberal socially and that kind of thing. But they were tight-fisted in terms of they didn't put a lot of resources into the social side of what's necessary for work. So that was always a big battle between them and the liberal Democrats, just how much would go there. And same way they were abhorrent to excessive taxation.

Robert Hansen

Other than just the sheer demographics, has policy changed? Has it been easier or harder to get policy passed? Is there any sort of big trends?

Kinnan Golemon

Well, it has changed over time. Actually, it's gone in waves of different times. Let's say, as the Republicans started emerging in the late ‘70s or before Reagan, it was almost impossible to have a Republican sponsor on a major piece of legislation. The Democrats just wouldn't accept that.

You had to pick and choose how legislation was crafted, who were the sponsors, that kind of stuff. Once Reagan came in, you had additional shifts from the Democrats to the Republicans. Pretty much, you had the Democrats control the House and the Senate. But the margins were so much closer.

Robert Hansen

What time period is this approximately?

Kinnan Golemon

Pardon?

Robert Hansen

Ron Reagan is what you're saying, so late ‘80s?

Kinnan Golemon

Yeah, partial late ‘80s. Then in the early ‘90s, of course, was the last time we had a Republican statewide elected official. In 1993, I think it was. And so we've gone 30 years with the Democrats steadily losing power.

Robert Hansen

Why do you think that is?

Kinnan Golemon

I think they've never developed a bench. There's been too many one off candidates. They've never coalesced like I thought they would. Part of it is they, I think, too often took for granted the Hispanics and felt like the Hispanics were just their natural constituency.

If you look at the Hispanics, they're more, in my opinion, closer to a natural Republican constituency.

Robert Hansen

Very religious.

Kinnan Golemon

The Republicans dismissed them because they thought they were, also. But you're seeing a shift now, which I thought probably should have happened about 10 years ago. They're hardworking, they're fiscally conservative, they are generally very religious, they are family-oriented, and they don't have a lot of respect for people who don't work.

Robert Hansen

What about the border issue?

Kinnan Golemon

Well, first of all, I think too many people don't realize the cartels really control northern Mexico and the border. And you're dealing with total crooks. They have a well-documented demonstration of not caring for other human beings. They murder them as fast as they need to, use all kinds of things that we seemingly see close to this country.

Robert Hansen

How does that affect the Hispanic population in Texas? Do you think that they want the border closed? Do you think they want it inclusive?

Kinnan Golemon

They don't want the border closed, but they don't want the border the way it is now. Many of those people along the border have families on both sides of that border. They know their relatives south of the border are basically being dominated by thieves. And so I think that's part of it.

The other thing is what happened recently with the total influx that we have been seeing. It puts a humongous amount of stress on those local communities who are not wealthy, generally. Fortunately, the border has gotten some better jobs and an income.

They started from a much tougher place than most of the rest of the people in Texas. Usually, if you put 5,000 people into a county of 18,000 people, then that’s huge demands on every aspect of that community.

I don't spend a lot of time along the border. But I have friends who have families down there. I talked to the representatives down there, the people who are elected, and they just don't think that our government, particularly the federal government, is doing enough to be sympathetic.

If this was happening in northern Michigan and Minnesota, if it was happening on the Canadian border, it'd be a very different story.

Robert Hansen

Well, I will probably punt on the conversation about the border going forward with you just because I have so many other things I want to talk to you about. But it's still very interesting.

I know you have focused a lot on land use and mineral rights and things revolving around, let's say, extracting things from the natural environment. How does lobbying work for that?

It seems like you have a constituency who both wants their land to be exploited because they can make money. But also, there's a lot of stuff that happens when you do that. There’s a lot of wear and tear on the roads. If you're trying to extract gold, there’s arsenic in the ground and all kinds of crazy chemicals going on there.

How does that work? How would you get that passed? Let's say, some new vein of some mineral popped up somewhere. How does that all happen?

Kinnan Golemon

Well, obviously, in Texas, we're blessed in one way in that our major material is not really a toxic material. Our major material’s limestone, and it's stretched across Central Texas.

We used shells out of the bottoms or the bays, but we quit that because we were disturbing the marine environment adversely and recognize that, fortunately, before we did too much damage.

Obviously, part of the whole aspect of extracting is, if you own the land and you're not moving your pollution-related onto others, the State of Texas says you're entitled to do that. It's when you start imposing costs on others, because of your activity, that a state gets involved.

Of course, with oil and gas industry, the extractive nature of that, you are imposing costs sometimes well beyond where the resources be in the ground.

Robert Hansen

Especially groundwater, that's one of those shared resources that’s hard to get passed.

Kinnan Golemon

Texas is now about the only state that still has the landowner totally in control of groundwater. A few other states had that, but they have gone to an interconnective type of resource.

Texas has not gone that far. Except we have created some groundwater districts to control the amount of groundwater that's extracted. And there are still questions about export of that groundwater to other regions that get into controversy.

I've not dealt with the export issue in my career. I've just watched it. It's been okayed, but it's controversial.

Robert Hansen

I can imagine so. Especially in Austin we have aquifers. So you pollute a little bit here, and it just goes all over the place.

Kinnan Golemon

We have had, for many years, been pretty protective of the aquifers. Fortunately, most of the aquifers are not that deep. So we've had in place for 60 years really, and it's gotten better over time, requirements of protecting the drinking water aquifers.

Now, when you get below that and you get into this brackish and saline aquifers, there's some aspects of higher potential for some pollution or degradation. But we've done a pretty good job with the upper aquifers. There are some instances, of course, that are primarily tied to legacy, things that happened. Most people want to put it totally on the oil and gas industry, the exploration, development and poor casing of wells.

They forget in some areas, we had people that were punching holes in the ground who were totally unregulated. They weren't tied to the oil and gas industry. They were seeking sulfur or some other compound. And they probably didn't adhere to good protection of the shallow aquifers. That was all 50 or 75 years ago, and people just forget about that.

Robert Hansen

They just truly didn’t know. They had no idea maybe in some cases. So interesting. I recently found out something I didn't know about Texas. I keep finding these little weird things about Texas. Maybe you do. Maybe it’s just an endless thing. Or there's tons of little weird quirks about Texas.

One of them was that apparently, when we became a state of the United States, in the negotiation, we basically said we own, I think, 15-16 miles off the border where most states I think are just five miles or something like that. It's about three times more, whatever it is. Five kilometers versus 16 kilometers, I’m not so sure.

I got to imagine, first of all, the amount of foresight that those people had to say, “We want more off the shore.” is pretty incredible because they had no idea what was out there. They had no idea what utility it was going to have. It was probably another 100 years before we even started doing offshore drilling or whatever it ended up being.

I think they're the only other states, so Texas and Florida both have that same extra land or extra buffer, I should say, around the state going out into the water. Has that really come up? Is that something that Texas exploits?

Kinnan Golemon

Oh yeah, absolutely. It really came about because if you think in 1836, Texas, our first independence that was funded by primarily Europeans. There was probably some eastern United States money in it, but it was primarily people from other countries. And so Texas, as a republic, it was indebted and had huge debt for that freedom.

Robert Hansen

It's weird that a state would go and get in debt to private citizens. That's interesting.

Kinnan Golemon

Well, back in that era, that's how rebellions were funded in the western world.

Robert Hansen

Was that because we were our own country temporarily? Was that similar to our national debt? Is that what it was?

Kinnan Golemon

It is exactly. They had incurred this debt and had to pay it off. Well, they had very low resources to pay. It was an agrarian economy. And so this significant debt was a few millions of dollars. But few million dollars back then was a lot of money.

When statehood was being considered, Sam Houston had served in the US Congress before coming to Texas. And he was the president of the republic. In the negotiations, his deal was twofold.

One is if the United States wasn't going to pay off the debt, then Texas was not going to give up any land going into statehood. It would still be privately owned, which was a huge thing, even more so than the tidelands.

The other thing was because we were a nation, we got international law water protection going in as a state.

Robert Hansen

I’m not surprised you knew this.

Kinnan Golemon

Well, I had a law professor who actually argued the tidelands case in the US Supreme Court and won. And so I learned a lot about the tidelands case as a freshman in law school.

Robert Hansen

That leads me to my next question. We have this natural resource. And we as a set of technologies that have been exploiting the land have not done a particularly great job of protecting it. There's a lot of different examples; Exxon Valdez, the BP oil spill, for instance. These are enormous catastrophes,

I think the oil and gas industry in particular, not so much mining, although I obviously I agree that there's been a lot of catastrophes in the mining space, it's got a pretty strong reputational hit associated with this. If it had done nothing at all, it would still probably be a bit of a pariah just because of the pollution aspect.

That seems like a big problem that the industry is just handcuffed to for the rest of time. I don't know if you watch Formula One, but there was a group called Just Stop Oil that ran out on the track just a couple days ago.

Incredibly stupid, by the way. If you're ever thinking about doing that type of protesting, wow, those cars do not turn on a dime. You’re caught 200 miles an hour down the track.

Fortunately, there was a red flag. So nothing happened. They were able to arrest them. But their whole point is this is bad for the Earth. I wouldn't classify them necessarily as eco terrorists, per se. But this is the kind of ramification of this set of things that end up happening.

How does the oil and gas industry feel about that? How do they see these people? How do they want to interact with the general public?

Kinnan Golemon

Well, interacting with the general public, I personally have felt that throughout my career, there were times when the industry was not interacting as appropriately as I thought that it should with the public on issues.

I think, more recently, they've done a much better job of at least having forums and discussions. They've put more people into their organizations in the communications sector, public affairs sector, that kind of thing.

That has helped, I think, to at least bring down the noise level some unless, let's be realistic about Valdez. No question about it. I was giving speeches around the country representing oil and gas and others on environmental issues.

I gave a speech in Dallas. Prior to Valdez, I got invited the next spring to come back into the same forum. My point that I made had to do with the development of certain aspects of environmental law. And my point when I came back is, “Forget everything I told you last year, the timetable’s changed.”

This one incident and the graphics from that are going to play out over a much shorter period of time.

Robert Hansen

Maybe in some weird, perverse way, this was the best possible thing that could have happened because it was so public. And it was so bad that everyone went, “Oh my, we really have to do a lot right now. And immediately. Even if it bumps gas price up a little bit to do it, we got to do it.”

Kinnan Golemon

I don't know why they were hauling crude in a single Shell ship. Maybe it was cheaper. I don't know what the deal was. But most everybody else was using at least double haul, some of them triple haul to protect against those kinds of events, single haul. Boom, you got a leak right now.

Anyway, that was one. BP was terrible. Actually, I'll tell you a little story about that. John Browne came in, and BP was Beyond Petroleum. John Browne’s people would start cutting corners on things they shouldn't have been cutting corners on.

I recall I was sitting in downtown Austin at a conference room shortly after. Beyond Petroleum, and they were broadly bringing around and telling others how they were going to be different.

I remember a very sophisticated, experienced oil and gas individual lawyer leaned over to me. He said, “We, as an industry, are going to pay dearly for what these stupid people are doing and why they're cutting back on the basics that will protect the environment and their employees.”

Robert Hansen

That's foreshadowing.

Kinnan Golemon

Well, long before the BP oil spill, they blew up a plant in Texas City and killed about 11 people and injured a whole bunch more because of a construction job where they were doing an internal plant turnaround. And they didn't protect their people appropriately.

They basically violated what most of us in the chemical and oil and gas industry would have said, “That's absurd. You don't do that.” In any group of selling, there's always five to 10% that is missed, 15% of the people are going to do wrong. And it happens.

Fortunately, that's why we have laws and regulations to try to police and make sure that someone doesn't go off and do something that is detrimental to themselves and to others.

Robert Hansen

One of the superpowers I have is the ability to see just about anything I want about any company I want. I did some analysis on BP years ago. They've registered a bunch of domains basically telegraphing what they're about to build. And so they had BP oil spill, gulfoilspillresponse.com or something, a bunch of different things that have happened.

One of them that caught my eye when I was looking was abudhabiresponse.com. And I'm like, “Abu Dhabi? I don't remember anything happening in Abu Dhabi.” So I went and did a bunch of research.

There was this one article buried way down. It's like, “Oh yeah, there might have been some small oil spill in Abu Dhabi just covered up, just barely worth a mention deal.”

I wonder how bad that really was. Was it bad enough that someone would create a website preemptively just knowing full well that they might have to pull the trigger and publish this very large response? It was a dead site, there was nothing there.

That got me thinking, “I wonder how many more of these sorts of disasters that we just don't see.” Offshore, is there anyone really going to notice anyway? There's going to be a handful of people, maybe sailors, who might have a bad catch one day or something. But that's there. No one's ever going to see that when it's way out in the middle of the ocean.

Kinnan Golemon

Oil leaks are pretty easy to see. Of course, what they did on the horizon was some bad decisions made internally relative to when they were about to have a blowout. And then those bad decisions made sure they had a blowout.

Robert Hansen

I talk a lot about security and security of all kinds of things. It could be security of a nuclear submarine, it could be the security of someone stealing a cup, it doesn't really matter. It's all same ballpark from my perspective.

When I talk about the risk versus reward, if I leave this vulnerability out there, it's going to cost me let's say, a million dollars or something. And to fix it, it costs, let's say, $10,000. That's a $990,000 ROI. That's a great vulnerability to fix. But if it's inverted, don't fix it.

You can basically draw a 45 degree angle the amount of money in versus the amount of money out. Anything that falls below that line, doesn't matter how far up the line you go, don't fix it, which is a weird way of thinking about the world. But that is indeed how most people think about the world.

Except oil and gas. They're the one, and so I can go in there. And I can say, “Here's $10 worth of risk. You can solve that $10 worth of risk with $1.” They'll say, “Why are we talking? You're wasting my time. If it's a million dollars, you're still wasting my time. If it's $10 million, I'll pick up the phone. If it's $100 million, fine. I'll get some people on that. If it's an oil well that blew up somewhere, who cares? It doesn't matter. Well, someone will go and fix it.”

It’s like, “Why are you in my office?” situation. The scale that we're talking about with oil and gas is so astronomically larger than it is for, let's say someone who's selling cups online or something. The whole risk model doesn't follow the normal rules that you'd might think of as just ROI, in and out dollars and cents as a typical balance sheet.

How does the oil and gas see itself? If the industry is looking at itself, is it going to say, “Yeah, I don't really care if one oil well blows up or 10 or 100. But what I do care about is public opinion because that will change policy, that's where you get involved.” And that's a real problem.

Kinnan Golemon

One of the other leads to that, I don't get involved with my clients on those Shell risk rewards. But I do know that in terms of, let's say, other industries I've worked with, I would put the oil and gas and chemical industries as being the most concerned about safety, and protecting their equipment and personnel as compared to nearly every other industry.

Now, what has happened, and when you get these booms like we had in West Texas, with the Permian device basin development. Initially, because of the way waters move, there's so many things moving on roadways, and stuff like that. And those were subcontractors. So I think the industry kind of got blindsided a little bit, they hadn't seen that in decades. So I know, as soon as that blew up out there, and growth was just phenomenal.

Robert Hansen

Different kind of blow up for the audience there.

Kinnan Golemon

People and vessel. Sitting in Austin, you can't imagine a 10 mile line of 18 wheelers on a two lane road, going both ways, because they're moving the materials and stuff. And so I got very involved on behalf of several of my clients, in trying to immediately, how do we address this?

First of all some of it is to try to be able to pop liquids, instead of howling liquids, that was part of it. We so we worked with TxDOT and the legislature and tried to immediately get a great amount of money on the front end there. TxDOT does 10 year planning, generally the way they do it.

So we fronted what would be a normal 10 year out there into about two or three year period, try to attempt to alleviate some of that. I had friends going out there part time going back and forth from Houston and doing stuff, it was totally dangerous.

I would tell him “Look, try to do the best you cannot even get on the highway.” Because the other thing is subcontractors are not as cautious as the companies are. It’s better today. It's still not perfect out there but it's way safer than it was five years ago.

I've seen particularly, everybody forgets, they're about the only industries chemical and oil and gas. Everything they touch around there is explosive. Like flares, you got to have flares, because if you don't have flares, you're going to have an explosion sometimes.

So excess heat flaring, there's reasons to, and fortunately, I think the industry has done a really good job in the last four years of addressing the excessive flaring that was going on. But part of that reasoning you have that for the flaring, nobody is going to build a pipeline to two wells.

You have to have a significant amount of weld structure before the pipe launcher going to come there and take away the associated gas. So if you're going to get the oil, you got associated gas coming with it, there's nobody with a pipeline, and you have to be able to flare that gas for a set period of time.

Robert Hansen

That's because it's on top and you need to get rid of it so that you can get the oil.

Kinnan Golemon

Yes, it comes with the oil. You get oil, natural gas liquids, and then natural gas, which is made up of a lot of different things, propane, xylene, butane, all-natural gas fraction.

Robert Hansen

So you kind of mentioned that a little bit. What about fracking? So if we're moving away from the traditional oil and gas and more towards, it's still not renewables, we’ll kind of do it in a gradient, I think. Let's start with fracking. So fracking has got a terrible name, it's probably because it's called fracking, by the way.

Kinnan Golemon

Yes, fracture stimulation.

Robert Hansen

Yes, it's probably a poor name that you probably could have come up with something else.

Kinnan Golemon

It was put there for a reason.

Robert Hansen

It's got a bad name, because I think it seeps into the groundwater and people are worried about earthquakes and various different seismic activity going on in their neighborhoods. And there was some report by BBC that said there was 6600 fracking sites that had some amount of spillage.

Which amounts to 16% of the amount of fracking site. That's a lot. I'd say that's up there. If those numbers are to be true, it sounds like a lot.

Kinnan Golemon

It was spill.

Robert Hansen

Yes, it could have been a small spill, they didn't say how much or what was spilled or whatever. So take that all with a grain of salt. But I think the point remains that people's perception of it is that it's a very messy business, even more messy than oil.

Kinnan Golemon

It's really not. But fracking has of course been going on since 1948. So it's been around. And I was given a speech one time early on in 2000s. And talking about fracture stimulation and what was going to be happening with the oil, and I was in the classroom at Pace University in New York, North in New York City.

So some young law student says, “Well, have you ever have you ever been seen fracking?” I say, “Oh, Yes, I've seen quite a few times.” So like “When?” I said, “Well, first time I was about 14 years old, I think I was. 1952.”

My dad got me up real early one morning and told me that he wanted me to go out and see what was happening at this job site where they were going to be doing some fracture stimulation. And that fracture stimulation was with chemicals, bad chemicals in huge volumes.

It was the noisiest, smelliest place I've ever been in my life. But they were fracking an oil well, in Greene County, Texas, which came in a big time isn't oil well. So fracking, of course, back then we were doing vertical wells. So fracture stimulation has grown over ever since then.

You can acid wash, you can do certain kinds of development of a bottom hole. But in certain formations, the only way you're going to get the hydrocarbons to really flow to the bore, is with some form of fracture stimulation. And there's lots of different ways you do it.

Robert Hansen

So how do you talk about the safety issues of it? If BBC is even close to the right number of 16% of them having some sort of spillage, not saying they are, but that is what they're reporting, that seems like a problem.

Kinnan Golemon

I probably have seen that number of sites I've been to, and I've seen a lot of them. I've never seen that much. First of all, you've got water coming in. So there may be a spill of the water that's coming in, which is generally fairly clean water.

Fact is you don't put very big chemicals into modern day frack jobs, the way into the water, most of the chemicals that you put in, about 85% of them are underneath your kitchen sink. They're either bass sides of their surfactants or something to help with making sure friction removers, different kinds of things that are in minute.

These are in parts for me. And they're generally just parts per million in maybe 100 parts per million and 400 parts per million but not real. In the combined water that's going in, then obviously, there's what are known as propane, and that's usually sand.

But there can be some chemical propane also and what the that sand goes in for is because, as matter of fact, in the back of my truck I carry around a piece of shale. It`s harder than a hockey puck, it's way more dense than granite or any other thing that the normal person is used to seeing.

Robert Hansen

Is that a weapon just in case someone tries?

Kinnan Golemon

I keep it so people can understand what shale really is, and why it has to be fractured. Because the fractures are generally 1,000th of a human hair. Those fractures are that small that are allowing the hydrocarbons.

Robert Hansen

I was picturing something much larger.

Kinnan Golemon

Now you've got to put a lot of force and you create these minor fractions and small amounts of sand get squeezed in there that allow this to come out, hydrocarbons to come out.

I was fortunate I got hired by Devon Energy, six weeks before they bought metals fracking technology. And Devon at that time had developed already horizontal drilling technology and Seismology better than almost anybody else. And so that was in 2001.

Until about 2008, Devin was drilling and producing in the Barnett Shale outside and northwest of Fort Worth. So when everything blew up around 2000, 2007 2008, everybody got all excited about fracking, we had already probably done five to 6000 wells.

Robert Hansen

I'm going to need to stop saying the word blow up about oil and gas. People get nervous.

Kinnan Golemon

But anyway, we had done that many wells. The beauty of these fracture stimulation Wells is that in modern day seismology back when I was a kid, if you drilled and were successful on one out of three wells, you were a really good reducer.

Robert Hansen

That makes sense.

Kinnan Golemon

On the wells today most of these companies are in the 99 plus percent. If they drill a well, they're going to have a producer. And so you don't have near the amount of people going out and sticking holes in the ground, chasing and maybe getting hydrocarbons. Today, if they're drilling, they're getting hot.

Robert Hansen

So where would you place it on the safety scale compared to say just natural drilling for oil? Is it more safe, less safe, or where would you put it personnel?

Kinnan Golemon

I think they're both safe.

Robert Hansen

You think they're both about the same.

Kinnan Golemon

Yes.

Robert Hansen

Interesting. Because fracking definitely gets a bad rap. Bad name for multiple reasons. So what about stuff like, I know, I was talking with Chris and he said you're really into renewables and different sources of energy. So I'd really like to kind of dig into some of the other ones out there. So let's just start, solar. When do you think?

Kinnan Golemon

Solar has a proper place. I've got solar panels at my range for gates and things like that. Solar fortunately, the cost has come down considerably. The bad side of solar to me is we're not producing it in this country. Nearly everything that we are putting ourselves dependent on somebody else. If we're going to have a solar power,

Robert Hansen

You mean the raw materials to make the solar panels?

Kinnan Golemon

Yes, polysilicon, everything is being virtually made somewhere else.

Robert Hansen

They don't have like a particularly long life cycle. It's like 15 years max,

Kinnan Golemon

Generally around 15 years. The other part of it is solar way people think of it is clean and renewable. They think of wind the same way clean and renewable. But they're only thinking about from the point in time that you put a solar panel out there, into the end of its life out there.

Robert Hansen

All the setup and building.

Kinnan Golemon

What goes into building that, all the mining that has to go into making that, gets ignored.

Robert Hansen

And then and then where do you put it when you're done? It’s a waste.

Kinnan Golemon

Exactly, it is totally a waste is 100%, a waste. Now I have a friend in California and California has some provision out there where so much of has to be recycled. He runs a recycling plant, working in recycling business.

They basically do some big array, recover essentially nothing. They grind them up, do something with them. Maybe one or 2% of the lithium comes back. They send it overseas to be dumped somewhere. Which is totally waste. And so solar has a place. But it's weak power. Even on the best of days in Texas,

Robert Hansen

With direct sunlight. 100 degree day.

Kinnan Golemon

100 degree day, sunup to sundown, you're only getting about nine and a half hours of power. What are you going to do for the other 13 hours,

Robert Hansen

You may need a battery.

Kinnan Golemon

Well, and there's another problem, we’ll talk about that in a minute, because batteries are going to be here, they were just wrapping around the corner for the last 10 years, for 50 years now.

We're still same placement batteries in terms of, they're a little better. But in terms of the amount of electricity that we have, the volume of electricity that we're using, batteries are still not catching up. So solar, in the right place can help. It is not going to be a permanent source of electricity.

Robert Hansen

So what about wind?

Kinnan Golemon

Wind is the same thing.

Robert Hansen

I think wind is even worse, though,

Kinnan Golemon

Well, it is. See both solar and wind have a from all thermodynamics, they only have a certain potential. And that potential is, I can't remember for solar somewhere around 20%, for wind is plus or minus that. That’s really weak power.

That's really not a whole huge bang for your buck. And it does not have reliability cranked in, something else has to be there. Personally, I've always been an advocate for nuclear. If you're worried about co2,

Robert Hansen

We’re going to get to that one because I want to spend quite a bit of time on that.

Kinnan Golemon

It’s the same way with wind. Nobody thinks about all the mining and all the material that it takes to get the materials for wind and nobody thinks about what you're doing with the thereafter. I understand maybe some of those fiberglass blades are getting used in some way. But best I can tell 90 something percent of them are just being buried.

Robert Hansen

It's an enormous footprint and the lifecycle is much shorter than solar. And they're extremely heavy. So have specialized equipment to get them out there and it just seems like the wrong solution for many reasons.

Kinnan Golemon

The other thing is where they work, where they generate is long way from where the power is being used. And so therefore you're going to have to build a tremendous amount of electrical power lines going across somebody's property.

Robert Hansen

So Hydro Electric is another one of them. That one seems a little bit more like we could just set it and forget, it has a similar transmission problem that you just described there. But at least it seems like power that's kind of constant, always worked

Kinnan Golemon

It's good, reliable power in as long as you aren't in a drought. And like Lake Mead, and Lake Powell, and what's happening in the Western United States, then hydroelectric suffers.

The other thing, of course, from the environmental standpoint, there's been a lot of concern about the impacts on the marine environment and the salmon. I've been and seen how those salmon ladders work at hydroelectric facilities, and salmon get up to the spawning grounds.

Robert Hansen

Salmon cannon, which if anyone's watching online, pause the video, go find salmon cannon, because it is hilarious. The other one, I know you told me you watched a little bit of the Leon Vanstone video I did with him.

He has a technology that can fire this billet, usually made of like a concrete. He can fire it at Mach two, or three or five or whatever, straight down and it just creates a big hole in the ground. And he can just keep doing it.

You could get geothermal pretty much anywhere as long as you're close to a crust and cheaply, reliably. That seems a little bit more promising to me, aside from all of the numerous permitting issues, and groundwater issues, and so on.

But with a typical type of rig you would have for let's say, just making sure that you're getting oil pumped from the ground, it seems like you could do something very similar, kind of hybridizing the oil and gas pipeline portion of it with something like what Leon's tech does.

Kinnan Golemon

Yes, there's actually some people in Texas, there's an association that has been assembled over the last year, year and a half friend of mine, and those very involved with it. And there's, I think about 10 or 12 companies seriously looking at geothermal resource potential here in Texas and there are some.

I think geothermal makes, if you have the right conditions, could be an additive. I'm kind of an all of the above kind of person. I just don't like it when people don't paint the poor picture of whatever resource they're talking about.

Because I'm not opposed to as long as you put in all the facts, and then you start making decisions off of that because there's no question when solar don't impact co2, excepting the production of the material or disposal.

Robert Hansen

Of course and how much land do you have to mow down. So Dan Faber Exxon Mobil just said that he believes by 2040 I believe all cars, not some cars, all cars will go electric. Do you think that that's a realistic expectation? That sounds pretty likely to me personally but you never know. It's 18 years away.

Kinnan Golemon

That’s ambitious to me because first of all, if you watch what's happened with the automobiles. Right now wealthy people can afford electric vehicles. My housekeeper in her lifetime and she's got probably got another 20 to 25 years I don't think she'll ever have an electric vehicle

Robert Hansen

Unless the price comes way down for some reason well, through subsidies or whatever.

Kinnan Golemon

Why in the world are we going to sub, electric vehicles work great in cities. What's the biggest problem in cities besides congestion? Is ozone potential. So you put electric vehicles in there and eliminate your ozone potential. So LA might one day not be smoggy in the afternoon.

Houston might not have quite as many smoggy days in the summer. So I see EVs working really well in major metropolitan areas, but they're going to have to lower the cost considerably. Right now the average vehicle is I believe 12 and a half years old as your average.

That means you got vehicles that are 24 years old, 25 years old, I got a vehicle, my main race truck, a diesel truck is 15 years old. And it's got another eight to 10 years left. So the concept that you're going to have to stop letting people buy fuel is the only way you're going to move that many people in my opinion.

I think you're going to have supply chain problems galore over the next decade. I represented the copper industry for nearly 30 years, it takes from the day you decide you have a resource that you're after, first metal you're going to get out there is about 10 to 12 years later,

Robert Hansen

Wow, really, is that a permitting problem, or?

Kinnan Golemon

Both a permitting and then actually, generally, you have to develop, take a lot of Earth off the surface and put it somewhere. And then you have to start extracting the ore, and you have to build all the facilities that you can do it.

If you did a Crash Bang, in some place other than United States and Western Europe or someplace like that, rally regulate, you might get it down to seven and a half. But I've been watching the metals market and talking to metal traders for the last four years.

Who's putting money into new copper, new nickel, new lithium, new, all the things that you need, in order to have these EVs that are going to be here in 2030 and 2040? There has not been a significant volume of money put into new resource development over that for last four years.

Robert Hansen

That sounds pretty definitive, right there. So even if you started today would take you 13 years, and this is all supposed to happen within 18. And that just doesn't sound plausible.

Kinnan Golemon

Doesn't to me. Somebody’s going to be doing without copper, somebody's going to be doing without nickel. And somebody's going to be doing without Lithium, or something else.

Robert Hansen

Or maybe an entirely new battery tech that we haven't seen yet using nothing of those types of materials maybe. So one thing that I'm still shocked that has not really gotten out there is just hydrogen fuel cells.

That seems like the one tech to me that has the most analogous to a traditional fuel engine, uses a fuel source and it uses combustion and turns a turbine and things go. It also has another distinct advantage, which is you can quickly replace it, you can just fill your tank up and go.

So you don't have this weird like mega delay. I have this friend of mine who accidentally ended up with a Tesla, it's a long story about how he accidentally ended up with this Tesla. But he didn't drive it because it wasn't his, sort of was his, sort of wasn't his but he didn't really want it.

It wasn’t very convenient because he was travelling long distances and he didn't have an easy place to charge it. So he ended up having it basically in his apartment just sort of sitting there. And then it stopped working because the batteries to slowly decayed or used themselves up.

Then he couldn't get into the car. Because the door handle was hooked to the battery. And it wasn't his originally so he couldn't call Tesla to have them do anything because he didn't have whatever paperwork he needed.

It just ended up being this massive paperweight sitting. That is just so ridiculous to me. He should be able to walk over to it and replace a battery and then suddenly it works. Or, in the case of hydrogen fuel cells, replace it. Just pour some liquid hydrogen in there.

I realize there's a little bit more complexity to that, but not much. That's much more analogous to what people are used to go to the gas station, do one thing or maybe replace the entire fuel cell with another pre charged fuel cell and be off to the races.

Why do you think the ultimate motive industry have just totally ignored that tech?

Kinnan Golemon

Well, I don't think Toyota has totally ignored it. Honda has looked at but I don't think they've figured out how you're going to do it on a mass production scale and supply the fuel on a mass production basis.

Robert Hansen

This is something you could do in your house with enough electricity, you could create hydrogen fuel cells in your house. And all it takes is water, ideally distilled water or something like that.

Kinnan Golemon

Produce some electrolysis. I don't know, I haven't studied enough to know exactly why. But those two seem to have been the only automotive companies that really tried hard. GM or somebody, one of US companies sort of.

Robert Hansen

I’d really like to see someone at least attempt to model that out and make it look as similar to as what you'd expect your traditional driver to be doing and the distances to everything being exactly the same, like what would it take, I have a feeling it's not as far away.

It also seems like a way safer option as well, because unlike gasoline, it doesn't go down, it goes up. And dissipates in the atmosphere and it's gone. And it's not like, who cares if a tiny bit of explosive stuff is in the air and so dissipated, nothing's going to happen.

It's also not chemicals that you're going to die breathing. These are all chemicals you encounter normally in nature. So yes, that one seems to me like, everyone sort of missed the boat on that one.

But maybe not. Maybe there's other reasons I'm not aware of. So I need to talk to you about the price of gas, what's going on? Why is it so crazy right now? It’s on Every American's mind and probably everyone worldwide.

Kinnan Golemon

It will be only Americans mine for quite some time yet. As long as there's a war going on over there. First of all, people don't like to hear it, but gasoline, crude oil and all of its derivatives are global commodities, they are not tied to any particular nation.

So the price goes wherever the stress is at any given time. And the other thing is that for decades, we have not built new refiners. So there's a limited capacity on refining of gasoline, refining for gasoline or diesel worldwide.

Here in the United States, refineries are built to process crude oil. In Europe, they have a little bit different makeup. Ours was designed to produce primarily gasoline, diesel, and jet fuels. Other kerosene means as neat as needed, essentially for US demand.

In Europe, theirs are built more for diesel production. What most people don't realize is you can't just go down and change what input goes into a refinery. Refineries are built based on a margin of particular hydrocarbons to be in come into that plant for at least 30 years.

So for instance, I was involved with Shell owned, which in the Saudi Arabians own the Motiva plant at Beaumont. And that plant got modified in the 1990s, I guess it would have been to go to a particular slate that was heavily dependent upon sour crudes, because you get sour crude from Mexico.

You get them from Venezuela, you can bring them from Saudi Arabia, and Saudi Arabians own half the plant. So that plant got built. Well, we don't get stuff from Mexico anymore because of the dysfunctionality there. We've locked Venezuela out because of the

Robert Hansen

Geopolitical issues there.

Kinnan Golemon

The inability to get sour crudes out of restrictions on getting sour crudes out of Canada. So you're left really with an abundance of West Texas Intermediate coming across to the coast. But you can't put that west coast intermediate into that refinery and have any kind of efficiency in recoveries.

A lot of it is really tied to, and it's really complex in terms of where you can get the right kinds of mixes or slates into the plants. And again, there's been no incentive to build a new refinery. I permitted the next to last one that was built in the United States and teams, I think got permitted 1973.

Robert Hansen

Wow, I just assumed they're popping up all over the place.

Kinnan Golemon

The last one that got actually permitted and built was in Louisiana in 1976, or 77. There's been three proposed refineries, one in Arizona, one in either Nebraska, or Illinois, or somewhere else, there had been three.

Robert Hansen

North Dakota, maybe.

Kinnan Golemon

It might have been North Dakota. But anyway, there were three that were talked about that never got built since the 1970s, in the United States, and we've closed probably 30 refineries over that period of time.

So there is no excess refining capacity to meet. And when Russia starts cutting off crude of certain refineries that are dependent on that Russian crude. So it’s not an easy thing to absorb. And we had this pandemic and we suddenly had an explosive.

Robert Hansen

Stop using that word come on. You're going to scare people.

Kinnan Golemon

Yes, we've had these, suddenly, everybody's outgoing everywhere, and we didn't have an inventory.

Robert Hansen

So they stopped going out. And so maybe everyone just puts that in a reserve or whatever, temporarily. And then all of a sudden, everyone's out. Everyone's out. I was in Maui last week, and also Oahu, and the traffic was insane.

Kinnan Golemon

They import everything.

Robert Hansen

Everybody's out. COVID is over. So there was a meme going around, which I love to hear your comment on. It was something saying, “Well, if you if you don't like the gas prices, just consider that the Republicans voted against the consumer fuel price gouging Prevention Act.”

That's kind of a mouthful. But my analysis of it and other people that I've seen online seems to say that it doesn't really do anything to increase the amount of fuel. It's more about just decreasing profits.

But I don't really see there being, obviously, there's a lot of profits in the oil and gas industry. But I don't see that as being the thing that went up. It seems more like the supply has gotten thinner. Am I misunderstanding?

Kinnan Golemon

No I that's right. We have a tighter supply in the gasoline and diesel area, particularly the diesel. Diesel is even tighter right now than the gasoline is. And the fact of the matter is, yes the refiners will make higher margin in a time of tight supply.

One of the reasons you don't have refineries being built, is generally the oil and gas companies is they make money on refining about three out of eight years. Goes in cycles for them.

But over an eight year period, they don't make a very big margin, on refining. And most people don't realize that, who sells the gasoline is not the big oil companies. They may have Exxon, or they may have a Shell, or they may have Total or Chevron, Chevron may have more stations than the others.

But many of those they're just lashes in their name. And the gasoline that's coming through there may come from a let's say, my wife is always saying, “Well, I'm not going to buy this kind of gasoline because these people did something wrong.”

So how do you know who's gasoline is really coming out of that pot? Because it'd be me had been made by Coke in Corpus Christi, and put it into the pipeline that went to Waco or wherever and got distributed. And it's sold at a Shell station.

So gasoline is highly fungible. There are some stations that yes, they are very protective, because they've got certain additives in their gasoline. But for the most part, it's not tied just to the name on it.

Robert Hansen

So I did a quick look up on the different margins across the oil and gas industry, just to see from quarter over quarter, year over year, sort of how things play out. In q1 22 versus q1 2021, it was about the same 74.57% versus 77.62%.

That's basically the same. But Evida went from in 2021 is 3.95 to 23%. That's an enormous increase. And typically what that means is, there's less depreciation going on. Basically, there's a potentially, the write offs have ended at that point, and now you're just making profits. So that's probably a more accurate representation of the real profit margins being made.

That still doesn't seem a 23% margin, after expenses, after depreciation, after everything, still doesn't seem crazy to me. That seems like right in the wheelhouse of what I expect any Fortune 500 to eke in.

Kinnan Golemon

Ever heard Apple or Microsoft. Others like that.

Robert Hansen

Even possibly quite low. Yes, for software as a service, I'd expect ideally 50 to 60%, somewhere in that range. So, to me, that doesn't seem crazy, those margins and obviously they go up and down, which means there are spikes in depreciation.

That's typically what that means is, they had a big cycle where they wanted to depreciate a bunch of stuff. And for some reason, they decided this year, they're not going to do that, or they're out of things to depreciate. That usually happens when they do a massive project and a certain amount of years are up, and suddenly, they're out of that depreciation cycle.

Why do you think Americans seem to believe that this is something the oil and gas industry are responsible for? Why are Americans blaming, not all certainly, but a lot of Americans are blaming the oil and gas industry directly for this.

Kinnan Golemon

I think most of it is the fact that we have educated people really as well across the board about where fuel comes from, how it gets priced. I mean, very educated people really don't understand it because they've never had to go in and dig out the information you were showing or speaking about.

And are the supply chains issues and the fact that there's only a certain amount of production? I mean, you can't go out and start a new refinery today.

Robert Hansen

Is that the same internationally as well? This long? There's no refinery Haven somewhere where you can just go build a refinery and call it a today?

Kinnan Golemon

No.

Robert Hansen

Okay. I happen to know a queen. Maybe I can get you guys in touch. Let's talk about a change, complete change outside of all of this stuff to nuclear. What is your feeling on that?

You mentioned that's where you believe things are going, and I've heard earlier we were talking about this a little bit. You believe nuclear is kind of where things are going or could go? I don't want to put words in your mouth.

Kinnan Golemon

I think it's where things should go.

Robert Hansen

Should go. Okay. All right. I don't want to put words in your mouth, but it seems like this is an area you see some promise and hope in.

Kinnan Golemon

I do. I mean, I've been involved with uranium production since about 1968 or 1969. South Texas has significant uranium resources and off and on.

I first started with representing people who were doing surface mining of uranium, because it actually in areas in south Texas, it's in the water table but naturally it occurs. And it got put there because when the Chihuahuan Mountains were developed, uranium went into the groundwater.

And it flows, it stays in solution until it meets an area of a de-oxidized area. And there are areas in our groundwater system in Texas, approximately 100 miles inland from the coast where because of the oil and gas below and seepage from generational seepage has gotten into pockets of groundwater that are de-oxidized.

And there you will find sands that are actually, you can solution mine. Bring that up to the top, oxidize and the uranium falls out. You put it back down. So circular process, it's really benign. It's about the most benign environmental issue that I've dealt with in my whole career.

Robert Hansen

Just bringing up nuclear fuel. Why not.

Kinnan Golemon

Oh, but let me tell you, it's emotional. I mean, the neighborhoods go crazy. But because of representing the uranium and actually studying a good bit about nuclear energy and how nuclear power plants work.

Robert Hansen

And you're a technical guy, so you can follow the specs.

Kinnan Golemon

Yeah. I can at least understand a lot of it. Let's take Three Mile Island. Three mile Island was a near disaster. It was actually every year, when I go to the capital for six months in a year, and I stay in and out of the Texas capital, that's six months, I get multiple higher doses of radiation than anybody ever got from Three Mile Island.

A person, as a matter of fact, who flies from New York to Los Angeles, gets more exposure than anybody did at Three Mile Island. But if you talk to the average person, they think Three Mile Island was a disaster.

Robert Hansen

Well, I think it was near disaster.

Kinnan Golemon

It was a near disaster.

Robert Hansen

Sure.

Kinnan Golemon

But near disasters just as safe as a non.

Robert Hansen

A non-disaster. Okay. But let's talk about the real disasters then.

Kinnan Golemon

Chernobyl.

Robert Hansen

Chernobyl and Fukushima.

Kinnan Golemon

Fukushima was a flood disaster. It wasn't a nuclear disaster.

Robert Hansen

Well, it ended up being a nuclear disaster.

Kinnan Golemon

Well, it ended up being a problem, but didn't impact people's human health.

Robert Hansen

That's true. That we know of.

Kinnan Golemon

Yeah. But I think we're pretty confident that the levels that were there, that people got exposed. First of all, it happened later in our history, so we made sure people didn't get exposed. Whereas if it had happened 30 years before, there probably would've been more exposure.

Robert Hansen

Sure. I actually know a girl who was at Chernobyl, very young at the time this happened. I got to hear a couple of the stories, and it was pretty traumatic, I would imagine.

Kinnan Golemon

It was horrible.

Robert Hansen

She obviously was fine and her family's fine. And Chernobyl's not over as the other thing. I mean, it's not like it's done.

Kinnan Golemon

No.

Robert Hansen

I remember hearing a story just the other day, because the Russian invasion inside of Ukraine, some soldiers were out there digging out around Chernobyl trying to dig trenches or whatever, and they got highly irradiated. And maybe even all of them died from it.

That stuff gets in your lungs and it's pretty much came over. I said the bad thing to say the good thing. That's three accidents. One of them was a real true catastrophe.

Kinnan Golemon

True disaster.

Robert Hansen

True disaster. And the other two, I think you could argue away, but still, it's stands out in people's minds. And there's been others.

There's been near messes in other plants, but that represents three, let's say, pretty good, where people would actually be able to know what I'm talking about type disasters out of 400 different nuclear power plants. That seems like a pretty the last 50, 60 years or how long we've had these power plants.

Kinnan Golemon

It's a good 60 years.

Robert Hansen

60 years even.

Kinnan Golemon

Yeah, more than that, actually. Some of them are 70 years old.

Robert Hansen

That are still operational?

Kinnan Golemon

I don't know. They're I'd be one or two that are.

Robert Hansen

Okay. That'd be interesting to know that. But yeah, either way that's a really good safety record, I think. And the places where we have seen these issues, we learned a lot. It wasn't like, "Okay, we're just going to keep making that mistake over and over again." I think Chernobyl was especially bad because of the way the country ran it, not just because the technology.

Kinnan Golemon

The way they built it to begin with.

Robert Hansen

Yeah, exactly. It was built wrong from the ground up. And we learned a lot from that. And I think everyone takes nuclear safety a lot more seriously as a result of it. It's not one of those, we're going to let this one fade out of memory. I think everyone was horrified by the ramifications of it.

To me, this reminds me a lot of the BP Oil’s spill. It was a disaster. It was really bad and no one's going to dispute that. But maybe it ended up being this weird, gross, awesome thing for the United States, because now we know, well, we're not going to build reactors like that anymore, and we're going to take them a lot more seriously.

Where do you think it's going to go? Do you think we're going to end up with more nuclear power plants in the United States? Do you think we're going to get more of them globally?

Kinnan Golemon

I think globally you are. There's no question in my mind. Globally, you will. We've advanced the technology considerably. You don't have to have it nearly as big. And the protections I think are for these smaller plants are better developed than what we did with the older plants.

But to me, I have never yet seen any record of significant cancer or other illness of our naval submarine fleet. And those guys...

Robert Hansen

Are standing right next to a nuclear power pin all day. That's a good point.

Kinnan Golemon

Underwater, living next to a nuclear reactor.

Robert Hansen

Handful of feet away.

Kinnan Golemon

Yeah. Just a few feet away, Monsonia.

Robert Hansen

That's a very good point.

Kinnan Golemon

Years in service, because the nuclear submarine fleet stays within the nuclear submarines. They don't go off and spend a bunch of time on destroyers or carriers or aircraft carriers and come back every now and then. They're in the nuclear fleet.

Rickover made sure that his people were trained and that they stayed in that system. And to me, that's the best example of, take that model of how you make sure have a protective setup for your nuclear generated power and then deploy it in the right places.

To me it eliminates a lot of the reliability and resiliency issues that we're going to continue to seal and grids globally until you have a significant amount.

Robert Hansen

And the need for power is only increasing. We're going to need more power sources. Whether it be a bunch more solar panels or whatever, we're going to have to have it.

Kinnan Golemon

The difference between the poor in the world, a flood in the world is energy, affordable and a huge amount of that is going to be, and it's going to grow is electricity.

And so to me, that's why you need to be concentrating on every form and how you can best utilize that form in a particular location because what works in one locale is not going to work in the other. But nuclear has the capability of being able, we've already shown it.

It can work pretty much globally. And France is what? 72% nuclear or something like that? And we had the technology, we were the leader in the 1960s, and we exported it to France and Japan. The leadership now is not in the US.

Robert Hansen

Where do you think it is? In France?

Kinnan Golemon

It's in France. And in Japan is second probably. Its way to being into China being third.

Robert Hansen

I have read a couple of papers on thorium reactors now, and I feel like the press has definitely done this one a disservice. They really make it seem like thorium is the next thing, and that's where everything is going.

And there's no proliferation issues with it and much better safety, et cetera. But it didn't take very long for me to find out that that's probably none of that is true. First of all, it's quite easy to convert a thorium reactor into U-233, which is not the same chemical as we used in Hiroshima, but it is very close, and you need less of it. It's actually worse than U-232. And it is also more stable than plutonium.

That's not great. We should probably talk about proliferation, but then also it seems like, yes, it is theoretically possible, but no one's figured out how to actually do it commercially.

Like no one's even really particularly close. And maybe that's just an expenditure thing. Maybe just people haven't spent enough time on it. Like what, where's your feeling about Thorium?

Kinnan Golemon

I've read it just enough to be dangerous on it but I'm not I'm not buying into the hype on Thorium myself. I think that's the wrong direction to be going because of the aspects of it. It's pretty easily to convert it and there's bad people in this world.

Robert Hansen

That just leads to the next question. Well, any nuclear reactor is going to have access to some amount of fizzle material. And even if you don't turn it into a real traditional nuclear bomb, you could still create a dirty bomb or something, or a traditional explosive that just spreads radiation everywhere. Are you worried about that? I mean, is that where you spend time thinking?

Kinnan Golemon

No.

Robert Hansen

If nuclear is the future what are we going to do to make sure that all these materials...

Kinnan Golemon

Well, I think we have to have a real high security. I mean, I think, on our current nuclear plants that we have in the United States, I think we have a good security. Maybe not the best, but best I can tell. The one thing we don't do here is we don't recycle.

And Carter didn't want us to recycle because of the concerns about security. France has been recycling for 50 years and has not had problems. Japan was recycling. They weren't having problems.

To me, if you want to take the newer types of nuclear and recycle so that you don't have to have as much waste would be the way, I would think with this country ought to go. And we ought to have high security.

Robert Hansen

Okay. If fracking has a 16% oil spillage type problem, or just waste that needs to be dealt with, even if we don't believe those numbers, it doesn't really matter. This is sort of the granddaddy version of that.

What do we do with all this irradiated material that we just need to store somewhere? I mean, are we building a bunch of these sarcophagus all over the United States?

Kinnan Golemon

No, we're not.

Robert Hansen

What would you say the plan should be for that?

Kinnan Golemon

The plan should be that we should have a site or two within the United States, and that'd last us about 200 years.

Robert Hansen

You think you could do it all in one or two?

Kinnan Golemon

Mm-hmm.

Robert Hansen

Just not that much fuel being...

Kinnan Golemon

Yeah. And particularly if you recycled it.

Robert Hansen

Do you know how many we have in the United States? Out of curiosity. Nuclear sites.

Kinnan Golemon

I think forty something. I don't know. A friend, Robert Bryce can tell you the exact number. It's somewhere, I think in the 50 to 60 range.

Robert Hansen

Okay. So let's say we had a hundred or 200. Do you think we could still get away with just one or two sites?

Kinnan Golemon

I think so. Particularly if you recycle.

Robert Hansen

Okay. All right. Well, what about things like more exotic, like there was recent, not that recent, but somewhat recent finding that the moon has Helium three on it, and you can theoretically utilize that to create some extreme reactions. Very similar to the nuclear stuff that we're doing here on Earth, but it's very prevalent on the moon as opposed to here.

It's basically a radiated iridium, decays into Helium three. Any thoughts on that? If we get off the planet, is it Helium three in the future?

Kinnan Golemon

I'm sure there'll be some things long after I'm gone that smart people will figure out, but I don't put anything. It's just never happening. Never is not a good word when it comes to energy.

Robert Hansen

What about Tokamak fusion reactors? What do you think?

Kinnan Golemon

I really don't have an opinion.

Robert Hansen

It seems like that it might actually be something. I think we're probably 20 years away from it. But the National Ignition Labs claims that they did reach Ignition.

Kinnan Golemon

I saw that.

Robert Hansen

They've not been able to reproduce it. So let's hope it actually happened. I don't know, maybe just getting everyone's hopes up, but if that's the case, then that might be the ultimate safe way to do this. You may not need a lot of nuclear fuel to make that happen.

Kinnan Golemon

Exactly.

Robert Hansen

Much cleaner source of energy. Any feelings? You think it's coming?

Kinnan Golemon

They're going to keep studying it for quite some time. It's not off the chart.

Robert Hansen

Okay. Back to oil and gas, there's been a couple of fairly interesting things that happened. One of them was the colonial pipeline had a bunch of ransomware on it, so it basically was shut down.

Now, my understanding of this, and I don't have a ton of insider information, but my understanding was they actually did have backups of their computers, and they could have backed up. But the amount of time it would've taken to do that, to get the pipeline back up and running, they estimated would be several weeks as opposed to just paying the ransom off and just letting it go or whatever.

I think that there's a whole class of attacks against pipelines that I'm a little concerned with that just being one of them.

Kinnan Golemon

I'm not a little, I'm more than a little concerned about them.

Robert Hansen

Yeah. I mean, we saw Saddam Hussein blowing up oil wells. Ukraine just took out the Druzhba oil pipeline between them and Russia. There has been other examples of the Turkey having their pipelines exploded by I think Chechnya, maybe.

I'm not 100% sure about that. But needless to say, there's been a lot of tax on oil. It's a nice standard target. You can just look at it and go shoot something at it.

And it's pretty frail. It's not a particularly hardened target. That seems to me to be one of those things that oil and gas industry just doesn't have a great answer for. What do you think about that?

Kinnan Golemon

I'm not that familiar really with what their security efforts are. I haven't spent much time dealing with midstream companies as they're called. I've either always either been on the production end or on the refining or chemical side.

But I mean, we also move up awful lot of materials other than oil and gas in pipelines. I mean, with refined products. Vast majority are done by pipelines. I think there is, probably more security than most of us are aware of in that plane, but I'm not that familiar with it. It is a vulnerability, there's no question.

Robert Hansen

Yeah. To me it seems an enormous one. But I had a guest on earlier this season, Karim Hijazi, and he spent some time overseas and trying to help out some oil and gas company, which I don't think he actually ended up naming.

But he found an enormous amount of crude being siphoned off the top. Basically, they would over pump these super tankers using faulty equipment, and then they'd take it out in the middle of the sea, turn off their beacons, withdrawal, just the perfect amount off the top so it looked exactly right amount, and then ship it back.

And it would, everything would look fine on the register on the other side. But there was enormous, enormous amount of money being stolen there.

So much so that he actually got a hit out on him and it was forced to flee the country kind of thing. Interesting guy. Is that just like a cost of doing business? Is this just there's a certain amount of just the underbelly of these foreign nations and cartels and whatever you just kind of have to deal with just to get this done? How do you think about that whole scene?

Kinnan Golemon

Well, I don't know enough. I've never dealt in the foreign aspects, although I did at one time go to a briefing about moving copper out, it was actually copper and cobalt out of the Belgian Congo. And what I learned is I think there's three roads in the entire Congo, and Congo is huge.

And essentially all the cargo that moves out of the Congo, this was maybe before the Chinese really moved in there. I think there was five payments you had to make five in order to get it out of the country.

Robert Hansen

See, that's just ripe for innovation there. Just get it all at once.

Kinnan Golemon

I mean, it was just amazing to me. And there's like two rivers and there's 4 bandits you had to pay on the rivers or something.

Robert Hansen

It's like that Star Wars, it's a hive of scum and villain in a lot of these places. And you just sort of end up having to pay the toll or die. And there's so much money to be made that they're going to protect it at all costs.

This also leads to, well, we've got some bad players in the industry, not just middlemen, but actually nation states. I think what's happening in Russia right now is probably one of the more interesting things I've seen in my lifetime. Where there is a shift away from the petro dollar towards the petro ruble, let's call it.

I don't know whatever you'd want to call that. Do you believe that Russia knowingly started this conflict or accidentally kind of stumbled into the fact that, "Oh, wait, we can actually switch a huge amount of the money being transacted for oil and gas to our currency." Do you think that was intentional, or do you think that was accidental, stumbled into it?

Kinnan Golemon

I think that board probably more stumbled into it. Based on what I know about Putin and his efforts. I think the main focus was that he thought he could take Ukraine in a short period of time and that the world would not react the way it did. And I think he made a misjudgment on both scores.

And then, the petrol ruble has kind of been the fallout of beneficiary to Russia as a result of the stress that has been put on particularly Europe in order to try to figure out how they're going to stay warm the next couple of winters.

To me I don't think it was in his mind that the sanctions were going to come this way and all this followed and it's a repercussion which turned out beneficial for Russia up to this point in time.

Robert Hansen

I saw a article, I think it was Reuters said that we had just shipped in the last couple of months, 5 million barrels of oil overseas out of our strategic reserves to places like Italy and strangely places like China who are buying Russian oil. What other sort of impacts are you seeing in your industry?

Do you think that might be coming out of this conflict? Are there any changes that you're seeing that might sort of have a long-term ripple effect on the industry?

Kinnan Golemon

I think in all likelihood, there are oil and gas reserves in Western Europe, and they've been off limits. It's a possibility, not a probability that one or more of those countries will decide to take advantage of their own reserves that they're sitting on top of.

Robert Hansen

This actually brings up a good political point. I have a feeling the United States is largely leaning red coming up in this next election because of this issue. Specifically this issue. Almost nothing else matters.

I mean, if you were a conspiracy theorist, you'd say, well, if the oil and gas industry just lets this ride and just lets it get as bad as it's going to get, it opens the door to removing a lot of barriers to getting stuff out of the ground and opens things up long term.

How is that being seen internally? Or is this just a massive mess that everyone would like to get out of?

Kinnan Golemon

Well, I think it's more of a massive mess that everyone would like to get out of. I do think from the oil and gas, people like to focus on the big companies where the production of oil and gas comes from is really from the independence.

I mean, yes, in the last few years with fracking some of the majors have gotten back into actually, at least in the United States, drilling more wells and whatnot. But the investment community in Western Europe is responsible, in my opinion, more for the higher, the less volume of readily available gasoline and diesel than anybody else.

They made the decision five years ago, they were no longer going to fund exploration and production. And you can't turn that back around overnight. And only in the last, really since the Ukraine war started have some of those major financial houses that here to four, they got burned. There's no question they got burned in the 2010 to '16, '17 because they were just given money.

If you show me you're going to get some production, they'd give you a bunch of money. They weren't asking for a specific return. And of course, guys will go do that. And then they came back and said, "Well, you're not giving us efficient return, so we're going to cut you off."

So if there's any single set of people, in my opinion that have bear more responsibility in all this, it's that investment community, they dried things up.

And even now it's still hard to get. If you've got a guy and let's say you have 50,000 acres that you can develop and you know that you're going to get X number of wells that 50,000 acres will produce for the next 40, 50 years, at a certain rate, you may or may not be able to get financing today.

Robert Hansen

I keep thinking that the United States made maybe an accidental. Maybe they blundered into this decision, but a somewhat wise decision to not drill in the United States very much because that long term means that we have a lot more oil than everybody else.

And why don't we just suck every last drop out of the Middle East because then you're depleting their reserves before ours. And yes, it costs a little bit more at the pump, absolutely. But maybe that's the right thing to do. This puts us in a kind of a weird situation where we really do need to...

We're a big exporter of oil, but we're also a big importer of oil in a weird way. Probably because this refinery issue you've highlighted here.

Kinnan Golemon

Largely.

Robert Hansen

Yeah. I don't know where this leaves us. I don't know whether we should just start tapping the ground and just keep going or keep the prices high and maintain this long-term strategic preserve that we could eventually tap into if we were so inclined to do it if we got so isolated from the rest of the world where that became necessary. What do you think?

Kinnan Golemon

I think technology's going to keep moving. I think we've got plenty of oil and gas here for next 200, 300 years. We know we've got at least enough for 100 years with current technology and technology's going to improve.

To me, I think yes. Investing in other parts of the world, partly. I mean, if you take a map of the globe and you see where there's energy, oil, gas, and electricity, that's where the rich people are. All the rest of that, much of it's got the same natural resources available. But they got thieves in charge and they're not taking advantage of their natural resources.

Therefore they don't have electricity and the people are destitute.

Robert Hansen

How does OPEC play into this whole thing? How are they seen amongst your cohort? Are they friendly or are this really as a foe that we're working against or trying to negotiate with? Like how much control do they really have over the industry?

Kinnan Golemon

They're very sophisticated, which most people don't think of but they're very sophisticated and knowledgeable oil barons.

I think those who deal with them have a great amount of respect for the fact that they are very knowledgeable. They're not very kind to their populace and that they are long-term players, not short-term players.

They're a formidable person or entity to have to deal with. And there have been some times where they have helped make things better, but not that many and it's usually to their advantage.

Robert Hansen

And Russia is part of OPEC Plus which I guess is a larger cohort of that.

So not only are they sophisticated just amongst themselves, but now at least to some degree, they are partially in bed with or controlled by or whatever, Russia as well.

That seems to me like we really cannot trust anything coming out of that group without putting our own spin on the strategic utility of whatever they're asking for.

Kinnan Golemon

But I do think the most significant thing that's happened geopolitically, has been Russia's attack on Ukraine. And it has definitely turned things, I won't say upside down, but it's certainly knocked them off kilter.

And it's not going be over quickly. It may not lead to a recession here, but it may it's going to be real dicey. We are not going to have the kind of steady growth and in my opinion, in our economy. We're going to have some ups and downs.

And as I tell my younger friends, "Hold onto your money. Start being as conservative as you can. You don't have to miss a whole lot of stuff. But you're going to be in for a five to six-year ride. That's not going to be very pretty."

Robert Hansen

Okay. So get the crystal ball out. One is five, six years look-like for the United States.

Kinnan Golemon

I agree with you. I think you're going to have, certainly Republican house. I don't know who's going to be the next president. We haven't have anybody out there that I can even predict.

Robert Hansen

A lot of rumblings about DeSantis.

Kinnan Golemon

There's a lot of rumblings about it, but usually the first guy outs the last one.

Robert Hansen

That's true.

Kinnan Golemon

So not the last one standing. I do think there's a chance that the house does not go Republican. It'll be state democratic. I mean, not the house, the Senate. I mean the US Senate might very well stay very split like it is right now. Could maybe even actually have a Democrat majority by one or two, probably one. The house I think will end up going Republican.

We're going to have kind of a mess. And unfortunately, the biggest problem in this country is Congress last 20 years, 25 years, hadn't done its job. And they can't even pass a budget. You got an entity that's supposed to be responsible for the citizen, and you can't even pass a budget, much less anything else.

We're going to continue, in my opinion, to have a hard time until we have a Congress that actually sits down and does real business on behalf of the people. Fortunately in Texas we like the outcomes sometimes, but we get things done.

Robert Hansen

It's true. A lot of movement.

Kinnan Golemon

A lot of movement. And not everybody's a winner.

Robert Hansen

That's true.

Kinnan Golemon

But to me, predictability is better. If something's highly predictable, then you can make your decisions on how to live with it or live without it.

Robert Hansen

Does that mean you dislike Texas from that particular dimension?

Kinnan Golemon

No, I think we're pretty predictable.

Robert Hansen

You think so? Okay.

Kinnan Golemon

It's a great place to invest your money. It's a friendly place by and large.

Robert Hansen

Yeah. That's how I found my way here. Starting a small business.

Kinnan Golemon

And government's not going get in your way, it can but it is not set up to be in your way, where in many other places that's not the case. And I think the old story, wasn't born in Texas, but got here as fast as I could.

Many people are glad they got here and Texans, they're receptive as long as you don't try to tell them they got to do something. We came out of Maverick's and we're still mavericks.

As I always tell my friends that come in from somewhere else, and they're new here, I say, "The one thing don't ever do is tell a Texan that he can't do something because you're going to have to hide and watch it and get it done."

Robert Hansen

Well, as one maverick to another I really appreciate you on the show. Where can people get in touch with you? How do they get to reach out and talk to you. Are you on social media?

Kinnan Golemon

I don't do anything on social media. I probably talk too much at times. Now, actually kg@kgstrategies.com. I'll follow my email and my cell phone number (512) 633-9428.

Robert Hansen

You're going to get a lot of calls on that one.

Kinnan Golemon

That's fine. I love talking to people.

Robert Hansen

All right.

Kinnan Golemon

People are important. And the mere fact that someone has a different opinion than what I have, I'm always open to listening and thinking about it and studying it a little bit. Sometimes I've changed my opinion from time to time based on someone having...

Robert Hansen

Very adult of you.

Kinnan Golemon

None of us are the smartest one in the room.

Robert Hansen

Amen. Well, Kinnan, thank you very much. I very much enjoy this.

Kinnan Golemon

All right. Thank you.

Robert Hansen

Thank you. All right.