February 14, 2025 – President Trump’s push for energy dominance is ambitious, but is it realistic? Energy expert Art Berman joins Jim Puplava to break down the numbers, challenge mainstream analysis, and explain why oil companies don’t actually care about oil prices—only investor enthusiasm. They dive into the 333 plan, government subsidies, the geopolitical power of oil, and why shale may not be peaking as some predict. Will Trump’s policies drive energy prices down, or are we missing the bigger picture? If you want the real story behind U.S. energy policy, this is a must-listen interview.
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Key topics discussed in today's interview:
- Trump’s 3-3-3 Plan – Aiming to boost U.S. oil production by 3 million barrels per day by 2028.
- The Reality of U.S. Oil Growth – Crude oil vs. barrels of oil equivalent and what’s actually achievable.
- Investor Priorities Over Oil Prices – Why oil companies focus on shareholder returns, not lowering prices.
- Government’s Role in Energy Expansion – Subsidies, tax incentives, and infrastructure challenges.
- Oil as a Strategic Weapon – How U.S. energy dominance impacts global power struggles, especially with China.
- Is Peak Oil Happening? – Declining well productivity vs. overall production potential.
- The Future of Oil Prices – Could WTI drop to $50 per barrel under Trump’s plan?
Transcript
Jim Puplava:
Well, no matter what you think of President Trump, he's following through with many of his campaign promises. One of those promises is to drill, baby, drill and drive down the price of oil. Will it work? Well, let's find out. Joining us on the program is energy analyst and consultant Art Berman. Art, Trump promises to drive down oil prices. His Secretary of the Treasury, Scott Bessent, has a plan called 333, which plans to boost oil production by 3 million barrels by 2028, which would take us somewhere around 15, 16 million barrels of production a day. Is that realistic and is it achievable?
Art Berman:
Okay, well, first of all, thanks for having me on the show again, Jim. Always a pleasure to talk to you. Let's be clear about what Scott Bessent means when he says 3 million barrels a day. He very specifically says barrels of oil equivalent. Okay, so he's not talking about just crude oil. So, no, we're not going to have 16 or 17 million barrels of crude oil and condensate production. What he's talking about is crude oil and condensate, natural gas liquids, biofuels, refinery gain, and natural gas. Now, you take all those things, convert them to barrels of oil equivalent, and that's where he gets his 3 million barrels from. So, I've done some calculations, and people can look at them for free on my website if they like. But my best guess is that the most likely case, aggressive case, not the high case, is that we may get to 14.5 or 15 million barrels of crude and condensate by the end of 2028. That's also what he's talking about, by the end of Trump's term. Now, we may get to the 3 million. I think we can get to the 3 million by including natural gas liquids, biofuels, natural gas, and refinery gain. Okay, but we have to be clear about what Scott Bessent is actually talking about.
Jim Puplava:
Okay, so he's not talking about 3 million barrels of regular oil. It's a combination of those three.
Art Berman:
Right. And there's nothing wrong with that approach. I mean, I'm not criticizing it. I just want to make sure that people are clear that if we're producing, you know, 13.2 or 3 million barrels of crude and condensate, he's not saying we're going to be producing 16.3 by the end of Trump's term. I'm sure he'd be thrilled if that were the case, but that's not what he's saying.
Jim Puplava:
Well, some of the criticisms of that policy are that companies are more disciplined today. They're focused on shareholder value in their returns. Why would they want to produce a whole bunch more, let's say, energy, to drive down the price?
Art Berman:
Yeah, that's a great question. Let me say first that I find most of the analysis of this plan, and by that I mean investment banks, just the other kind of energy analysts that I read in the press, the industry press, I find them to be very shortsighted. I don't think they really understand what Trump and Scott Bessent are talking about. But specifically to your question, oil companies, I don't think they care that much about the price of oil. What they care about is investor enthusiasm for buying their shares. And so, for instance, back in 2016, 17, even 18, when oil prices were very low, I mean, that's when oil companies were doing drill, baby, drill, okay? And investors were going berserk over their stocks, okay? Because they like the growth story. Now, investors soured on the growth story because it wasn't producing the kind of returns they expected. Okay? And that's another conversation that we can have here. But oil companies are being disciplined not because they think it's a good idea, but because they want to regain investor confidence. It's really that simple. I mean, all you have to do is look at the compensation packages for industry, for the oil company executives, and they're clearly tied to share price and the number of deals they do, not to oil price. So, as long as share price is doing well, they're doing well. Therefore, back to kind of returning to the question, if investors are on board with drill, baby, drill, then we're going to drill, baby, drill. I mean, the oil companies are not going to say, whoa, wait a minute, we're kind of enjoying this moment of Zen that we've been having here with fiscal discipline. They want to grow. I mean, that's the way oil, that's the way all companies are. All companies want to grow. The problem is that investors got weary of the growth story and said, well, yeah, this is great, but, you know, everything else about your company looks pretty bad. So, what I think people are missing here is that the energy dominance plan is basically for the government to underwrite, subsidize, and loan oil companies the money to make this drilling profitable. And this is not anything out of the ordinary. I mean, if you look back to the 1980s and 90s, all sorts of programs were in place or put in place to encourage tight gas drilling. There were tax subsidies, even, I think, direct support bonuses for companies that drilled deeper to try to find the tight gas. Now, that's not to be confused with shale gas. This is gas, conventional gas from conventional reservoirs that were just low permeability. So, the government essentially underwrote and subsidized those programs. All of the work that John Mitchell did on developing fracking, which was eventually applied to the Barnett Shale and other shale gas and later shale oil plays, that was all underwritten by the Gas Research Institute, which was another government plan, and then, I think, a big piece. So, the point there is that the U.S. federal government has always had the means to aggressively encourage more drilling without the oil companies and the gas companies losing money. Okay? So, that's number one. What I think most people are missing is legislation like the Defense Production Act. And the Defense Production Act, I don't even know when that was enacted, but, you know, certainly at least 50 years ago. And that, for instance, gives the federal government the means to say, hey, you know, we've got a military base or an Air Force base or something that's right outside of New York City, and we need to get gas pipelines built to that military facility. And despite the fact that New York has effectively blocked all natural gas pipelines, not just New York, all kinds of northeastern states, we're going to say, hey, this is kind of eminent domain. This is a national security issue, and we're going to get pipelines built, like it or not. And what that does, and I'm using that perhaps as an extreme example, but one of the big problems with fully unleashing existing oil production is that we have to do something with the natural gas that comes along with it. And states have gotten a lot tougher on allowing companies to flare or vent natural gas. And so, if there was more pipeline takeaway for that natural gas, that would allow a lot more oil that's already been drilled and found to be produced. So, that's another factor. A third thing that the Defense Production Act and other legislation provides is investment in refineries. And I think that many of your listeners understand that one of the problems, but one of the facts about U.S. oil, is that we can only use so much of it in our refineries because of the way they're configured. They're configured to use a mix of heavier oils, which are not produced in the United States so much, and the light oils that are. And the result is that we export four and a half million barrels a day of our light oil and import an equal or slightly greater amount of heavier oil, mostly from Canada and Mexico, but also from other countries, so that we get the mix right for the way that our refineries are configured. Now, there's nothing to say that we couldn't change that refinery configuration to accommodate more of our light oil. I don't want people to think that, all of a sudden, we're going to be able to use only U.S. oil and make all the products we do today. That's not the case, and that's the subject of a whole other podcast between us. But we could use more of it. But that's expensive, and refiners are, you know, cautious about wanting to make those sorts of very expensive and long-term investments. Now, if the government were saying, don't worry about it, you know, we're going to, you know, loan the money interest-free, or we're going to pay the money, or, I don't know, I'm not an expert on all these laws, but the point is that there are many, many levers that the government has available to it today, and has had in every administration for the last 50 or 60 years, to drill, baby, drill, if that's what they want to do. So, we're just talking about enabling or re-enabling existing tools to get things going. So, that was kind of a long-winded answer, but it's a long-winded question, Jim. And I think people really need to understand that what they're reading is a very narrow view, or, in my opinion, is a very narrow view of exactly what the government could do if it chooses to, and also can get away with it. I mean, there's political opposition. Clearly, more fossil fuels doesn't go down well with an awful lot of people, not just in Congress. And that's another subject which we can get into also. So, what I'm telling you right now is a purely neutral opinion. I'm not endorsing what Trump and Bessent and others want to do, nor am I against it. I'm just saying it's eminently feasible. There's no reason they can't do it. And that seems to be the main blowback, that it's not going to work. It can work. There's no question about it. Now, whether it's a good idea, that's another subject too.
Jim Puplava:
And let's talk about the Trump plan itself. He's not talking just about oil. It's more encompassing. He's talking about natural gas, nuclear, renewables, coal, geothermal. He's talking about opening up federal land exploration, rare earth dominance, energy security pipelines, as you mentioned, LNG terminals, and using those existing laws to cut through the red tape to get something done. So, this is much bigger than oil?
Art Berman:
Well, it is bigger than oil, but oil is really the biggest piece of it. And I say that, you know, without a considerable amount of study. I mean, what's the reason Trump wants to do this? Let's turn the question around. You know, he talks about energy dominance, and in my most recent post, I think I even called it, "What will energy dominance be used for?" Okay. I mean, you know, if we produce another 3 million barrels a day, well, whoop-de-doo, you know, what's that do, you know? It's what you use it for that matters. And I think what Trump wants to use it for is to, well, first of all, I guess the stump speech is he wants to make energy prices cheaper for average Americans. And fine, that's a great idea, but ultimately, he wants to use it to make the United States the dominant geopolitical power in the world. That's what he wants it for. I mean, you know, he's not spouting off about taking over Greenland and Panama and annexing Canada and, you know, taking over Gaza and all of that just because those are kind of cute ideas. I mean, we're talking about, I mean, we've got a new Monroe Doctrine going on here, and it doesn't just apply to the Western Hemisphere. I mean, Donald Trump, rightly or wrongly, views territory as a resource, as an asset. Okay? Now, the truth of the matter, like it or not, is that militaries run on gasoline, diesel, period. They don't run on renewable energy. They don't run on coal. You know, other than a few nuclear submarines, they don't run on nuclear, they don't run on natural gas. They run on oil. And if you want to be the dominant power in the world, you've got to lean on your military. And that means oil, pure and simple. Now, I've also written about, and people can, you know, look at the documentation behind it, the Germans lost both world wars for one fairly simple reason. They didn't have enough access to oil. I mean, the Battle of the Bulge was 100% about breaking through the Allied lines so that they could get a hold of the gasoline depots that Eisenhower had in the Argonne Forest. Okay? If they had done that, I'm not saying they would have won the war, but they sure could have gone on a lot longer. During the Battle of the Bulge, the fact that they couldn't get there, German tanks ran out of gas, they just stopped working. Okay, so both world wars were lost by Germany because they didn't have enough oil to run their armies. The Japanese expropriated the oil in Indonesia. That was really what Pearl Harbor was about. I'm not going to get into that right now, but that's what it was about. The Japanese, once they took Indonesia, had plenty of oil. The reason the Japanese lost World War II is that U.S. submarines were so effective at sinking the tankers that were bringing that oil to their military that their military ground to a halt. By the end of World War II, the average Japanese Zero, I think it was a Zero, was flying two hours per month because they didn't have enough gasoline. Okay? So, oil is power, pure and simple. If you want to be the biggest dog in the world, you'd better have plenty of oil. And China, its Achilles' heel is oil. It is an oil have-not. It is the largest importer of crude oil in the world. And every time there's a blowup, a geopolitical crisis in the Persian Gulf, or anywhere in the world, the news, like lemmings, always says, oh, well, what if the Straits of Hormuz are closed? You know, that's the biggest transit point for oil in the world, the Straits of Hormuz, you know, the Persian Gulf, pretty darn important. But it's nothing. Why, it's nothing. It's a whole lot less than the Strait of Malacca, which is between, well, Indonesia and Malaysia, which carries 4 million barrels a day more than the Strait of Hormuz. And where does all that oil go? It goes to China, and of course, some of it goes to Japan, and some of it goes to South Korea, but most of it goes to China. So, China is super vulnerable on oil. It is painfully dependent on imported oil. And the scariest thing in the world for China is, what if the U.S. decides to blockade the Strait of Malacca? They're paralyzed. I mean, they've got some reserves, but that's a serious vulnerability for China. Okay, now, I would be stunned if this weren't front and center in Pete Hegseth's, Donald Trump's, Scott Bessent's minds right now. They know that. So, that's what it's all about, in my opinion.
Jim Puplava:
I want to go to Goehring and Rozencweig because they've been putting out some papers believing that shale is about ready to peak. That the Permian is either going to peak at the end of 2024 or certainly in the first part of this year. And one of the things that they cite, Art, is with the oil embargo, the Six-Day War in 1973, where oil went all the way up to 11 or 12 bucks, up three- or fourfold, Nixon and the administration came forth with all these policies. Drilling increased, but despite all of that, oil continued to fall for almost three or four decades. So, they're citing that as an example as to where we are today. What is your take, or do you think that is credible? Or, if you have an issue with that analysis, what would it be?
Art Berman:
Well, how many ways can that be wrong? Not saying it is wrong. I'm just saying, how many ways could it be wrong? The first is, I mean, U.S. oil production peaked for the first time in 1970. And so, an awful lot of the decline, and therefore U.S. dependency on foreign imports, had nothing at all to do with anything that was happening in the Middle East. It had to do with just the exhaustion, the depletion of U.S. supply. And you can do all the wild and crazy things that you want to try to get people to drill more, but if 80 or 90% of the low-hanging fruit is gone, you're not going to accomplish very much. Okay. I mean, that was the whole problem. It wasn't that there was no will to drill or with the government programs from Nixon and Carter and, you know, whoever else, if it isn't there, it isn't there, or if it isn't there in some volume that matters. And that was the problem, that it's a power law thing, that 80% of the oil that was in large enough accumulations to matter had been found, that was known. And the rest of the 20% was scattered in tiny little accumulations that weren't going to move the needle. I mean, I was working for a major oil company at the time, and we were selling all of our production in the United States, even though it made us money, because it wasn't going to grow the company. We were going overseas, we were going everywhere other than the United States. So, that's the first thing, you can't, you know, this is, my dad was a doctor, and he always used to complain about these studies that said, you know, if, you know, the reason that so many people are dying is because, you know, name your reason. They don't get enough exercise. Okay, great. And he would say, well, you know, did they ask how many of them smoke cigarettes? Well, no. Did they ask how many of them had diabetes? Well, no. Did they ask how many of them were obese? Well, no. Okay, so, what does the result mean? I don't know. It doesn't really mean anything. So, you can't compare, you can't compare something that happened when U.S. supply was declining because of depletion with a situation today where we've got plenty of supply. It's just, there are other factors that are working against oil companies going, you know, full throttle toward developing. So, that's a big problem. The other thing is that, I mean, Goehring and Rozencweig, and don't get me wrong, I read everything they write. I respect those guys. They're smart, and they seem to be data-driven, although they never actually show the data. They say, well, our neural networks have shown us that the shale plays are turning over. Well, I don't want you to show us your proprietary software, but how about showing us, you know, a plot? You know, give me something here, guys. I mean, you know, I trust you. I mean, no, I'm not going to. Well, and maybe I would, except that that's not what the data tells me. I mean, I look at the EIA, and, you know, okay, you can say that their forecasts have been wrong. Well, all forecasts are wrong. But I think the EIA, that's the Energy Information Administration, part of the Department of Energy, they've got, I think, a pretty good idea of the near term, at least for United States oil production and gas production. And if you just look at what they publish for the near term, in their monthly Short-Term Energy Outlook, they have a projection that goes out through 2026, and it shows that shale production is going to increase, that it's going to increase a little, but basically stay kind of flat in plays like the Eagle Ford and the Bakken. And it's going to continue to increase in the Permian. And they also show that production in the Gulf of Mexico and in Alaska is going to increase. And so is conventional production going to increase. Not, again, none of those hugely, but it all adds up. And so, if Goehring and Rozencweig want to say, well, shale production or U.S. production is turning over or has turned over, then they're going to have to tell me, well, what's wrong with the EIA, and, oh, by the way, many of the other international organizations and oil trading organizations. What they see, and what I see, is what I call a peak plateau, that oil production will eventually reach a maximum. And, just for fun, it's not fun, but say it's approximately in five years, and that's pretty close. Again, you can look at the graphs that are publicly available on my website. Let's just say 2032. I think that's the right date. But, unlike the peak oil symmetrical plots, instead of reaching a peak and then, you know, going down the other side, it stays at a very high plateau, barely decreases at all for something like five years or more. Okay, so, that's a whole different thing. That's, you know, that's not a Hubbert curve. And, believe me, I, you know, I'm a student of M. King Hubbert, and I think that he made tremendous contributions to probability theory, and he was right about U.S. oil production. But that symmetrical curve is for conventional oil. And right now, conventional oil is what, 35% of U.S. production and falling. So, it's, you know, that's not, I mean, the facts have changed, the conditions have changed. And the problem with peak oil, of which I was a part, is you can't keep ignoring unconventional oil. When unconventional oil is 75 or 65% of your production, it's the biggest piece, you can't ignore it and say, well, you know, well, if it weren't for that, we'd be declining. Well, whoop-de-doo, you know, but that's not the way it is. So, I mean, I don't think there's a lot of support for Goehring and Rozencweig's position. Now, I have published the fact that my analysis says that, per well, average EUR, estimated ultimate recovery, kind of reserves for, say, the Permian, is declining. It's not as good. You know, the average well is not as good as it was a couple of years ago. That doesn't mean that we're falling off a cliff. That just means that they're not making quite as much money as they were a couple of years ago. But those wells are still fantastically commercial, and they're still producing a heck of a lot of oil. So, you know, people challenge me and say, well, you said that the wells are getting worse. And I said, yeah, I said the wells are getting worse. But, you know, keep reading. They're not very much worse. And they're not, I mean, that's just what oil fields do. There's nothing magic about shale. I mean, the way that you drill it and complete it is different. But the liquid, the oil itself, is just exactly the same as every other kind of oil. And it obeys the same laws of fluid dynamics and physics. And it's going to, once you've drilled all your best locations, subsequent locations are going to be a little bit worse. But if the technology keeps improving, as long as they're commercial, you're going to keep drilling. And as long as you keep drilling, you can keep adding to production. So, I'm just not buying this falling-off-a-cliff thing. I'm certainly realistic enough to say it ain't going to last forever. Peak oil will happen, it's just not happening. It doesn't seem to be happening the way that we thought it would happen. I thought it would happen 20 years ago. We're not seeing the symmetrical climb, increase, peak, drop-off. That's not the way it's working.
Jim Puplava:
Take us through your analysis because in one of your pieces, you're talking about, based on current prices where they are today, we have probably about 60 years of production. Take us through that.
Art Berman:
Yeah, it's real simple, Jim. Proven reserves are, you know, something like, I mean, for the shale plays, something like 25 billion barrels. And for the United States, you know, again, I'm not looking at a chart right now, it's something like 40 billion, all right? So, all you do is you say, well, you know, how much are we consuming today? And at those consumption rates, if we never found another reserve, how long would that production last? And it's a simple division problem, and we can do the same for the world. And so, the people who say, oh my God, you know, we're not finding the kind of reserves that we did 30, 40, 50 years ago, and that means we're in trouble. Yeah, I hear you. You know, I'm not going to disagree that we're not finding 100-billion-barrel fields anymore like we were 50, 60 years ago. Nor am I saying it won't be a problem someday. All I'm saying is it's not a problem today, that overall U.S. reserves and overall world reserves are at their highest level ever. And if you take either one of those, whatever those proven reserves are, and divide by current production, you come out with a very big number. You come out with 40, 50, 60 years if we never add another reserve. But that's not the way markets work. The way markets work is, I mean, somehow people and analysts think that oil companies are like a public service company, that their job is to always find reserves. Well, no, that's not right. Their job is to make money for their shareholders. And finding oil that you're going to keep in the ground for 40 years or 30 years or whatever is not commercial. That's not a good investment, okay? So, oil companies aren't in business to always be finding more and more reserves. Oil companies are in business to find the right amount so that they can make money for their shareholders and have enough so that they can go a couple of years, maybe, without replacing reserves if the price is too low or other factors are that way. And then, you can go back historically, and I mean, I remember when I was a young geologist, back when I was riding a dinosaur to graduate school, there were 10 or 15 years of crude oil and condensate proven reserves then. And that's always been the case, that there's always 10 or 15 or 20 or whatever the right number is of reserves. And there always was, and there always is, and it always continues to be because as soon as supply gets low, the market raises the price, and people get motivated to find more. Now, again, you know, that's not an endless process. At some point, you run out of the stuff, or you run out of things that are commercial. So, you know, just to be clear, I mean, peak oil is a perfectly valid concept that I believe in. It's just that, you know, you can't cling to the things we thought were true in 2000 and say they're still true today when they're not true. And depletion of reserves is not a problem today. That's what I've shown.
Jim Puplava:
I want to talk to you about peak oil. I was in the peak oil camp. In fact, I was a friend of Matt Simmons, and he shared a lot of his research with me. I did not see shale coming, but it obviously changed everything. You were on the Peak Oil ASPO board. You wrote at The Oil Drum. What changed things for you? Because there's still a lot of people in the peak oil camp that really don't acknowledge the advent of shale and how it changed the dynamics of energy. And you use an analogy, and this is, we have conventional oil, we have unconventional oil. And I think you used the analogy of a tomato. You don't care, if you want a tomato, whether it's grown in the ground or a greenhouse, it's still a tomato.
Art Berman:
Well, that's exactly right. So, let me get back to tomatoes and oil in a minute. But first of all, shale as a source of crude oil is hardly a new idea, okay? So, when we say nobody saw shale coming, what nobody saw coming was that it would ever be commercial. Everybody in the business, everybody who paid attention in the oil business, knew there were tremendous resources of crude oil that were trapped in the source rocks that generate the oil that's in the reservoir rocks. We've known that ever since we first understood the relationship between source rocks and oil. And that was still slightly controversial when I was in graduate school in the 1970s, but not very. So, just, you know, to bookmark it, it's been more than 50 years since people have said, okay, yeah, oil comes from source rocks, which are shale, and there's a heck of a lot of oil that never makes it out of those shales. Therefore, if we only had the technology or the right price, you know, we could go in and produce that oil. So, that's nothing new. Oil companies have been estimating the volume of that oil that's in shale since before I was in the oil business. What changed was, well, two things. The first was that the price shocks that Goehring and Rozencweig remind us of, not that some of us ever needed reminding, but that's another subject. The oil shocks, by creating higher prices, also provided a lot of incentive for companies to try to figure out new ways, albeit more expensive ways, to find oil, as did a lot of the government programs that I've already mentioned before. So, what the shale revolution was really about was combining existing technologies of hydraulic fracturing, which, again, wasn't new. I mean, heck, we've been fracking wells since, you know, the 1860s. In fact, the term moonlighting comes from exactly that, that there was one company that kind of had a monopoly on dropping nitroglycerin down an oil well back in, I don't know, after the Civil War. And there was another company that was competing with them, and in order to compete without getting shot, they did all their fracking at night. So, that was called moonlighting, okay? So, fracking's been around for a long time. Obviously, we don't drop nitroglycerin down a hole anymore for fracking. But it was, and fracking was used before, long before shale came along as a commercial venture. I mean, you know, tight gas, when I was a brand-new geologist at Amoco in the 1970s, we were fracking conventional reservoirs in the Denver Basin in Wattenberg Field, okay? We were using hydraulic fracturing just like we are today. It wasn't as sophisticated. We couldn't pump as much water under as much pressure, but we were fracking. So, fracking isn't new. Horizontal drilling isn't new. It was in the early 2000s, people figured out how to combine those two technologies in a way that was commercially feasible. That's what shale was all about. So, that allowed companies to go in and exploit the oil that they always knew was there, or always, at least since the 1960s or 1970s. So, yeah, shale, like most discoveries in science, didn't happen like somebody woke up in the morning in 2003 and said, hey, I got a great idea, let's combine horizontal drilling and hydraulic fracturing and see what we can do in the Barnett Shale. No, it was a long process of evolution that led to that. A lot of people were involved, a lot of time, energy, and smart ideas came together. The tomato story, the tomato story is, look, you know, I mean, peak oil people, and again, I include myself, you know, we made a big deal about conventional versus unconventional oil. But who are the only people in the world that actually pay money for oil? The only people I know that pay money for a barrel of oil are refiners. And refiners couldn't give a rat's ass about whether the oil comes from the Bakken Shale or some conventional reservoir somewhere in the Illinois Basin. The refiners say, I need this much oil of these specifications, this density, this sulfur content, et cetera, et cetera, and at this price. And whoever says, hey, I can give you that, they say, bring it on, you know? They're not going to say, well, wait a minute, did that come from the Bakken? Because if so, we don't want it. No, they don't care. Just like I want, when I go to buy a part for my car, I don't really care that much who made it. I want to know, is it the right part for my car? Will it work? Does it have a warranty? And is the price right? That's all I care about. So, why do we care whether a tomato was grown in the ground or in a greenhouse? Well, I mean, I'm sure there are, you know, some tomato connoisseurs that will say, well, they're not as good if they come from a greenhouse. But realistically, I mean, how many people, when they go to the supermarket to buy a tomato, even know if it came from a greenhouse or not? So, I think we're just getting into, you know, this is an artificial distinction that might have made sense once when unconventional oil was a very small proportion of total oil. It doesn't make any sense now.
Jim Puplava:
Now, I want to talk a final thing about oil, and that's peak demand. And the idea is, you know, our silly state and governor, we're going to rule out gasoline engines by 2035. But there's this idea that, you know, everybody's going to be driving EVs, wind and solar will be powering our cities. I just don't see that happening. In fact, EV sales have been down. They don't work very well in cold weather, and people like choice. You know, if I'm going to take a trip, I know that if I have a gasoline car, I'm not going to have any trouble pulling into a gas station and refueling. If I have an EV, I better hope there's a charging station close by, and it may take me half an hour or 45 minutes to charge my car.
Art Berman:
Well, those are certainly valid observations, Jim. I take it a step further. I'd say, show me that the whole spectrum of renewable energy, whatever it is, whether it's wind, solar, EVs, hydro, nuclear, biofuels, show me that any of that has had any effect whatsoever on climate change. Is there any evidence that carbon dioxide emissions are decreasing or the temperature increase is flattening? The answer is no, it's not. So, at some point, I think you have to ask, are we, you know, on some sort of a wild goose chase or a trip to Abilene here that, you know, hey, we all kind of decided this was a good idea, or maybe not all of us, but some of us did because we thought it was worth saving the climate and paying a little bit more or having a little bit more inconvenience for having an EV? Say, okay. And by the way, I mean, if people want to buy an EV and they like it, they should buy it, I think it's great. But, you know, I think, if we're going to get in the business of telling people what they can and can't buy, I think I want to know, well, okay, I'm willing to do that, but show me that this is going to help. Show me this is going to work. Now, I don't want to say that renewable adoption isn't a good idea. I mean, there's no doubt that the amount of carbon that goes into the atmosphere or the amount of electricity produced from a wind turbine or a solar panel is tremendously less than if you generate that same electric power by any other means. And I'm talking about the whole supply chain from extracting whatever the mineral is in the mine to shipping it to wherever it's manufactured, the whole thing, it's substantially lower. Here's the problem, Jim, and that is that renewable energy can run a civilization just fine, just not this civilization. And what's happened is that for all the increases in renewable energy, we haven't decreased any of the fossil fuel energy. We're continuing to use more and more coal, natural gas, and oil, and we're just adding the renewable on top of that. And so, the net result is we're just using more and more energy. And if we're using more and more energy, society continues to grow and grow and grow. And that results in a lot of negative effects for the environment, of which carbon dioxide is only one. So, the problem with the whole thing is, it's one of these, I won't say it's a half-baked idea, it's just an idea that was, renewable energy and EVs, it's an idea that was considered in isolation. It wasn't, nobody said, well, okay, that does seem like kind of a good thing if we could reduce emissions, you know, let's think about, you know, how does that work in the broader scheme of things? What are the positives, what are the negatives? And like most things in our society, we don't do that. We just say, oh great, let's go. So, my position, I'm very, I take climate change and our ecological crisis very, very seriously. I mean, I'll put it real bluntly, I think we're in deep doo-doo for climate change. I completely disagree with people that say, ah, it's not that big of a problem. I think it's a huge problem. But that's, you know, that's again a subject for another conversation. What I'm saying is, I find no evidence whatsoever that adoption of renewable energy and EVs has made any difference toward, I won't even say solving that problem, limiting that problem, slowing that problem, nor do I see any evidence that it will unless we, as a society, one way or another, agree that we have to stop growing. If we stop growing, whether it's by choice or by government mandate or by catastrophe, that will make a big difference for the planet. I don't see that happening voluntarily under any circumstance. I kind of wish I could say maybe, but I don't see it. And so, to me, it's a much bigger issue than just, you know, what Governor Newsom wants to do or, you know, what the state of New York or the government of Amsterdam does. I mean, I think all these guys, if they had a holistic view of what they're really doing, well, they're politicians, so they would never change their public opinion. But, you know, if you look at the whole system, you're not going to fix the environment with renewable energy unless there's a massive behavior change in the way that civilization relates to energy. It's, you know, it's like, you know, you go into a doctor, and you say, oh my God, you know, I'm having a heart attack here. Okay, well, you know, let me give you a shot of adrenaline, and you'll be fine. Well, until you walk out the door. And no, it's, you're treating a symptom, and you haven't thought about how it interacts with the rest of the system, and that's the problem. So, I hate to be negative, but I really think that the problem is so much bigger and more serious than just, oh, should we have EVs, should we have wind turbines, should we have solar panels? That's the tip of the iceberg.
Jim Puplava:
So, in summary, as we take a look at oil production, oil reserves, your contention is it is more dependent on technology, capital investment, and price, not just geology. So, a final question, Art. If you were looking at these policies that the Trump administration wants to put in place, if you were to take out your crystal ball, today, we're at WTI around $70 a barrel. Where do you think oil prices will be going in the next couple of years? Just a rough guess.
Art Berman:
Well, I've published what I think is going to happen, a range of scenarios. I think WTI could easily be at $50 if Trump's plan is successful. Now, it's not nearly as simple as, oh, well, if they just produce 3 million barrels a day, that's a piece of it. But the tariffs have to work. That's another complicated issue where most of the mainstream says, oh, that'll never work. I'm not an expert on tariffs, but I've read enough and talked to enough experts to say, well, they can work, they have to be done right, which is always questionable. But again, I don't want to get into that. But again, it's a much bigger system. My question, which I've stated before, and I'll state again, it's like GDP, hey, you know, I want, Scott Bessent wants to increase GDP by 3%, okay, that's part of his plan. Oil production goes up 3 million barrels a day, GDP goes up 3%, deficit goes down 3%, that's 333. My question is, what are you going to do with a 3% increase in GDP? Is it just a trophy that you put on the mantle? Because if so, you know, BFD, I mean, I don't care. What are you going to do with the extra GDP you have? You decrease the deficit by 3%, well, whoop-de-doo. What are you going to do with the surplus or the decrease in the deficit? And the same with oil. What are you going to do with that extra 3 million barrels a day? If all you're going to do is be a price taker and just sell it to more countries, I say that's a big damn waste of a natural resource that accomplishes absolutely nothing. Well, I wouldn't say absolutely nothing, that accomplishes very, very little, except to make a few corporations richer, and it takes away from the natural resource treasure of the United States. Now, if you're going to use that 3 million barrels a day to make life better for Americans and make the United States a more decisive force in the world, and you're going to use that for good, then I say, okay, let's talk about it, it's worth it, maybe. If you're going to use U.S. power to somehow make the, you know, the geopolitical mess that the world is in right now slightly better, then I say, I'm all for that. If you're going to use U.S. power to diminish the negative effects of certain countries that are basically just out there causing trouble, I say, I'm all for that. But you have to show me what you're going to do. I mean, not that they care about what I think, but again, what will you use energy dominance for? If all you're going to do is sell more U.S. oil and gas, I say you're wasting your time, you're wasting our resources. Show me that you're going to use it not just strategically, but they're going to use it as a key element of U.S. economic statecraft to accomplish what Marco Rubio says he wants to do, which is that everything we do is to benefit Americans and make America stronger, but not just for its own sake. I'd add to that, to make the world a better place or a slightly better place. That's what I want to, that's, so, again, just to go back to basics, I'm neither a fan of or a critic of energy dominance, the 333 plan. I'm telling you, it's feasible, whatever, you know, anybody who says no, it's not going to work, I'd love to debate them on it because I think it can work. But whether they can reach 3 million a day or not is not the issue. It's what are you going to do with the 3 million barrels a day? That matters to me.
Jim Puplava:
All right, so, if I was summing up, if you were looking out in the next couple of years, you think lower energy prices are possible, which would also help on the inflationary front. Art, you are a very prolific writer, and I like the fact that you changed course from peak oil early as you saw the advent of shale and its impact on the energy markets. Why don't you give out your website? Because you do publish a lot of work, and you make that available free for your viewers.
Art Berman:
Right, so, my website is just my name, artberman.com. My website is 100% free, there's no advertising, there's no subscriptions, there's no paywalls, there's no nothing. It's pure information, you know, you can have it, or you can choose to ignore it. You can find me on X or Twitter, whatever you want to call it, @AEBerman12. I'm on LinkedIn, I'm on Facebook, I'm on Substack, I'm in all the normal places, but unlike some, obviously, I need to earn a living, and I use a lot of this basically as marketing, you know, because then people call me and say, hey, I have work for you. But you're not going to get charged, you're not going to get hit up with any promotion or anything just by reading the information that I put out there, no paywalls, no, you know, you can only read this far and then you have to subscribe, none of that. So, yeah, I think there's a, I mean, I have a somewhat unique perspective in that I not only analyze all this, but I'm an active petroleum geologist, I mean, I work in the business. There are very few people, and that goes for peak oil, by the way, Jim, also, very few people that talk about oil and gas that actually have drilled wells and know what's going on and know what it means to companies. So, I'll just leave it there.
Jim Puplava:
Okay, well, it's one of the reasons I wanted to have you back on the show. Well, listen, Art, thanks for being so generous with your time. And I would really recommend to our viewers here and listeners that they go to your website and read some of your articles. It'll give you a different perspective on the energy markets. Art, all the best to you, and I hope to talk to you again.
Art Berman:
Thanks, Jim. All the best to you, too.
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