Power Struggle
Improving the energy dialogue in Canada (and beyond) through honest, non-partisan, and fact- based conversations.
The energy conversation is personal: it’s in our homes, in our hands, and now, it’s in our ears. Power Struggle invites you to listen in on honest, non-partisan, and fact-based conversations between host Stewart Muir and the leaders and thinkers designing modern energy.
Watch videos at https://www.youtube.com/@PowerStrugglePod
Power Struggle
Doomberg tells all: The dirtiest secret of the modern economy
What does it take to turn a green chicken into a global voice in energy?
We dive into the world of Doomberg—the #1 paid finance Substack tackling energy, geopolitics, and predictions of what's to come.
Global energy dynamics are more than just economics; they intersect deeply with immigration and social tensions. Doomberg discusses how an energy-rich or energy-poor environment can exacerbate societal issues.
We discuss:
- Why a green chicken became the face for Doomberg
- The dirty secrets of the modern economy and today’s virtue strutting
- Why we take energy for granted and who the real heroes are
- Making Canada the 51st state: a US attempt to take Canada’s oil?
- Why Canadian citizens should be among the wealthiest people in the world
- Betting on human ingenuity - always!
- Why peak oil is a myth
- What the “Church of Carbon” is and what it tells us about climate narratives
- The completion of LNG Canada and its global impact
- How natural hydrogen could be the next big disruptor
Tune in to see why 300,000+ subscribers trust Doomberg for sharp, unfiltered insights.
Mentioned in the show:
The Year of the Dragon - free for Power Struggle subscribers:
https://newsletter.doomberg.com/p/52366083-26e1-4289-899a-9352fb196a53
More and More and More: An All-Consuming History of Energy
https://www.amazon.ca/More-All-Consuming-History-Energy/dp/0241718899
Follow us and our guest on social media:
Doomberg on Substack
Doomberg Website
Doomberg on Linkedin
Stewart Muir on Linkedin
Reach out to us with thoughts, questions, or ideas at info@powerstruggle.ca
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Video available on Power Struggle’s YouTube! https://www.youtube.com/@PowerStrugglePod
I think immigration is mostly an energy issue, like if you bring people into your country and you starve your country of energy. At the same time, of course, there's going to be social tensions. In our view, energy explains all and solves all.
Stewart Muir:Welcome to Power Struggle, where we uncover the challenges and opportunities shaping the global energy landscape. I'm your host, stuart Muir. Today we have a very special guest, a thought leader in energy and natural resources, whose ideas influence policymakers, industry leaders and anyone paying attention to the future of our planet, and all of this under the guise of a cartoon chicken. Yes, I'm talking about Doomberg. Hey Doomberg, welcome to Power Struggle.
Doomberg:Stuart, great to be with you. I'm looking forward to a fantastic discussion.
Stewart Muir:Me too. What is Doomberg and how did it come into existence, how has it evolved since its conception and why the chicken?
Doomberg:Yeah, great questions. We started Doombergurg as a sub stack almost four years ago now, which is kind of hard to believe back in the early days of sub stack and we observed in the market for energy content that there wasn't really a strong contribution from industry. Our team comes from industry. We were owners of a bespoke consulting firm at the time and the lack of that industrial perspective Was the market inefficiency that we identified and chose to fill via the Doomburg masthead. The green chicken was a Growth hack in the early days because we had no social media presence whatsoever and we decided to create an accompanying Twitter account to the Doomburg name. And if you're scrolling on Twitter and you just notice another executive-looking person in a suit as the avatar, then you really don't stop. But if this funny-looking green chicken with startled eyes is saying something funny or intelligent or insightful, you're far more likely to stop and look at it.
Doomberg:And one thing we observed over time. You know, doomberg's brand blew up beyond all of our wildest imaginations over the years. If you ever de-anonymize as an anonymous brand on Twitter or Substack, it kind of takes the air out of the brand intrigue, and so we just decided, for brand purposes, to stay anonymous and to keep the green chicken as the front of house for our brand. We are the largest paid financial sub-stack in the world, which is sort of amazing and humbling and surreal to say. We have almost 280,000 total subscribers. We write about eight articles a month for our annual tier and we also do a monthly webinar for our pro tier. It's been great. It's the work of our lives. We've turned what was our passion into a multifamily success and it's been great. When you found what you're meant to be doing in life, you know, for heaven's sake, just keep doing it.
Stewart Muir:That's our plan. You found it. When I see Doomberg pop into my inbox, that's the first thing I read in the morning. In the time zone I'm in, it comes in very early, which I like, and I get up to speed right away. I really just never miss it. I sound like I'm a big fan because I've been working in the energy space, too, for a long time, and I find it refreshing to see someone who is so incisive, a voice that is looking at the angles and sometimes stating what isn't popular but is true.
Doomberg:Yeah, we are guided by physics and economics and the realisms of the world and not to belabor it too much, but you have just articulated our exact brand ambition. You know, a brand is actually a gut feeling. It's a gut feeling that you induce in your ideal clients when they interact with your product. And when we sat down to conceive Doomberg brand is one of the five pillars of any business we brainstormed what a brand ambition would be and, ironically enough and we did not compare notes before recording here our brand ambition that we settled on was when our ideal subscriber sees our email in their inbox, the gut feeling we induce in them is ooh, I get to read that. And if we could do that, we knew that we would have a winning business, and so we've always focused on the reader.
Doomberg:Does this delight our ideal customer? Is this provocative or polarizing? Is this funny or silly? Does this teach or is it self-indulgent? Those are the sort of the three sub-brand ambitions we always make sure that we are on the right side of. But it truly is what we were meant to do, and I can tell you the old adage, which is kind of cliche at this point, is if it's fun, it's not work and truly I haven't worked a day at the Doomer Project. It truly is. I get up and I get to go to the office. I get to record podcasts with people like you. I get to write interesting articles. You know, we, we research, write, edit, publish, promote and defend a piece roughly every four days. To some people that might sound like a treadmill, but to me it's, it's my daily exercise.
Stewart Muir:It's great and it's great. As a reader, I mean you. You dive into these complex energy issues. You manage to make topics like decarbonization, monetary policy but a whole raft of other things. I never know what you're going to be writing about. I just know I want to read it. It's genuinely engaging, and previously you've talked about being provocative without being polarizing, and I think there's a real gift in that. You've talked about being provocative without being polarizing, and I think there's a real gift in that. I think you say things that need to be said, that no one else is saying.
Doomberg:Yeah, there's a business model in polarizing. Frankly, having learned this business inside out for the past four years, we've studied every aspect of it as carefully as we can and we have a mindset of continuous improvements. We're always looking for opportunities to grow and to please our customers better. We've observed a lot of people in this space who make a very healthy living serving red meat to conservatives or serving red meat to liberals or crossing over that line for shock effect, and I mean there's a skill to that, there's a talent for that and there's a market for that. This is not who we are and it, frankly, is inconsistent with what our ideal customers want to consume.
Doomberg:We charge a pretty well. It was a controversial price at the time that we went behind the paywall, but now we're well below the average of the finance sub stacks. But we've kept our price the same. But you know, at $300 a year you're catering to a certain consumer who has certain expectations around. You know mannerisms and politeness, but also being provoked into thinking and not being afraid to say the truth or what we believe to be the truth. And look, we get some things wrong. We have a very systematic mistake management work process, which is mistakes should be rare admitted to, corrected and learned from. And I think we've confronted all of our mistakes and been open with our subscribers, which is another reason why they like us, because they know that when we press send, in that moment we believe 100% of every word. We might be wrong and we might change our mind, but in the moment on that day when the email hits your inbox.
Doomberg:that's our view of the world, raw and unfiltered, and I think it really serves a very powerful niche. You know, the mainstream media has really debased itself in the past 10, 15 years and it's opened an entire array of opportunities for unique voices like ours non-traditional media which I think is actually a huge inefficiency in the market that Substack is occupying.
Stewart Muir:I spent a lot of years in the news business and in our newsroom we had this box. That was only for one news service and if we need to go over and dive deep into some data, you know where I'm going with this Doonberg. But do indulge me and I think it cost us about $5,000 a month to have that bespoke data served right into the newsroom and there was always a lineup of journalists needing to access it. Of course, that was the Bloomberg terminal and I do believe there's a subtle joke Maybe you could unpack it for us in the choice of name of Doomberg.
Doomberg:Yeah, we're huge fans of Bloomberg and we have a terminal here in the office and it costs a fair bit to use it. It was a central tool for first our consulting business and now Doomburg, of course, and we're big fans of Bloomberg and the original brand concept, which we've sort of gone away from, was, you know, chicken little gets a terminal. We have found that, um, when you achieve a certain level of success in life um, perhaps you've accumulated some wealth and you've had some children and, um, you know, you've succeeded against most of your life's ambitions, which would be sort of characteristics of our ideal customers um, you spend a lot of time worrying about how you might lose it, and there's a technical phrase for that which is called doom scrolling. And so we envision Chicken Little pecking away at a Bloomberg terminal, looking for headlines to be afraid of or risks to hedge against and so on, and so we kind of ran with it and it's been fun.
Doomberg:And again, nothing but respect for the Bloomberg. Bloomberg is a controversial product, mostly because of its price. It's worth every penny. I mean, it has a huge moat. I use it every day, hours at a time. That and the new AI tools are sort of cornerstones of our research technology and love it, big fans of it. And so Bloomberg is a slight play, but I mean the brand is really a green chicken and so it's sort of far enough away from the Bloomberg brand to be sort of complementary and parody as opposed to anything else.
Stewart Muir:You've said that, as a general rule, the flashier a company's booth is at a climate summit, the more hypocritical the corporate behavior, because such virtue strutting is a sign of overcompensation.
Doomberg:That's correct. Yeah, we published that in a piece yesterday titled Labor Laundering, and you could probably guess where that piece is going. Look, there's a dirty little secret of the climate agenda, one which we live directly and so I can tell you. You know, I was in and around the solar industry when China used, you know, thermal coal and slave labor to dump solar panels onto the market, put everybody in the West out of business, and you know the B2C companies, the business to consumer companies that have the flashiest booths and want to be seen as being virtuous and sustainable and all that jazz. Well, the procurement teams never get the message and I've been in meetings where I explain that our competitor in china's idea of a water treatment plan is a pipeline to the river and we can't possibly meet that, you know, request for proposal or the competitive bid, because we actually have a water treatment plant that we have to capitalize and operate and staff and we respect the environment and our competitors don't. And so sure, they're 15% cheaper than we are, 20% cheaper than we are. But surely you have this big booth at COP 17 or whatever it was at the time and the response was has been and I have no doubt still is today. Meet the price or lose the business.
Doomberg:And, as we say in the piece, this is how China came to make everything. We wrote a prior piece, sort of a precursor piece, to this one, called geopolitical warfare. If you want to take monopoly control over difficult to manufacture early stage minerals and metals and other goods, just debase your environment and put the West out of business. And we don't make magnesium anymore, we don't process rare earth metals anymore, we don't make solar ignits anymore, we don't make purified cobalt anymore, we don't make all manner of militarily and economically vital early inputs to manufacturing, because China took it all away from us and we let it happen. By the way, there was no shortage of people from industry parading into Washington and highlighting this to the EPA and to the various administrations.
Doomberg:Ultimately, wall Street and their obsession with quarterly profits and low cost at all costs hollowed out American manufacturing and, I think, explains the popularity of Trump. I mean this was all very predictable. In the past 20 years I lived it personally. I saw how they operate and if you ever go to rural China, which very few Western business people get to see, they get to see Beijing and they get to see Shanghai and the nice hotels and they think, oh wow, china is just like us, it's not like us and they're willing and they do dastardly things in order to gain geopolitical dominance over the US. And, frankly, that weakness and their strength explains much of the tensions that we're seeing today and all the stuff that Trump is talking about Greenland and Canada, which I'm sure we'll get into.
Stewart Muir:And it's an even bigger story and you've written to say that one of the dirtiest secrets of the global economy, not just this year, last year, next year, but over the last half century. So the modern story that most people listening to us right now, who read your stuff, see it as the norm of how the world works, that you just have all this cheap stuff. Go to Amazon, boom, there it is. And yet what's underneath that is an extensive exploitation of labor, degradation of local environments because of pollution. It's almost the essence of our modern life and you're calling it out.
Doomberg:Yeah, I mean people think you know. Look, first of all, slavery is a very controversial and sensitive topic for obvious reasons, and we try to be very careful in the piece, but slavery still exists. Various, you know, nonprofit organizations estimate anywhere between 20 to 50 million people are still in what is sort of unquestionably labeled as slavery. Now, there are differences of degree and kind, of course, but as we say in the piece, anybody who is forced to work for pittance in harsh conditions under the threat of violence is on that spectrum somewhere, and all manner of supply chains depend on such cheap labor. Like, just think about what the definition is of cheap labor. Why is that labor cheap? Well, what?
Doomberg:goes into the cost of labor.
Doomberg:Wages benefits, working environment, and so there's like no way you can become cheap without sacrificing on some of those parameters. And I can tell you that there's all manner of cut out companies and middlemen companies that aren't afraid to lie on various corporate attestations about supply chain sanctity and denying the existence of any taint in whatever it is they're selling apple or pick your favorite you know makeup brand or food company. By the way, this is not like a china thing and this is not an asia thing or a russia thing or an eastern europe thing. This, this happens in america. We went into the piece about the whole h2a visa scandals, which which kind of a lot of people know about but never gets talked about. You know one of the reasons why food is so cheap in this country these people are brought into the country on seasonal work visas, which is a euphemism for really hard work under terrible conditions, oftentimes not all the time.
Doomberg:I will say, like everything, the exceptions don't always prove the rule, but there's a number enough exceptions that have brutal labor abuse. Look, the cartels are involved in all of this. There's kickbacks, there's bribery, there's violence and there's huge money to be made under Biden. The number of people brought into the country under such visas has soared. You know for all of the controversy on Twitter about H-1B and I'm not sure if you followed that, but H-1B is sort of the more higher-end visa program which the IT industry has indeed abused, but there's an even greater scandal on the sort of labor end of the spectrum. So this is real. It needs to be acknowledged. By the way, normalizing this and correcting this would be extremely inflationary, which is why it's not being done. And, by the way, I typed up that piece on a MacBook and I know that the battery in that MacBook has cobalt in it from the Congo, and the Congo uses child labor to. They call it artisanal mining, which is the same thing as sort of Foxconn calling the iPhone factories in China iPhone City.
Stewart Muir:It sounds so benign you wouldn't want to work in iPhone City. I can assure you, dumberg, energy is all around us, all the time we're able to have this conversation because of energy. Why do we take it for granted that we have energy the way we do today?
Doomberg:That is truly a luxury of the rich. The direct answer to your question is that members of the upper, the middle and upper classes of Western society have been separated from the hard work required to do the things necessary for us to have a high standard of living, and so you take it for granted. Look, energy is life. Your standard of living is quite literally defined by how much energy you and your family get to harness, and the reason you need to harness energy is to impose order on your local environment. Entropy is a universal force, and the human endeavor is a constant, unrelenting struggle against the forces of entropy. Disorder is spontaneous. Right angles do not appear spontaneously in nature. They have to be built and maintained, imposed, and so the more energy you have at your disposal, the richer you are.
Doomberg:All humans everywhere want a higher standard of living, and it's forever thus, and so food does not come from your iPhone and electricity doesn't come from the light switch. There's a whole pyramid of people behind the scenes, blind to you, that are working very hard to make that happen. Some of them exploit it, others not, but energy is so critical to everything, in fact, the AI and the internet and your phone, and all of that would just go away without primary energy. This is why the abuse that is brought to bear upon the fossil fuels industry and the chemical sector is truly self-defeating. We call it. You know chopping the tree down to save the branches. You know the roots of our economy begin in the oil patch. You know the tens of thousands of PhDs and engineers and lab technicians and oil field workers who do the dizzying array of work that make our modern lifestyle possible should be lauded as heroes. And yet we besmirch them as planet destroyers. And so ultimately, it doesn't end well, as Europe is finding out, as Europe is finding out.
Stewart Muir:I've long been fascinated by the kind of techno transition mindset, which is that there is this new economy coming along that will replace the bad old economy, the polluting one, with all those things we had to dig up or chop down or drill or whatever, and that would be represented by a lot of Silicon Valley. We're past that, but at the same time, some of those who've gotten richest in Silicon Valley, like Elon Musk or Jeff Bezos they're using millions of gallons of fuel to send their rockets into orbit and all of the materials needed for that. How did this get so polarized that lots of people tell me all the time that we are in a post-resource world as they sip on their matcha and talk on their phone?
Doomberg:there's only so many bricks from the bottom that you can put on top before the whole jenga tower collapses, right, um? So part of the sort of the second part of my answer to your original question about you know, how can people be what my friend Nate Higgins calls energy blind. Part of that explanation also must be ascribed to the shale revolution. You know, the most important question any macroeconomic or geopolitical analyst for that matter, should ask themselves when analyzing any situation is is this market long or short energy? In other words, is there abundance of energy or is there a shortage? Because those are two very different worlds.
Doomberg:And the shale revolution created this period of extreme excess abundance of energy, especially in the US.
Doomberg:And, as I said earlier, having a hostile view of the energy sector of extreme excess abundance of energy, especially in the US.
Doomberg:And, as I said earlier, you know, having a hostile view of the energy sector, or even no view of the energy sector, can only happen during a period of energy abundance, as Europe found out during the energy crisis of a few years ago. You know, once you run out of even just a bit of it, all hell breaks loose, and so we've been. You know, the US is a global energy gigapower. Now we produce 20% of the world's oil, 25% of the world's natural gas, we have the largest set of nuclear reactors in operation in the world temporarily at least, until China overtakes us and we also are sitting on the world's largest coal reserves, and so it's easy for us also are sitting on the world's largest coal reserves, and, and so it's easy for us just to be separated from from the fundamentals of physics you know um, but ultimately, as we we say many times, you know the, in the battle between platitudes and physics, physics is undefeated, and so you should be mindful of physics, otherwise you could lose your way I'm reading a new book that's just come out.
Stewart Muir:I'm reading a new book that's just come out. It's called More and More and More. I'm going to hold it up here. It's by a French historian, jean-baptiste Fressoz.
Stewart Muir:He is the latest voice bringing forward concerns that the world is not seeing this energy transition, which has been the mantra of policy for quite a few years now.
Stewart Muir:But actually it's a bottomless appetite for more energy of every kind, and there is no evidence, in fact, that there's ever been a transition out of one kind of energy into the next, greener one which is the whole expectation of net zero 2050, that there will be this transition in that direction, and the thesis here is that every new energy type that becomes popularized maybe it's coal is dependent on those that came before, because coal needed all of these beams of wood from trees to support coal mining in places. And he's provided compelling evidence that you know they didn't stop using firewood when they started using coal. No, they cut down just as many trees to be able to make coal mines. And the same is true of whale oil, transitioning to oil and so forth. So it seems to be an awakening, maybe going on that energy transition is a way more complicated term than we've been talking about, or some have been talking about.
Doomberg:Energy transition is an oxymoron. All primary energy sources are additive. To the extent that we get more efficient at harnessing energy, we just do more work. A classic example is the energy needed to compute has gone down exponentially over time, but the number of computations we do has gone up at an even faster rate, and so the total amount of energy that we're consuming to compute as a species is growing substantially. This is the single easiest bet to fade is the belief that global total human energy consumption will ever go down for a meaningful amount of time.
Doomberg:There's no doubt that the business cycle and the capital cycle of the energy sector are out of phase, and sometimes you get too much energy and sometimes you get not enough energy. But if you just plot, go to the, the statistical review of world energy, and plot global energy consumption and exit jewels from 1965 to today, that is a straight line up and to the right, and to the extent that it's not straight, it's slightly sinusoidal, and what that means is sometimes we have too much, sometimes we have too little, but we very quickly use it all. Sometimes we have too much, sometimes we have too little, but we very quickly use it all. And so what we see in contemporary media and politics is what we call drawing of a tangent line to a sine wave. Oh look, it's going down. It's going to go down forever. Oh look, it's going up. We're going to run out of resources here soon. These things have a way of regressing to the mean, and the single easiest bet in the world is betting on the energy regression mean on that curve that represents the ultimate human endeavor. To bet against that, I think, is just a fool's errand. And then, last point I'll make is if you plot the global human energy consumption in exijules by fuel source and layer them on top of each other, you'll see Like coal set a record in 2023. Natural gas tied a record in 2023. And oil set a record in 2023. Guess what? Coal is going to set another record in 2024. Natural gas because of the price, while price swings might not, but it'd be close and oil will set another record.
Doomberg:For all the talk of an energy transition, there's one thing that most people in the West fail to understand. The G7 is what? 700 million people? The rest of the world is 7 billion people. They live at a fraction of our standard of living and they all want to hire one. And who are we to tell them they can't? We will double and triple our global energy consumption from here. We will double and triple our carbon emissions from here, to the extent that you believe increasing carbon emissions is catastrophic to the planet. Brace for impact, because we're going to run the experiment and we'll use excess energy to deal with the consequences of any negative externalities. That's what's coming To bet otherwise is foolish. We're seeing it today, by the way.
Doomberg:Rightward lurch in European politics the election of Donald Trump, trudeau resigning. Macron can't form a government. Stalmer's polls are in the tank. Austria can't form a government. Germany's government just collapsed. They had to cancel the election in romania, um, a failed color revolution in georgia. I could go on and on, but we're seeing that a populist revolt happens when you try to restrict people's access to energy. And, by the way, last point, I think immigration is mostly an energy issue, like if you bring people into your country and you starve your country of energy at the same time, your BTU per capita goes down a lot, and so if you have less energy and there's more people you have to share it with, of course, there's going to be social tensions, and so you know, in our view, energy explains all and solves all. It certainly put it this way energy is the most important variable that almost nobody looks at, and it explains much of the variance that we observe in the news flow.
Stewart Muir:Now there's going to be someone saying, well, that's fine, we're just going to have abundant renewable energy that won't have all of these negatives, so get on with it.
Doomberg:Yeah, the gating function of demand for fossil fuels is supply, and Europe, for example, for all of its virtue struttingting to borrow a phrase that we quoted earlier Produces basically no oil or gas, and so what Europe thinks or does on the subject is irrelevant. And less than until you start restricting the development of fossil fuels and Lord knows, we've seen plenty of that in the world every molecule of fossil fuels produced will be burned by somebody somewhere, and local restrictions against such activities merely relocate who gets to enjoy that privilege. This is what we've memorialized as Duhemberg's postulate. It's a very good working model.
Doomberg:If we cut off coal in the US and switch to natural gas, yay, our carbon emissions are going down. That coal is still being burned, usually in the developing world, and at a lower price than it would be if we hadn't stopped it. And so you know. And there's a mountain of coal and a tsunami of natural gas and a virtually endless supply of oil. And even if we restrict the development of oil and gas and coal in the Western world, there's enough of it everywhere else and prices will skyrocket and that will induce a supply response. When people start talking in that way, what they're really saying is they don't know anything about energy.
Stewart Muir:I'd like to talk about the future, some predictions for 2025. And it's kind of hard not to start with President-elect as he stands today, donald Trump Dumberg. I've got a little clip here. We're going to roll it.
Donald Trump:ISIS is making a tremendous amount of money because they have certain oil caps, right. They have certain areas of oil that they took away. They have some in Syria, some in Iraq. I would just bomb those suckers, and that's right. I'd blow up the pipes, I'd blow up the refineries, I'd blow up every single inch. There would be nothing left. And you know what? You'll get Exxon to come in there in two months. You ever see these guys how good they are, the great oil companies. They'll rebuild that sucker brand new. It'll be beautiful and I'd ring it and I'd take the oil. And I said I'll take the oil. In a post yesterday to Truth, social, president-elect Trump suggested US statehood for Canada and said, quote many Canadians want Canada to become the 51st state.
Stewart Muir:Canada could then become the 51st state and that Trudeau could be governor. What exactly is he trying to achieve with his biggest trading partner? So is this about taking Canada's oil?
Doomberg:You know, for those listening, we're recording this on the day of what I think is a historic and infamous press conference by Trump. I'm still sort of digesting it, but moments before we hit record, Trump was out saying that he intends to rename the Gulf of Mexico the Gulf of America, and he seems to be very serious about not only Canada but also quote unquote acquiring Greenland. Trump is an interesting character. It used to be that you took Trump seriously, but not literally. It might be that we should begin to start taking him more literally now that he is unburdened by the need to run for reelection. He is an astute observer of real politics and I think he understands the critical role that energy plays. I don't think that the US should be wantonly bombing energy infrastructure around the world, even if it happens to currently be in the possession of quote-unquote ISIS. Whatever that is. I think the destruction of the Nord Stream pipelines was one of the great scandals of our time, and I think it sets an extremely dangerous precedent, something that we're going to be talking about in our Doom Zoom webinars and writing about during 2025, because it's not like the US doesn't have energy choke points either, and if we're going to make the wanton destruction of what amounts to civilian infrastructure and industrial infrastructure normalized. That's not a world that any of us wants to live in. So I would start with that. More broadly to your question about Canada, we actually kind of wrote about this potential in December in a piece called Alberta Clipper. We, for a variety of reasons, have a pretty detailed understanding of Canada and its politics and its resources and it's a very interesting time.
Doomberg:On Canada, I don't know if he's as serious as he is about Greenland. I think he is rattling the cages for a negotiation between the countries for a better working arrangement. But if Canada said, yeah, we'd like to be, you know, the 51st through 60th states, because I don't think you should just call Canada all one state I think Trump would welcome it. Look, Canada is an energy superpower. It's in possession of the third largest hydrocarbon base in the world, I believe. It is a major producer of oil and gas and fertilizer and food. It has enormous hydro power, great nuclear technology, predominantly deployed in ontario today, amazing resources from coast to coast. There's no reason reason why Canadian citizens shouldn't be amongst the wealthiest in the world. It has roughly the same population of Saudi Arabia and has far greater resources than Saudi Arabia, far better institutions, far better history. And yet the average Canadian is struggling deeply and something has to give, and I think the resignation of Justin Trudeau on the exact same day that Trump's election was certified in Congress was more than a metaphor.
Stewart Muir:The appeal of Canadian oil to America is a foundation stone of the Canadian economy. We export a large and growing amount of oil. A lot of it most of it is heavy oil, which is needed in the refineries and that's why Americans can drive their cars in large parts of the country. Could you talk about the differences between the heavy oil, the oil sands and the shale oil, mostly lighter oil that is behind America becoming this gigapower in energy, and maybe what the medium and long-term prediction might be as to who's going to have the last barrel of oil in North America and what importance will that have?
Doomberg:Yeah, before I dive into that, which I intend to, I just want to say it's far more than about just oil. For Trump, I think, removing tariffs and trade barriers between the countries, stopping the fentanyl trade pouring over the border, controlling Canada's border and the US's border in a sort of co-equal way so that we can get a handle on immigration. Oil is certainly important, Gas is certainly important, but I think in Trump's mind those are but two inputs into a broader desire to have sort of a larger conversation. To your question the weight of oil, which is sort of a somewhat unscientific way to characterize various grades of crude, is determined by the number of carbons in the chain. And if you have a small number of carbons in the chain, that's considered light oil. And if you have a large number of carbon atoms in the chain, on average you know the distribution that's considered heavy oil. And then when you have such oil like heavy oil, there tends to be a lot of other undesirables like sulfur and other heavy metals and impurities in the crude. And the US Gulf Coast refinery network was built to take both the heavy grades from Canada and perhaps even, just as importantly, Venezuela and to convert them into diesel and gasoline and jet fuel and chemicals and all those things that make up modern society.
Doomberg:The shale revolution is on the far lighter end of the spectrum. A lot of natural gas, C1, the lightest of the hydrocarbons, ethane, C2, propane, C3, butanes and pentanes. Those are sort of the natural gas liquids. And then after that you get the light, sweet crude that comes out of the Permian. The refineries of the US Gulf Coast can refine those things. They're just not tooled to do so in an optimized way, because they have installed all of the necessary machinery and technologies to deal with heavy grades of crude, and heavy grades of crude tend to trade for far lower prices than cleaner grades of crude, ie lighter grades of crude. And then, as to your question about who will run out of oil first, my answer is neither, at least not on a time horizon or timeframe that matters to anybody listening here because of technology yeah, look, this whole concept of peak oil is a myth, something that we wrote about to some controversy a year ago.
Doomberg:Stand by every word of that piece. Um, when you talk about writing out of oil, what you're really doing is taking a massive short bet on human ingenuity, and that has always been a soccer trade. We will develop the technology to find exploit. Look, three or four years before the shale revolution, there were still self-declared serious analysts claiming that the US would never produce a million BTUs of economically viable gas from the Marsalis shale, for example, and it's only twice as big as Qatar. Now, as one deposit, it's producing at a rate of roughly two guitars. People look silly when they bet against human ingenuity. We are always very respectful of exponential technological growth and the compounding interests that that entails, and, frankly, there's other technologies on the horizon that would make all of this moved anyway. So I would the. The human endeavor shall not be denied and and it's kind of like pascal's wager why would you want to bet against?
Stewart Muir:it anyway. About 20 odd years ago I went to scotland, to aberdeen, the houston of scotland, as it were, and that's where the north sea oil patch is, is serviced, and met an engineer who spoke to us there and he said Scotland the North Sea, he said has always had 20 years' worth of oil left, and I think that's still true, maybe less, but it just hasn't run out. Should we be equally optimistic that on the environmental side, the obvious and acknowledged ill effects of burning all these fossil fuels will, just as the success in extracting more of it, even unexpectedly over long periods of time, has occurred, that we will see the kind of progress that, frankly, most people want to see?
Doomberg:So I would partition the environmental dilemma into pollution and climate, because I think they're two separate things. They're too often commingled. I think pollution is much more easily handled with a bit of legal discipline and enforcement. Climate is a different issue altogether. On the climate side, we have argued I think persuasively we're going to run the experiment, and the money that we're spending now to execute the quote-unquote energy transition is best held in reserve to react to any negative consequences, should and if they arise, because the very machines that oil and gas are powering today could be geared towards mitigating any potential negative impact on humanity. Building a wall around a city because sea levels are rising, or moving people you know people like to talk about skyrocketing insurance costs in Florida as proof of climate change. That's just proof of people being, you know, moving to higher risk areas because they're wealthier. We've seen an explosion in home building across Florida, and some of the riskiest areas are the prettiest ones, and so I think, for example, the insurance issue in Florida has nothing to do with climate, and perhaps we should reconsider whether it's wise for people to live in areas that get a major hurricane once every 10 years. You know, I don't live in such an area. When I chose my home, I did look at floodplain maps and risks and so on, because this is the place where my family lives and far too few people do that. But everything is climate change. Every negative thing that happens with the weather, a natural disaster, is climate change, and it's truly a hypothesis that cannot be nullified. And so it's. It's not scientific, um, and so I I just argue it's futile to even have the debate, because we're going to run the experiment, we are going to burn every molecule of fossil fuels produced. If there is a net negative impact of that um, we will use some of our abundance of energy to to mitigate the the total impact on society.
Doomberg:The one word that's missing from the entire energy climate debate is tradeoff. What's the tradeoff? We know, if we burn this pile of coal today, we're going to have electricity which is going to power a data server, which is going to lead to an iPhone, which is going to lead to all the other things that we've grown accustomed to. You might find those things objectionable, and I could certainly understand why some of them are, but if we just don't burn that coal and we have none of those things, are we net better off? And I think the fundamental difference is are you starting with a human-first mindset or are you starting with a nature-first mindset? And if you're starting with a human-first mindset, then you optimize for humans while minimizing the impact on the planet. If you start with a nature first mindset, not much in the way of trade-offs are considered and in that mindset, humans are viewed as a parasite on the planet that we only destroy and nature is meant to be preserved.
Doomberg:And look, there's a balance. I think polluters should be held to account. I think industry does itself no favors in this regard. By the way, I mean, the short-term profit drivers of Wall Street are in fact real and do cause corporations to do evil, dumb, destructive things all the time, and we should hold them to account. But to the larger picture of the climate question, to me it's wasted breath. We're not going to meaningfully change the way we live for very long. The political revolutions we're seeing in the Western world today can be directly drawn to poor energy policies. As we like to say, on the path from abundance to starvation is riot, and we are seeing the beginnings of a political riot in the G7. And whether that's enough to course correct and get back on that curve that I talked about? I suspect it will, and that's where we'll be.
Stewart Muir:Bloomberg, there's a term you use often in the newsletters church of carbon. Is that a religion?
Doomberg:It. You know, we're kind of having fun with it. That's sort of straddling the line between provocative and polarizing. If I'm being fully honest, we like to have a little fun once in a while. There are aspects of the climate agenda that seem to be replacing the positive things that a religion brings to you. As the West has become more secular and I don't think that's a controversial view. I think many people have stated it and so, to have a little fun with it and to bring a little less seriousness, we often, you know, for example, in describing Germany and their crazy energy policy, they impale themselves at the altar of the Church of Carbon. What Germany does on climate is irrelevant. New Zealand, for example, I mean, I think China increased its emissions in 2023 more per day than all of New Zealand's emissions in a year. The increase was more right. Like what New Zealand does. What New Zealand does just doesn't matter. Like, by the way, china is the biggest sinner if we're worried about carbon emissions. China burns more than half of the world's coal. The OECD basically the Western countries has cut its carbon emissions in the past 20 years. China's have been skyrocketing. Like. If we are actually worried about carbon emissions, we need to talk to China, not to ourselves.
Doomberg:We did a, so we have two tiers. We have the newsletter and we have our monthly webinars, and our most popular webinar from 2024 was one we did, I believe, in July, called the Year of the Dragon China Through the Lens of Energy. We did a, a. I think it was a 45 or 50 minute deep dive presentation. Um, I'll send you a free link to it. If you're interested to listen to it, then maybe you could. Could we share that? You could share it with your listeners, um as well. Yeah, we'll send you a free link to it. Um. Look, first of all, full credit to the ccp.
Doomberg:They have a national energy strategy. It's very clear. We lay it out in that presentation and they execute it. They don't really care about the church of carbon. They care about geopolitics, power, standard of living for their citizens, mostly because they're worried about their citizens revolting against them. But whatever, at least they're worried about it and they pay attention to what their citizens are saying.
Doomberg:Their energy use is skyrocketing. Coal is the main driver of it. The energy crisis of 22, 23 only caused China to dig up even more coal and put it in inventory, and they're still a major importer of coal. By the way, they're building out nuclear at an amazing pace and sure they're kinking around with solar and wind. To look good, by the way. They sell all of the critical supply chain elements to the West for solar and wind. Look good, by the way, they sell all of the critical supply chain elements to the West for solar and wind, so it's kind of an easy loss leader for them.
Doomberg:No, they are a fossil fuels company. Look, they're short oil, so they're long refining. They're short natural gas, so they're cutting pipeline deals. They're building LNG import infrastructure. They have a true all-of-the-above energy strategy. They know that energy is power. By the way, like China, as we say in that presentation, is the arsenal of democracy. They're the new arsenal of democracy. They make everything for the Western militaries, and so to think that we can go to war with with our suppliers is crazy. But that's a presentation. I'll send you a magic link to it and you can put it in the description. It's about 45 minutes if listeners are interested. That's what we typically do once a month for our pro tier of subscribers.
Stewart Muir:A few months' time I haven't seen exactly when it seems to be a closely guarded secret, the completion of LNG Canada to the point where it's actually sending its first cargo to markets. One of the investors is a state-owned oil company from China, so there's a good probability that there will be Canadian natural gas molecules finding their way to China for the first time, at least from Canada, in 2025. It's a big deal, but it's come after a very long journey of developing Canadian LNG. When British Columbia started talking about LNG, that was before the US started talking about it, but it's the United States that has catapulted itself ahead, and now Canada. While the US has got how many 10, 20 LNG export terminals sending natural gas to Europe to get it through the crisis of security that it's seen and to other regions, canada has still been in the starting blocks and we're about to come out of it.
Stewart Muir:And I mention this because there's a new report from Investors for Paris Compliance. It's called Late to the Party the Business and Climate Risks of Canadian LNG and basically it's Climate Risks of Canadian LNG and basically it's extensively citing all of the reasons they argue that Canada shouldn't host investment into LNG because you know it's too expensive or it's too late. Someone else the Americans, have already taken the opportunity. Don't bother Canada. What do you think? Are they right?
Doomberg:Well, no, they're wrong. First of all, that's all sunk cost fallacy. You now have an LNG export terminal, and you have a very important advantage with that terminal, which is you don't have to pass the Panama Canal, and so you can easily, far more easily, serve Asia from there than you can from the US Gulf Coast the Gulf of America, I guess, is what we're going to be calling it soon. And that's why Mexico is also building LNG export terminals on the Pacific coast, because they have pipeline connections into the Permian Basin. Look, the way to look at natural gas markets is they are regional on land, hyper-regional on land, and determined by pipelines. And then, once you get an energy carrier onto the ocean anywhere, that's one big global market. And so, whether the specific molecules end up in China, get resold by China, go to California, assuming you know anyway or they end up crossing the panama canal and going to europe, because the price differential between, you know, the jkm contract in asia and the dutch ttf contract in europe is, is motivating and and and covers the cost of shipping, um, those long distances. Once the boat's on the water, it's gone. That's one market, um, and arbitrage is a very powerful force, um. But now that you have one terminal. You know these things can be expanded. The time and cost and energy to go from one to two is much less than zero to one.
Doomberg:I think it's very important that the first cargos of gas start flowing through that terminal. I think that would be a very important milestone for Canada. And look, I mean British Columbia and Alberta, bc in particular, are sitting on a mountain of natural gas, an endless supply of natural gas, and build it and they will come. If there are cargoes of LNG floating on the ocean, they will get bought by somebody and burned. They just will. And any such talk about being late to the game is, I just think, happy talk from know-nothings. There's no other way to say it. Doomburg, do you?
Stewart Muir:see any disruptors on the horizon that could change the game on any of these topics. We've been talking about Some black swan events maybe.
Doomberg:Or positive events. Yeah, one big one that we see that we've been chronicling we were a bit early to it is natural hydrogen, which we wrote a piece called, I believe, in Search of the Next Shale. So hydrogen today is a poor energy carrier and it was long assumed that you couldn't just drill a hole in the ground and find hydrogen and bring it up to the surface as a fuel. You had to make hydrogen from water or fossil fuels like natural gas, and then when you burn that hydrogen to the surface as a fuel, you had to make hydrogen from water or or fossil fuels like like natural gas. And then when you burn that hydrogen to get the energy out, you you only get half of what you put into it, and so it's a poor energy carrier compared to, say, a battery. But if you could drill for hydrogen and it is a, it is sort of a natural fuel that would be a real game changer.
Doomberg:And the us geological survey a couple of their key scientists who have been studying this issue just put out an interesting scientific paper in December trying to characterize the amount of natural hydrogen that exists subsurface and its economic potential to be developed, and I think we're very close to a breakthrough in that regard, and that would be a true game changer that I would keep your eye on and that actually has a huge benefit, of course, is that if you burn it, it doesn't produce any carbon dioxide. Hydrogen is a very, very good fuel. By the way, we could run our cars on hydrogen internal combustion engines. There's all manner of things we could do if hydrogen were plentiful. Hydrogen is formed subsurface when water comes into contact with iron ore deposits, and then the hydrogen that's formed in the right geological formations can get trapped, and so if you could poke a straw into a cavern that contains hydrogen and bring it up to the surface, well, that would be a game changer. That would be on par with the development of racking.
Stewart Muir:I recently sat on a panel in Anchorage, alaska, with a local geologist, a professor, who was talking about this very opportunity. It's abundant, it's out there and it could well be the future.
Doomberg:Yeah, and these things are hard to predict in advance. Again, almost nobody had the extent of the shale revolution on their radar, and then it just sort of happened overnight and then everybody took it for granted. We went from saying it'll never happen to saying we'll soon run out of it. You know, there's this fleet of energy pessimists, as I call them who are ironically, since we're Doomba who seem to be always hoping for an outcome. Maybe they're long energy stocks or something, I don't know. But you know, to bet against the human endeavor in this way, I just think is foolish. But yeah, back to hydrogen. If that were to happen, it would be a game changer. We've written about it twice on the masthead. And look, we take very seriously the topics we write about and what we say about them, because we recognize that our track record is important. But we've written on that subject twice in 2024, and we suspect we'll be coming back to it again this year. How?
Stewart Muir:about utility scale batteries. How about?
Doomberg:utility scale batteries. Yeah, we would fade that as a concept for a variety of reasons.
Stewart Muir:No-transcript the stuff of spreadsheet dwellers. You've been unafraid to write about things that might be criticized. Have you had any blowback from something you've written that stays in your mind?
Doomberg:I mean not particularly. One time we wrote about how we thought that ethanol in gasoline formulations was really a cover-up for the lead anti-knock scandal and that sort of was connecting a few dots, too many for some people. That's a whole other topic we could probably discuss on another podcast. But if you have enough ethanol in your formulation you don't need to have anti-knock. And the inclusion of lead as an anti-knock for decades is one of the great environmental scandals of our time. And I think because there are two senators in every US state, hence there's a majority in the Senate who care about corn that was a very elegant way to sort of remove the need for an anti-knock from US gasoline formulations while stoking demand for US farmers. So I mean talk about a win-win.
Doomberg:That one we received a lot of blowback on. That was in the early, early days of Bloomberg. The peak, cheap oil is a myth. One Ruffled a few feathers. We stand by that. You know you can't be afraid in this business. One of the things we like to say is you can't make a living on the internet if you're afraid of people saying bad things about you. And, by the way, if you go looking for people saying bad things about you. I can assure you you will find them, and so we don't go looking for them, and when we see them, we just ignore them.
Stewart Muir:Doomberg. This has been an incredible conversation. I'd like to thank you for coming on to Power Struggle today.
Doomberg:You're more than welcome and I'll be sure to send the link to that webinar I talked about.
Stewart Muir:And you can find all of our work at doombergcom, if you're listening to this and you want to learn more, and we'll make it really easy for people to go to that link and enjoy that webinar, which will be high value. So thanks again, doomberg, it's been great. You're welcome.
